Attorneys for The SCO Group, Inc.

This Agreement is entered into between UNIX System Laboratories, Inc. ("USL"), having an office in Morristown, New Jersey, and Sequent Computer Systems Inc. ("SEQUENT"), having an office in Beaverton, Oregon. The effective date of this Agreement shall be the later of the dates of execution by the respective parties.

WHEREAS, USL intends to develop and market an SVR4 MULTIPROCESSING VERSION as contemplated in UNIX International's "UNIX System V Roadmap" dated January 1990; and

WHEREAS, in connection with this activity USL desires to acquire certain licenses from SEQUENT to EXISTING SEQUENT TECHNOLOGY; and

WHEREAS, USL also desires SEQUENT to assist USL in developing CONTRACT SVRX ENHANCEMENTS for integration into an SVR4 MULTIPROCESSING VERSION; and

WHEREAS, SEQUENT is willing to grant such licenses and undertake such development under the following terms and conditions.

NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement, the adequacy and sufficiency of which are acknowledged, the parties agree as follows.

DEFINITIONS

Except for names of parties and Section headings, or unless otherwise defined in this Agreement, capitalized terms shall have the meanings specified in this Section.

SVR4 MULTIPROCESSING VERSION means any commercially available post-Release 3 version of UNIX System V (including any pre-release load) that incorporates MULTIPROCESSING ENHANCEMENTS.

EXISTING SEQUENT TECHNOLOGY means SEQUENT's multiprocessing software technology listed in Section 4 of the current version of the Statement of Work set forth in Appendix A hereto, and shall further include all other multiprocessing technology embodied in (1) any commercially available SEQUENT product in existence as of the effective date of this Agreement with functionality equivalent to UNIX System V, Release 4; and (2) any other SEQUENT nonproduct multiprocessing technology in existence as of the effective date of this Agreement required to produce said SEQUENT products.

MULTIPROCESSING ENHANCEMENTS means software (including related documentation) that implements any multiprocessing features and functionality considered by USL for incorporation in an SVR4 MULTIPROCESSING VERSION.

CONTRACT SVRX ENHANCEMENTS means any MULTIPROCESSING ENHANCEMENTS developed by SEQUENT for USL pursuant to the Statement of Work. The term includes any intermediate loads and any other work in progress resulting at any time from any such development activity.

INSOLVENCY of a party means any of the following: (i) the party becomes insolvent or admits in writing its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors; (ii) a voluntary or involuntary petition under any federal, state or foreign bankruptcy etc, receivership statute, or the like, as they now exist, or as they may be amended, is filed by or against the party; or (iii) a petition is filed with respect to such party by anyone, or an application for a receiver of such party is made by anyone, and such petition or application is not resolved favorably to such party within sixty days; or (iv) such party ceases to conduct business in the manner contemplated by this Agreement.

STATEMENT OF WORK

SEQUENT shall undertake the activities set forth in the Statement of Work (either in the form existing as of the effective date of this Agreement or as it may be amended from time to time by written agreement between the parties) to assist USL in the creation of CONTRACT SVRX ENHANCEMENTS.

LICENSES TO AT&T

A. Subject to paragraph B of this Section, SEQUENT grants to USL a fee-free, non-transferable right to use, reproduce and modify EXISTING SEQUENT TECHNOLOGY and to sublicense and distribute (and to authorize its customers to further sublicense and distribute) such software, and modifications thereof, in source and binary form in accordance with standard USL licensing provisions. Such right shall be exclusive to USL, except that SEQUENT shall retain the right to grant licenses (including sublicenses down the chain of distribution) in the ordinary course of its business. USL will not knowingly transfer EXISTING SEQUENT TECHNOLOGY, on a stand-alone basis and in the form in which it is provided to USL by SEQUENT, for purpose of competitive analysis by SEQUENT's competitors. With respect to any portion of such EXISTING SEQUENT TECHNOLOGY that USL has not incorporated into an USL product offering, or otherwise put into use in its business operations, within five (5) years after the effective date of this Agreement, USL will not unreasonably refuse to consider a request by SEQUENT that USL relinquish its ability to license such unused portion hereunder for the purpose of permitting SEQUENT to license such unused portion to a third party. USL agrees that, if at a time earlier than the end of such five year period it finally commits not to use such unused portion, it will so consider such a request made by SEQUENT at that earlier time.

