Exhibit 2.1
THIRD AMENDMENT TO
AGREEMENT AND PLAN OF REORGANIZATION
THIS THIRD AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION (this
"Amendment") is entered into as of February 9, 2001, by and among Caldera
Systems, Inc., a Delaware corporation including for all purposes Caldera
Surviving Corporation, ("Caldera"), Caldera International, Inc., a Delaware
corporation ("Newco") and The Santa Xxxx Operation, Inc., a California
corporation ("SCO").
RECITALS
A. On August 1, 2000, Caldera, Newco and SCO entered into an
Agreement and Plan of Reorganization, which was amended on September 13, 2000
and December 12, 2000 (as amended, the "Agreement") which all parties to the
Agreement wish to further amend pursuant to the terms and conditions of this
Amendment.
B. All terms not otherwise defined herein shall have the meanings
set forth in Section 13.15 of the Agreement.
NOW, THEREFORE, the parties hereby agree to amend the Agreement as
follows:
1. The introductory sentence of Section 1.3(a) of the Agreement is hereby
replaced with the following text:
(a) Issuance of Newco Common Stock. At the times set forth below, and
subject to the terms and conditions of this Agreement, Newco will, in
consideration for the contribution and transfer of the Contributed Stock and
Contributed Assets to Newco as contemplated by this Agreement, perform the
following:
2. Section 1.3(a)(i) of the Agreement is hereby replaced with the
following text:
(i) Consideration.
(A) At the Effective Time, Newco shall (i) issue to SCO
that number of issued, fully paid and nonassessable shares of Newco Common Stock
equal to the sum of 16 million shares less the Escrow Shares issued to SCO and
placed directly into escrow by Caldera pursuant to Section 1.3(b) below (but not
less any shares issuable pursuant to options granted or assumed pursuant to
1.3(a)(iii)), with the number of shares to be appropriately adjusted in the
event of any Caldera stock split, stock combination, reclassification or other
similar capital change (the "First SCO Certificate"), (ii) pay SCO cash
consideration equal to twenty-three million dollars ($23,000,000) (the "Cash
Consideration"), by the combination of a wire transfer of immediately available
funds and the cancellation of SCO's then outstanding indebtedness to Caldera and
(iii) issue to SCO a non-interest bearing, secured promissory note (the "Secured
Note") in the amount of $8 million (subject to certain rights of setoff as
provided
therein), secured by the assets of the OpenServer Business, and in the form
attached as Exhibit 1.3(a)(1).
(B) During the three year period (the "Earn-out Period")
beginning with the first, full Caldera Fiscal Quarter following the Effective
Time (provided that if the Effective Time falls within the first five days of
any Caldera Fiscal Quarter, then the Earn-out Period shall begin with such
Caldera Fiscal Quarter), SCO shall be entitled to receive from Newco on each
Earn-out Payment Date 45% of the amount by which OpenServer Revenue for the
prior four full Caldera Fiscal Quarters is higher than the cumulative Earn-out
Thresholds for such periods (such amount, an "Earn-out Amount"). Notwithstanding
the intention of this provision that the parties shall share in the future
revenue of the OpenServer Business as operated by Newco, such operation of the
OpenServer Business shall be in Newco's sole discretion, and Newco shall be
under no obligation to provide any minimum level of support to the OpenServer
Business.
3. Section 1.3(b) is hereby replaced in its entirety with the following
text:
(b) Escrow. As soon as practicable after the Effective Time, and
subject to and in accordance with the provisions of Section 10 and the Escrow
Agreement, a form of which is attached as Exhibit 1.3(b) (the "Escrow
Agreement"), Caldera shall deliver to the Escrow Agent on behalf of SCO a
certificate representing one million six hundred thousand (1,600,000) shares of
Newco Common Stock (the "Escrow Shares"). The Escrow Shares distributed to the
Escrow Agent shall be held in escrow and shall be available to transfer to
Caldera for certain damages as provided in Section 10. To the extent not
transferred to Caldera for such damages, the Escrow Shares shall be released to
SCO, all as provided in Section 10 and the Escrow Agreement.
