SCO Grp v. Novell Inc

Filing 867

NOTICE OF FILING OF OFFICIAL TRANSCRIPT for dates of March 24, 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 by removing restricted text on 7/19/2010 (rks).

SCO Grp v. Novell Inc

Doc. 867 Att. 1

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(Recess) THE COURT: MR. SINGER: Ready, counsel? There was one item we wanted to bring

up before the jury returns and before we formally rest our case, and that relates to the introduction of just these two figures from the 10-K that relate to the net worth of Novell, which come in for punitive damages. MR. NORMAND: I misunderstood Your Honor's

directive, after speaking with my colleagues, and I thought your point was when you said let's see how if goes, that I could see if Mr. Jones's direct would allow me to use the document with him. Apparently that was not how the rest of

the members of my team interpreted what Your Honor said, so I didn't make an effort to use it with him because I thought the scope of his direct -MR. BRENNAN: Your Honor, on that subject I don't

think there was a misunderstanding and there was no attempt made to use it. I think they have run out of the right now

to try to do that with Mr. Jones. MR. NORMAND: I just actually saw Mr. Jones in the

hall, so if we are going to get to the point of the silliness of calling Mr. Jones back or asking Mr. Russell to stand up to answer four or five questions, we can do that, but I don't know on what grounds Novell is going to dispute the substance of this 10-K.

Dockets.Justia.com

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THE COURT:

I would agree that perhaps you

misunderstood, but the Court's intention was that you be allowed to make the offer and a lay foundation, then there could have been an objection, but if you misunderstood it is the Court's problem and I want you to be able to solve it. So we can either have Mr. Jones stay and bring him back, or if you want to have another witness called that can accomplish the same thing, whatever is most efficient. MR. BRENNAN: Your Honor, just as were considering

the point, there is an issue regarding Mr. Jones's examination by Mr. Normand. The Court may recall that

during Mr. Normand's cross-examination of Mr. Jones he made an express, explicit reference to previous trial testimony, not deposition testimony, trial testimony in the context of asking Mr. Jones about copyright ownership issues. Novell believes that that has left the impression in the minds of the jury that there was a previous trial related to copyright ownership issues, and given the limitations we have been faced with explaining the outcome of these various matters, perhaps a suggestion in the jury's mind that that issue in a previous trial was decided differently than now in this proceeding. This, again, is a case where in our view plaintiff's counsel through its own questioning has opened the door and has created an issue of confusion. What we

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would ask the Court to do to resolve that point of confusion, is to instruct the jury that there was in fact a previous trial between Novell and SCO, and not on the issue of ownership but others, that a judgment was entered in Novell's favor and that that wasn't reversed by the Tenth Circuit. Otherwise, the jury is left to wonder about all of

this by virtue of the way SCO's attorneys conducted the examination. I would just note as well, Your Honor, that it is my understanding that there had been a previous agreement that if there was to be any reference to previous testimony, that it would be phrased in that terminology and not trial testimony. That agreement was not observed. THE COURT: MR. NORMAND: Go ahead, Mr. Normand. Well, I can speak to the issue or

Your Honor can speak to it first. THE COURT: The Court's recollection is that the

questions asked about prior testimony, and it was not prior trial testimony, and it was Mr. Jones who raised the issue about it being trial testimony. That was concerning to the

Court, but he then went on with a broad explanation about how this was at the end of the trial and in trying to work through something at the trial and so on and so forth. I don't think it can be laid at the feet of Mr. Normand, when he asked a question about in your prior

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testimony is this not what you said? MR. BRENNAN: Would the Court view it differently

if, in fact, the question that referenced trial was in the question rather than the answer? MR. NORMAND: Your Honor, my recollection is as I can't say that I

yours, that Mr. Jones raised it.

remember chapter and verse how the question was phrased. Mr. Acker asked me where the testimony came from and I told him it was from trial, and Mr. Jones may have heard me speak with Mr. Acker. I took care not to ask Mr. Jones any substantive questions, after his long answer and explanation about the trial, I didn't ask him anything about the trial. trying to stay away from that issue. I was

One, I don't think the

jury picked up on this issue that Mr. Brennan has raised. Two, the solution proposed is grossly overbroad. At most,

you should tell the jury there was a prior trial and that it was on different issues than are at issues here, but I don't think the jury is drawing a big distinction between the trial and the deposition testimony. MR. BRENNAN: Your Honor, it seems to me that

speculation by SCO's counsel about what the jury is drawing or not is always drawn in their favor. SCO always puts it

in the position of, well, this is what I think the jury would have done or wouldn't have done and it is favorable to

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them. I sit on the side of a defendant who is being accused of slandering title and damages have been sought of $250 million. I believe that we have every right and

entitlement to make it clear to the jury what really has happened, when SCO's attorneys have invited the problem. THE COURT: my problem. I am not sure that they did. That is

Even if he had simply made reference to trial

testimony, I don't believe that by itself would have raised the issue. I believe it was Mr. Jones's explanation in

great detail about what happened at the trial that may have raised any type of issue at all. I think in fairness and to avoid the issue, the Court will instruct the jury when they return that there was reference in Mr. Jones's testimony to a prior trial, but understand that it is not the same trial involving the issues in this case and just leave it at that. MR. BRENNAN: Thank you, Your Honor.

Back to the question of how we ought to proceed in light of the misunderstanding regarding how to seek to introduce information from Mr. Jones, may I confer with my colleagues for one minute? THE COURT: (Time lapse) MR. BRENNAN: Your Honor, our suggestion in light Go ahead.

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of the apparent misunderstanding, is that the parties stipulate to the admission of -- I believe it is form 8-K. Is that correct? MR. NORMAND: MR. BRENNAN: 10-K.

10-K. That it simply be admitted into

evidence without further discussion or explanation. MR. NORMAND: If that has built into it that it

can be addressed at closing, then we would -THE COURT: If it is an admitted exhibit, then it

certainly can be referred to at closing. MR. BRENNAN: With that understanding, we would

just stipulate to the admission of the 10-K. THE COURT: MR. NORMAND: Your Honor. MR. SINGER: It will be redacted to just reflect What is it marked as? It is marked as SCO Exhibit 552,

the information on I think the first page with respect to the market capitalization of Novell, and on page 26 with respect to the stockholder equity of Novell. MR. BRENNAN: Our understanding, of course, is

that the admission of that redacted 10-K would be subject to our reservation of all rights and arguments relative to the entitlement to punitive damages and otherwise, Your Honor. THE COURT: Certainly.