B. To the extent that the rights granted in paragraph A of this Section include licenses to the particular items of EXISTING SEQUENT TECHNOLOGY set forth in Appendix B hereto, such licenses are subject to preexisting restrictions to which SEQUENT is bound by contract with one or more third parties. Such restrictions are set forth in Appendix C hereto.

C. The provisions of this Section shall survive termination of this Agreement.

INITIAL SEQUENT DELIVERABLES

Within sixty (60) days after the effective date of this Agreement, SEQUENT shall provide to USL a complete copy of the EXISTING SEQUENT TECHNOLOGY.

OWNERSHIP

SEQUENT shall have and retain all ownership in EXISTING SEQUENT TECHNOLOGY. USL shall have and retain all ownership in (i) any items (including CONTRACT SVRX ENHANCEMENTS) created pursuant to the Statement of Work, and (ii) any modifications made by USL to EXISTING SEQUENT TECHNOLOGY, other than any portion of EXISTING SEQUENT TECHNOLOGY contained in such modifications.

AVAILABILITY OF LICENSES FOR CONTRACT SVRX ENHANCEMENTS

In the event that USL has not, within two (2) years after the completion of delivery of the last of the CONTRACT SVRX ENHANCEMENTS created pursuant to the Statement of Work, incorporated such enhancements into an USL product offering or has otherwise put such enhancements into use in its business operations, USL will not refuse a request by SEQUENT to acquire source code and/or binary distribution licenses from USL on reasonable terms and conditions, including license fees. USL agrees that if, at a time earlier than two (2) years from the delivery of the last of the CONTRACT SVRX ENHANCEMENTS, it will consider a request by SEQUENT to acquire source code and/or binary distribution licenses from USL for such software on reasonable terms and conditions, including license fees. The provisions of this Section shall survive termination of this Agreement.

PROTECTION OF PROPRIETARY INFORMATION

A. It is understood that in the performance of this Agreement, each party may require from the other certain technical and business information which the furnishing party considers proprietary and which has not yet been furnished to the other party through a suitable license or non-disclosure agreement ("PROPRIETARY INFORMATION"). By way of example but not of limitation, PROPRIETARY INFORMATION of USL shall include (1) any unpublished USL software and related documentation and (ii) any other unpublished material of USL that may be made available to SEQUENT at any time pursuant to the Statement of Work provided that such other material, if in documentary form, is clearly marked in a manner to give notice of its confidential nature. Also by way of example but not of limitation, PROPRIETARY INFORMATION of SEQUENT shall include (i) EXISTING SEQUENT TECHNOLOGY and (ii) any other unpublished material of SEQUENT that may be made available to USL at any time pursuant to this Agreement provided that such other material, if in documentary form, is clearly marked in a manner to give notice of its confidential nature. Unpublished information of either party that is orally disclosed to the other shall be considered PROPRIETARY INFORMATION only if, and to the extent that, such information is summarized in a document which marked in the manner contemplated above and supplied by the disclosing party to the receiving party no later than fifteen (15) days after the oral disclosure.

B. The party receiving PROPRIETARY INFORMATION (whether in oral or documentary form) shall:

C. Notwithstanding anything to the contrary herein, the party receiving PROPRIETARY INFORMATION shall have no obligation to preserve the confidentiality of any portion of the PROPRIETARY INFORMATION which:

D. The rights and obligations of either party under this Section shall survive termination of this Agreement for five (5) years, with the exception of any source code of a disclosing party which shall survive the termination of this Agreement for twenty (20) years.

EARLY TERMINATION

Either party may terminate this Agreement for cause (i) pursuant to the next paragraph, if the other party materially breaches any substantive provision hereof, or (ii) immediately upon written notice to the other party, in the event of INSOLVENCY of the other party.

Termination by a party for material breach shall be initiated by written notice of intent to terminate, specifying the reasons therefor. The other party shall thereupon use its best efforts to cure the breach giving rise to such notice. If despite such best efforts substantial progress has not been made toward curing the breach within a thirty (30) day period after receipt of such notice, the initiating party may give formal notice termination. Such termination shall be automatically effective (30) days from receipt of the formal notice by the other party unless such breach is cured within such latter thirty day period or unless the initiating party formally withdraws such notice.

The rights and remedies of each party provided in this Section shall not be exclusive and are in addition to any other rights and remedies provided by this Agreement.

