EXHIBIT 10.8
SOFTWARE SALE AND ASSIGNMENT AGREEMENT
This agreement (the "Agreement") is made as of April 23, 2003 (the "Effective
Date") between XXXXXXX KODAK COMPANY, a corporation organized and existing under
the laws of New Jersey with its principal office at 000 Xxxxx Xxxxxx, Xxxxxxxxx,
Xxx Xxxx, ("Xxxxx"), and FRONT PORCH DIGITAL, INC., a corporation organized and
existing under the laws of Nevada with its principal office at 00000 Xxxxxxx
Xxx, Xx. Xxxxxx, Xxx Xxxxxx 00000 (hereinafter referred to as "FPDI").
WHEREAS, FPDI owns or licenses from third parties with the right to
sublicense to customers in the course of its business certain archiving software
programs for the Medical Imaging and Information Management Market known as DIVA
software ("DIVA Medical Software");
WHEREAS, FPDI is no longer interested in continuing to commercially exploit
such DIVA Medical Software in its business operations;
WHEREAS, KODAK desires to purchase and have assigned to it such DIVA
Medical Software and have sublicensed (or assigned as the case may be) to it any
third party software licensed to FPDI and included with the DIVA Medical
Software; and
WHEREAS, KODAK desires to offer employment to thirteen current employees of
FPDI's wholly-owned French subsidiary, Front Porch Digital International SAS
("FPDISAS"), who are necessary for future development, maintenance, support and
licensing of such DIVA Medical Software.
NOW, THEREFORE, in consideration of the terms and conditions of this
Agreement, the parties agree as follows:
1. DEFINITIONS.
1.1. "Assigned Software" means the DIVA Medical Software applications in all
formats, associated documentation and tools owned by FPDI, including without
limitation work product
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conceived or under development as of the Effective Date, as well as the DIVANet
product and related software for the Medical Imaging and Information Management
Market developed after the Effective Date, and to be assigned to KODAK, as
listed in Appendix 1.
1.2 "Third Party Software" means the DIVA Medical Software applications in all
formats, associated documentation, and tools licensed by FPDI or FPDISAS from
third parties, as listed in Appendix 2.
1.3 "DIVA Medical Software Employees" means those FPDISAS employees listed in
Appendix 3.
1.4. "Software Support Customers" means those FPDI-KODAK common customers, as
listed in Appendix 4, whose express or implied contracts with FPDISAS call for
certain ongoing software support for DIVA Medical Imaging Software.
1.5. "DIVA Non-Medical Market Software" means that DIVA software customized for
applications outside the Medical Imaging and Information Management Market that
is substantially similar to the DIVA Medical Software, but retained by FPDI for
its continued business operations.
1.6. "Medical Imaging and Information Management Market" means those customers
who purchase products and services that utilize medical, dental, or veterinary
data of any kind, including without limitation doctors, dentists, veterinarians,
hospitals, clinics, pharmacies, health care insurers, and any international,
federal, state, and local government agencies only to the extent that that such
agencies are purchasers of medical imaging and information management products
and services.
1.7. "Non-Medical Market" means those customers who purchase products and
services other than for the Medical Imaging and Information Management Market,
including any international, federal, state and local government agencies to the
extent that such agencies purchase products or services other than for medical
imaging and information management.
1.8. "KODAK's Contact" means Xxxxxxx Xxxxxxx whose address is 000 Xxxxx Xxxxxx,
XX 00000, Xxxxxxxxx, XX 00000-0000.
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1.9. "FPDI's Contact" means Xxxxxxx Xxxxxxx whose address is 0000 Xxxxx Xxxxxx,
Xxxxxxx, XX 00000.
