EXHIBIT 10.3
END USER LICENSE AGREEMENT
This license agreement (the "Agreement") is entered into as of May 19, 1999 (the
"Effective Date") between HUMANA INC., a Delaware corporation ("Licensor"), and
TIER TECHNOLOGIES, INC., a California corporation ("Licensee"), for the purpose
of granting Licensee a license to use certain software furnished by Licensor.
RECITALS:
WHEREAS, Licensor engaged Licensee on or about February 16, 1998, to
develop a proprietary software system known between the parties as the New
Billing System;
WHEREAS, Licensor now desires to license the New Billing System software to
Licensee for Licensee to use internally as well as exploit commercially;
NOW, THEREFORE, for and in consideration of the promises and the mutual
covenants and agreements herein contained, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows
AGREEMENT:
1. DEFINITION. As used in this Agreement:
"Affiliates" means, with respect to a party, any person or entity that controls,
is controlled by, or is under common control with such party, where "control"
means ownership of fifty percent (50%) or more of the outstanding voting
securities (but only as long as such person or entity meets these requirements.
"Health Care Business" means any health care, health insurance or managed care
(HMO and PPO) business, including but not limited to a physician or physician
groups, hospitals, and other health care providers, and health insurers,
arrangers or payors.
2. LICENSE GRANT.
2.1 Grant. Subject to the terms and conditions of this Agreement,
Licensor grants to Licensee and its Affiliates an exclusive, transferable,
perpetual and irrevocable (unless terminated under Section 8), license to use
the Licensed Software (as defined in Exhibit A) for Licensee's internal
developmental purposes and to exploit and market on a worldwide basis the
Licensed Software commercially without limitation, except in the Health Care
Business, in which case the grant of license is subject to the provisions of
Section 2.2. Further, Licensor hereby reserves for itself a non-exclusive,
perpetual and irrevocable license to use the Licensed Software in its business.
Licensee is further granted the right to make up to three copies of the Licensed
Software solely for backup or archival purposes.
2.2 Use in the Health Care Business. Further subject to the terms and
conditions of this Agreement, Licensor grants to Licensee and its Affiliates a
non-exclusive, perpetual and irrevocable (unless terminated under Section 8)
license to use the Licensed Software in the Health Care Business, provided that,
in the event Licensee desires to use the Licensed Software in the Health Care
Business, Licensor must first give its consent to such transaction in writing,
which consent may be granted or denied in its complete and absolute discretion.
Licensor, upon Licensee's request for consent to use the Licensed Software in
the Health Care Business, must respond within a reasonable time period, which in
no event may be longer than thirty (30) days, whether or not it consents to
Licensee's request. Should Licensee ever enter the Health Care Business, or
should Licensee ever be acquired by any person or entity in the Health Care
Business, this license may not and will not be used in any such Health Care
Business without
Licensor's express consent, which consent may be granted or denied in its
complete and absolute discretion.
3. MODIFIABILITY AND DERIVATIVE WORKS. Licensor acknowledges that Licensee
may (a) modify, adapt, alter, translate, or create derivative works from the
Licensed Software; (b) merge the Licensed Software with other software; (c)
sublicense (through multiple tiers), lease, rent, loan, or otherwise transfer
the Licensed Software to any third party (subject in each case to the limitation
set forth in Section 2); or (d) otherwise use or copy the Licensed Software
except as expressly disallowed under Section 2.
4. DELIVERY, INSTALLATION AND ACCEPTANCE. Licensor will make available the
Licensed Software, in its current form as set forth on Exhibit A-1, to Licensee
immediately upon execution of this Agreement in accordance with Licensee's
previously given instructions. Licensee shall immediately commence transmission
of the Licensed Software upon execution of the Agreement and shall make multiple
attempts to achieve such transmission, if necessary. The Licensed Software will
be transmitted to Licensee in California electronically (and by other means if
necessary) in accordance with Licensee's reasonable instructions. Licensee will
be responsible for installing the Licensed Software on its computers as
permitted under this Agreement. The Licensed Software will be deemed accepted
after 7 days following the successful transmission of the Software (the
"Acceptance Period") unless Licensee rejects it earlier as nonconforming, upon
which Licensor shall have 10 days to deliver the Licensed Software in accordance
with this Agreement. Any delay by Licensee in commencing transmission of the
Licensed Software shall result in a shortening of the Acceptance Period by the
duration of such delay.
5. LICENSE FEES AND PAYMENT. Licensee will pay License Fees of $4,000,000.00
to Licensor by wire transfer upon acceptance of the Licensed Software.
