SCO Grp v. Novell Inc

Filing 859

NOTICE OF FILING OF OFFICIAL TRANSCRIPT for dates of March 12, 2010-Jury Trial before Judge Ted Stewart re 567 Notice of Appeal,. Court Reporter/Transcriber Patti Walker, CSR, RPR, CP, Telephone number [phone]. NOTICE RE REDACTION OF TRANSCRIPTS: Within 7 business days of this filing, each party shall inform the Court, by filing a Notice of Intent to Redact, of the parties intent to redact personal data identifiers from the electronic transcript of the court proceeding. The policy and forms are located on the court's website at www.utd.uscourts.gov. Please read this policy carefully. If no Notice of Intent to Redact is filed within the allotted time, this transcript will be made electronically available on the date set forth below. Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER. Redaction Request due 5/10/2010. Redacted Transcript Deadline set for 5/20/2010. Release of Transcript Restriction set for 7/19/2010. (Attachments: # 1 Part Two, # 2 Part Three)(jmr) Modified on 4/20/2010-added text (jmr). Modified by removing restricted text on 7/19/2010 (rks).

SCO Grp v. Novell Inc

Doc. 859 Att. 1

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: MR. BRENNAN: THE COURT:

(12:05 p.m.) Are you ready, Mr. Brennan? Yes. Thank you, Your Honor.

Ms. Malley, if you would.

Mr. Singer, when will you be getting the court a response to defendant's motion about the door that you have opened? MR. SINGER: Well, I believe yesterday Your Honor

requested it by Monday morning and it was our intent -THE COURT: MR. SINGER: THE COURT: All right. -- to comply with that. Thank you. Have you had a jury

instruction meeting since the court requested it? MR. JACOBS: Your Honor, we have. We had probably an

hour long discussion last night.

We talked about the

prospect of trying to put in a joint submission either today or Monday. THE COURT: MR. JACOBS: All right. We decided that, um, given your action --

unfortunately we decided that we wouldn't be able to do that. We thought we would still have SCO put in submissions We tried very

this afternoon and Novell will respond to it.

hard to come up with a format that would be helpful to the court and the court's clerk, but we ended up thinking this would still be the more -694

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THE COURT:

So you will respond with your own set of

instructions today and then Novell by Monday? THE CLERK: All rise for the jury, please.

(Whereupon, the jury returned to the courtroom.) MR. ACKER: MR. NORMAND: THE COURT: MR. BRENNAN: Yes, Your Honor. Yes, Your Honor. Go ahead, Mr. Brennan. Thank you, Your Honor. CROSS-EXAMINATION BY MR. BRENNAN: Q. It is now good afternoon, Mr. Mattingly. Have we met before? My name

is Sterling Brennan. A. Q. A. Q. before? A. Q.

Did you do my deposition here? Do you think I did? I don't know. Actually, no. You answer the question for me. Do you think you and I have met

I don't think so. Well, I am a little disappointed since you and

were classmates together at BYU. A. Q. Now, I remember. You used to cheat off of me.

Well, I was an economics major and never made it But the answer to your But that does

over to the engineering building.

question, no, I did not take your deposition. lead me to an important question.

Do you recall that your 695

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deposition was taken in this case on January 19th, 2007? A. Q. A. I do. Do you remember who did take your deposition? I don't remember, but it was -- he had similar

features to you, he was a little bit darker. Q. He must have been very good looking, no doubt.

Well, let me ask you this, do you recall that your deposition was taken in this case on January 19th, 2007, and that you were asked questions by Mr. Normand who is sitting at counsel table here today? A. Q. Yes. Okay. And that deposition was more than two

years previous to today's date, right? A. Q. Correct. And did you remember facts and circumstances

involving the 1995 timeframe better a little more than two years ago, than you do today? A. Q. Very likely. And that is because, of course, that would be two

years closer to the events than would today, right? A. Q. Correct. Since your deposition was taken on January 19th,

2007, have you had occasion to meet with any of SCO's attorneys? A. I have. 696

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Q. A. Q. A.

Who have you met with? I met with Ryan Tibbitts. When did you have that meeting or meetings? You know, not meetings but, um, I was cleaning my

garage last year and came across some folders and they had Sleigh Ride and Rhine River on them which were the code names for these divestitures. So when I found those

documents there, I contacted Ryan. Q. Now you say these code names, Sleigh Ride was the

code name for the transaction that ultimately came about between Novell and Santa Cruz Operation; right? A. Q. Yes. And Rhine River was another transaction involving

Hewlett-Packard, right? A. Q. correct? A. Q. A. Q. A. Yes. And you brought those with you today? I did. May I have them, please? Sure. At least see them? I should them Yes. And so you came across some documents; is that

You want to see them again?

to you ten minutes ago. Q. You did. Thank you. I did a quick read. And

the documents that you brought here today, are these all of 697

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the documents that you found in your garage? A. No. I found a big folder that had Sleigh Ride

and Rhine River documents. Q. What did you do with those other documents that

you didn't bring with you today? A. Q. I just have them. Did you ever give them to Mr. Tibbitts or any

other representatives of SCO? A. Q. A. No. What is in those other documents? You know, a lot of legal docs, some MOU drafts, a

lot of power point presentations, just typical deal collateral. Q. So why did you decide to bring to court today the

folder of documents that you brought but not the other ones? A. Well, I think that that one had some information

at this September 15th board memo that is interesting, and it also has kind of what the final executable documents were on the 19th. Q. In addition to -- let me back up. You say that

you found some documents in your garage and you then contacted Mr. Tibbitts and said I found some documents? A. Q. Yes. And when did you have that discussion with

Mr. Tibbitts you have identified? 698

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A.

My guess would be it would have been probably in

the fourth quarter of last year sometime. Q. So that would have been sometime October,

November, December of -A. Q. A. Q. Yeah, possibly. -- 2009? Yes. Now just so we are all clear, Mr. Tibbitts is Right next to

this handsome man to my left, is that right?

Mr. -- Mr. Tibbitts, do you mind standing for just a minute? Is this Ryan Tibbitts? A. Q. Yes, it is. Thank you. Did you meet with Mr. Tibbitts in

person to talk about this case? A. documents. Q. A. Q. And how long did your meeting last with him then? Probably 15, 20 minutes. And since then, have you had any other He came to my office and I just showed him the

communications with any attorneys representing The SCO Group? A. Q. Tibbitts? A. I think we probably went to lunch sometime this 699 Just Ryan. And when was your last meeting with Mr. Ryan

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year. Q. A. Q. the case? A. A little bit. Ryan is pretty -- just look at But it was Sometime in 2010? Yeah. And during that lunch meeting, did you talk about

him, he doesn't say much, he is pretty stuffy.

kind of some old teammates, we kind of got together for a lunch. Q. And during this lunch meeting you talked about

this case that brings us here today? A. Q. No. No, we had a mixed group of former athletes.

