EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
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THIS AGREEMENT FOR THE PURCHASE OF ASSETS ("Agreement") is entered into as
of the 17th day of May, 1999, by and between TIER TECHNOLOGIES, INC., a
California corporation ("Purchaser"), and HUMANA INC., a Delaware corporation
("Seller").
W I T N E S S E T H:
WHEREAS, Seller is engaged in the business of providing health care
through a national network of health maintenance organizations;
WHEREAS, Purchaser is an IT solutions company that was engaged by Seller to
integrate various computer systems and develop proprietary software for Seller;
WHEREAS, Seller, in conjunction with Purchaser, has developed an assortment
of tools, processes, policies, procedures, manuals, guidebooks, etc. which
collectively have become known as the Project Management System (PMS); and
WHEREAS, Seller desires to sell and transfer to Purchaser, and Purchaser
desires to acquire from Seller, all of the right, title and interest of Seller,
as such may be, in the assets that comprise the PMS, upon the terms and
conditions contained herein; and
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:
1. PURCHASE AND SALE OF ASSETS.
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1.1 Purchase and Sale. Subject to the terms and conditions contained
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herein, Seller agrees to sell, transfer, convey and assign to Purchaser, and
Purchaser agrees to purchase and acquire from Seller for Purchaser's internal
business use on client engagements, on the Closing Date (as hereinafter
defined), all of Seller's right, title and interest in and to all of the assets
and properties of Seller which comprise the PMS as the same may exist on the
Closing Date (the "Transferred Assets"), including the following:
(a) The Project Management Database (a.k.a.: Secure Billing
Requirements Database) which includes the following: all
necessary tables to support requirements, design specifications,
testing, problem reports, issues tracking, action item tracking,
lessons learned (a.k.a.: Lessons Learned Database), change
control (a.k.a.: Change Management Database, and the production
of metrics.
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(b) Document Deliverable Templates and examples which include: the
System Segment Specifications (SSS), Software Requirements
Specifications (SRS), Interface Requirements Specifications
(IRS), Software Design Document (SDD), Interface Design Document
(IDD), Software Test Plan (STP), Software Test Description (STD),
Software Test Report, Software Training Plan (TP), Implementation
Plan (IP), Conversion Management Plan (CMP), Data Base Design
Document (DBDD), Project Management Plan (PMP), Facilities
Management Document (FM), Financial Analysis Document, Risk
Assessment Report, Project Metrics, and Lessons Learned Document
(LLD).
(c) Methodologies: Project Life Cycle Methodology
(d) Guidebooks including but not limited to: Software Process
Improvement Guidebook, Software Project Planning and Management
Guidebook, Peer Review Guidebook, Request for Proposal Guidebook,
and the Software Configuration Guidebook.
(e) Procedures/Practices including, but not limited to: Process
Improvement Process, Project Management Plan (PMP) Practices,
Project Prioritization Practice, Project Profiling Practice,
Project Request Practice, and Project Scheduling Practice.
(f) Processes related to Business Rules Extraction, SpecPac
Development, and Testing Processes as documented in the PMP.
(g) Policies: including, but not limited to: Software Requirements
Management Policy, Software Project Planning Policy, Software
Project Tracking and Oversight Policy, Software Subcontract
Management Policy, Software Quality Assurance Policy, Software
Configuration Management Policy, Organization Process Focus
Policy, Organization Process Definition Policy, Training Program
Policy, Integrated Software Management Policy, Software Product
Engineering Policy, Intergroup Coordination Policy, Peer Review
Policy, Issues Management Policy, Project Prioritization Policy,
Software Quality Management Policy, Defect Prevention Policy,
Technology Change Management Policy, and Process Change
Management Policy.
(h) Presentation briefings related to above stated databases,
documents, templates, Guidebooks, Methodologies,
Procedure/Practices, and Policies.
