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EXHIBIT 10.39
STRATEGIC BUSINESS AGREEMENT
This Strategic Business Agreement is made and entered into on the date last
signed by and between The Santa Xxxx Operation, Inc. (hereinafter "SCO"), a
company incorporated under the laws of the State of California, with its
principal place of business at 000 Xxxxxxx Xxxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000,
and Caldera Systems, Inc. (hereinafter "Caldera"), a company incorporated under
the laws of the State of Utah, with its place of business at 000 Xxxx Xxxxxx
Xxxxxx, Xxxx, Xxxx 00000.
This Strategic Business Agreement describes the principal terms and conditions
of a business relationship between SCO and Caldera. Both parties will work
together to develop, market, and support Caldera's eServer products technology
utilizing SCO's Tarantella(R) and other SCO software products. The parties
recognize that the relationship will require the negotiation and execution of
additional agreements, and a public announcement regarding this Strategic
Business Agreement. This agreement evidences an intention to proceed in good
faith to negotiate the terms of other future agreements consistent with the
terms of this Strategic Business Agreement (hereinafter "Agreement").
RECITALS
WHEREAS, SCO is a licensor, manufacturer and distributor of Tarantella software
products, related software products and materials, and
WHEREAS, Caldera is a licensor, manufacturer and distributor of OpenLinux
eServer, related products and materials, and
WHEREAS, Caldera wishes to license SCO Tarantella and other software products in
connection with Caldera's internal development, use and distribution of a
bundled eServer product offering, and
WHEREAS, SCO wishes to grant certain rights to use SCO Tarantella software,
related products and materials to Caldera, and Caldera wishes to accept such
rights, and
WHEREAS, the parties desire Caldera's use and marketing of SCO software, related
software products and materials, in conjunction with Caldera's OpenLinux eServer
and related products.
NOW, THEREFORE, in consideration of the mutual promises made herein it is agreed
as follows:
1. PRESS EXPOSURE, PUBLICITY
The parties agree to cooperate to prepare at least one press release and
one public announcement, which may be released and distributed by either
party. Except as agreed to by the parties, no other press releases or
public announcements will be made concerning the parties cooperation under
this Agreement.
1.1 Caldera and SCO agree to cooperate to provide mutually agreeable
material to be released to consultants, analysts and press upon prior
written approval of the parties. Caldera and SCO will invite each
other to participate in each other's press activities as appropriate.
1.2 SCO and Caldera will work on a press release for Linuxworld
Exposition.
Such press release may consist of the following points:
o SCO's investment with Caldera Systems
o Professional Services agreement
o Linux Standards Base ("LSB") investment of $100,000 from Caldera
and from SCO
o Overview of SCO and Caldera's intent to co-operate on:
- Caldera education to SCO channels
- Marketing, sales, and training efforts
- Future plans for product and channel bundles
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2. MARKETING ACTIVITIES
SCO and Caldera agree to co-operate on joint marketing activities that
mutually benefit each of the companies' respective Linux strategies.
2.1 SCO and Caldera agree to participate together in industry shows from
year to year, including:
o Linuxworld Exposition in New York City
o CEBIT in Hannover, Germany
o Linux Business Expo in Chicago
o Other industry shows as may be identified and mutually agreed
upon by the parties
Each party will make reasonable efforts to provide the other with space in
their respective exhibits at trade shows, press events and other marketing
or promotional activities where appropriate.
2.2 If Caldera executes another OpenLinux tour, similar to the
"City-to-City VAR Recruitment Tour" by Caldera in the summer of 1999,
Caldera agrees to provide SCO with the opportunity to be a major
participator in this effort. Such participation by SCO will be
mutually defined and agreed by the parties prior to such an event.
2.3 SCO and Caldera agree to cross recruit and cross match channel
partners for the Tarantella Products line and OpenLinux eServer. SCO
and Caldera may cooperate on specific sales calls to accounts
requesting a combination of SCO and Linux systems and solutions. SCO
and Caldera agree to work together to execute at least one joint
customer briefing at an SCO briefing center in Santa Cruz, California
or a resort in Utah by June 30, 2000. The agenda for such joint
customer briefing will include presentations on SCO's products and
services and Caldera's strategy and product and support offerings.
Each company will invite customers and prospective customers.
2.4 SCO and Caldera agree to cross-reference each other's corporate
websites and product solutions, and discuss in good faith other
opportunities to promote joint web cast events.
2.5 SCO and Caldera agree to market and promote their participation in
Linux Standards Base (LSB). SCO and Caldera will each contribute a
budget of One Hundred Thousand dollars ($100,000) to this effort. Such
amount may be increased or decreased upon mutual agreement by the
parties. This LSB marketing contribution shall be a one time only
requirement regardless of how many times this Agreement is renewed.