So just so I'm clear, at any time this year prior

to your appearing in court this morning, have you had any discussions with Mr. Tibbitts about this case? A. Q. Yes. Tell me what you and Mr. Tibbitts have talked

about regarding this case? A. Well, we have had some phone conversations

regarding these documents that you have in your possession, and kind of their interest level to me, and whether they would be of interest to Ryan and the SCO case. Q. Now, at any time this year have you had any

communications with any Novell attorneys? A. I have not. 700

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Q.

Have you had any communications with any Novell

attorneys since your sworn testimony was taken on January 19th, 2007? A. You know, probably superficial meetings or

crossings with someone like Jim Lundberg who is in the room. That would probably be the only attorney that I would have crossed with from Novell. Maybe Greg Jones, if he is still

a Novell attorney, over at the gym. Q. Have you ever talked with Mr. Lundberg or

Mr. Jones about this case? A. Q. No. Okay. Now I want to ask you a little bit about You indicated

your relationship with -- with The SCO Group.

in response to Mr. Singer's questions that you're a SCO stockholder; right? A. Q. Yes. And I think you told me you have 9,000 shares of

SCO Group stock? A. Q. A. A little north than that. How much north of that? I am not sure. I mean there was 9,000 and some

change probably in here somewhere exactly how many shares I got through the Voltis transaction. Q. And when you talk about this Voltis transaction,

this was a situation where The SCO Group was going to buy 701

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this other company called Voltis; right? A. Q. Yes. And your role in that transaction was essentially

as a business broker essentially? A. No. I was on the board of Voltis at one point.

And so, um, then when the Canopy Group did an investment in Voltis, I am not sure if I was still on the board or not but I had an equity position in Voltis. Q. And in connection with that transaction you dealt

with an individual by the name of Darl McBride; right? A. Q. Yes. Who do you understand Darl McBride to be in

connection with the SCO Group? A. Q. He was the CEO of The SCO Group. Did you have any form of dispute with Mr. McBride

regarding how The SCO Group was treating the shares that you hoped to get out of the Voltis transaction? A. Um, yes. Basically the SCO stock had, if I can And so the number of shares

recall, had some appreciation.

that you are getting in consideration goes down if the stock price goes up. And when you -- when we had structured some

type of an arrangement there, um, as the stock went up, of course SCO was trying to present less shares to the Voltis shareholders. Q. So let me see if I understand what you're telling 702

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me.

When you thought that Voltis and The SCO Group had

entered into some form of an agreement, you thought that the compensation should be fixed based on the number of shares when you reached the agreement, right? A. Q. Right. And The SCO Group stock increased, and as you

understood it, SCO was claiming well the stock is worth more so we shouldn't have to give you as many shares; right? A. Q. A. Q. A. Q. Correct. You disagreed with that, right? Yes. You didn't think that was fair, did you? No. You thought that was contrary to the agreement

that you had reached with Mr. McBride at The SCO Group, right? A. Well, I didn't reach that agreement with McBride.

It was the company that was negotiating with SCO, I don't know, general counsel or employees. Q. me. So you thought that -- thank you for correcting

So you thought that The SCO Group was in essence

welching on an agreement that it had entered into with Voltis relative to the number of shares that not only Voltis would get, but that you would get in SCO, right? A. No, I wouldn't say welching is the correct 703

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characterization of that.

But in negotiation, if you have

a, you know, if you establish a collar, then shares can float within that. But I don't recall if they had a collar And so absent

or anything as sophisticated as that.

something like that, it comes down to if you can negotiate something that inures to your benefit. Q. A. Explain that answer to me, please. I think it is pretty explanatory. Well, if you

don't have a collar and the price goes up, you can go to them and still say hey, look, we cut this deal on this date so the stock was at this price that date so you should give me X number of shares instead and not take advantage of the appreciation. If the stock had gone down, um, I wouldn't be

here telling you you got to give me a lot more. Q. So the way to avoid that sort of dispute is if

The SCO Group and Voltis had had a written agreement, right? A. Q. Correct. So if in that transaction before this dispute

arose, if Voltis and the other principals that you were involved in and representing had a written agreement with The SCO Group, then you wouldn't have had to have a fight over what had been agreed to or not agreed to, correct? A. Depends on how -- how definitive that written

agreement was. Q. How well the agreement was written, right? 704

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A. Q.

Correct. So would you agree with me that having a clearly

written agreement is important to make sure that later on when there is a dispute you could look back to the written agreement to see what had actually been agreed to? A. As long as it is consistent with the intent and

spirit of what the transaction relationship was. Q. Now you have been involved in investing in other

business ventures for a number of years, right? A. Q. Yes. You have been a party to written contracts,

A. Q.

Yes. And the reason that you have been a party to

written contracts in your business dealings is for some of the reasons we have talked about here today. You wanted to

make sure that there was a clear understanding regarding what the actual terms of the agreement were so that when later on, there may have been a change of circumstances, or a question about what people agreed to, or maybe a loss of memory, you could go back to the written agreement and you could look at what the parties had agreed to at the time they reached their agreement, right? A. Q. Yes. So you recognized the importance of written 705

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agreements, fair? A. Q. Yes. Now, with respect to your -- your business

dealings, I would like to pick up from what you told Mr. Singer. A. Q. A. Q. You left Novell in 1997, correct? Correct. Do you remember the month that you left Novell? I don't. Probably summertime.

And what was your first source of employment or

business venture immediately upon leaving Novell? A. and Novell. Q. And that joint venture was called Novonyx, A joint venture between NetScape Communications

N-O-V-O-N-Y-X? A. Q. Novonyx? A. Well, I authored the idea and completed that Novonyx. Thank you. And what was your connection with

joint venture between NetScape and Novell. Q. And in connection with your involvement with

Novonyx, you became involved in a dispute with Novell; right? A. Q. Yes. In fact, you and Novonyx threatened to sue

Novell, right? 706

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A.

I don't know if we threatened to sue them.