4. Section 1.4(b)(i)(B) is hereby amended by adding the following phrase
to the end of such section:
", except for rights associated with the Commit Transaction
Receivables"
5. Section 1.4(b)(i) is hereby amended by adding the following sentence
to the end of such section:
Notwithstanding Sections 1.4(b)(i)(A)-(C), Newco's continued use
of certain Excluded Assets as part of UnixWare and OpenServer, and sale of
certain unbundled and bundled products including certain Excluded Assets,
is set forth in Exhibit 1.4(b)(i).
6. A new Section 1.4(c)(i)(D) is hereby added to the Reorganization
Agreement:
(D) all Liabilities relating to Commit Transaction
Receivables.
7. Section 4.2 of the Agreement is hereby amended by adding to the end of
such section the following:
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"Without limiting the foregoing, SCO shall be required to budget at
least (and shall not be required to budget more than) $21.4 million for the
maintenance of the Group Business during the three month period ended March 31,
2001, of which amount, $1.9 million shall be applied specifically to SCO's
professional services line of business. If the Effective Time has not occurred
prior to March 31, 2001, then SCO shall be required to budget an amount for the
three month period ended June 30, 2001 to be agreed by the parties at such time
and which shall be commensurate with historical expenses to revenue ratios.
8. Sections 4.12, 4.24 and 5.14 are hereby deleted in their entirety.
Exhibit 4.12 is also deleted in its entirety.
9. A new Section 5.20 shall be added as follows:
5.20 Reimbursement for Pre-paid Commissions and Royalties. During
the period beginning on the Effective Time and ending on the one year
anniversary of the Effective Time, Newco shall, on a quarterly basis, reimburse
SCO for any sales commissions or royalties previously paid by SCO that relate to
Commit Transaction Receivables that are actually collected by Newco during such
period.
10. All references in Section 8.1 to "February 28, 2001" are hereby
replaced with "May 31, 2001", and the reference to "March 31, 2001" in such
section is hereby replaced with "June 30, 2001".
11. Section 8.4(a)(i) is hereby replaced in its entirety with the
following text:
(i) If this Agreement is terminated by Caldera pursuant to
Section 8.1(i), then SCO shall promptly pay to Caldera (by wire transfer or
cashier's check) a nonrefundable fee equal to five hundred sixty thousand
(560,000) multiplied by the average closing price of the Caldera Common Stock
for the ten (10) days following the public announcement of this Agreement (the
"Termination Fee") within two (2) business days following delivery of the notice
of termination by Caldera pursuant to Section 8.2;
12. Section 10.1 is hereby replaced in its entirety with the following
text:
Escrow Fund. In accordance with Section 1.3(b) hereof, Caldera
shall deliver to the Escrow Agent one million six hundred thousand (1,600,000)
shares of Newco Common Stock (the "Escrow Fund"). The Escrow Fund shall be held
by the Escrow Agent for a period of one year from the Effective Time pursuant to
the terms set forth in the Escrow Agreement. The Escrow Fund shall be available
to compensate Caldera Surviving Corporation and Newco pursuant to the
Indemnification obligations of SCO.
13. Section 10.4 is hereby replaced in its entirety with the following
text:
Limitations on Indemnification. SCO shall not have any liability
under this Section 10 unless the aggregate amount of Loss attributable exceeds
$1,000,000, and, in such event, SCO shall be required to pay the entire amount
of such Loss from the first dollar thereof. SCO shall not have liability for any
Loss in excess of the amount determined by multiplying (i) one million six
hundred thousand (1,600,000) by (ii) the Caldera Closing Price,
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except that as such Losses relate to the SCO IP Rights, SCO shall not have
liability for any Loss in excess of the amount determined by multiplying (i)
eight million (8,000,000) by (ii) the Caldera Closing Price. Notwithstanding the
preceding sentence, there shall be no limitations on liability pursuant to this
Section 10 relating to intentional fraud or misrepresentation by SCO.
14. Current Exhibit 1.4(b) of the Agreement is hereby amended and replaced
in its entirety with Attachment A.
15. Current Exhibit 13.15A of the Agreement, the Contributed Assets, is
hereby amended to have added to it the contents of Attachment B to this
Amendment.
16. Current Exhibit 13.15B of the Agreement, the Contributed Contracts, is
hereby amended to have added to it the contents of Attachment C to this
Amendment.