6. DISCLAIMER OF WARRANTIES
LICENSOR MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, REGARDING THE
LICENSED SOFTWARE, INCLUDING ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, TITLE, AND NON-INFRINGEMENT OF THIRD PARTY RIGHTS. LICENSEE
ACKNOWLEDGES THAT IT HAS RELIED ON NO WARRANTIES IN ENTERING INTO THIS
AGREEMENT.
7. LIMITATION OF LIABILITY.
IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT,
EXEMPLARY, SPECIAL OR INCIDENTAL DAMAGES, INCLUDING ANY LOST DATA AND LOST
PROFITS, ARISING FROM OR RELATING TO THIS AGREEMENT.
8. TERM AND TERMINATION
8.1 Term. The term of this Agreement will begin on the Effective Date and
will continue indefinitely unless terminated pursuant to Section 8.2.
8.2 Termination. Licensee may terminate this Agreement at any time, with
or without cause, upon written notice to Licensor. Licensor may terminate this
Agreement, effective immediately upon written notice to Licensee, if Licensee
breaches any provision of this Agreement and does not cure the breach within
fifteen (15) days after receiving written notice thereof from Licensor.
2.
8.3 Effects of Termination. Upon termination or expiration of this
Agreement for any reason, all licensed rights granted in this Agreement will
immediately cease to exist, and Licensee must promptly discontinue all use of
the Licensed Software, erase all copies of the Licensed Software from Licensee's
computers, and return to Licensor or destroy all copies of the Licensed Software
on tangible media in Licensee's possession or control and certify in writing to
Licensor that it has fully complied with these requirements.
8.4 Survival. Sections 1 ("Definition"), 2 ("License Grant"), 3
("Modifiability and Derivative Works"), 6 ("Disclaimer"), 7 ("Limitation of
Liability"), 8.3 ("Effects of Termination"), and 9 ("General") will survive
expiration or termination of this Agreement for any reason.
9. GENERAL
9.1 Proprietary Rights. The Licensed Software, and all worldwide
intellectual property rights therein, are the exclusive property of Licensor.
All rights in and to the Licensed Software not expressly granted to Licensee in
this Agreement are reserved by Licensor and its suppliers.
9.2 No Maintenance or Support. Licensor is not required to provide any
maintenance or support services with respect to the Licensed Software under this
Agreement.
9.3 Updates or Enhancements. All changes, additions, modifications,
enhancements, or improvements that occur to the Licensed Software after the
Effective Date of this Agreement are expressly included within the definition of
Licensed Software and are subject to this Agreement and must be delivered to
Licensee by Licensor, at no additional charge, in accordance with Section 4, but
only to the extent that Licensee was employed by Licensor to make such changes,
additions, modifications, enhancements or improvements and Licensee in fact made
such changes, additions, modifications, enhancements or improvements. This
section shall not apply to changes, additions, modifications, enhancements, or
improvements to the Licensed Software that were made by Licensor internally or
by a contractor other than Licensee.
9.4 Inspections. Licensee will permit Licensor or its representatives to
review Licensee's relevant records and inspect Licensee's facilities to ensure
compliance with this Agreement. Licensor will give Licensee at least ten (10)
days advance notice of any such inspection and will conduct the same during
normal business hours in a manner that does not unreasonably interfere with
Licensee's normal operations.
9.5 Assignments. Licensee may not assign or transfer, by operation of law
or otherwise, any of its rights under this Agreement to any third party without
Licensor's prior written consent. Any attempted assignment or transfer in
violation of the foregoing will be void.
9.6 Notices. All notices, consents and approvals under this Agreement
must be delivered in writing by courier, by electronic facsimile (fax), or by
certified or registered mail, (postage prepaid and return receipt requested) to
the other party at the address set forth beneath such party's signature, and
will be effective upon receipt or three (3) business days after being deposited
in the mail as required above, whichever occurs sooner. Either party may change
its address by giving notice of the new address to the other party.
9.7 Governing Law. This Agreement will be governed by the laws of the
State of California without regard to its conflicts of law principles.
3.
9.8 Remedies. Except as provided in Section 7, the parties' rights and
remedies under this Agreement are cumulative. Licensee acknowledges that the
Licensed Software contains valuable trade secrets and proprietary information of
Licensor, that any actual or threatened breach of Section 2 will constitute
immediate, irreparable harm to Licensor for which monetary damages would be an
inadequate remedy, and that injunctive relief is an appropriate remedy for such
breach. If any legal action is brought to enforce this Agreement, the
prevailing party will be entitled to receive its attorneys' fees, court costs
and other collection expenses, in addition to any other relief it may receive.