We

retained counsel when we disagreed about their valuation. Q. Did the counsel that Novonyx retain, did they

threaten to sue Novell? A. I don't think anyone threatened to sue Novell. I

think it was about trying to get representation to make sure that the valuation process by which Novell, the majority shareholder in a small little company, valued the small amount of shares that they didn't own and how they valued those shares and therefore bought them. Q. Now, you indicated that you and others at Novonyx

retained legal counsel, right? A. Q. A. Q. Yes. That is what you told us here, right? Yes. And the purpose for retaining legal counsel was

to make sure that your legal rights could be protected, correct? A. Q. A. Q. Correct. You're not a lawyer, right? No. And so you would look to legal counsel to make

sure that your interests were best advocated and protected, right? A. Reasonably, yes. I mean, when you say that, you 707

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know, I think when you look at something like that you can -- you can take that legal representation a long way and actually get into litigation. trying to do. But that is not what we were

We actually had -- we had legal counsel that

represented us to make sure that, you know, if there is any give and take inside of their rights under the agreements, that we could try and maximize those. Q. Now, in your business career, including the

Novonyx situation that you have described and other settings, you have been around lawyers, right? A. Q. Yes. And let's take your time at Novell. You

understood that Novell hired lawyers, both in-house corporate lawyers and outside legal counsel, to best protect the interests of the corporation, right? A. Q. Right. And did you understand when you were at Novell

that the best interests that were to be protected were those of the shareholders? A. Q. A. Q. Yes. That is the owners of the business? Yes. And so while you are at Novell working with

Mr. Frankenberg, I think you told us about, or Mr. Noorda? A. Yes. 708

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Q.

Both of whom had been at one point in time the

chairman of the Board of Directors of Novell, you understood that those individuals as chairman of the board, their first obligation was to protect the interests of the shareholders of Novell, right? A. of Novell. Q. A. approach. And in order to create shareholder value? When you say protect, you're taking a legal The idea -- the idea is that, you know, they're That is their To create shareholder value for the shareholders

supposed to maximize shareholder value. charter. Q. Thank you.

And you're right, I am taking a legal I apologize.

approach it is an occupational hazard. A. Q. Yes, it is.

But as you have worked with lawyers, you have

understood as they have represented to the corporation that their role is, I suppose as you have put it to, to best represent shareholder value, right? A. Q. Correct. You mentioned David Bradford. You said that he,

at a point in time, was the general counsel of Novell, right? A. Q. Yes. And you understood that his role was to best 709

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protect shareholder value from Novell, right? A. Q. Yes. Now, you said that you're, I think, a friend of

Mr. Bradford, right? A. Q. A. Q. A. Q. A. Q. lawyer? A. Q. A. Q. I don't know. I am not a lawyer. Yes. You respect him? Yes. You admire him? I do. You believe him to be an honest man? Yes. From your observation do you think he was a good

So you don't know how to judge that? I don't know how to judge that. In your role while you were at Novell, you

observed Mr. Bradford work with the Board of Directors of Novell? A. Q. Yes. Now, I want to ask you a few questions about the And I would You are

transaction that brings us into court today.

like to have you focus on the time period of 1995.

familiar in 1995 that Novell had some negotiations with a company called The Santa Cruz Operation; right? 710

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A. Q.

I am. And your involvement was not focused on the

details on that transaction, was it? A. Q. No, I was more the high level strategy guy. Now, when you say high level strategy guy, you

were not involved in any of the negotiations of any particular provision of what ultimately became the Asset Purchase Agreement signed by Novell and The Santa Cruz Operation on September 19th, 1995, were you? A. Well, I don't agree with your characterization of

I mean I was heavily involved with the MOU phase of

that, that is why we had, you know, six to eight weeks on the ground negotiating face-to-face with their team. That document is the input to the legal process where they kicked out the Asset Purchase Agreement not the Licensing Agreement. Q. You used an acronym MOU. That sounds for

memorandum -A. Q. Memorandum of understanding. So your suggestion here today in court is that

you were involved in the drafting of the memorandum of understanding? A. drafting. No, not in the drafting, in the input into the So we had a team out there, Ed Chatlos that you

have referenced, and clearly he has been up on the stand. 711

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Q.

Let me pause you right there.

How do you know

that Mr. Chatlos has clearly been up on the stand? A. Q. A. Q. Well, because you guys have talked with him. How do you know that? I am just sure he has. Has somebody told you that Mr. Chatlos has been a

witness in this trial? A. Q. A. Q. A. Q. A. Q. A. Q. A. Q. Yes. Who told you that? A friend of mine. Who? Lee Johnson. Do you know what Mr. Chatlos' testimony has been? I don't. What did Mr. Johnson tell you about Mr. Chatlos? Just that he was up on the stand. Anything else? No. Now, back to this memorandum of understanding,

you said that you did not actually draft any provisions, you provided input, right? A. Q. Correct. But let's set a time reference here. Do you

understand that the Asset Purchase Agreement dated September 19th, 1995 was signed both by Novell and The Santa 712

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Cruz Operation on September 19th, 1995? A. Q. A. Q. right? A. Q. Yes. So let's use that as a point in time. How Yes. Did you observe the signature of that document? I don't think so. But it is your understanding that it happened;

further in advance of September 19th, 19 -- excuse me, September 19th, 1995 were you involved in the process of this memorandum of understanding? A. Well, all the way until the point where we

reached a meeting of the minds and agreement around the substantive business terms and that is when it was kicked over to the legal teams. weeks, I don't recall. Q. Well, it was several weeks before the Asset Whether that was one week, two

Purchase Agreement was signed at a minimum, right? A. Q. A. Q. deposition? A. Q. I do not. Well, we will turn to that in a minute. 713 If you say so. Well, I'm asking you? I don't recall. Do you recall answering that question at your

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In your own words you were not the detail contract guy in connection with the Asset Purchase Agreement, right? A. Q. As I have previously stated, yes. And your role in the discussions concerning the

transaction between Novell and The Santa Cruz Operation related only to a high-level business strategy, right? A. Well, the business strategy and the whole purpose

of why we were engaging in this transaction with SCO. Q. You weren't involved in the details of the actual

legal document that was created that set forth the terms and conditions of the parties agreement, namely, the September 19th, 1995 Asset Purchase Agreement, right? A. Q. That is correct. You didn't help write or craft any of the

provisions of that referenced Asset Purchase Agreement; did you? A. Q. No. You didn't participate in any of the so-called

wordsmithing or specific language that was used in the Asset Purchase Agreement, did you? A. Q. No. You didn't make any contribution whatsoever to

the terms or conditions of the September 19th, 1995 Asset Purchase Agreement, did you? A. No. 714

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Q.

In fact, your so called high-level strategy

involvement with respect to what ultimately became the transaction, that is the September 19th, 1995 Asset Purchase Agreement, took place at least two to three weeks before that agreement was signed, right? A. Q. That sounds reasonable. And, in fact, your observation, although you have

been involved in some high-level discussions, it was at least two to three weeks after your involvement ended before the Asset Purchase Agreement was finalized, right? A. Well, other than the fact that I presented at the

board meeting the day before it was finalized some of the substantive terms. Q. And during this two to three week period between

when your involvement ended and when the Asset Purchase Agreement was signed, you were generally aware that there was a back and forth of many drafts of the Asset Purchase Agreement, right? A. Q. Yes. And who did you think that those various drafts

were being passed back and forth between? A. Well, the legal teams was Ed Chatlos being the

detailed business guy that remained there for continuity. Q. Now Ed Chatlos was at that point a Novell person,

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A. Q.