ADDITIONAL RIGHTS AND OBLIGATIONS UPON TERMINATION

In the event of early termination of this Agreement at any time (except for termination initiated by SEQUENT as a result of a material breach by USL), SEQUENT shall promptly deliver to USL a copy of the then-existing version of each item to be delivered by SEQUENT pursuant to the Statement of Work, in the form in which each such item may then exist.

Should USL terminate this Agreement for material breach by or INSOLVENCY of SEQUENT, USL shall, as its sole and exclusive remedies for such breach or INSOLVENCY, be excused from (i) making any further payments to SEQUENT under this Agreement and (ii) making available to SEQUENT any further discounts provided for in Section CONSIDERATION TO SEQUENT below.

Should SEQUENT terminate this Agreement for material breach by or INSOLVENCY of USL, the sole and exclusive remedy to which SEQUENT shall be entitled for such breach or INSOLVENCY shall be the conversion of any and all exclusive license rights to EXISTING SEQUENT TECHNOLOGY, afforded to USL in Section LICENSES TO USL above, to non-exclusive license rights as of the date of termination by SEQUENT.

EFFECT OF TERMINATION

Termination of this Agreement will terminate all future rights and obligations of the parties hereunder except (i) those specified in Sections LICENSES TO USL, PROTECTION OF PROPRIETARY INFORMATION, EXPORT, OWNERSHIP, SUPPORT, AVAILABITITY OF LICENSES for CONTRACT SVRX ENHANCEMENTS, and ADDITIONAL RIGHTS AND OBLIGATIONS UPON TERMINATION; (ii) where such termination is for material breach by or INSOLVENCY of USL, SEQUENT's rights to receive the discounts specified in Section CONSIDERATION TO SEQUENT; and (iii) others, including SEQUENT's right to acquire licenses from USL on standard terms as contemplated in Section CONSIDERATION TO SEQUENT, which by their inherent nature should survive termination.

CONSIDERATION TO SEQUENT

A. In consideration of (1) the activities undertaken by SEQUENT under this Agreement and (2) the rights granted to USL in Section LICENSES to USL above, USL will (a) consistent with Section STATEMENTS AND REMITTANCES below, reimburse SEQUENT for fifty percent (50%) of the reasonable and auditable costs incurred by SEQUENT for the development of acceptable versions of CONTRACT SVRX ENHANCEMENTS, subject to the applicable maximum amount set forth in the Statement of Work; (b) make available to SEQUENT additional discounts, set forth in Appendix D hereto, against certain net sublicensing per-copy fees payable by SEQUENT to USL for the distribution, during the calendar years 1991-1995, inclusive, of SUBLICENSED PRODUCTS that are binary versions of derivative works of Unix System V, Release 3.0 (or later) as such products are defined in the existing Sublicensing Agreement between USL and SEQUENT; provided, however, that such additional discounts shall not apply with respect to per-copy fees accruing after the date of termination of this Agreement where such termination results from a material breach by, or INSOLVENCY of, SEQUENT; and (c) grant licenses to SEQUENT for all SVR4 MULTIPROCESSING VERSIONS and all MULTIPROCESSING ENHANCEMENTS (including CONTRACT SVRX ENHANCEMENTS) under all USL proprietary rights on USL's then-standard terms and conditions for any such licenses. For purposes of this Agreement, "net sublicensing per copy fees" means sublicensing per-copy fees payable after any applicable normal discounts are applied.

SUPPORT

A. SEQUENT shall make available to USL the maintenance and support services set forth in Appendix E hereto, and for the period specified in such Appendix, with regard to CONTRACT SVRX ENHANCEMENTS. Except in the event of material breach by or insolvency of USL, the provisions of this Section shall survive termination of this Agreement.

B. In payment for such maintenance and support services, USL will, consistent with Section STATEMENTS AND REMITTANCES below, reimburse SEQUENT for fifty percent (50%) of the reasonable and auditable costs incurred by SEQUENT for the provision of such services.

DISCLAIMER OF WARRANTY

EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT ANY AND ALL WARRANTIES OF ANY KIND WHATSOEVER, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTIBILITY AND/OR FITNESS FOR A PARTICULAR PURPOSE, AND WARRANTIES AGAINST INFRINGEMENT OF ANY THIRD PARTY PROPRIETARY RIGHT, ARE EXPRESSLY DISCLAIMED AND EXCLUDED.

LIMITATION OF LIABILITY

NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT OR AS A RESULT OF ANY PERFORMANCE OR NON-PERFORMANCE OF SUCH PARTY HEREUNDER, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR A PARTY'S EXCLUSIVE REMEDIES FAIL OF THEIR ESSENTIAL PURPOSE.