(i) All of Seller's proprietary and confidential information
contained in the PMS and its components as set forth in (a)-(h)
above, including, without limitation (i) trade secrets, technical
information, know-how, ideas, designs, processes, procedures,
algorithms, discoveries, patents, patent applications, and
copyrights, and all improvements thereof, and (ii) all of
Seller's intangible property rights relating to the operation of
the PMS or otherwise used or useable with respect to the PMS;
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(j) All of Seller's trademarks, service marks, and trade names used
or useable with respect to the PMS including, without limitation,
all registrations and pending applications therefor, and all
goodwill associated therewith.
Purchaser may use the Transferred Assets only for its internal business
purposes and, with the exception of the End User License Agreement of even date
herewith to Seller, may not sell, license, rent, loan, or otherwise transfer the
Transferred Assets to any third party.
1.2 Purchase Price. The purchase price for Seller's interest in the
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Transferred Assets (the "Purchase Price") shall be $2,000,000.00, payable at
Closing by wire transfer.
1.3 Obligations Not Assumed by Purchaser. Purchaser shall not assume any
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obligation or liability of Seller of any kind, and Seller shall pay, satisfy and
perform all of its obligations, whether fixed, contingent, known or unknown and
whether existing as of the Closing or arising thereafter, which may affect in
any way the Seller's interest in the Transferred Assets. Without limiting the
generality of the foregoing, under no circumstances shall Purchaser be deemed to
assume any liability or obligation of Seller arising out of or relating to (a)
any actual or alleged tortious conduct of Seller or any of its employees or
agents, (b) any product liability claim, (c) any claim for infringement or
breach of warranty or contract by Seller, (d) any claim predicated on strict
liability or any similar legal theory, (e) the violation of any law, ordinance
or regulation in effect prior to the Closing, (f) any business or business
activities of Seller, (g) any liability of Seller for any federal, state or
local taxes of any kind or character arising out of Seller's business, or (h)
any liability of Seller under or arising by reason of this Agreement.
Notwithstanding any other provision of this Agreement, the obligations of Seller
pursuant to this Section shall survive the Closing and the transactions
contemplated by this Agreement.
1.4 Closing. The consummation of the transactions contemplated in this
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Agreement (the "Closing") shall take place at the offices of Tier Technologies,
Inc., 1350 Treat Blvd. Suite 250, Walnut Creek, CA 94596 at 10:00 a.m. local
time, on or about May 20, 1999 ("Closing Date").
1.5 Transactions and Documents at Closing.
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(a) At the Closing:
(i) Seller shall convey to Purchaser by quitclaim bill of sale
(attached hereto as Exhibit 1) all of Seller's right, title and interest in
and to the Transferred Assets. Henceforth seller shall make no use thereof
and shall not disclose any of the contents thereof or any of the
intellectual property rights or trade secrets embodied therein without the
prior written consent of Purchaser; and
(ii) Seller shall transmit the Transferred Assets by "remote
communications" (for example, electronic transmission via modem) from
Seller's place of business to Purchaser's office in Walnut Creek,
California; and
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(iii) upon such transmission by Seller, Purchaser shall pay the
Purchase Price in the amount and in the manner set forth in Section 1.2.
(b) Each party shall, at the request of any other party from time to
time and at any time, whether on or after the Closing Date, and without
further consideration, execute and deliver such deeds, assignments,
transfers, assumptions, conveyances, powers of attorney, receipts,
acknowledgments, acceptances and assurances as may be reasonably necessary
to procure for the party so requesting, and its successors and assigns, or
for aiding and assisting in collecting and reducing to possession, any and
all of the Transferred Assets, or otherwise to satisfy and perform the
obligations of the parties hereunder.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER.
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To induce Purchaser to enter into this Agreement and to purchase the
Transferred Assets, Seller represents, warrants and covenants to Purchaser as
follows:
2.1 Enforceability of Agreement. Seller has the full corporate power
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and authority to enter into and execute this Agreement and to carry out the
transactions contemplated hereby in accordance with its terms. There are no
outstanding contracts, demands, commitments or other agreements or arrangements
under which Seller is or may become obligated to sell, transfer or assign any of
the Transferred Assets. This Agreement and all transactions required hereunder
to be performed by Seller have been duly and validly authorized and approved by
all necessary corporate action. This Agreement constitutes the valid and legally
binding obligation, subject to general equity principles, of Seller, enforceable
in accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting the rights of creditors
generally.