Yes. And who were the lawyers who were involved for

Novell during that two week period or three week period of sending drafts back and forth? A. Well, there was a, you know, I don't remember There was a Michael Hoffman who was the --

everyone's name.

one of the primary attorneys that was out there in California on the ground and unfortunately he has passed away. I don't recall who all of the other attorneys were. Q. Well, you knew, for example, that the law firm of

Wilson Sonsini was involved, right? A. Sure. You said Novell, so if there were outside And so yeah, Tor Braham would have

counsel, he is Wilson.

been one of the main guys there, or the main guy. Q. When you say "the main guy," you mean that he was

the primary first drafts person of the Asset Purchase Agreement, right? A. I don't know if he was the primary drafter. But

Tor Braham was the senior attorney from Wilson Sonsini and did a lot if not all of Novell's transaction. Q Let me ask you about that. During the time

period that you worked for Novell from 1992 to about 1997, to your observation the law firm of Wilson Sonsini was Novell's primary outside counsel on corporate matters, right? 716

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A. Q.

Yes. And Tor Braham was the lead attorney for Novell

in those various transactions, right? A. Q. Yes. Tor Braham essentially was the lawyer that Novell

turned to to document corporate transactions; right? A. Q. A. Q. Yes. He was a trusted attorney? Yes. And to your observation, Tor Braham was the key

component to the drafting of the actual terms and conditions of the Asset Purchase Agreement, correct? A. You know, I don't know. Again, as I stated, I

don't know if he was the key draftsman, if he had some of his other people drafting. He was the senior attorney so he

may have looked at it from a high level and had others doing the drafting work or the detail work. Q. We referenced your deposition a bit earlier. I would ask you

There is a transcript of your deposition.

if you would like to turn to page number 89 of your deposition. Again, this was taken on January 19th, 19 --

excuse me, 2007. And Your Honor, with the court's permission, I would like to display the lines and pages that I'll now state on the record. 717

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THE COURT: Mr. Singer? MR. SINGER: THE COURT: MR. SINGER:

Do you have any objection to that,

I do not, Your Honor. All right. You may go ahead, Mr. Brennan.

I would only ask that he tell us what

lines he plans to -MR. BRENNAN: Mr. Singer. Q. (By Mr. Brennan) I'm going to be reading from Do you have that I am about to do that. Thank you,

Page 89 Line 23 through page 90 line five.

in front of you or you can see it on the screen, either way. A. Q. Yes. Question, "is it your understanding that Tor

Braham from Wilson Sonsini was actually drafting the, what became this September 19, 1995 Asset Purchase Agreement?" Your answer, "I don't know that he was drafting the APA. I

think he was -- he was certainly a key component there, so I would think he would be working with the Novell legal team, which was Michael Hoffman and someone from New Jersey, I would assume." That was your understanding when you gave this testimony? A. Q. Yes. Do you now agree with me that by your own

previous testimony Tor Braham was the key component to the 718

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drafting of the Asset Purchase Agreement? A. You know, I am reading where it says I don't know

that he was drafting the APA, so I don't know what you're wanting me to agree to. Q. A. I'm simply want you to agree -I think it is consistent with what he said there

with what I just verbally stated which is he was the senior guy. Does that mean that he is the guy drafting the I don't know. Now during -- during the preparation of the Asset

agreement? Q.

Purchase Agreement, you understood that Mr. Braham took the lead role in drafting that agreement, fair? A. Q. Well, being responsible for the drafting, sure. Well, don't you think that he took the lead on

drafting the definitive ultimate agreement between the parties? A. We're disagreeing on semantics and definition.

When I hear you say drafting, I don't believe he was sitting there at a keyboard typing stuff in, do you? Q. You know -Mr. Mattingly, you don't get to ask

THE COURT: questions. THE WITNESS: THE COURT: THE WITNESS:

Okay. You answer the questions. We're just kind of rat-holing on this 719

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one. Q. (By Mr. Brennan) I can only take you at your

previous word.

Let's look now at Page 91 of your deposition

and I will be reading from lines two through nine on Page 91. May I proceed, Your Honor? You may. Question, "does reviewing that

THE COURT: Q.

(By Mr. Brennan)

paragraph refresh your recollection as to Tor Braham's involvement in drafting the agreement? Answer, yeah.

According to this, it looks like Tor was the lead on drafting the definitive and -- which would still be consistent with what I suggested that, you know, he would doing that with input from the team, including potentially Michael Hoffman, as well as attorneys from Summit." Do you see that? A. Q. Yes. Would you agree that Tor Braham took the lead on

drafting the definitive Asset Purchase Agreement? A. Well again, definitionally, I think consistent

with at that time I am still consistent that he was primarily responsible for the drafting. But I don't believe

that he was actually typing on the keyboard. Q. And you understand that what we're reading into You

the record is your previous words under oath. understand that, right?

720

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A. Q. A. Q.

Yes. I'm not quoting somebody else, I'm quoting you. I think I understand that. Okay. Now, you were not a member of any

transition team that was formed after the Asset Purchase Agreement was signed, were you? A. Q. No. In fact, you had no further involvement with the

Asset Purchase Agreement after it was signed, did you? A. Q. Agreement? A. Um, I probably read it. I'm sure that I have a I did not. Now, did you ever read the Asset Purchase

copy of it in the folder that you have and was sent that so I would have read it slash, perused it, skimmed it, either before or after the close. Q. When did you first skim or peruse or glance at

the Asset Purchase Agreement? A. I would imagine when it showed up in my inbox

sometime ago. Q. A. Now when would that have been? I don't know, sometime in that two to three week

period prior to the close. Q. I'm going to -- I am going to select from the

documents you brought today, one of them is a document 721

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entitled Asset Purchase Agreement By and Between The Santa Cruz Operation, Inc. and Novell, Inc. dated as of September, then it has a blank, 1995. This is one of the documents you

brought with you to court today? A. I believe so if you pulled it out of that manila

folder that I had. MR. BRENNAN: where it came from. I will represent to you that that is Your Honor, with your permission, I

would like to have this labeled for identification as Novell's Exhibit 045. THE COURT: MR. SINGER: for identification. MR. BRENNAN: Your Honor, with permission of the Mr. Singer? I have no objection to it being labeled

court, I would like to display this on the ELMO projector? THE COURT: MR. BRENNAN: THE COURT: MR. BRENNAN: THE COURT: MR. BRENNAN: Your Honor. Q. (By Mr. Brennan) Now, do you recall, Well, you asked for it to be marked. Yes. You have not asked for it to be admitted. That is correct. Are you going to seek its submission? I will in just a moment. Thank you,

Mr. Mattingly, whether this document that I have identified which has been marked as Defendant's Exhibit 045 is a 722

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document that you received previous to the Asset Purchase Agreement being signed? A. If it is a draft, then that would have been

previous to it. Q. A. Is this the copy of the draft that you looked at? It would have been a paper or online to an

electronic format. MR. BRENNAN: Defendant's 045. MR. SINGER: THE COURT: No objection. It will be admitted. Your Honor, I do move the admission of

(Whereupon, Defendant's Exhibit 045 was received into evidence.) MR. BRENNAN: Honor? THE COURT: MR. BRENNAN: Q. You may. Thank you. Now, we have just displayed to May I now present it on the ELMO, Your

(By Mr. Brennan)

the jury through this technology the first page of Defendant's Exhibit 045. And I would now like to turn to a

portion of that document which is entitled Schedule 1.1(b) Excluded Assets and in particular, I will show that first, I'll try to keep my fingers out of the screen, but do you see that page there? A. Yes. 723

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Q.

