Is A Software Development And Services Agreement

Exhibit 10.17


AGREEMENT


This is a software development and services agreement Red Hat Software, Inc. ("Red Hat"), a Connecticut, USA corporation, and Building Number Three, Ltd. ("B3"), a Private Company, limited by shares and registered at [CONFIDENTIAL TREATMENT REQUESTED]** enter into this agreement as of the last date following the signatures below.


1. DEFINITIONS.


A. "Linux" means the Red Hat Linux operating system computer software for Intel and compatible based computers, version 5.0 and later versions released by Red Hat during the term of this Agreement.


B. "Red Hat Product" means the product of Red Hat currently known as "Official Red Hat Linux" for Intel-based computers, version 5.0 and later versions released by Red Hat during the term of this Agreement.


C. "B3 Software" means any and all software provided to Red Hat by B3 pursuant to this Agreement.


D. "Bugs" means errors in a software program that cause the software to fail to function as intended.


E. "Source Code" means software in written form which is easily understood by a human knowledgeable in the art of computer programming.


F. "Binary Code" means software in machine-readable form that is not easily understood by a human knowledgeable in the art of computer programming, but which is understood and used by a computer to run the software.


K. "Confidential Information" means any information identified as being Confidential Information by either party, either orally or in writing, at the time it is disclosed, or designated as confidential in writing (either electronically or by other means) within 30 days of the disclosure, provided that the information (a) was not publicly known or generally in the public domain prior to the disclosure, (b) does not become generally known or part of the public domain through any improper action or disclosure by the receiving party, or (c) can be shown to have been in the rightful possession of the receiving party prior to having been identified as Confidential Information by the disclosing party.


2. WORK MADE FOR HIRE.


A. B3 shall perform software development and consulting work as follows:


1. Develop, enhance, fix bugs, and otherwise work to improve the kernel of Linux,


-------------- **[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


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as directed by Red Hat;


2. Perform high priority bug fixes and other custom development or consulting work, as directed by Red Hat;


3. Perform other work or services related to Linux, as directed by Red Hat.


B. The Source Code to be written by B3 pursuant to this Agreement shall be a work made for hire, and Red Hat shall be the sole owner of the copyright of the Source Code.


3. ADDITIONAL SERVICES.


From time to time, B3 shall send a representative designated by Red Hat to Red Hat's offices for consultation and other purposes related to this Agreement. Red Hat and B3 agree to cooperate in selecting dates and times for such meetings. Red Hat shall bear the reasonable travel costs and expenses incurred by the B3 representative in attending these consultations.


4. PAYMENT.


A. In consideration for the work outlined in this Agreement, Red Hat shall make monthly payments to B3 in accordance with the provisions of Schedule A. Both parties may modify at any time the amounts to be paid by Red Hat to B3, but any and all such modifications shall be in writing and shall be signed by both parties in order to be effective.


B. Payment shall be made in U.K. funds on the last standard business day in the United States of each month for the work performed that month. Work performed for less than a full month shall be prorated accordingly. Payment shall be made via bank wire transfer, or other means agreed to by both parties. Red Hat shall bear the risk of any fluctuation in currency exchange rates between U.S. and U.K. currency.


5. NON-EXCLUSIVITY.


This Agreement is a non-exclusive agreement, and both parties remain free to enter into similar agreements with third parties. In the event that B3 enters into an agreement with a third party in which B3 performs software development, consulting, or other services related to Linux, B3 shall inform Red Hat of that agreement before or at the time it enters into such agreement. Nothing in this section limits or supercedes the provisions of Section 7.


6. OUALITY AND TESTING.


B3 shall thoroughly test the quality of all Source Code and Binary Code it delivers to Red Hat in accordance with customary practice within the industry. All such code delivered to Red Hat by B3 shall be of commercial production quality. Red Hat shall have the option to test all such code


-------------- **[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


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pursuant to its own quality assurance procedures, and may reject any code it reasonably believes does not meet commercial production quality. In the eve ...