Exhibit 552 as redacted, and in the form and way

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that Mr. Normand just represented it would be redacted, will be admitted. (Plaintiff's Exhibit 552 was received into evidence.) MR. BRENNAN: THE COURT: Thank you, Your Honor. Ms. Malley, please bring the jury in.

(WHEREUPON, the jury enters the proceedings.) THE COURT: Ladies and gentlemen, before we

continue with the examination of Mr. Messman, I do need to instruct you on one thing. During the examination of Mr. You may

Jones there was a reference to a prior trial.

remember that there was an exchange between Mr. Normand and Mr. Jones about Mr. Jones's prior testimony in another trial. That trial did not have anything to with the issues that you are going to be asked to address in this trial, so you should not pay any attention unduly to the fact that there was a prior trial, nor draw any conclusions about what that trial was about. Go ahead, Mr. Singer. MR. SINGER: BY MR. SINGER Q. Mr. Messman, before the break I was asking you about Thank you, Your Honor.

the August 4, 2003 letter. Do you recall that question?

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A. Q.

Yes. I was asking you if there was any new information which

came to light between the June 6 press release and the August 4th letter. Do you recall that? A. Q. I recall the question. Was there any such additional information that came to

light between June 6 and August 4? A. Q. I don't recall. Would it be fair to say that you're not aware of any

such new information? A. It could be that I wasn't aware of it, but I don't

recall that I was not aware of it. Q. Well, is it fair to say that you don't think there were

any new materials? A. If I thought there were new materials, I would have

said I recalled them. Q. As far as you know, there wasn't anything different

that Novell had on August 4th that it didn't on June the 6th? A. Q. I don't recall. And yet the company reached a completely different

position in its August 4th letter than in the one on June the 6th, correct? MR. ACKER: Your Honor, that is argumentative and

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it misstates his testimony. THE COURT: MR. SINGER: BY MR. SINGER Q. Did you after August the 4th authorize Novell to file Sustained. I will rephrase the question.

copyright registrations for UNIX copyrights in September and October of 2003? A. Q. Yes. Were you aware that those copyrights covered the same

versions of UNIX that AT&T had obtained copyright registrations on and which were transferred -- the copyright registrations were left with Santa Cruz back in 1995? A. I was not aware that they were left with Santa Cruz. I

was under the impression that they were still registered in AT&T's name. Q. Did you have an understanding that those were the same

copyrights which were being referred to in your June the 6th letter? A. Yes, they were. It was my opinion and I was of the

opinion that they were the same. Q. Did you have an understanding in September and October

of 2003 that SCO had at that time copyright registrations in its name for those copyrights? A. I was informed that SCO had filed registrations on top

of the AT&T registrations.

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Q.

Now, in October and November -- September, October and

November you didn't go public with respect to any of those registrations, correct? A. They were a matter of public record. If anybody wanted

to go get them they are at the U.S. patent office. Q. But you didn't issue a press release about them,

correct? A. Q. you? A. Q. I would have to see the letter to remember. It is Exhibit 105. This letter was not published as a press release, correct? MR. ACKER: BY MR. SINGER Q. A. Q. At the time, in August of 2003. I don't think it was. Now, did you approve a press release that was issued on Objection, vague as to time. Correct. You didn't publish your August 4th letter either, did

December 22nd, 2003, which is SCO Exhibit 517? A. I'm familiar with that press release. I was involved

with all press releases, so I'm sure I approved it. Q. And you understood that this press release stated that

Novell believes that it owns the copyrights in UNIX and has applied for and received copyright registrations pertaining

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to UNIX consistent with that position; is that correct? A. Q. Yes. Now, why was December 22nd, 2003 chosen as the date to

inform the public about copyright registrations that you had obtained in August or September or October? A. Q. I don't know. Well, I would like to show you a demonstrative exhibit, I would like you to assume for

which is a calendar of 2003.

the moment that we have accurately indicated the dates of SCO's earnings releases for the calendar year 2003 as having been February 26, May 28th, August 14th and December 22nd. Mr. Messman, as former chairman of a public company you understand that the earnings release dates are important dates for a public company, correct? A. Q. Yes. Now, May 28th, we have already covered was the date

that Novell issued its first public claimed ownership of the UNIX copyrights, correct? A. Q. That is correct. Is it your understanding that that was a coincidence,

that that also happened to be the date that SCO announced its earnings for the preceding quarter? A. Q. It was coincidence. December 22nd, 2003, when SCO issued its earnings for

the year to date period before that, also happened to be the

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date that you issued a press release pertaining to the copyright registrations and reasserting ownership of UNIX copyrights, correct? A. That is the date we released this press release,

correct. Q. Do you have an understanding as to why that precise

date was chosen? A. Mr. LaSala came to me and asked me about putting the

information that the public didn't have on our Web site and I approved doing it. I did not approve the date. I assumed

he was going to do it as soon as he could. Q. So you don't have any understanding of why that

specific date was chosen? A. Q. I do not. Do you believe it is just a coincidence that that also

was the date that SCO's earnings were released? A. Q. I think it is coincidence. Now, there are only two public statements by Novell in

2003 asserting copyright ownership, correct, the one in May and the one in December? correct? A. There were a number of letters. I don't know which May 28th and December 22nd,

ones were public, but there were a number of letters between us and SCO where we asserted the ownership of copyrights and patents.

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Q.

I think my question -- maybe I didn't phrase it

clearly -- but was about public assertions like in press releases. correct? A. I would have to see all of the press releases to answer I can't recall. Those were only on May 28 and December 22nd,

that question. Q. A. Q.

Are you aware of any others? Not off the top of my head. So assuming that those are the only two public

statements by Novell in calendar year 2003 asserting copyright ownership, and if my assumption is right that those are the dates in which you have SCO earnings releases, both of those fell on dates, two of the four dates that SCO released earnings for the whole calender year and that was a coincidence, correct? A. Assuming that those were the only two announcements

that we made, that is a coincidence. Q. 2003? A. I had a lot of things to do and I was not following Mr. Messman, were you following SCO's stock at all in

SCO's stock. Q. In fact, weren't you aware of the fact that in May of

2003 SCO's stock was going up and down? A. I knew that the volume of press releases from SCO was I wasn't following their stock.

going up and down.

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Q.