And on the version of the document that you see,

it says, let me lower it just a little bit, do you see where it says "draft" stamped on the top? A. Q. Yes. I know it is a little difficult to see but there

appears to be a handwritten date to the right 9/16/95; do you see that? A. Q. A. Q. Yes. Is that your handwriting? I don't think so. Does this suggest to you that you had possession

of this document at least as early as September 16th, 1995? A. Q. That would be reasonable. And so did you understand that in this draft at

least that what is set forth in this schedule Excluded Assets were Novell assets that would not transfer to Santa Cruz Operation under the Asset Purchase Agreement then being considered? A. Q. Yes. I'm now going to turn to Page 2 of that draft Excuse my big hands there. You will see,

Schedule 1.1(b).

I know it is a little difficult, but there is a Roman numeral five Intellectual Property. that out on the screen? A. Yes. 724 Are you able to make

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Q. A. Q.

And it has three parts; correct? Yes. One is labeled capital letter A and it says

patent licenses, parenthesis, i.e. Pike and all others associated with the UNIX System, in parenthesis, do you see that? A. Q. Yes. Did you understand that the draft under

consideration several days before the Asset Purchase Agreement was signed was to exclude all patent licenses? A. Q. A. Q. Sure. That is what it says, right? That is what it says. And the draft that you had in your possession

several days before the final agreement was signed had that exclusion, right? A. Q. That is correct. And September 16th, 1995 would have been before

the Novell Board of Directors meeting that was held on September 18th, 1995, correct? A. Q. Yes. So you would have had in your possession at least

two days before the Novell Board of Directors meeting a draft of the Asset Purchase Agreement that listed at least these proposed exclusions from transfers of assets by Novell 725

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to Santa Cruz, correct? A. Q. Yes. Let's then look at Item B, all copyrights and Do

trademarks, except for the trademarks UNIX and UnixWare. you see that? A. Q. Yes. So is it correct then that as with the patent

licenses you had in your possession a draft of the Asset Purchase Agreement at least two days before the board meeting that listed as excluded assets, that is assets that would not be transferred to Santa Cruz Operation, a document that showed all copyrights and trademarks except for the trademarks UNIX and UnixWare? A. If that was delivered to me on the date that the

-- somebody wrote 9/16 then I would have had it at least two days before the board meeting. Q. So even before you went into the board meeting,

you would have had access to a draft of the Asset Purchase Agreement that clearly stated that -- no, let's put it back just so we have no mistake here, clearly would have stated that contemplated to be excluded are all copyrights and trademarks except for the trademarks UNIX and UnixWare; right? A. As long as it wasn't delivered at the board

meeting and actually copied on the 16th. 726

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 16th.

Q. A.

When did you tell me you got this document? I don't know. You just said that it was on the

Q.

Now, just so that we're clear here, I showed you

the previous page that had a date? A. Q. Written. I asked you and we can go back to that, we're

back to the first page of the draft and I asked you about the reference to the date 9/16/95, and unless I misheard you, I thought you told me that you believed that was the date that you got this. A. Did I misunderstand? I don't know -So

That is the date it was written.

you asked me if I wrote that and that is not my writing. I wouldn't have written 9/16/95 there. that date, I assume.

So someone did it on

And whether it was delivered to me on

a Saturday, or whether I received it Monday as part of the board package, I don't know the answer. Q. I am going to show you the original that I have I would like you to look at the date.

in front of you.

Does that appear to be written in handwritten ink? A. Q. A. Yes. That is not a photocopy, is it? It is not. But if you look at the fax date on

the bottom, what does the fax date on the bottom say? Q. There is a fax date on the bottom, it says 727

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September 18, 1995, right? by fax? A. I don't know.

Now, are you saying you got this

I am just saying it has that

written on the bottom so, you know, you're trying to establish whether I got it on the 16th, I don't know. it have 9/16 written in handwriting? Q. A. In original ink, right? Well, I don't know. Well, I don't know if that Yes, it does. Does

is original ink, original or a photocopy. Q. Let's take a look, I apologize. I thought we

cleared that up. A.

Let's go back and have another look at it.

But my point is, is whether I got it on the 16th

or the 18th as part of the board meeting, I don't recall. Q. If you would like to take another look,

Mr. Mattingly, does that appear to be original ink rather than a copy or a facsimile? A. No, it looks to me like it is a photocopy of

original ink. Q. A. Q. That is your best observation? Yeah. Now, before you -- before you entered the board

meeting you had access to this document, right? A. Well, or at the board meeting. As I stated, I

don't know if it was before or if it was at the board meeting. 728

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Q.

Let's take a look at what has been marked as This is the

defendant's, excuse me, SCO Exhibit 570. September 15th, 1995 package.

And is it your testimony that you received a copy of this document? A. Q. A. Yes. And when did you receive it? Well, again, it is dated September 15th, so I

would assume that that being a Friday, I might have received that on the 15th. Q. And did you review that document at the time you

received it? A. Q. I'm sure I did. Let's look at the -- now you were not a member of

the Board of Directors of Novell, were you? A. Q. A. Q. A. Q. No. Never were? No. You weren't a voting member of the board, right? No. And in the board meeting that you attended on

September 18th, 1995 it was not your purpose to vote on any resolution, right? A. Q. No. So let's look at this package that you were given 729

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a copy of.