2. ASSIGNMENT
2.1. FPDI assigns to KODAK, its successors and assigns all of FPDI's worldwide
right, title and interest and benefit in and to the Assigned Software,
including, without limitation, all of FPDI's worldwide right, title, interest
and benefit in and to the copyright rights therein under the copyright laws of
the United States and all foreign countries for the full term or terms thereof
(and including all copyright rights accruing by reason of copyright treaties and
conventions). The rights assigned by this paragraph include, without limitation,
any renewal, extension or revision of any copyright now or hereafter provided by
law and all rights to make applications for and receive copyright registrations
therefor, insofar as any copyright right in the Assigned Software, or any part
thereof is not considered to vest in or be owned by KODAK by operation of law.
The rights assigned by this paragraph also include, without limitation, the
right to xxx for, settle or release any past, present or future infringement of
any copyright, the same to be held and enjoyed by KODAK, its successors and
assigns to the same extent that it would have been held and enjoyed by FPDI if
this assignment had not been made.
FPDI authorizes and requests the Register of Copyrights or head of any foreign
Copyright Office to issue all copyright registrations which may issue on an
application for the Assigned Software to KODAK, its successors and assigns, in
accordance with this assignment.
3. ASSIGNMENT/SUBLICENSE OF THIRD PARTY SOFTWARE
3.1. FPDI has identified to Kodak only two (2) licenses for Third Party Software
described in Appendix 2 that are necessary to operate with the Assigned
Software. Prior to payment for the DIVA Medical Software hereunder, at KODAK's
request, FPDI shall execute or cause to be executed satisfactory assignments or
sublicenses (as in the case of the Oracle license) of all of the Third Party
Software to KODAK at terms no less favorable than those currently enjoyed by
FPDI.
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4. PAYMENTS.
4.1. In consideration of the Assigned Software acquired, licensed, or
sublicensed hereunder, KODAK shall remit to FPDI the total payment of Eight
hundred fifty thousand U.S. dollars ($850,000 U.S.) as set forth below and
provide training to certain FPDI employees as described in Section 7 below.
4.2. Eight hundred thousand dollars ($800,000) of such payment is due and
payable ten (10) days after receipt of an invoice from FPDI and completion of
the following:
a. Receipt and functional verification by KODAK of all of the Assigned
Software;
b. If requested by KODAK, satisfactory assignment or sublicense of all of
the Third Party Software to KODAK at terms no less favorable than those
currently enjoyed by FPDI;
c. Payment to KODAK of its pro-rated share of any pre-payments received
by FPDI from Software Support Customers for software support services to be
provided by KODAK after the Effective Date; and
d. Acceptance of KODAK's employment offers by each of the DIVA Medical
Software Employees.
4.3. Following completion of all of the items listed in Section 4.2, the
remaining fifty thousand dollars ($50,000) of the amount specified in Section
4.1 will be payable ten (10) days after receipt of an invoice from FPDI and
completion of the following:
a. Commencement date of employment with Kodak by the two FPDISAS
employees referenced in Section 7.4, provided such commencement date is no
later than July 1, 2003; and;
b. Receipt and functional verification by KODAK of all of the DIVANet
Software described in Section 7.4.
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5. USE OF FPDI TRADEMARKS
5.1. FPDI grants to KODAK a fully-paid, non-exclusive worldwide license to use
any of FPDI or FPDISAS' trademarks included as part of Assigned Software for any
of KODAK's business purposes in the Medical Imaging and Information Management
Market for a period not to exceed six months from the Effective Date in order to
allow KODAK adequate time to remove such trademarks from the Assigned Software
and Licensed Software for future versions of the DIVA Medical Software.
5.2. FPDI grants to KODAK a fully-paid, non-exclusive worldwide license to use
any of FPDI or FPDISAS' trademarks included as part of Assigned Software for
software support services for the Software Support Customers that KODAK has
agreed to service throughout the period of KODAK's service obligation.
6. SALES/SERVICE REVENUE FROM DIVA MEDICAL SOFTWARE
6.1. All sales and service revenue resulting from customer signed agreements for
the purchase of or service support of DIVA Medical Software that were fully
executed and delivered prior to the Effective Date shall vest in FPDI. This does
not apply to any service revenue prepaid by the customer for which KODAK will
provide software support following the Effective Date. For all such service
revenue, FPDI shall pay KODAK a pro-rated share directly proportional to the
fraction of service period obligation for which KODAK has service responsibility
to Software Support Customers.