I would like to ask you to take a look at what is clip

eight of your deposition. MR. SINGER: MR. ACKER: MR. SINGER: 3. Mr. Calvin, would you play that clip. (WHEREUPON, the following deposition clip was played.) Q. Were you subsequently aware that SCO's stock price Mr. Calvin -Can I have the page and line? This is page 56, line 20, to 57, line

declined 30 percent in the immediate aftermath of your press release? A. SCO's stock price was going up and down during that

period of time based on what was happening and what Darl was saying in the marketplace. I can't recall what it did on

any given day when we were making these. BY MR. SINGER Q. A. Q. Do you agree that that was your testimony, Mr. Messman? Yes. You agree that you were aware that SCO's stock price

was going up and down during that period of time in 2003? A. Q. I was aware, but I was not following it. In January of 2004 did you approve the announcement of

a Linux indemnification program? A. Yes.

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Q.

I would like you to look at SCO Exhibit 756. Was this a press release on January 13, 2004 announcing

that indemnification program? A. Q. Yes. And in connection with this release did you state in

the statement that says Novell's unique -MR. SINGER: evidence. MR. ACKER: BY MR. SINGER Q. If we turn to Novell's unique legal rights, and we go It is already in evidence. Let me first move Exhibit 756 into

down a little further on the page -MR. SINGER: BY MR. SINGER Q. You stated at that time that Novell had rights which Mr. Calvin, expand that.

include, and if we turn to the next page, the third point was as previously confirmed by Novell, copyright registrations on UNIX SVRX releases consistent with Novell's position that it retained ownership of these copyrights. You approved that? A. Q. Yes. Now, are you aware, Mr. Messman, that Chris Stone, who

at the time was the number two man in the company, your vice chairman, made a statement at an open source development conference in March 2004 regarding the ownership of UNIX?

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A.

I am aware that Chris made several presentations to

several trade groups, but I am not aware of the particular one you're talking about. Q. Are you aware of a conference where Mr. Stone stood up

and said publicly that we still own UNIX, referring to Novell still owning UNIX? A. Yes. I mean, I think that is true so it wouldn't

bother me that he said that. Q. UNIX? A. Q. Yes. How long after that statement did you wait before You think it is a true statement that Novell still owns

asking Mr. Stone to leave Novell? A. We sent Mr. Stone away to Harvard for I think it was a He was gone for a period of time.

nine to 12 week program.

In may have been May or June before he left the company. Q. A. Q. Was Mr. Stone asked to leave Novell? No. Thank you. THE COURT: MR. ACKER: Mr. Acker. Just a very few questions, Your Honor. CROSS EXAMINATION BY MR. ACKER Q. Mr. Messman, take a step back a little bit and tell the

ladies and gentlemen of the jury about your undergraduate

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and graduate degrees. A. I have a degree in chemical engineering from the

University of Delaware in 1962, and a degree in business from the Harvard Business School in 1968. Q. A. Q. A. Were you at Novell in the beginning of the company? Yes. Can you explain that for the jury, please. Well, I had been running a consumer products company

through most of the seventies and I joined Safeguard Scientifics -- I believe it was in the 1980s, late '80, and Safeguard had made a significant investment in a company called Novell Data Systems, Inc. It was in trouble. I was I did

asked to come out to Provo and figure out what to do. that.

After an analysis that took maybe three or four weeks, I called back to the head office and said I think we ought to shut it down. They instructed me to do that. It was not

just as if we could just turn the key overnight and shut the thing down. We decided it would be better if we did an

orderly liquidation, because we had lots of spare parts that could be used by other manufacturers of the equipment. We

started to try to sell the parts to various people in the industry. In the course of terminating various people I ran across three young fellows from Brigham Young University who

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were programmers on contract to Novell. To make a long story short, they had a product that I recognized the potential of. I decided, and I convinced

Safeguard, who wanted to get out of the business, I convinced them to recapitalize the company, and we changed the name from Novell Data Systems to Novell, Inc. C.E.O. I was the

My job was to get this business off the ground with

a software strategy, and ultimately to hire my replacement. I hired Ray Norda as my replacement, and Mr. Norda gets all the credit for having built the company to what it is today. Q. What was the product that the three young programmers

from BYU had? A. It was NetWare. It was a piece of software that

allowed computers to interact with one another at the same time. It was something that hadn't been done at that point

in time. Q. After Mr. Yarrow became the C.E.O., did you remain on

the Novell board? A. Q. Mr. Norda. I'm sorry. After Mr. Norda became C.E.O., did you

remain on the Novell board? A. I went off the board for I think about a year, because

I left Safeguard and went to work in the cable business in New York City. the board. When they got ready to go public I rejoined

Other than a period of maybe a year, I have been

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associated with Novell since 1980. Q. A. Q. Z-3. Do you recognize that as the minutes of the Novell board of directors meeting on Monday, September 18, 1995? A. Q. A. Q. I do. Were you present for that telephonic board meeting? I was. Was there a discussion at that board meeting regarding Were you on the board in September of 1995? I was. Let me show you what we have admitted into evidence as

the asset purchase agreement? A. Q. Yes. Is this the meeting at which that asset purchase

agreement was approved? A. Q. Yes. Was there a discussion at the meeting about whether

copyrights would be included or excluded from that sale? A. It was -- I don't know whether to say mandatory or not,

but it was important that they were not included, because we felt SCO was a company that was a little bit of a fledgling company, and we were worried that this revenue stream that we were getting from the UNIX licenses would be at risk, and we insisted that we keep the copyrights and patents so that if anything happened to SCO that we would be able to get

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full control of the revenue stream. Q. Was the fact that the copyrights were to be excluded

from the deal, was that discussed at the board meeting on September the 18th, 1995? A. Absolutely. That was the key part of the deal that

convinced the board to do that deal. Q. Let me fast forward now and ask you a few questions

about some documents and dates. On May 28, 2003 Novell issued a press release claiming ownership of the UNIX copyrights. A. Q. Yes. Tell the ladies and gentlemen of the jury why Novell

did that. A. Well, I think the marketplace both for UNIX and for

Linux was being bombarded by accusations that Mr. McBride was making that were in our opinion untrue. He was claiming

that it was UNIX and Linux -- he was claiming that all Linux users, end users, not just the companies but the end users, probably should have to pay a license to use Linux. It is

an open source community which develops Linux, which is all about not paying any licenses. It is free software.