It says, if we can highlight the first full

paragraph, "dear board member" and then the first full paragraph. It says quote, "we are in the process of

negotiating long-term business relationships with SCO and Hewlett-Packard for the purpose of strengthening UNIX on the Intel Platform." Now let me just pause right here. Did you believe as

of September 15th that it was the intention of Novell to sell its entire UNIX and UnixWare business to SCO? A. Q. sentence. Yes. Let's go back then to Exhibit 570, the next Quote, "one of the key steps in this process is

the sale of a portion of our UnixWare business to The Santa Cruz Operation." Now certainly when you read this document you understood that what was being considered was a sale of a portion of the business, right? A. Well, yes, because we were retaining the royalty

stream from the SVRX royalties. Q. right? A. Q. Yes. And that next sentence which is a parenthetical In fact, that is referenced in the next sentence,

reads, "for example, we will be retaining our traditional royalty stream from UNIX SVRX source code which we -- which 730

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was approximately $50,000,000 for FY 1995;" correct? A. Q. Yes. And that suggests that the Novell royalty

payments that it received for UNIX SVRX source code alone was about $50 million; is that right? A. Q. A. Q. For that year. Fiscal year 1995, right? Correct. So you understood going into the board meeting,

that Novell had a very keen important interest in maintaining that royalty stream; right? A. Q. A. Q. To an extent, yes. Well, that was critical to Novell, right? Well, the revenue was clearly critical, right. And so you understood, for example, Mr. Bradford

and other members, excuse me, Mr. Frankenberg and other members of the board in order to maintain and enhance shareholder value would have felt a duty and obligation to do everything that they reasonably could to protect that royalty payment stream, right? A. That is what you would assume if you didn't

understand what we were trying to accomplish from a higher level strategic initiative. Q. Let me see if I understand what you're saying.

By your own testimony you believe that one of the things 731

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that was a part of the transaction between Novell and SCO, excuse me, Santa Cruz, was a provision whereby the royalty payments that Novell was receiving, $50 million according to this fiscal year in 1995, after the Asset Purchase Agreement would continue to come to Novell, right? A. Q. A. Q. Yes. That was very important to Novell, right? Yes. And so back to my question, that was a

fundamental part of the transaction, right? A. Q. It was. And so Novell and its officers and directors,

including its general counsel, Mr. Bradford, in your estimation would have been acting within the scope and duty of their offices in taking whatever reasonable and appropriate steps were available to them to protect that royalty stream, right? A. Within the framework of the strategic objectives.

If you would like for me to elaborate on that, I would be happy to briefly -Q. A. Q. Just answer my question. That is all I need.

Well, then the answer would be no. So it is your testimony under oath that it was

not within the purview of the members of the Board of Directors of Novell and its officers, including its general 732

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counsel, to take all reasonable steps to protect Novell's interest in that royalty stream? under oath here today? MR. SINGER: THE WITNESS: quit badgering me. MR. BRENNAN: THE WITNESS: I did not intend to badger you. The intention here and the strategic Objection, that is a compound question. I'm trying to answer your question so Is that your testimony

realm of what we're trying to do is to establish a common UNIX operating environment on Intel processors. So while we

absolutely wanted this $50,000,000 in revenue and it's very important to Novell because it was very heavy margin, that is almost 50,000,000 that goes right to the bottom line, very important, but more importantly for Novell was to try and get a common UNIX platform out there on Intel so that there was a viable alternative to what Microsoft was offering that was eroding NetWare away aggressively. So in the greater context of things, okay, sometimes short-term sacrifices for long-term gains have to take place. And so the purpose here is there would have been

nothing better for Novell than if SCO had been very successful with this UNIX business that they had acquired in successfully unifying the entire industry around their UNIX offering on X86 architecture. If they could have done that, that would have eroded 733

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our revenue streams here from this SVRX old royalties. in the greater strategic contest, that would have been a fantastic tradeoff for Novell. Q. A. (By Mr. Brennan) Now let me --

But

So that is what I'm referring to when I say You can't

they're trying to look after shareholder value.

take a rifle shot of an isolated thing and try to badger me on that. Q. badgered. A. Q. I was being badgered. I do hope that you can answer my questions. Now, Well, I apologize if you think you're being

in terms of the business objective that you understood of SCO, excuse me, Santa Cruz Operation when this transaction was being contemplated, what did you think Santa Cruz Operation was going to do with the development of the UNIX or UnixWare code? A. They were going to create a merged product. They

were going to try and establish an opportunity for all of the other OEM's that were out there, some of which were paying royalties that counted into this 50,000,000, to entice them to adopt this new version of an operating environment for their hardware platform and unify UNIX on Intel. Q. Your basic understanding was that what Santa Cruz 734

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Operation would do is take whatever rights they got to UnixWare and seek to further develop it and develop a product that would be a benefit to its customers; right? A. Q. A. Well, to their customers and the industry. The industry. And therefore, we established this agreement in a

fashion that NetWare components would be part of this future merged UNIX. So if you could get HP and Sun and Fujitsu and

Hitachi and everyone using that version of UNIX that had NetWare in it, then all of a sudden we could, you know, drag in and be the de facto networking standard inside of these UNIX operating environments. Q. You did not understand that the purpose of the

transaction was so that Santa Cruz Operation or any of its successors could turn on users of Linux, right? A. Well, that wasn't -- that wasn't even discussed

at that point. Q. Now, let's go back to what we were looking at, The next line in this board memo that

namely Exhibit 570.

Mr. Bradford says we are currently finalizing the terms of an Asset Purchase Agreement which would result in Novell owning, on a post transaction basis, about 16 percent of SCO. Do you see that? A. Q. Yes. And then it says, SCO's current market cap is 735

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

$300,000,000 at $10 a share. A. Q. Yes.

Do you see that?

Now, when you were involved back in 1995, did you

think that this transaction that was being discussed was one where SC -- excuse me, Santa Cruz Operation, abbreviated SCO here, would be paying Novell about $125,000,000 in cash? A. Well, I don't know about cash but consideration.

In my mind, it seemed like it was about $125,000,000 deal that came in various forms of consideration of which I think we looked at earlier. Q. Well for example, 16 percent of SCO's stock at

$10 a share, how much would that be? A. Q. A. I don't know. Far less than 125,000,000, right? Sure. But there were multiple components that

added up to what I recall to be that amount. Q. Do you recall at your deposition you thought that

the deal was such that SCO would be paying Novell $125,000,000 in cash? A. Q. in cash? A. Yes, I probably volunteered the 125. I didn't Yes. And you told the answer I think it is 125,000,000 Do you remember being asked that?

stay in cash. Q. Then you asked at you deposition are you even in 736

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the ball park? A. Q.

Do you remember that?

Yeah, I do. So when your deposition was taken two years ago,

you didn't even know what the financial terms of the agreement were, right? A. I don't recall what it was that built up to what

in my mind seemed like it was about $125,000,000 transaction. Q. Now, you were asked about the meetings of the I would like to turn back, if you

Board of Directors.

could, to what has been entered into evidence as Exhibit Z3. Now, let me ask you a question while you're looking at that. Who was present in the board meeting? A. Q. present? A. Um, well yeah, they were all pretty good about Those listed in the first paragraph. Do you recall each of those individuals being

showing up for the meetings. Q. My question is, do you recall each of those

individuals being present? A. Q. A. I don't. Did Larry Sonsini speak at the meeting? Well, Larry usually speaks at any meeting he So is he here? Without reading the minutes 737

participates in. Q.