PUBLICITY AND CONFIDENTIALITY

A. The terms and conditions of this Agreement are confidential and shall not be disclosed to any third parties by either party hereto without the prior written consent of the other, which approval shall not be unreasonably withheld. Except as permitted in paragraph B of this section, no public statements or announcements shall be issued hereafter by either party relating directly to the terms and conditions of this Agreement or to any work specified in the Statement of Work without the prior written consent of the other, which approval shall not be unreasonably withheld. Subject to paragraph C(4) of Section PROTECTION OF PROPRIETARY INFORMATION above, nothing herein shall prevent either party hereto from supplying such information or making such statements or disclosures as may be required by, or as such party considers necessary to be disclosed in connection with any filings with, or any proceedings before, any competent governmental authority, court or agency or as such party may consider necessary in order to satisfy its obligations under applicable laws or regulations, but such party shall furnish prior written notice thereof to the other party.

B. (1) As soon as practicable after the effective date of this Agreement, the parties will issue a mutually acceptable press release announcing the relationship set forth herein. Such release shall, in substance, contain (a) an acknowledgment that Sequent has made Existing Sequent Technology available to USL for possible incorporation in a commercial release of an SVR4 Multi-processing Version, and (b) a statement of intent by USL to implement the following:

STATEMENTS AND REMITTANCES

A. SEQUENT shall provide USL with quarterly statements, certified by a responsible office of SEQUENT, giving a detailed breakdown of any development costs incurred by SEQUENT hereunder in creating CONTRACT SVRX ENHANCEMENTS since the previous such statement, if any, was submitted to USL. SEQUENT may thereafter invoice USL for fifty percent (50%) of the development costs covered by each such statement until the applicable maximum amount authorized in the Statement of Work has been billed. Subject to paragraph B of this Section, such amount shall be payable within forty five (45) days after the date of the applicable invoice. Statements and payments hereunder shall be sent to the appropriate address set forth in Section NOTICES below. Invoices shall be addressed to:

B. USL shall have the right, through its authorized representatives and subject to reasonable restrictions as to confidentiality, to make examinations and audits on an annual basis, at a mutually agreeable time, during normal business hours, of SEQUENT's records kept pursuant to this Agreement and such other records and accounts of SEQUENT as may under recognized accounting practices contain information bearing upon the amounts payable pursuant to paragraph A of this Section. Prompt adjustment shall be made by the proper party to compensate for any errors or omissions disclosed by such examination or audit. All such audits shall be at USL's expense, except in the case of an audit which reveals an overstatement by SEQUENT of at least two thousand five hundred dollars U.S. ($2,500) for the period covered by the audit. In such case, SEQUENT shall reimburse USL for its reasonable cost of such an audit.

NOTICES

All notices or other communications in connection with this Agreement shall be in writing; shall be sent by certified or registered mail, return receipt requested; shall be effective on the date such return receipt is signed by the recipient or the first date of any unsuccessful attempt to deliver, and (except the case of invoices) shall be addressed as follows:

FORCE MAJEURE

The obligations of USL and SEQUENT hereunder shall be temporarily suspended in the event of strikes, riots, war, invasion, fire, explosion, accident, delays in carriers, acts of God and all other delays beyond the obligated party's reasonable control, and any failure to perform by the party as a result of any such interference or interruption shall not be deemed a default. Performance may be suspended for the period of any such delay. The party whose performance is suspended shall notify in writing the other party within 15 days of such suspension.

AVAILABILITY OF HARDWARE DISCOUNTS

It is the present intention of USL and SEQUENT to enter into a Master Purchase Agreement covering SEQUENT's computer systems of the type set forth in the March 26, 1990 SEQUENT proposal to USL. It is understood and agreed that the pricing terms offered to USL for such hardware in such Master Purchase Agreement shall be no less favorable to USL than the terms contained in such SEQUENT proposal.

REPRESENTATION OF AUTHORITY

Each party represents to and assures the other that it has full and unrestricted authority to enter into, and perform under, this Agreement.

SUPERVISION OF DEVELOPMENT ACTIVITIES

A. In the event that one party hereto ("first party") engages any third party, other than an employee or paid contractor of the first party, to assist such first party in the development activities to be undertaken by such first party pursuant to the Statement of Work, such third party shall not be permitted to function in any supervisory capacity with respect to the development activities of the other party hereto.