This was a very confusing time and a tumultuous time. UNIX customers and UNIX licensees were calling to ask what is going on with my license? Linux customers were delaying

their orders until they figured out what was going on with

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regard to having to pay a royalty. Q. Was that press release put out to protect Novell's

business interests or to harm SCO? A. We did it to protect Novell's interests and to protect

our shareholders and to protect the revenue stream. Q. How many conversations have you had with Mr. McBride in

your life? A. I have had one telephone conversation with him and one

meeting with him. Q. The telephone conversation, was that on the evening of

June the 5th? A. Q. It was. Can you describe that conversation for the jury,

please. A. Well, it was late at night because everybody in my I was still there. The call came in

office had gone home.

and, therefore, I answered it. calls that come in directly. McBride.

I normally don't answer the I answered it and it was Mr. I said, what are you I said, no, I

He says, have you got it?

talking about?

He said, well, amendment two.

don't have amendment two. He made a few comments, and I don't recall all of the conversation, and we hung up. Shortly after that a fax copy

came and somebody in our office that was still around brought it into my office and showed it to me. Mr. McBride

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called again and said, now do you have it? I did have it.

I said obviously

He then said it took him three to four I said we hadn't had it until I said,

months to find it himself. you sent it.

He asked me what did I think of it.

well, I have not had a chance to review it and contemplate what it means. He said, have you talked to I.B.M. about this? I said

I wouldn't have talked to I.B.M. if I just got it, but I talk to I.B.M. about a lot of things. and excited. He was quite agitated

I didn't know him well enough to say whether

he was mad, but we hung up on the phone call and I proceeded to then talk to my general counsel the next morning. Q. At any point during that conversation did you say words

that in any manner conveyed to Mr. McBride that you believed that SCO owned the UNIX copyrights? A. Q. A. Q. Absolutely not. Any doubt in your mind about that? None. Another press release was put out on December the 22nd

of 2003. Can you tell the ladies and gentlemen of the jury why Novell did that? A. Well, again, it was a one-sided conversation that Mr.

McBride was having with the marketplace and at trade shows and at press conferences and in press releases and things of

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that nature.

We thought he was wrong.

The Linux community, which is a very open community, wanted to know what was going on. We felt that the best way

to tell our side of the story was not to interpret the documents and make press releases, that we ought to just put the information out on our Web site so that everybody could see it and make their own judgments. Q. One final topic. At some point in the fall of 2003 Novell began the acquisition of a Linux company SUSE Linux? A. Q. Yes. Can you tell the ladies and gentlemen of the jury why

it was that Novell sought to acquire SUSE Linux? A. Well, I think that there was a great deal of concern

about what was going to happen to Linux if Mr. McBride's accusations were true. We were looking for a way to solve

that problem, and one of the ways was for us to acquire a Linux operating system company. I think it was late September or early October when we were made aware that SUSE Linux was available for sale. got the brochures from the investment bankers and we read them, and we thought that there was a possibility that we would be interested, so we started a process of making bids. We won the bid, which allowed us to then negotiate exclusively with the sellers. The sellers were venture We

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capitalists, not the company itself.

Venture capitalists

owned the company and they were interested in maximizing the price that they got. We did our due diligence and then closed the deal I think in the first or second week of January of 2004. Q. In connection with that deal, did I.B.M. subsequently

purchase $50 million worth of Novell stock? A. They did, at my suggestion. I was worried that we were

paying $210 million for a company that had very little revenues but had great technology. I was trying to figure We decided that

out how to get comfortable with that risk.

we would call some of the bigger players in the industry to figure out whether they would join us in some way in supporting us. I called Bill Zeigler, who was the executive at I.B.M. that I was dealing with on a regular basis, and I asked him if he would be willing to give us some comfort that we were doing the right thing. He asked me, well, what form did I I didn't think we wanted

think the comfort would come in?

him to buy a piece of the SUSE Linux deal, because then we wouldn't own 100 percent, so I suggest an investment in Novell. So he said, well, how much do you think we ought to invest? Well, it has to be something that the marketplace He said, well, what is

would think would be significant.

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that number?

I said, I think it is $50 million. I think it was a week or

He said he would consider it.

two later, and I can't recall exactly the time frame, but he came back and said they would do it. We did not close that

transaction until after -- I think it was in March or early April, so the SUSE Linux acquisition closed in January, and they made their investment in late March or early April. Q. A. Q. 2004? 2004. Was there any relationship at all to the events

involving SCO in 2002 and 2003 and I.B.M.'s investment in Novell regarding SUSE Linux? A. There is no connection. MR. ACKER: THE COURT: That's all that I have, Your Honor. Mr. Singer. REDIRECT EXAMINATION BY MR. SINGER Q. 754. Do you recognize this to be a memorandum that Mr. Bradford sent to you and other members of the Novell board of directors on September 15, 1995, three days before the board meeting that you have testified about? A. I don't remember it, but I'm sure that I got it if it I was a director. I am Mr. Messman, I would like you to take a look at Exhibit

was sent to the board of directors.

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reading it now. Q. Why don't you take a look at it. You can see on the

first page that it says there is certain information pertaining to SCO which is being included, including item E, a term sheet for the proposed transaction. Do you see that? A. Q. Yes, I do. Would you turn to the term sheet. MR. SINGER: Mr. Calvin, would you blow up the

first two items, what Novell transfers and what Novell retains. BY MR. SINGER Q. The term sheet that you received right before the board

meeting from the general counsel, Mr. Bradford, said that Novell transfers to SCO UNIX technology assets and UnixWare technology assets, correct? A. Q. I see that. And it says Novell retains all patents, that it will

have a license back to UNIX and UnixWare for internal use and resale in bundled products, and Tuxedo and other miscellaneous unrelated technology. Do you see that? A. Q. I see that. Do you see anywhere on that list of what Novell retains

that word copyrights?

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A. Q.

Not on this list. This was the term sheet that accompanied a memorandum

sent by the general counsel to the board of directors in advance of the meeting, correct? A. Q. Yes, sir. Now, let's take a look at the board minutes which are

Exhibit Z-3. MR. SINGER: Mr. Calvin, can you expand the first

page of the minutes where it says proposed sale of UnixWare business and equity investment in SCO? BY MR. SINGER Q. Do you understand that this summarizes the discussion

of what was being discussed by the board in connection with that transaction? A. Q. Yes. Do you see where it says Mr. Bradford and

Mr. Frankenberg first confirmed that the directors had received the materials on several transactions and then there is a summary of the discussion. That discussion then

continues, and I would like you to read these three paragraphs, and I am going to ask you to read the first paragraph on the next page which is a continuation of this. So you have my question in mind, my question is going to be, do you see any reference in this summary of the discussion at the board meeting to copyrights?