2.6 SCO and Caldera agree to discuss Caldera's eChannel initiatives. SCO
may include its Tarantella software products, other products, and
services on Caldera's eChannel. SCO and Caldera agree to discuss any
synergy with Caldera's eChannel and SCO's investment in LinuxMall and
promote such discussion.
3. PROGRESS REVIEWS
In addition to performing marketing and development activities, each party
will participate in progress reviews, as requested by the other, to
demonstrate performance of their obligations under this Agreement.
4. INTERNAL USE PRODUCTS
4.1 Caldera agrees to provide SCO with ten (10), no charge not for resale,
copies of each release of the "shrink-wrap" OpenLinux product for
SCO's internal use. Additional copies, if requested by SCO, will be
charged at a nominal fee not to exceed twenty-five US Dollars ($25)
per copy. Each such copy of the "shrink-wrap" OpenLinux product
delivered to SCO will be governed by Caldera's standard OpenLinux
License Agreement.
4.2 SCO will provide Caldera with three (3), no charge not for resale,
copies each release of the "shrink-wrap" Tarantella Express product
for Caldera's internal use. Each such copy of the product delivered to
Caldera will be governed by SCO's standard license agreements for
these products.
5. ENHANCEMENTS AND ERROR CORRECTIONS
Caldera will provide SCO, at no charge, with enhancements and error
corrections for OpenLinux as such enhancements and error corrections are
released by Caldera, including beta releases and commercial releases
thereof, for a period of one year from the signing of this Agreement. Such
enhancements and error corrections will be subject to the ten (10) copy
limitation set forth in Section 4.1 of this Agreement, and will be governed
by the OpenLinux License Agreement. All decisions concerning enhancements
and error corrections to OpenLinux will be made by Caldera at its sole
discretion. Caldera will consider input from SCO.
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6. PORTING ACTIVITIES
SCO and Caldera agree co-operate and work together to port Tarantella
Express products to Caldera's eServer and eDesktop. SCO may also choose to
port other members of the Tarantella Product family as appropriate. The
parties agree that such porting and testing activity will be completed
before any marketing dollars, as set out in provision 2.5, are committed by
either party
7. PRODUCT DISTRIBUTION
7.1 SCO and Caldera agree to pursue the distribution of a software bundle
through Tech Data or other common distributors, as mutually agreed. It
is intended that such a product bundle will include SCO's Tarantella
Express and Caldera's eServer products. SCO and Caldera will each
contribute Market Development Funds in equal amounts, to be determined
at a later period. Such Market development Funds are to drive mutually
agreed upon marketing programs through the range of distribution
options, including distributors and the VAR channel.
7.2 SCO and Caldera will discuss with customers opportunities regarding a
Tarantella Express trial copy of a 2-user license option, or a
"try-and-buy", full function, sixty (60) day limited license. Such
customers must obtain the licensing rights from SCO.
8. EDUCATION
Caldera and SCO will meet to discuss how to cooperate on product education
by March 1, 2000.
9. PROFESSIONAL SERVICES
9.1 SCO and Caldera agree to negotiate in good faith a Field Services
Outsourcing Partner contract.
9.2 Caldera agrees to refer customer enterprise service opportunities to
SCO.
9.3 Caldera agrees to hire SCO professional services to certify Caldera
Linux on Oracle products. Caldera has performed a week's worth of
certification at Oracle, and will pay SCO to complete the initial task
and work on any ongoing certification requirements of Oracle products.
The details of such certification are to be set out in a separate
"Schedule of Work", which is to be completed within sixty (60) days,
and to be attached herein to this Agreement as "Exhibit A", and
incorporated into this Agreement by reference.
9.4 A Product briefing meeting for SCO personnel to take place at
Caldera's Utah facilities will be arranged within forty-five (45) days
of this Agreement.
10. TERM AND TERMINATION
10.1 The term of this Agreement will commence on the date it is last
executed by an authorized SCO and Caldera signatory and, shall remain
in effect for a one (1) year period (the "Initial Term"). Thereafter,
this Agreement shall automatically renew for subsequent one (1) year
periods (the "Renewal Period") unless (i) the Agreement is terminated
by either party pursuant to Section 10 of this Agreement, or (ii)
either party terminates for convenience by sending the other notice
thereof at least thirty (30) calendar days prior to the end of such
Initial Term or the then current Renewal Period.
10.2 Should either party breach any provision of this Agreement and fail to
remedy such breach within thirty (30) days of written notice thereof,
the injured party may terminate this Agreement immediately.