B. Any technical issues, arising out of the day-to-day activities undertaken hereunder pursuant to the Statement of Work will be resolved through the escalation procedure set forth in the Statement of Work.

INDEPENDENT CONTRACTOR

All work performed under this Agreement by a party shall be performed as an independent contractor and not as an agent of the other. No persons furnished by either party shall be deemed the other party's employees or agents, and each party shall be responsible for its employees' compliance with all pertinent laws, rules and regulations.

NO ENTITY

Nothing contained herein and no action taken by USL or SEQUENT pursuant hereto or in connection with this Agreement shall be deemed to constitute a partnership, association, joint venture or other entity between the parties.

ENTIRE AGREEMENT

This Agreement constitutes the entire understanding of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understanding (written or oral) between the parties with respect to the subject matter hereof.

EXPENSES RELATING TO THIS AGREEMENT

Each party hereto shall pay its own expenses incident to the preparation of this Agreement and any other pertinent agreements and instruments executed pursuant to this Agreement.

GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey (other than its rules on conflicts of laws).

SEVERABILITY

In case any one or more of the provisions of this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, but such provision or provisions shall be ineffective only to the extent of such invalidity, illegality or unenforceability without invalidating the remainder of such provision or provisions or the remaining provisions of this Agreement. In such case, this Agreement shall be construed as if such invalid, illegal or unenforceable provision or provisions had never been contained herein, unless the deletion of such provision or provisions would result in such a material change as to cause performance by a party to be unreasonable.

MODIFICATION

This Agreement shall not be modified, altered, changed or amended in any respect, except by a writing signed by the authorized representative of each party hereto.

WAIVER

No consent or waiver by either party hereto of any breach or default by the other party hereto under this Agreement shall be effective unless such consent or waiver is set forth in a written instrument signed by such party. The failure of a party hereto to enforce at any time any of the provisions of this Agreement shall in no way be construed to be a waiver of any such provision, nor in any way to affect the validity of this Agreement or any part hereof or the right of any party hereto thereafter to enforce each and every provision hereof. No waiver of any breach of this Agreement shall be held to be a waiver of any other or subsequent breach hereunder.

ASSIGNMENT

A. Neither party hereto may assign this Agreement or any of its rights hereunder to any other person or entity without the prior written consent of the other party; provided, however, that either party may assign its rights and delegate its obligations under this Agreement to (i) any of its subsidiaries and (ii) any other entity which may acquire the portion of such party's business to which the subject matter of this Agreement relates.

B. Subject to paragraph A of this Section, this Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of USL and SEQUENT and is not intended to confer upon any other person any rights or remedies hereunder.

EXECUTIONS AND COUNTERPARTS

This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall be a binding agreement when one or more counterparts have been signed by each party hereto and delivered to the other party hereto.

EXPORT

A. Each party hereby assures the other that it does not intend to and will not knowingly, without the prior written consent, if required, of the Office of Export Administration of the U.S. Department of Commerce, Washington, D.C. 20230, U.S.A., transmit, directly or indirectly:

B. The parties agree that their obligations under Paragraph A of this Section shall survive and continue after any termination of rights under this Agreement.

APPENDICES INCORPORATED

Appendices A-E are included herein and made a part hereof.

HEADINGS

Sections headings herein are inserted for convenience only and are not intended to affect the meaning or interpretation of this Agreement.

IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the dates written below.

1. INTRODUCTION

This statement of work (SOW) documents the proposed program for USL to develop, with assistance from Sequent, certain multiprocessing (MP) capability. The intent of the program is to minimize program risk and improve quality by leveraging the Sequent MP-technology and MP experience.

This SOW addresses development based on a release of UNIX System V with B2+ security features. This release will be referred to as SVR4ES in this SOW. The reference SVR4ESMP refers to a release that incorporates CONTRACT SVRX ENHANCEMENTS in SVR4ES. It is intended for Sequent to assist USL throughout the duration of the MP program, till its completion.

The present intent is to phase in the MP functionality and make it available to UI in several Early Access (EA) Release X loads. (Release X is defined in Unix International road-map.)

This SOW describes the currently planned program content, Sequent staff requirements, and development model. Any changes to the described program will be reflected as addenda to this SOW.

2. SVR4ESMP PROGRAM

2.1 Definition

To maintain the high quality, SVR4ESMP will include all important MR fixes in the SVR4ES Release. SVR4ES loads will be selectively incorporated. To address the needs of a broad spectrum of customer platforms, enhancement MRs will also be applied, particularly in the area of kernel memory allocation (kmemalloc) and VM/VFS subsystems.