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A. Q.

Not in the first three paragraphs. Look and see if there is any reference to that in the

fourth paragraph. A. Q. No, there is no reference there. The only reference is in the text of the resolution,

which then follows. MR. SINGER: resolved. BY MR. SINGER Q. After the resolution there is a summary which says that Mr. Calvin, blow up where it says

Novell will transfer to SCO its UNIX and UnixWare technology assets -A. Q. Where are you, Mr. Singer? This is on the resolution. It is highlighted on the

screen. Do you see that? A. Q. Yes. The only reference to copyrights is then in the third

paragraph under the word resolved, where it says Novell will retain all of its patents, copyrights and trademarks, correct? A. Q. Yes. It also goes on to say that there would be a worldwide

license back to UNIX and UnixWare for internal use and resale in bundled products, correct?

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A. Q.

Yes. And that would be a license back of the technology

being sold, correct? A. Q. Of the technology being sold, right. One of the copyrights that was not being transferred

was NetWare copyrights, correct? A. Q. Yes. Now, it is your testimony that you have a specific

recollection of the copyright issue being discussed even though it is not captured in the discussion summary in the board of director minutes, correct? A. Yes. It is the prerogative of boards to make decisions

based on discussions that take place. Q. Even though it was not mentioned as something being

retained in a term sheet that was provided to the board in advance of this meeting? A. Q. Yes. Terms change as the board discusses them.

Is it your testimony that the transaction changed from

Friday the 15th of September to when the board met to consider this on the 18th of September? A. All I can tell you is that we were very concerned about

any transactions with Santa Cruz Operation, which I have characterized as a fledgling corporation, and we were worried that we were turning over this very valuable stream of royalties to a company that may not make it, so we

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retained the copyrights and patents. Q. You have a distinct recollection in now 2010, that at

this board meeting that was 15 years ago, that the board was told the copyrights were not being sold, correct? A. It was a point of discussion at the board meeting and

that is how we resolved it as this resolution shows. Q. Do you recall anything else that Mr. Bradford said with

respect to the assets being told and not sold, leaving aside what you have just seen in the minutes, do you recall anything else except the copyrights and patents not being sold? A. Well, that was the most important from my point of view

and I remember that, but there probably were other things that I don't remember. Q. Isn't it true that at least as of the time of your

deposition in 2007 that you couldn't recall anything else that Mr. Bradford said with respect to the assets being sold or not sold other than your recollection about copyrights and patents? A. If my earlier deposition said that it is probably true

because my memory is -- I'm 70 years old and my memory is getting worse. Q. Let's take a look at clip two, page 27, 19 to 28, 03,

to see if that is in fact what you said. MR. ACKER: Your Honor, he just confirmed the

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deposition testimony. playing the clip. THE COURT:

I don't know what the purpose is of

Unless there is something contrary to

what he testified to in the deposition testimony, I don't think it would appropriate for you to show it. BY MR. SINGER Q. As you sit here today, Mr. Messman, you agree that at

the time of your deposition the only thing that you recall Mr. Bradford saying was this recollection that you have regarding the copyrights and patents? A. Q. Yes, because it was the most important thing covered. With respect to the press release that was issued after

the transaction, I would like you to look at SCO Exhibit 526. This was a press release issued September 20, 2005. I am sorry. 1995.

If we scroll down, why don't we scroll down a little bit further for a moment. Do you see that it says Santa

Cruz Operation and Novell today announced a definitive agreement for SCO to purchase the UNIX business from Novell? Do you see that? A. Q. I see that. Do you see that under the agreement Novell will receive Then

approximately 6.1 million shares of SCO common stock?

if we go down to the next page, do you see that there is a quote from Robert Frankenberg, chairman and C.E.O. of

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Novell? Do you see that? A. Q. Yes. Do you have any reason to believe that this was not the

approved joint press release by Novell and SCO after the announcement of the transaction? A. Q. I don't think it is a joint press release. Well, you wouldn't quarrel with Mr. Frankenberg's view

on that, since he was the chairman, would you? MR. ACKER: Your Honor, I just object if he is

referring to the testimony of another witness in the trial. I don't think -MR. SINGER: testimony. MR. ACKER: I don't think Mr. Frankenberg is I don't think I expressly referred to

quoted, Mr. Frankenberg saying that this is a joint press release and -MR. SINGER: Now it is Mr. Acker who is referring

to the testimony of witnesses. MR. ACKER: knowledge. release. He needs to ask this witness's

Ask him if he thinks this is a joint press That is the question. THE COURT: It is not appropriate for you to be

asking this witness to comment on the testimony of another witness. If you can elicit testimony that would not do

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that, please. BY MR. SINGER Q. Do you think Mr. Frankenberg would be in a position to

say, since he was chairman and C.E.O. of Novell at the time, whether this was an approved press release on behalf of Novell as well as Santa Cruz? A. Q. He was in a position to know what the deal was. Do you see in the next paragraph it says according to

the terms of the agreement SCO will acquire Novell's UnixWare business and UNIX intellectual property, correct? A. Q. I see that. Now, I would like to turn to the issue that you

discussed in cross-examination about the timing of I.B.M.'s investment in Novell. April of 2004, correct? A. Q. I think that is when it closed. But, in fact, the commitment of I.B.M. to invest $50 You referred to that as March and

million was made in November of 2003, correct? A. I think we made an announcement about that. Whenever

that was is when it took place. Q. A. What is you best recollection? I thought it was sometime in December, but you could be

right that it was earlier. Q. Okay. During that same period of time, the fall of

2003, are you aware of whether or not Novell took action to

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waive SCO's legal claims against I.B.M.? A. Q. Yes, we did. In fact, you did that on June 12th and in October and

then again in February of 2004, correct? A. I can't recall the February one, but I think the first

two are correct. Q. In the middle of that process is when I.B.M. made a $50

million investment in Novell? A. Q. I think it is coincidental. The two are unconnected.