6.2. All sales and service revenue resulting from customer agreements for the
purchase of or service support of DIVA Medical Software that are fully executed
on or after the Effective Date shall vest in KODAK.
7. EMPLOYEE HIRING/TECHNOLOGY TRANSFER/CONTINUED DEVELOPMENT
7.1. FPDI acknowledges and agrees that Kodak's hiring of all of the DIVA Medical
Software Employees is critical to KODAK's future commercial use of the DIVA
Medical Software. Therefore, FPDI will use its best efforts to encourage all
such DIVA Medical Software Employees to accept employment with KODAK.
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7.2. In no event will KODAK be liable in any way for past or future
compensation, pensions, benefits, expense reimbursement, car leases, living
expenses, or any other payments of any kind owed to the DIVA Medical Software
Employees ("Employee Benefits") while employed by FPDI, FPDISAS, or any previous
employer. FPDI will hold harmless and indemnify KODAK, its subsidiaries and
affiliated entities from any claims, demands, actions, judgments or settlements
by the DIVA Medical Software Employees and any other past or current FPDISAS
employees for Employee Benefits while employed by FPDISAS, FPDI or any previous
employer.
7.2.2. Kodak's employment offers to each of the DIVA Medical Software
Employees will allow such Employees to take in 2003 the vacation days they
accumulated with FPDISAS in years 2002 and 2003 (25 days per employee) on a
"leave of absence basis" meaning that the DIVA Medical Software Employees may
take up to twenty-five (25) days' vacation as KODAK employees in 2003. FPDI
represents that such Kodak offers will resolve all potential claims by or
liabilities to the DIVA Medical Software Employees relating to vacation time
accrued while such Employees were employed by FPDISAS.
7.3. Following the Effective Date of this Agreement and the hiring of all or
substantially all of the DIVA Medical Software Employees, KODAK shall provide to
certain FPDI employees and contractors the following training for DIVA
Non-Medical Market Software:
7.3.1. For a period of two consecutive weeks (ten business days) beginning
on May 15, 2003, KODAK, through a certain number of the DIVA Medical
Software Employees, shall provide a one on one transfer of knowledge
relating to the DIVA Non-Medical Market Software to certain FPDI employees
and contractors on a regular full-time basis (eight (8) hours per business
day) at the FPDISAS facility in Toulouse, France. This knowledge transfer
will include detailed instructions on the organization of source code,
review of software architecture, functional design, implementation details,
etc. This process may be separated by modules, such as Actor, Manager, GUI,
Interfaces, etc. The instructions shall also include project builds for
both the UNIX and Windows Operating Systems, compilation instructions,
versioning, and the use of all software utilities and tools.
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7.3.2. For a period of ten consecutive weeks immediately following the
initial two week period described above, KODAK, shall make available by
phone conference or e-mail a certain number of the DIVA Medical Software
Employees for up to one-third of their working time to continue the
knowledge transfer described above to the designated FPDI employees and
contractors.
7.3.3. For a period of a maximum of six consecutive months following the
ten week period described above, KODAK, shall make available for phone and
e-mail consultation a certain number of the DIVA Medical Software Employees
during France's regular business hours to continue the knowledge transfer
described in Section 7.3(a) to the designated FPDI employees up to a
maximum of 300 KODAK labor hours.
7.3.4. KODAK shall have no liability for paying any of FPDI's expenses for
any of the training provided hereunder, including without limitation,
travel, living expenses, or salaries of FPDI's employees.
7.3.5. The obligations in Paragraph 7.3 represent KODAK's entire liability
with respect to its training obligations to FPDI hereunder. Any additional
training requested will be offered at KODAK's sole discretion and will be
billed at $300 per hour and will be provided under other terms to be
negotiated in good faith.
