Yes, I was quick to jump on the SCO gets $100 million lifeline story. And yes there is always more story to tell.

As we reported last week, embattled, bankrupt Unix vendor SCO may yet live to fight another day thanks to $100 million in financing that it may be getting from SNCP.  A Memorandum of Understanding (MOU) on the deal is now available that sheds a whole lot more light.

SCO will only get $5 million upfront from SNCP. The other $95 million in financing will be made available to SCO as needed - and at a hefty premium too. SNCP's 'premium' is an interest rate that is LIBOR (London InterBank Offered Rate) plus 1700 basis points.  What that means at today's rates is that SCO will be charged nearly 20 percent on the funds that SNCP makes available.

While that sounds like alot (because it is), it also makes some sense. The 20 percent premium is really just SNCP's way of ensuring a built-in return on their financing of SCO.  When you take into consideration the fact that there is a significant and non-trivial risk to the money that SNCP is sinking into SCO, 20 percent isn't too crazy. After all most pundits think that SCO doesn't have a leg to stand on legally. SCO's sales are also somewhat paltry, so it's really not clear how SCO will be able to pay SNCP.

The SNCP deal also is not a done deal at this point either. In the MOU it is specifically stated that if the Bankruptcy court does not approve the deal by April 28, 2008 the deal will terminate.

The MOU also requires that once the deal becomes effective (pending approval of the bankruptcy court), existing SCO CEO Darl McBride will resign.

McBride has been the Linux boogeyman since SCO first made its accusations. He has been the voice and face of Linux public enemy number one. On a personal note he has also been the source for marvelous quotes over the years as his bravado has known few bounds.

The fact that McBride is on his way out could signify that SNCP and its backers think that McBride has mishandled SCO's actions to date. Whether or not McBride's departure will make any difference though is highly debatable. After all, SNCP is financing SCO to help continue the legal actions against Novell and IBM.