10.3 Further, either party may terminate this Agreement immediately if the
other party becomes insolvent, admits in writing its inability to pay
its debts as they mature, makes an assignment for the benefit of
creditors, files or has filed against it by a third party any petition
under any Bankruptcy Act, or an application for a receiver of the
other party is made by anyone and such petition or application is not
resolved favorably to the other party within sixty (60) days.
10.4 Upon termination of this Agreement in accordance with this section 10,
neither party will be entitled under local law or otherwise to receive
payment from the other, whether for actual, consequential, indirect,
punitive, special or incidental damages, costs or expenses which arise
from such expiration or termination, whether foreseeable or not
(including, but not limited to labor claims and lost profits,
investments, good will, or claims made by customers against a party),
any rights to which the parties hereby waive and disclaim.
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11. DISCLAIMER OF WARRANTY
11.1 Neither party warrants that the function contained in their software
products will meet the other party's requirements or that its
operation will be uninterrupted or error free. Each party warrants
that their software products substantially conform to the
specifications and functional descriptions contained in the pertinent
documentation; and that the reproduction of the software on the media
material provided by it is correct. Provided a party notifies the
other party of any non-conformance within ninety (90) days of receipt
of the non-conforming software product, the distributing party shall
at its sole discretion either 1) repair the non-conforming software
product, 2) replace the non-conforming software product, or 3) accept
return of same and refund or credit any fees paid by the other party
for the returned non-conforming software product.
11.2 Further, each party warrants the supplied media on which the software
product resides to be free from defects in material and workmanship
under normal use for a period of ninety (90) days from date of
delivery, and shall at its sole discretion either 1) repair the
defective media, 2) replace the defective media, or 3) accept return
of same and refund or credit any fees paid by the other party for such
returned software product.
11.3 Except as provided herein, EACH PARTY'S SOFTWARE Product is provided
"AS IS" without warranty of any kind, either express or implied,
including, but not limited to, the implied warranties of
merchantability and fitness for a particular purpose.
12. PRODUCT INFRINGEMENT INDEMNIFICATION
12.1 Each party shall indemnify and hold the other harmless from and
against and defend any claim, suit or proceeding, and pay any
settlement amounts or damages awarded by a court of final
jurisdiction, arising out of claims filed by third parties in a court
of competent jurisdiction that a software product infringes any
copyright or other intellectual property right provided the party
promptly notifies the party providing such software product in writing
of any such claim, suit or proceeding, and permits such party to
control the settlement or defense thereof. The other party has the
option to be represented by Counsel at its own expense.
12.2 If, pursuant to any such claim as set forth in 12.1, a court removes
or restricts a party's right to use a software product, the providing
party shall, at its sole option (i) procure for the other party the
right to continue to use the software product; or (ii) modify the
software product, provided the functionality thereof is not
substantially affected, so as to make it non-infringing; or (iii)
require the other party, immediately upon written notice, to
discontinue use of the software product; provided that the providing
party provides a refund of any fees received by them for the software
product. In addition, the providing party shall have the right to
exercise any of options herein at any time following receipt of notice
of a claim of infringement of copyright or other proprietary right.
12.3 Neither party shall have an obligation under this section with respect
to any claim of infringement of copyright or other proprietary right
based upon any modification of their software product by the other
party or the combination, operation or use of their software product
with materials not supplied by them.
12.4 This Section 12 sets out each party's sole liability and the exclusive
remedy for any infringement or alleged infringement of copyright or
other proprietary right by a software product provided under this
Agreement.
13. LIMITATION OF LIABILITY.
NEITHER PARTY, NOR ITS SUPPLIERS, SHALL BE LIABLE FOR ANY INDIRECT,
SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY KIND, HOWEVER CAUSED,
WHETHER FOR BREACH OF WARRANTY, BREACH OR REPUDIATION OF CONTRACT, TORT,
NEGLIGENCE, OR OTHERWISE, EVEN IF SUCH PARTY AND/OR ITS SUPPLIER HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH LOSS. IN NO EVENT SHALL EITHER PARTY OR
ITS SUPPLIERS BE LIABLE FOR ANY LOSS OF PROFITS, LOSS OF BUSINESS OR
GOODWILL, OR FOR LOSS OF DATA OR USE OF DATA.
No clause of this Agreement shall be construed as purporting to restrict or
exclude liability for death or personal injury due to the negligence caused
by either party.
14. NOTICES AND REQUESTS
Notices and requests are to be sent to the following addresses:
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Caldera: Caldera Systems, Inc. SCO: The Santa Xxxx Operation, Inc.
000 Xxxx Xxxxxx Xxxxxx 000 Xxxxxxx Xxxxxx
Xxxx, Xxxx 00000 Xxxxx Xxxx, XX 00000
Attention Legal Department Attention: Legal Department
Telephone No: 000-000-0000 Ext. 307 Telephone No: 000-000-0000
Fax No: 000-000-0000 Fax No: 000-000-0000
Or to such other address as the party to receive the notice so designates
by written notice to the other party.