9.9 Waivers. All waivers must be in writing. Any waiver or failure to
enforce any provision of this Agreement on one occasion will not be deemed a
waiver of any other provision or of such provision on any other occasion.
9.10 Severability. If any provision of this Agreement is unenforceable,
such provision will be changed and interpreted to accomplish the objectives of
such provision to the greatest extent possible under applicable law and the
remaining provisions will continue in full force and effect.
9.11 Confidentiality of Agreement. Neither party will disclose any terms
of this Agreement to anyone other than its Affiliates, attorneys, accountants
and other professional advisors except (a) as required by law or (b) pursuant to
a mutually agreeable press release or sales materials or Tier shall be entitled
to make oral and written communications consistent with the approved press
release and sales materials without further approval from licensor (c) in
connection with a contemplated transfer of such party's business and this
Agreement (provided that any third party to whom the terms of this Agreement are
to be disclosed signs a confidentiality agreement reasonably satisfactory to the
other party).
9.12 Construction. The headings of Sections of this Agreement are for
convenience and are not to be used in interpreting this Agreement. As used in
this Agreement, the word "including" means "including but not limited to".
9.13 Counterparts. This Agreement may be executed in counterparts, each of
which will be considered an original, but all of which together will constitute
the same instrument.
9.14 Entire Agreement. This Agreement constitutes the entire agreement
between the parties regarding the subject hereof and supersedes all prior or
contemporaneous agreements, understandings, and communication, whether written
or oral. This Agreement may be amended only by a written document signed by both
parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.
LICENSOR: LICENSEE:
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx Xxxxxx
------------------------------------- --------------------------------
Xxxxx X. Xxxxxxx, Xx. Vice President Xxxxxxx Xxxxxx, President
and CTO
Address for Notice: Address for Notice:
------------------ ------------------
Humana Inc. Tier Technologies, Inc.
000 Xxxx Xxxx Xx. 0000 Xxxxx Xxxx., Xxxxx 000
Xxxxxxxxxx, XX 00000 Xxxxxx Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx Attn: Legal Department
Fax: 000-000-0000 Fax: 000-000-0000
4.
EXHIBIT A
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"Licensed Software" is defined to include all New Billing System (NBS) computer
programs, file definitions, test scenarios documentation (not raw test data),
and system documentation developed by Tier staff and their employed contract
staff under the Master Agreement for Consulting Services as included in the most
current version of the NBS Project Management Plan (PMP), specifically including
as of the execution of this Agreement the Project Documents, the appropriate NBS
Cool:Gen Model Objects and Procedures, and the NBS Cobol and Focus Objects, all
as itemized on Exhibit A-1. To the extent following the execution of this
Agreement it is discovered that Exhibit A-1 does not include all items
comprising the Licensed Software as of the date of this Agreement, regardless of
the cause of such omission, Tier upon reasonable written request to Humana shall
be entitled to receive such omitted components from Humana at no additional
charge. Such omissions will not delay Tier's obligation to pay upon
confirmation of receipt of the items listed on Exhibit A-1. This Agreement does
not entitle Tier to any ownership rights in any CI Parameter related software
products, CI file conversion programs, or any raw test data built or used during
the development and or testing of the NBS. Tier understands that most of the
test data used during the development of the NBS is confidential Humana-owned
proprietary client and member information that is not transferable to Tier under
this Agreement.
In order to facilitate Tier's future use of NBS it is understood that Tier will
need certain file definitions for Humana's Customer Interface (CI) Database.
Humana agrees to provide appropriate file documentation (e.g., DB2 table
----
definitions, table relationship diagrams, etc.) of its CI database structures as
part of this license, which are included in Exhibit A-1. Humana and Tier agree
and understand that no CI system program software, job documentation, system
documentation, or Humana proprietary CI file data have been provided for under
the terms of this Agreement.
Tier understands that the NBS as licensed herein is not an executable system due
to its reliance on other Humana systems which Humana has not agreed to license
to Tier and that the NBS is not a completed system as of the date of this
Agreement and will be delivered "as is" whether completed or not. The
components of the Licensed Software that exist as of the date of this Agreement
and that Licensor will transmit upon execution of this Agreement are the
Increment 1 Development NBS COOL:Gen Model and those items associated with such
model as set forth in Exhibit A-1. This license is intended to provide certain
software components (as described above) that will facilitate Tier's building a
stand-alone executable system.
5.