7.3.6. In the event of a dispute between the parties as to whether KODAK
fulfilled its obligations under this Section 7.3, the parties will
participate in the following escalation and dispute resolution process:
i. FPDI will send written notice to KODAK that it wishes to escalate
the dispute to the next level of KODAK management. Within ten (10) days of
the date of such notice, Kodak will appoint a manager at least one level
above the management level at which the dispute was previously discussed to
meet face to face or by conference call with FPDI's designated
representative. Such meeting or conference call will take place within
seven (7) business days from the end of the ten (10) day notice period
referenced above.
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ii. If the FPDI designee and the appointed KODAK manager are unable
resolve the dispute within fourteen (14) days of the meeting or conference
call referenced above, the President or Chief Operating Officer of Kodak's
Health Imaging division will meet face to face or conduct a conference call
with FPDI's designee within seven (7) days thereafter.
iii. If the President or Chief Operating Officer of KODAK's Health
Imaging division and FPDI's designee are unable to resolve the dispute
within fourteen (14) days after such meeting or conference call, both
parties will be free to pursue the dispute in the U.S. courts.
7.4. KODAK acknowledges and fully supports FPDI and KODAK's mutual desire to
complete the development of new DIVA software known as DIVANet and all dependent
and related software ("DIVANet Software"). Therefore, KODAK agrees to permit
DIVA Medical Software Employees Marc Laurentin and Beranger Gonnet, following
their acceptance of employment offers from Kodak, to remain employed by FPDISAS
in order to complete work on the DIVANet Software and other work required by
FPDI until June 30, 2003. Both KODAK and FPDISAS employees shall work jointly to
develop the DIVANet Software and other DIVA-related software until completion of
the first release version of such DIVANet Software but in no event later than
June 30, 2003. For a period of up to one (1) calendar month following such first
release (or work product created as of June 30, 2003), and in no event later
than July 31, 2003, KODAK shall provide testing services for both the Medical
Imaging and Information Management Market and Non-Medical Market versions of the
DIVANet Software, and shall use commercially-reasonable efforts to provide an
update, if necessary, that corrects bugs and fundamental operational issues in
such DIVANet Software. Regardless of which party creates any particular part of
the DIVANet Software or other DIVA-related software until July 31,2003, KODAK
and FPDI agree to assign their respective rights and interests as follows:
7.4.1. KODAK shall be the owner of all right, title, and interest in and to
the DIVANet Software and other DIVA-related software for the Medical Imaging and
Information Management Market, including the copyright and all related
intellectual property rights therein; and
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7.4.2. FPDI shall be the owner of all right, title, and interest in and to
the DIVANet Software and other DIVA-related software for Non-Medical Imaging and
Information Management Market applications, including the copyright and all
related intellectual property rights therein.
7.5. Effective August 1, 2003 and thereafter, each party shall own all right,
title, and interest in and to the intellectual property created by its own
employees and contractors with no licensing rights granted to the other party,
unless otherwise agreed in a separate written agreement.
8. SOFTWARE SUPPORT OBLIGATIONS
8.1. KODAK shall assume FPDI's software support obligations to the customers
listed in Appendix 4. FPDI shall assign or cause to be assigned to KODAK any
executed contracts with such customers, including any payment obligations, and
shall fully describe in writing any oral agreements and/or understandings with
such customers to KODAK prior to KODAK's obligation for payment to FPDI under
Section 4.2.
8.2. KODAK shall have no liability to provide any of FPDI's software support
services to customers except for those customers listed in Appendix 4 and only
to the extent those services have been disclosed to KODAK in writing under this
Agreement. Notwithstanding the foregoing, KODAK is willing to provide support
services through a subcontracting arrangement with FPDI under terms to be
negotiated in good faith for the following four current FPDI customers:
CHU Bordeaux (France); XXX Xxxxxxxx (France); Saint Xxxxxx (France);
Neuchatel (Switzerland).