15. ACTS BEYOND PARTIES' CONTROL
Neither party shall be liable for any delay or failure in its performance
hereunder due to any cause beyond its control provided, however, that this
provision shall not be construed to relieve either party of its obligation
to make any payments pursuant to this Agreement.
16. OWNERSHIP OF PRODUCT, TRADEMARKS, AND OTHER INTELLECTUAL PROPERTY.
16.1 Each party acknowledges that, subject only to the rights specifically
granted herein, all rights, title, and interest in the software
products provided to it are and shall remain at all times the property
of the providing party and/or their suppliers.
16.2 Neither party shall alter or remove any copyright notices or other
proprietary notices on or in the software products provided to it
under this Agreement.
17. PROHIBITION AGAINST ASSIGNMENT OF RIGHTS
Neither party shall assign this Agreement, in whole or in part, without the
prior written consent of an authorized representative of the other, or any
right or interest under this Agreement (except moneys due or to become due)
to any entity other than to i) its corporate parent, or ii) a division or
wholly or majority owned subsidiary or affiliate. Neither party shall
unreasonably withhold such consent. Any attempted assignment without
written consent will be null and void.
18. CONTROLLING LAW
Governing Law and Jurisdiction. This Agreement shall be construed in
accordance with and governed by the laws of the State of California,
excluding that State's laws regarding conflict of laws and excluding the UN
treaty on the international sale of goods.
The state courts of Santa Xxxxx County, California, or, if there is
exclusive federal jurisdiction, the U.S. District Court for the Northern
District of California, shall have exclusive jurisdiction and venue over
any dispute or claim arising out of this Agreement; both parties hereby
consent to the jurisdiction of said courts.
19. EXPORT REGULATIONS
Each Party shall follow all laws and regulations of the United States with
respect to the exporting of software products. Each party hereby agrees not
to re-export the other party's software product, or any product
incorporating the other party's software product without first obtaining
the required U.S. Government export licenses. Each party further
acknowledges and represents that it is knowledgeable about U.S. Government
export licensing requirements or that it will become so prior to engaging,
directly or indirectly, in any export transaction involving the other
party's software product. Each party agrees that its obligations under this
provision shall survive and continue after any termination of the
Agreement.
20. WAIVER
The waiver of any breach or default hereunder by either party shall not
constitute the waiver of any subsequent breach or default.
21. EACH PARTY AS AN INDEPENDENT CONTRACTOR
Each party shall at all times be an independent contractor and shall not be
or represent itself to be an agent, partner, employee or the like of the
other party.
22. SEVERABILITY
If any provisions of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby. The
parties will seek in good faith to agree on replacing an invalid, illegal,
or unenforceable provision with a valid, legal, and
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enforceable provision which, in effect, will, from an economic viewpoint,
most nearly and fairly approach the effect of the invalid, illegal, or
unenforceable provision.
23. CONFIDENTIALITY
Each party shall at all times retain in confidence all confidential and/or
proprietary information and know-how disclosed or made available by the
other. The recipient shall make no use of such information and know-how
except under the terms and for the duration of this Agreement. The parties
hereby agree that all of the terms and conditions of this Agreement and
exhibits hereto, shall be treated as confidential material and shall not be
disclosed without the prior written consent of the disclosing party.
Confidential and/or proprietary information shall not include information
the recipient can document: (a) is currently in, or (through no improper
action or inaction by the recipient) enters, the public domain; (b) was
rightfully in its possession or known by it prior to receipt from the
disclosing party; (c) was rightfully disclosed to it by another person
without restriction; or (d) was independently developed by it by persons
without access to such information and without use of any confidential
and/or proprietary information of the disclosing party.
Each party, with prior written notice to the disclosing party, may disclose
confidential and/or proprietary information to the minimum extent possible
that is required to be disclosed pursuant to the lawful requirement or
request of a government entity or agency, provided that reasonable measures
are taken to guard against further disclosures, including without
limitation, seeking appropriate confidential treatment or a protective
order, or assisting the other party to do so.
24. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between SCO and Caldera
regarding the subject matter hereof and supersedes all previous
negotiations, proposals, commitments, writings, advertisements, and
understandings of any nature whatsoever. This Agreement may be modified
only in a writing executed by an authorized representative of the party to
be charged.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the last date set forth below.
AGREED TO:
The Santa Xxxx Operation, Inc. Caldera Systems, Inc.
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Authorized Signature Date Authorized Signature Date
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Printed Name Printed Name
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Title Title
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