In fact, you didn't need the $50 million in order to

purchase SUSE Linux because you had $750 million in cash on your balance sheet at the time? A. That is correct. We didn't need the money, but we

needed their commitment to support us in the marketplace. Q. It is just a coincidence that these things all happened

at the same time? A. They didn't happen at the same time. The waiver of the

patents and the copyright issues and the investment by I.B.M. were at different times of the year. Q. Well, are you aware of whether or not I.B.M. asked

Novell in June of 2003 to exercise its waiver rights at that time? A. I am not aware of that. MR. SINGER: THE COURT: Thank you. Mr. Acker?

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MR. ACKER:

I don't have anything else, Your

THE COURT: MR. SINGER: THE COURT: MR. ACKER: THE COURT: about being re-called.

Counsel, may this witness be excused? Yes. Mr. Acker? Yes. Thank you.

Mr. Messman, you do not need to worry I would caution you, however, to

please not discuss your testimony with any other witnesses in this case or in the presence of any other witness, or communicate to anyone who will be a witness the nature of your testimony in any way. THE WITNESS: THE COURT: When can I find out what happens? I am confident that you'll find out

very quickly after the rest of us do. THE WITNESS: THE COURT: being re-called. Thank you. Again, you don't have to worry about

You may return to your place of residence.

Mr. Jacobs. MR. JACOBS: Your Honor, our next witness is

Michael DeFazio by deposition. (WHEREUPON, the following deposition was played.) Good morning, Mr. DeFazio. Good morning. Were you the head of the organization responsible for

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product management, marketing and licensing terms and conditions for the UNIX System V operating system from 1984 until 1995, first with AT&T, then with USL and finally with Novell? A. Q. I was the head from 1984 to 1995. After 1995, Mr. DeFazio, when Novell sold certain of

its UNIX related assets to the Santa Cruz Operation, Inc., which is now known as Tarantella, did you continue to be involved in Novell's remaining UNIX business in, primarily in an administrative and advisory capacity? A. Yes, I had to help out to make sure Novell implemented I also had a different

its part of the agreement.

responsibility within Novell in that period. Q. What were your responsibilities with respect to the

UNIX operating system during the period from 1984 through 1995? A. My initial responsibilities when I transferred into the

organization was to head the product management organization. Over the course of time I assumed increasing I always maintained the product I then assumed I assumed

responsibilities.

management organizational responsibility. responsibility for licensing operations.

responsibility for our overseas affiliates in Japan and Europe. I assumed UNIX marketing responsibility and I

assumed UNIX development responsibility.

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By the time we were in USL, I was the executive vice president responsible for the overall UNIX system business and within Novell, after we were merged into Novell, and some period of time we consolidated UNIX operations within Novell, and I was named executive vice president and general manager of the so-called UNIX system group within Novell. Q. And in January 1994 did you become executive vice

president of UNIX systems group of Novell? A. Q. Yes, I did. Did there come a point when you met with Mr.

Frankenberg and Mr. Michaels to discuss the possibility of a sale of Novell's UNIX business to Santa Cruz? A. Yes, there was in, I believe, it was July of 1995,

perhaps June. Q. Would it be fair to say Mr. DeFazio that at that time

that you were the senior executive most knowledgeable within Novell regarding UNIX? A. Q. Yes, that's correct. And did you spend, well, how much time, Mr. DeFazio,

did you spend negotiating that transaction with Novell? A. I met with Doug Michaels and Bob Frankenberg and out of I then with Ed

that meeting we agreed to pursue a sale.

Chatlos and Ty Mattingly, Bob Frankenberg's assistant, traveled and met with Doug Michaels and some of this colleagues in Santa Cruz with a specific proposal for how we

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would do that sale. We came out of that meeting with a high-level agreement. I went back and we put together a team headed by

Ed Chatlos to work the details of how we would implement that, and I spent essentially all of my time subsequently working in one way or another aspects of that deal. Now, most of my time after that meeting was spent working within Novell itself on all of the details, architecting the way we would do it. Working the time

frames and working the large number of personnel issues that were associated with this since the organization had probably 400 people at that time. So I can't give you a number of hours other than to say this was my prime job in that period and there was a strong team of people, Novell people, Novell lawyers, Novell outside lawyers working with their counterparts at Santa Cruz to put together the details of the deal. Q. On September 19, 1995 Novell entered into an asset

purchase agreement with Santa Cruz; is that right? A. Q. That is correct. Is it agreeable if during this deposition we refer to

the asset purchase agreement between Novell and Santa Cruz as the A.P.A.? A. Q. Yes. Did there come a point when Novell sold certain UNIX

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assets to Santa Cruz pursuant to the A.P.A.? A. Q. Yes. Do you have any understanding, sir, as to whether

Novell retained any rights with respect to the UNIX System V source code licensing business? A. Q. Yes. Including those under the I.B.M. related agreements and

the Sequent related agreements? A. Novell retained substantive rights under the agreement,

as we had two UNIX system businesses and really sold Santa Cruz one of them. Q. And referring you to the last sentence of paragraph 10

of your declaration would you agree that the rights retained by Novell were what you considered to be significant, substantive rights? A. Q. Yes, I would. I believe you testified earlier that you understood

Novell to have retained significant assets in that sale; is that right? A. Q. That is correct. And did the retained assets include, as you understand

it, important intellectual property and significant substantive rights under the UNIX System V source code license agreement such as the I.B.M. related agreements and the Sequent related agreements?

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A. Q.

Yes, that's correct. And was responsible for negotiating the sale of

Novell's UNIX business to Santa Cruz? A. Q. A. Ed Chatlos and I were primarily responsible. How many UNIX businesses did Novell then have? The way we looked at the UNIX business, we parsed it A UnixWare business and a

into two components at that time.

source licensing or legacy System V business. Q. And what was the purpose of each of those businesses,

if you would briefly describe it? A. The UNIX System V source licensing business was the

outgrowth of the original way that we provided UNIX system technology to the marketplace where we provided it in source form customers were adapted it to their marketplace needs, they in turn would ship a binary version of the operating system to their customers, pay us a royalty. The UnixWare business was Novell actually developing a final binary form version of the UNIX operating system that was targeted to Intel specific X86 computer systems, basically PCs and servers and providing that product, that operating system product in binary form into the marketplace. Q. And initially did Santa Cruz express an interest in

purchasing both of the businesses? A. Yes, when Ed Chatlos, I and Ty Mattingly visited them,