17. Current Exhibit 13.15D of the Agreement, the Group Products, is hereby
amended to have added to it the contents of Attachment D to this Amendment.
18. Current Exhibit 13.15E of the Agreement, the Permitted Encumbrances,
is hereby amended to have added to it the contents of Attachment E to this
Amendment.
19. The definition for "Contributed Assets" contained in Section 13.15 is
hereby replaced in its entirety with the following text:
"Contributed Assets" shall mean (i) those assets, including real
property assets, that are owned, leased or licensed by the Contributing
Companies that are (A) listed on Exhibit 13.15A attached hereto, (B)
Intellectual Property Rights used in the production, development, support or
marketing of the Group Products or (C) used in the Group Business, (ii) all
Commit Transaction Receivables and (iii) all Contributed Contracts to which any
of the Contributing Companies is a party, but in all cases excluding the
Excluded Assets.
20. The following definitions are hereby added to Section 13.15:
"Caldera Fiscal Quarter" shall mean any three-month period ending
on any of the following days of the year: October 31, January 31, April 30 or
July 31.
"Commit Transaction Receivables" shall mean that portion of
accounts receivable arising from transactions involving Group Products for which
a contractual right to payment or true up is not yet due SCO at the Effective
Time. By way of example, and to the parties current knowledge, Exhibit 13.15F
reflects the Commit Transaction Receivables that would exist if the Effective
Time were as of the date hereof.
"Earn-out Amount" is defined in Section 1.3(a)(1)(B).
"Earn-out Payment Date" means the 45th day following each of the
fourth, the eighth and the twelfth full Caldera Fiscal Quarters following the
Effective Time.
"Earn-out Period" is defined in Section 1.3(a)(1)(B).
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"Earn-out Threshold", with respect to any particular Caldera
Fiscal Quarter, shall be as set forth on Exhibit 13.15G.
"OpenServer Business" means the business of SCO and its direct
and indirect subsidiaries with respect to the OpenServer Products, including
without limitation the business of developing, manufacturing, marketing,
licensing, distributing, using, operating, installing, servicing, supporting,
maintaining, repairing or otherwise using or commercially exploiting the
OpenServer Products; provided, however, that the OpenServer Business shall in no
way include any other line of business of Newco, notwithstanding that such other
line of business may incorporate OpenServer kernel or library code that
implements less than 15% of the OpenServer Application Binary Interfaces.
"OpenServer Products" means all software, development tools,
compilers, libraries, driver kits, utilities, and the operating system software
and other products in whole or in part based on or developed from or for the
AT&T Unix System V version 3.2 kernel and any succssor to that kernel, including
the kernel, the code base, the application program interfaces, the application
binary interfaces, derivative works thereof, and those products offered under
the names or marks "Appliance Server", SCO Admin, SCO OpenServer Enterprise
System, SCO OpenServer Host System, SCO OpenServer Internet FastStart System, or
SCO OpenServer Desktop System, SCO Virtual Disk Manager, SCO Doctor, SCO
ARCserve/Open, SCO Merge, SCO OpenServer SMP(TM) Licenses, SCO PPP from Morning
Star, SCO Internet Security Package, SCO Internet to NetWare Gateway, and
Interscan VirusWall, and all successors, upgrades, enhancements, releases, new
versions, and updates to any of the above that have been developed or acquired
by the Contributing Companies as of the Effective Time.
"OpenServer Revenue" shall mean all revenue relating to the
OpenServer Business, less product returns and provisions for bad debt.
"Secured Note" is defined in Section 1.3(a)(1)(A).
21. The definitions for "Caldera Percentage Interest" and "SCO Percentage
Interest" found in Section 13.15 are deleted in their entirety.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
Agreement and Plan of Reorganization as of the date first above written.
THE SANTA XXXX OPERATION, INC.
a California corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxxx Xxxxxxx
President and Chief Executive Officer
CALDERA SYSTEMS, INC.
a Delaware corporation
By: /s/ Ransom H. Love
-----------------------------------------
Xxxxxx Love
Chief Executive Officer
CALDERA INTERNATIONAL, INC.
a Delaware corporation
By: /s/ Ransom H. Love
-----------------------------------------
Xxxxxx Love
Chief Executive Officer
[SIGNATURE PAGE TO AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION]
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