9. NON-COMPETITION
9.1. FPDI acknowledges and agrees that KODAK is obligated under this Agreement
to pay good and valuable consideration for the assignment of the DIVA
Medical Software. Therefore, FPDI and its successors/assigns agree that for
a period of seven (7) years from the Effective Date of this Agreement, FPDI
and its successors/assigns shall not offer to sell or license/distribute
any software product, or provide services that utilize any software product
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with functionality to store digital data, to the Medical Imaging and
Information Management Market.
9.2. KODAK and its successors/assigns shall not offer to sell or
license/distribute the Assigned Software, or provide services that utilize
the Assigned Software, to customers in the Non-Medical Imaging and
Information Management Market.
10. WARRANTY AND REPRESENTATIONS
10.1. FPDI represents and warrants that the items listed in Appendices 1 and 2
are the complete components of DIVA Medical Software applications in all
formats, associated documentation, and tools necessary for KODAK to successfully
operate and commercially exploit the DIVA Medical Software.
10.2. FPDI represents and warrants that there is no Open Source software code
contained in the DIVA Medical Software.
10.3. FPDI represents and warrants that as of the Effective Date, there are no
past royalties owed for Third Party Software.
10.4. FPDI represents and warrants that the individuals listed in Appendix 3 as
the DIVA Medical Software Employees are knowledgeable in the development, use,
maintenance, and/or marketing of DIVA Medical Software.
10.5. FPDI represents and warrants that there are no outstanding obligations to
any of the DIVA Medical Employees which KODAK would be obligated to satisfy
provided that Kodak will include in its offers to the DIVA Medical Employees the
conditions set forth in Section 7.2.2 of this Agreement.
10.6. FPDI represents and warrants that there are no other customers other than
the Software Support Customers listed in Appendix 4 for which KODAK would be
obligated to provide software support services of any kind.
10.7. FPDI represents that as of the Effective Date, no claim has been made or
alleged against the Assigned Software that such Software infringes the
intellectual property rights of any third
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party. Except for all of the foregoing representations in Section 10, however,
all software programs are provided "AS IS", and without warranty of any kind.
FPDI DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
10.8 FPDI represents and warrants that there are no known past, current, or
future financial obligations from any party involving any commercial use of the
Assigned Software for which KODAK would be obligated to pay, other than those
obligations mentioned herein.
11. INDEMNITY.
11.1. KODAK assumes responsibility for its own use of the Assigned Software
under this Agreement, and will indemnify and defend FPDI against any claim of a
third party resulting from such use, and pay any costs and damages, including
reasonable attorneys fees, that a court finally awards against FPDI or FPDISAS
as a result of such claim, provided that FPDI gives KODAK prompt written notice
of such claim and tenders to KODAK the defense and all related settlement
negotiations.
11.2. FPDI retains responsibility for its own use of the DIVA Non-Medical Market
Software, and will indemnify and defend KODAK against any claim of a third party
resulting from such use, and pay any costs and damages, including reasonable
attorneys fees, that a court finally awards against KODAK as a result of such
claim, provided that KODAK gives FPDI prompt written notice of such claim and
tenders to KODAK the defense and all related settlement negotiations.
12. TERMINATION.
12.1. FPDI may void any assignment or terminate any license granted to KODAK
hereunder for KODAK's failure to make the payment specified in Section 4 above.
13. MISCELLANEOUS.
13.1. This Agreement shall be construed in accordance with the laws of the State
of New York without regard to its conflict of laws principles.
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13.2. Nothing in this Agreement is to be construed as an assignment or grant of
any right, title or interest in any trademark, copyright, design or trade dress
or patent right beyond the assignments or licenses expressly granted.
13.3. The parties are independent contractors under this Agreement. Neither
party has the authority and may not directly or indirectly contract for any
obligations of any kind in the name of or chargeable against the other party
without that party's consent.
13.4. All notices provided for herein shall be given in writing by personal
delivery, registered mail, or by facsimile with confirmation by registered mail,
addressed to the party to be notified at the address specified above for such
party.
13.5. This Agreement or any one or more of its Appendices may be assigned to a
parent or subsidiary of a party, or to a third party acquiring substantially all
of the assets of a party, provided that prior to such assignment the other party
has granted its written consent to the assignment, and further provided that
neither party may unreasonably withhold its consent to a request for assignment.