As presently envisioned, the SVR4ESMP will encompass the SVR4ES functionality, including Cl5 compilation system, OAM, etc., with the following functionality additions:

In addition to the described functionality, it is intended that SVR4ESMP meet the following requirements:

Some content-related issues still remain to be solved. For example, it is not yet certain which Intel-specific functionality must be provided in SVR4ESMP.

Documentation reflecting the addition of MP-capability and the described functionality changes will be provided. In particular, interfaces relevant to application programmers will be documented.

2.2. Non Goals

2.3 Sequent Staff Requirements

The following Sequent Staff Breakdown provides the estimated Sequent staff numbers. Staff numbers encompass systems engineering, development, integration, documentation, and test for the entire program; operating system and compilation system staff are included.

USL assumes that the Sequent development staff will assist USL in providing documentation, integration, and test support, and do maintenance after feature development has been completed.

The estimates assume a high degree of kernel expertise.

The staff breakdown for 90-92 is provided in Exhibit 1. In the staff tables, "c" indicates consultation-only activity. (Equivalent staff numbers rounded to the nearest integer are shown.)

The rows in the table indicate the specific SVR4ESMP activities. USL notes that to best leverage the Sequent MP expertise, Sequent experienced staff will be employed along with USL staff, in the design and implementation of key system areas, such as VM, VFS, Process Management, Signals, Job Control, Streams, Drivers, Light Weight Processes, Test and Performance Analysis. The shown staff breakdown and specific assignments will be adjusted, as necessary, to best meet the SVR4ESMP needs.

Staffing requirements for incorporating TCP/IP into SVR4ESMP is not part of this SOW and terms and conditions for this work will be mutually agreed upon.

The execution of Sequent's responsibilities under this SOW is contingent upon USL providing a minimum of 36 staff years of engineering effort starting 9/90 and such other staffing, equipment, and other support as in USL's reasonable judgement, are necessary to enable Sequent to perform its responsibilities under this SOW.

2.3.1 Sequent's Development Costs Sequent's development and support costs would include loaded salary costs for Sequent's staff, reasonable travel and living expenses, and extraordinary supplies expenses. The average annual loaded salary rate of Sequent's staff shall not exceed $110,000 per annum. The loaded salary rate includes the salary, benefits, taxes, and Sequent's normal allocations (e.g. facilities, supplies, etc.) per its headcount. The equipment and the depreciation on equipment used by Sequent's staff at Sequent's premises shall not be included as part of Sequent's development expenses. The total Sequent's development costs (including support for the CONTRACT SVRX ENHANCEMENTS) shall not exceed $4.5 million.

2.4 Hardware

It is present intent that Sequent Symmetry will be the primary hardware MP development base.

In addition, USL and Sequent will attempt to assemble a multiprocessor test system, which will allow USL to test the graphics server software on an MP box.

3. DEVELOPMENT MODEL

The working relationship and the development process followed during the described program are essential to the program success. The following captures the key aspects of the development model.

3.1 Development Approach

The essential aspects of the development methodology/approach are outlined below.

3.2 Decision Making Process

4. EXISTING SEQUENT TECHNOLOGY

The program assumes access to and use of, where applicable, the following Sequent technology by USL:

[See PDF for SEQUENT STAFF BREAKDOWN table on pages 33,-35.]

1. TCP/IP - Spider Systems Limited

Prior consent of Spider Systems Limited is required for distribution of the source code to ther than end user customers. Such customers must become source code licensees of Spider. Royalties are paid by customer source licensees of derivative products.

2. NFS - Sun Microsystems, Inc.

Prior written consent of Sun Microsystems is required for distribution of the source code form of Sun's software where distribution is to other than Sequent customers. Sublicensing fees or royalties are owed for each sublicensed product in object code form.

3. AIM - ptx/ADMIN

Prior consent of AIM is required for distribution of the source code form of the software to other than OEM and end user

SEQUENT makes no warranties, either express or implied, including, but not limited to, any IMPLIED WARRANTY OOF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE or any implied warranty arising from course of performance, course of dealing, usage of trade, or otherwise, with respect to services provided under this Appendix E.

This Appendix E is subject to the terms and conditions of the Multiprocessor Software Cooperation Agreement entered into between the parties, and this Appendix E is made a part thereof and incorporated therein by this reference.