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as I related earlier, the idea was that we would sell all of the UNIX system, both the UNIX system business to Santa Cruz. Q. A. And is that in fact what happened? No, it is not. The value that we, Novell placed on the

combination of those two businesses was much, much larger than Santa Cruz was in a position to pay for the business, and so they basically in that meeting I referred to said this is too expensive, whether we agree with your value or not, it's still too expensive. We, Santa Cruz, in the form

of Doug Michaels came up with an idea and said, why don't we just buy the going forward business, the UnixWare business from you. Why don't you, Novell, retain the source

licensing business. And it was very clear to me very quickly that since most of the financial value we placed on the combination of those two businesses was attributable to the UNIX source licensing royalty stream that in fact that idea by Doug Michaels was very good, and although we had to rework some of the financials that that idea would allow us to get to an agreement, whereby we could provide the UnixWare business to SCO at a price much closer to what they could afford. Q. Do you recall, Mr. DeFazio, what value you attributed

to both of the businesses combined? A. I believe that our initial proposal going into that

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meeting was for a composite value of about $800 million. That's my recollection. Q. Do you have a recollection of what portion of the $800

million you attributed to the source code portion of the business? A. Certainly the majority of that 800 million would be

attributed to the source code business, but I don't recall the specific fraction. Q. Do you recall how Novell reacted to the Santa Cruz

proposal? A. I reacted very well to it, because it struck me that

this was a way that we would close a financials value gap that looked to be otherwise insurmountable. So I

complimented Santa Cruz, I said this is a very creative idea, and I said it's good with me. I'm going to take it

back to my management, meaning Bob Frankenberg. And it was very good from a Novell viewpoint because although it meant we did not receive the kind of immediate payoff from Santa Cruz that we had estimated the value of the two businesses would be, what we did receive was a substantial payment in cash and equity in Santa Cruz Operation in excess of $100 million, but we maintained the source legacy business. At the time the $800 million I mentioned had two components, the source business in UnixWare, much of the

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UnixWare component was projected growth from the future. The value that UnixWare was contributing in 1995 was much smaller and so by implementing this proposal Novell was able to in essence maintain or keep the vast majority, 80 to 90 percent of the revenue stream from the two UNIX businesses while shedding the vast majority of the expenses associated with those two business, shedding perhaps 90 percent. Novell maintained a royalty stream that was financially significant, very high margin, because the costs going forward after the sale would be very, very small. Q. As you understood the deal, Mr. DeFazio, did Novell So

generally receive any royalties payable under the UNIX System V source code license agreements including the I.B.M. related agreements and the Sequent related agreements and Novell paid Santa Cruz a five percent administrative fee for its services in collecting such royalties? A. Yes, that was the way that we implemented the deal.

The royalties would flow through to Novell from Santa Cruz and they would be paid five percent for their work in administering that. Q. And you said twice, I believe, that Novell retained

significant assets following the sale; is that right? A. Q. That's correct. Do you recall that there was a provision in the A.P.A.

known as 4.16B?

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A. Q.

Yes. Let me refer you, if I might, to Exhibit 8 to your And in specific the Section 4.16 B. It's at

declaration.

page 24 of Exhibit A to your declaration. A. Q. Page 24 says 4.16. Right. And if you just look down the page you'll see a Do you see that, it begins buyer shall not.

subsection B. A. Q. Yes.

Would you just take a minute to refresh your memory as

to the contents of that section. A. Q. Yes. Yes.

Now, substituting Santa Cruz for the term buyer and

Novell for the term seller, Section 4.16B provides in part Santa Cruz shall not, comma, and shall not have the authority to, comma, amend, comma, modify or waive any right under or assign any SVRX license without the prior written consent of Novell, period. In addition, at Novell's sole

discretion and direction Santa Cruz shall amend, supplement, modify or waive any rights under or shall assign any rights to any SVRX license to the extent so directed in any manner or respect by Novell. In the event that Santa Cruz shall

fail to take such action concerning the SVRX licenses as required herein, Novell shall be authorized and hereby is granted the right to take any action on Santa Cruz' own behalf.

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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.

Do you see that? Yes, I do. Let me ask you, Mr. DeFazio, if you would tell me

please what you understood to be the intent of this provision? A. Yes. My understanding of this when we came back with

the notion that we would retain one business and sell the other one, that was a high-level concept. And to then go

forward and do the A.P.A., which you can see from here is perhaps 150 or 200 pages of documentation took a lot of work on the part of SCO people and Novell people and outside attorneys and the drafting of the document I was not involved in, but the teams were involved. However, I had

provided specific guidance recognizing that this future royalty stream would be very significant to Novell. And not

knowing exactly how we would craft the terms in the document to protect that royalty stream I had said we have to bulletproof, and I used those words, bulletproof, that's a business term I think not a legal term, bulletproof the parts of the agreement to make sure that Novell's ongoing financial interests, which I knew would be very significant, would be maintained, that there would be no loop holes possible for Santa Cruz to be able to somehow get around Novell collecting that -- that royalty. So with that general guidance of bulletproofing the

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team then went off and parts of the A.P.A. reflect the team's creation or ideas on how to achieve that bulletproofing and this section is an example of that. this is part of the implementation to make sure that Novell's ongoing lucrative financial interest would be maintained and assured. Q. Was it your understanding that the A.P.A. at the time So

was intended to transfer the copyrights for UNIX to Santa Cruz? A. No. The A.P.A. as it was written retained it and my

understanding was that the retention was a way the team crafted the words to implement the goal of bulletproofing this financial asset stream. I was not involved in any

discussions within Novell or certainly with Santa Cruz that talked about transferring the copyright or not transferring it. It just appeared this way in the A.P.A. and that's what

was executed. Q. So your testimony concerning the copyright issue is

based on your reading of the A.P.A.; is that fair to say? A. Well, it is based on two things. It's my reading of

the A.P.A., but also my recalling that I was not involved in any discussions one way or the other keeping the copyright or transferring it. It just wasn't discussed with me and

wasn't discussed -- wasn't an issue that was escalated and certainly wasn't discussed in my meetings with Santa Cruz.

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That would be, you know, kind of a specific of the deal, not part of the broad discussions on the whole concept of what we were trying to do with the A.P.A. Q. But that would have been something within Ed Chatlos'

realm of responsibility if there were discussions about that? A. If there was a discussion and an impasse on that

question that certainly would have been escalated to me. Q. If there was not an impasse but there was a discussion

was that something that would have been within Mr. Chatlos' responsibility? A. The entire A.P.A. if there was no impasse or

disagreement between the two parties generally that would just take place and until it was reviewed for signature a lot of the details we wouldn't even have been, I wouldn't even have been aware of. Q. And Mr. Chatlos would have been the person, the point

person for those portions? A. He should have been aware of those details as team

leader, yes. Q. If Novell owned the copyrights to UNIX why did Novell

need to take out a license from Santa Cruz to be able to use the UNIX product? A. Yeah, I was going to say that the way that you phrased

that to me is more a legal question.