Except as provided above, neither this Agreement nor any Appendix may be
assigned to a third party.
13.6. This Agreement and the Appendices are the entire Agreement between the
parties in connection with the matters set forth herein. This Agreement may only
be amended in writing signed by both parties.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized officers.
XXXXXXX KODAK COMPANY FRONT PORCH DIGITAL, INC.
/s/ XXXXXX XXXXXXXXX /s/ XXXXXX XXXXX
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Authorized Signature Authorized Signature
Xxxxxx Xxxxxxxxx / Vice President Xxx Xxxxx / Chief Executive Officer
APRIL 23, 2003 APRIL 22, 2003
-------------- --------------
Date Signed Date Signed
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Appendix 1
ASSIGNED SOFTWARE
1.1 All source code and materials listed in "DIVA SOURCE CODE, DOCUMENTATION
AND PACKAGING List" dated April 15, 2003 (provided to Kodak by FPDI) which list
is incorporated herein by reference; and
1.2 The DIVANet work product under development for the Medical Imaging and
Information Management Market and software related to DIVANet , including but
not limited to:
a. all of its underlying DIVAsan dependencies;
b. other dependencies including the DIVAnet SDK, the DIVAnet API's, all
related Graphical User Interfaces (GUI) and all associated tools and
utilities;
c. other modules, namely the File System Interface (Version 1.0) that
uses VxFS and DMAPI, and the VACPconverter ported on to DIVAnet, the
VACPconverter module for DIVAnet; and
d. other related software updates resulting from the fine-tuning or
completion of nearly developed modules. These include DIVAsan v5.5.
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Appendix 2
Third Party Software
Merge Technologies, Inc.(only used with DIVA Medical Software) assignment to
KODAK?
Oracle France SAS (also used with DIVA Non-Medical Market Software) sublicensed
to KODAK
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Appendix 3
DIVA MEDICAL SOFTWARE EMPLOYEES
GENERAL MANAGER
Xxxxxxx ALGAYRES
SERVICE
Xxxx KATOSSKY
Project Manager
Xxxxxxx XX XXXXXX
Medical Support
DIVA MEDICAL SALES
Pierre Xxxx XXXXXXX
Medical Marketing and Sales mgt
Xxxxxx XXXXXX
Sales Medical
R&D
Marc LAURENTIN
DIVA R&D mgr
Xxxxxx HAUTESSERRES
SW Engineer
X. XXXXXXXX SW Engineer
X. XXXXXX SW Engineer
Xxxx-Xxxx TOUCAS
Tech leader
Gaetan BUCHETET
SW Engineer
Xxxxxx XXXXXXX
Integration Specialist
Xxxxxxx XXXXXXX
SW Q&A tests
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Appendix 4
Software Support Customers
LIST OF KODAK-FPDI MEDICAL CUSTOMERS UNDER SUPPORT
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CUSTOMER SOFTWARE CONTRACT TYPE PARTNER DATE CURRENT VALUE
WARRANTY
ENDS
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Delft Hospital DIVA 5.4 First year Warranty Kodak August 2003 1000(euro)/month
(Netherlands) Business hours
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Dijon Hospital DIVA 5.2 First year Warranty Kodak June 2003 500(euro)/month
(France)
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Stavanger (Norway) DIVA 5.4 First year Warranty Kodak March 2004 1000(euro)/month
Business hours
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Sundswall (Sueden) DIVA 5.4 First year Warranty Kodak December 2003 250(euro)/month
Business hours
-------------------------------------------------------------------------------------------------------------------
ImageRive DIVA 5.4 First year Warranty Kodak December 2003 250(euro)/month
(Switzerland) Business hours
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NOTES:
o All of the above FPDI-KODAK common customers are under first year
warranty. Under FPDI revenue recognition schedule, 10% of the initial
software license price has been provisioned at start of project to be
recognized monthly as support revenue during the warranty period.
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