Let me ask you this.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

themselves, are you able to answer my question as to whether Mr. Sonsini spoke at the meeting? A. Q. A. Q. A. Q. A. I'm sure he spoke at the meeting. What did he say? I don't remember. Did David Bradford speak at the meeting? I'm sure he did. What did he say? I don't remember.

(Whereupon, the reporter requested the attorney to slow down.) Q. (By Mr. Brennan) I'll slow down. Did Robert

Frankenberg speak at the meeting? A. Q. A. Q. A. Q. A. Q. A. Q. A. Q. I'm sure he did. What did he say? I don't remember. Did Jack Messman speak at the meeting? I'm sure he did. What did he say? I don't remember. Did Elaine Bond speak at the meeting? I'm sure she did. What did she say? I don't remember. Did Alan Ashton speak at the meeting? 738

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

A. Q.

Alan Ashton?

I don't think so.

Was he there?

Well, let me ask you.

Do you remember whether he

was even there? A. I don't. It looks like it was a telephonic

conference call. Q. Well, you're aware that Mr. Ashton was a

participant in the meeting, right? A. I am now. He was a member of the board member

but at some point he got off of the board and -Q. So without looking at the minutes, are you able

to tell me whether Mr. Ashton was even a board member at the time? A. Sure. I think he was a board member until we

divested of WordPerfect. Q. Thank you. Do you remember anything about

Mr. Ashton or his participation at the meeting? A. I don't remember. He did not necessarily

participate a lot verbally at meetings. Q. Okay. You're familiar with a board member by the

name of Ian Wilson, right? A. Q. A. Q. Yes. Did Mr. Wilson speak at the meeting? I don't remember. Are you familiar with a board member by the name

of John Young, right? 739

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

A. Q. A. Q. A. Q.

Yes. Did Mr. Young speak at the meeting? I'm sure he would have spoken. What did he say? I don't remember. You just don't remember what any of these

individuals said? A. Q. I do not. Are you aware that at the Board of Directors

Meeting, that David Bradford and Larry Sonsini reviewed the terms of the Asset Purchase Agreement? A. Q. A. Q. I am sure they would have. So they -That was the purpose of the meeting. They would have gone through the terms of the

agreement, right? A. Q. Yes. And so to your recollection, the Board of

Directors would have had the benefit of two attorneys, Larry Sonsini and David Bradford going through the terms of the Asset Purchase Agreement; right? A. Q. Correct. And the Asset Purchase Agreement that was before

the board included the exclusions of all copyrights and trademarks except the trademarks UNIX and UnixWare, right? 740

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

A. Q. A. Q.

That is what the document states. Well, do you remember that? I remember that as I read it. So now looking at the minutes of the Board of

Directors Meeting, your memory is refreshed, and you recall that Mr. Bradford, general counsel, Larry Sonsini, a member of the board, and also a senior partner at Wilson Sonsini went through with the board the terms and conditions of the Asset Purchase Agreement, right? A. Well, I think that they would have reviewed the

high-level terms and conditions in the Asset Purchase Agreement. They would have not gone through the agreement

and gone on a line-by-line basis. Q. A. done that. Q. A. You guarantee it, but you just don't remember? I don't remember. But we would never take a 50, Well, do you remember one way or the other? I don't, but I guarantee you they wouldn't have

60 page document and review that on a line-by-line basis. Q. A. Now -Never in the four years that I attended board

meetings would we do that. Q. Would the most important aspects of the

transaction be reflected in the resolution of the board? A. They should be. 741

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Q.

So to your understanding, the most critical parts

of the Asset Purchase Agreement put before the board would have been those that the board reached specific resolution on, right? A. Q. Yes. So then let's look at the actual resolutions They're on Page 2. And we're going

reached by the board.

to focus on the third paragraph where it says, "Novell will retain." If I could have that highlighted. Our patient "Novell will

jury has seen this language several times. retain."

So if I understand your testimony correctly, the

most important parts of the transaction would be part of the resolutions, right? A. Q. Yes. It says here as part of resolved, quote, "Novell

will retain all its patents, copyrights and trademarks (except for the trademarks UNIX and UnixWare)" right? A. Q. Yes. And that -- that is almost verbatim if not

exactly the language that was in the draft Asset Purchase Agreement that you and other people attending the board meeting received in advance of the board meeting, right? A. Q. A. Correct. There was no surprise, right? Well, I think once again, as I talked about when 742

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

you were trying to badger me about the $50,000,000, you can't take a rifle shot in a two month negotiation and a 60 page document and try and zero in on that. This is

referring to the fact that Novell bundled a number of its products that it retained that weren't part of this Asset Purchase Agreement. And Novell obviously would retain that

intellectual property, those copyrights and trademarks with those products that they retained. stating. Q. following. What I'm trying to find out from you is the First, there was -- there was no surprise That is what this is

foisted on the board with language that would appear in the ultimate signed Asset Purchase Agreement that would state that the excluded assets would include all copyrights and trademarks except the trademarks UNIX and UnixWare. you agree with that? A. Q. In a perfect world that should be the case. But would you agree with me that the members of Would

the board and other participants in the meeting, including yourself, were provided with the draft of the asset purchase agreement before the board meeting that included the very language I have been focusing on? A. Q. Yes. So would you agree with me then that there was no

attempt by Mr. Bradford or anyone else to try to somehow 743

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

surprise or trick the board? A. I don't believe it would have been their

intention, but I want to emphatically state that at this point in time, this is the eleventh hour, 59th minute and 59th second to all of the sudden assume that the UNIX copyrights weren't part of this transaction that we had been selling for two months would have definitely raised eyebrows. That is not inconsistent with this because Novell

is going to retain its patents and copyrights for NetWare, for Groupwise, or any of those products that they bundled with UnixWare. Q. Well, again, just so we can be very clear on

these minutes, one of the resolutions was that the explicit exclusion that we have talked about was a part of the resolution by the board, right? A. Well, on the Novell patents or the Novell

patents, copyrights and trademarks pertaining to Novell's retained products. Q. A. UNIX. Q. Well I -- I appreciate the fact that that is your My question is -It is what I spent two Now -I disagree with you saying that that applies to

argument here today. A.

It is not my argument.

months out in California negotiating with SCO, with 12 other 744

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

people from Novell and 12 from SCO. Q. A. Now do you know whether -There was never confusion in my mind. Mr. Mattingly, please. If you have

THE COURT:

something more that you would like to say, you will be given an opportunity with Mr. Singer who will have another opportunity to ask you questions. Please just answer

Mr. Brennan's questions as directly as you can. THE WITNESS: Q. I apologize. Now, there was also additional

(By Mr. Brennan)

resolutions.