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Q. A.

Do you have any sense from a business perspective? Yeah, the business perspective is that we had

transferred -- the asset to Santa Cruz, Novell wanted to retain rights to do some things with that technology in the future. The copyright retention portion that I spoke to

earlier I linked to more this goal of bulletproofing and making sure that Novell's binary legacy revenue stream was protected. The technology license gave Novell the right, if

they had wanted it to, for example, add Unix software into its products like NetWare and in turn ship those to the market, irrespective of what we were doing with our legacy UNIX source business, our source licensee, so that's kind of two different things. Q. Well, if Novell was bulletproof, to use your term, with

respect to the ownership of the copyrights, then why did it need a license as a business perspective from Santa Cruz in order to be able to use that UNIX technology? A. It was bulletproofed relative to the revenue stream.

It needed the license because this had nothing to do with the revenue stream. This was to give Novell the rights to

take UNIX and very specifically combine it with its core product which was NetWare if it chose to do and ship those into the marketplace. Q. Now, you talked about I think you used the term

bulletproofing in connection with this provision you're

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aware, are you not, that I.B.M. bought a fully paid up license with respect to UNIX System V in 19 -- in the mid 1990s, right? A. Q. Yes, we discussed that earlier, 1996, April. So, if that was the case, then what need was there on

the -- on behalf of Novell to waive rights, source code rights with respect to agreements that had already been fully paid up? What bulletproofing or what interest was

being protected conceivably have been protected by Novell under those circumstances? A. I think you'd have to ask the Novell the need, what I

tried to say in conjunction with this and these exhibits 382 and so forth is that what Novell did was consistent with my understanding of their rights in the A.P.A. I did not

try to comment on their motivations for doing that, which is what I think you're asking when you say the need. Q. Well, was it your understanding that Novell under the

A.P.A. had the right to modify provisions or cancel provisions of SVRX source code agreements, software agreements without having any -- without protecting any interest that they had at stake in connection with the royalty rights that they had retained? A. Novell had the right if they felt a legacy licensee was

violating the license to take some actions and Novell had the right to ensure which is part of the bulletproofing that

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the old Santa Cruz company could not take any actions which would mess up its arrangement with those customers. MR. JACOBS: That completes Novell's introduction This was from a

of testimony from Michael DeFazio. deposition dated January 13, 2005. THE COURT: MR. NORMAND: designations. THE COURT: MR. NORMAND: and a half minutes. THE COURT: MR. NORMAND: Okay. Thank you.

Your Honor, SCO has some counter

Do you know long those would be? I have been told it is about eight

Let's go ahead then.

Thank you.

(WHEREUPON, the following deposition was played.) Q. Are you currently represented in connection with this

case by Mr. Jacobs as well? A. Q. A. Q. Yes, I am. And who is paying his fees? His fees are being paid for by Novell. You signed a declaration in this case I believe in

October of 2003? A. Q. A. Yes. Who had drafted that declaration? I.B.M. drafted it as a result of the meeting that I had

with them.

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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.

MR. NORMAND:

Your Honor, there was a problem with

the videotape during the deposition, so this following clip did not make it onto the videotape. I would propose to read

the question and answer into the record and then have the videotape continue. MR. JACOBS: MR. NORMAND: No objection, Your Honor. Question, after the sale, did your Answer,

work focus on Novell's broader network strategy? yes.

After the sale I took over a group that had to do with

Novell business processes that span the entire company, and was sort of in support of what Novell was trying to accomplish with a new networking strategy that it was implementing post UNIX. I still continued, as I said

earlier, with my administrative oversight responsibilities for any residual UNIX system related activities. THE COURT: All right.

(WHEREUPON, the following deposition was played.) Do you have an understanding, Mr. DeFazio, as to

whether there was an amendment two to the A.P.A.? A. I have an understanding that there was an amendment two

to the A.P.A. Q. And in paragraph 53 of the declaration you say that you

were not involved in negotiating amendment number two, and that you do not have personal knowledge as to what it was intended to accomplish and are unable to address what it

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means. A. Q.

Is that an accurate statement?

That is correct. Were you directly involved in negotiating the April

1996 amendment or amendment X? A. Q. No, I was not. During much of your examination by Mr. Marriott you

were referring to a particular document or holding a document in front and reading it while he was asking you questions, was that the declaration that I.B.M. drafted for you? A. Q. This is my declaration of October 2003, correct. And is that the document that you've had in front of

you during your entire examination by Mr. Marriott? A. Q. Yes. Who requested that you provide that declaration in

connection with this case? A. At the end of my first meeting with I.B.M. Mr. Marriott

and/or his colleague Gabe Saltarelli asked me if I would be willing to provide a declaration and I said I would be willing to do so if someone else did the initial drafting. Q. -A. Q. Yes. -- counsel? You, with reference to the asset purchase agreement, do And that someone else who did the drafting was I.B.M.

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you remember being asked questions about that agreement? A. Q. Yes. Okay. The negotiation team from Novell was led by a

person named Ed Chatlos; is that correct? A. Q. That's correct. Is it your view that Mr. Chatlos would have a strong

understanding of Novell's intent with respect to that transaction? A. Q. Yes. Is there anybody who had a better understanding of

Novell's intent with respect to that transaction than Mr. Chatlos that you know of? A. Well, I certainly think that I had an understanding of

the intent and I certainly think that my boss, Bob Frankenberg, had an understanding of the intent, and I'm sure that our outside counsel had an understanding. Ed was

in the top tier of people with a very good understanding, yes. Q. Ty Mattingly was another one. And you said that you did not have any involvement with

amendment number two to the asset purchase agreement; is that right? A. Q. That's correct. Were you still employed by Novell at at the time of

amendment number two? A. Yes, I was.

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Q.

So is it fair to say that after putting the negotiation

team together and attending the first meetings that you discussed with Mr. Marriott that Mr. Chatlos was the person who had primary day-to-day responsibility for the negotiation of the A.P.A? A. That's my perception, and it was Ed Chatlos I looked to

during this process as, you know, the principal. Q. And with respec