If we could go down to the resolution on the

bottom of page 2 where it says reserve -- excuse me, resolved further? A. Q. Uh-huh (affirmative). Next one down. Next one. So there was an

additional resolution, quote, "That the terms and conditions of the Asset Purchase Agreement as set forth therein are hereby approved, subject to such changes and modifications of a non-material nature as the proper officers of Novell may consider appropriate or necessary." A. Q. Yes. Now do you know whether the language that Do you see that?

appeared in the Asset Purchase Agreement, excluding all copyrights and trademarks except the trademarks UNIX and UnixWare were changed prior to the signing of the Asset 745

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Purchase Agreement by either Novell or Santa Cruz Operation? A. Q. I don't know. Did you have any involvement whatsoever in any

amendments to the Asset Purchase Agreement? A. Q. A. Q. right? A. No. Well personal knowledge, I do have the I did not. You played no role in any of that; right? No. You have no personal knowledge about any of that,

knowledge that there was an Amendment 2 that tried to clarify some of the ambiguous legal work. Q. A. Q. Somebody told you that? Sure, it was front page news. But you don't -- you weren't involved in any of

that, right? A. Q. No. Now, I would like to ask you a bit about an

individual I think that Mr. Singer asked you about, Duff Thompson. A. Q. You're familiar with Mr. Thompson? You bet. Mr. Thompson became your boss after you stopped

working for Bob Frankenberg; right? A. Q. Yes. And you had a chance in your role working for 746

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Mr. Thompson to observe his work habits? A. Q. A. Yes. You began working for Mr. Thompson when? I'm not sure exactly what the time frame was, but

after I stopped working for Bob Frankenberg then I took a job with him as vice-president of corporate development and strategic relationships. Q. In that role, you would have had that position

with Mr. Thompson before you engaged in any discussions with Santa Cruz Operation; right? A. Q. Yes. And you would have continued working with

Mr. Thompson until he left the company; right? A. Q. A. Yes. When did Mr. Thompson leave Novell? I am not sure exactly. It would have been after

the WordPerfect divestiture. Q. A. Q. Sometime in 1996? That sounds reasonable. Okay. So is it fair to say that from the time

period at least before any discussions were had with Santa Cruz Operation and until at least when Mr. Thompson left in 1996 you worked with and for him? A. Q. Yes. Now based on your observation of him, would you 747

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agree that Mr. Thompson was not really involved with the details of the Novell Santa Cruz transaction? A. No. Duff had specific responsibilities as the

senior executive overseeing that and participated in all of the high-level senior executive type meetings. He was not

on the ground for two months out in California day-to-day like the rest of the team was. Q. If we could go back to your deposition, let's

look, again this is your deposition taken more than two years ago on January 19th, 2007? A. Q. Yes. If you would turn with me to Page 70 and counsel Do

we're going to read from Line 17 through 22 on Page 70. you have that, Mr. Mattingly? A. Q. Yes.

The question, "Is it fair to say that, based on

your personal knowledge, that Duff Thompson was not really involved in the details of the Novell, Santa Cruz transaction?" Do you see that question? Your Honor, I would ask that the entire

MR. SINGER:

answer be shown to the witness and blown up on the computer screen. MR. BRENNAN: a problem. THE COURT: All right. 748 Well, I'm happy to do that. That is not

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Q.

(By Mr. Brennan)

And then we'll see your answer

that does spill over to the top of Page 71. Your answer, "you know, I would say that that's probably a fair statement because the real detail guy in this was Ed Chatlos, and of course, Ed and I were peers and reported to Duff. But he was a general counsel and formerly

with WordPerfect and was the senior or executive vice president of Corporate Development at Novell." So would you agree with me today, as I believe you agreed with Mr. Brakebill who asked you this question, that Mr. Thompson was not really involved with the details of the transaction? A. Well, as I stated there in my deposition and as I

earlier stated today, he was the senior executive overseeing the transaction, but that doesn't mean that he is the detail guy that is negotiating every aspect of the transaction. I think it is all consistent with what I said back then. So It

is consistent with the dialogue you and I had about whether Tor was drafting the APA or whether he was just focussing -THE COURT: THE WITNESS: THE COURT: Q. Mr. Mattingly, thank you. -- overseeing the drafting. Thank you. Is it true that in fact to your

(By Mr. Brennan)

observation Duff Thompson was quote "checked out" unquote from Novell during this time period? 749

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A. Q. A. Q.

No. Did you ever hear anyone suggest that? Yes. So just so I understand, you have heard people at

Novell suggest that Duff Thompson was checked out during that time frame; right? A. Q. Yes. And to your observation, was it commonly known at

Novell during this timeframe, that is discussions about the Novell Santa Cruz Operation transaction, that Mr. Thompson was checked out? A. Q. we might. No. Okay. Let's look at your deposition, again, if And if I could

This time we'll turn to Page 71.

direct your attention, I'll be reading from lines 18 through 23. Question, "would you say it was commonly known amongst the people who were working on the Novell, Santa Cruz transaction that Duff was checked out? Answer, yeah. I

would think that -- I would think that generally people would have agreed with that sentiment." MR. SINGER: Your Honor I would ask the prior question

and answer also be presented to the witness. MR. BRENNAN: Your Honor, they certainly will have

that opportunity on their redirect, but if he would like I'm 750

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happy to do the same thing. MR. SINGER: rule, Your Honor. THE COURT: it now. MR. BRENNAN: Q. I'm happy to do it right now. I think we probably ought to have you do I think this falls under the completeness

(By Mr. Brennan) So let's look on Page 71 the

question at line seven through the answer that continues to line 17. Question, "and what was your understanding of what that meant, Duff was checked out during this period of time preceding the Novell -- during the Novell, Santa Cruz transaction? Answer, well, Duff came into Novell and

assumed that position of, you know, senior executive over corporate development, but he was not in the office that often and participated in the senior executive level meetings inside of Novell, as well as the senior executive level meetings when we had high level meetings with, you know, maybe Alok Mohan and Doug Michels." A. Q. Yes. Now, were you also aware of a circumstance during Do you see that?

the course of discussions over The Santa Cruz Operation where you yourself believed that he had checked out? A. Q. No. Do you remember an all hands meeting held in 751

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California where Mr. Thompson didn't show up? A. Q. Yes. And you considered that to be in your own mind

evidence that he had checked out? A. No. Um, time frame wise, you asked if that was

during that SCO transaction and I don't believe that was during it. Q. I think it was after. So you thought that Mr. Duff Thompson was checked

out after the SCO transaction? A. to be. Q. Now, you believed that under the Asset Purchase Well, I think that is what people understood him

Agreement all UNIX related paten