2.2 No Inconsistent Obligations. Neither the execution and delivery of
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this Agreement, nor the consummation of the transactions contemplated herein
will result in a violation or breach of, or constitute a default under (a) the
articles of incorporation or bylaws of Seller, (b) any term or provision of any
indenture, note, mortgage, bond, security agreement, loan agreement, guaranty,
pledge, or other instrument, contract, agreement or commitment, (c) any writ,
order, judgment, decree, law, rule, regulation, or ordinance, (d) any applicable
ruling or order of any administrative or governmental body, or (e) any other
commitment or restriction, to which Seller is a party or by which any of them or
any of the Transferred Assets is subject or bound; nor will such actions result
in (i) the creation of any claim, lien, charge or encumbrance on any of the
Transferred Assets, (ii) the acceleration or creation of any obligation of
Seller, or (iii) the forfeiture of any material right or privilege of Seller.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
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As an inducement to Seller to enter into this Agreement and to sell the
Transferred Assets to Purchaser, Purchaser hereby represents, warrants and
covenants as follows:
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3.1 Authorization; No Inconsistent Agreements. Purchaser has full
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corporate power and authority to make, execute and perform this Agreement, and
the transactions contemplated hereby. This Agreement and all transactions
required hereunder to be performed by Purchaser have been duly and validly
authorized and approved by all necessary corporate action on the part of
Purchaser. This Agreement has been duly and validly executed and delivered on
behalf of Purchaser by its duly authorized officers, and this Agreement
constitutes the valid and legally binding obligation of Purchaser enforceable,
subject to general equity principles, in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors generally. Neither the execution
and delivery of this Agreement nor the consummation of the transactions hereby
contemplated will constitute a violation or breach of the certificate of
incorporation or the bylaws of Purchaser or any provision of any contract or
other instrument to which Purchaser is a party or by which any of the assets of
Purchaser may be affected or secured, or any order, writ, injunction, decree,
statute, rule or regulation to which Purchaser is subject, or will result in the
creation of any lien, charge, or encumbrance on any of the assets of Purchaser
or acceleration of any debt.
3.2 Consents. The execution and delivery of this Agreement by Purchaser
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(a) do not require the consent, approval or action of, or any filing with or
notice to, any person, firm or other entity, or any public, governmental or
judicial authority, and (b) do not impose any other term, condition or
restriction on Seller pursuant to any business combination, takeover or other
statute, rule or regulation.
3.3 No Violation. Purchaser is not in default under or in violation of
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(a) its certificate of incorporation or bylaws, or (b) any writ, order,
judgment, decree, law, rule, regulation or ordinance, or (c) any applicable
ruling or order of any administrative or governmental body.
3.4 Disclaimer Of Warranties.
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SELLER MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, REGARDING THE
TRANSFERRED ASSETS, INCLUDING ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, TITLE, AND NON-INFRINGEMENT OF THIRD PARTY RIGHTS.
PURCHASER ACKNOWLEDGES THAT IT HAS RELIED ON NO WARRANTIES IN ENTERING INTO THIS
AGREEMENT AND THAT IT ACCEPTS THE TRANSFERRED ASSETS "AS IS."
3.5 Limitation Of Liability.
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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.
4. TERMINATION.
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4.1 Termination for Certain Causes. This Agreement may be terminated at
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any time prior to or on the Closing Date by Seller or Purchaser upon written
notice to the other party as
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follows, and, upon such termination of this Agreement, no party hereto shall
have any liability to the other:
(a) By Purchaser, if any substantial part of Seller's interest in the
Transferred Assets are lost, destroyed, rendered unusable due to fire or other
casualty.
(b) By Purchaser if the terms, covenants or conditions of this
Agreement to be complied with or performed by Seller at or before the Closing
Date shall not have been complied with or performed and such noncompliance or
nonperformance shall not have been waived by Purchaser.
(c) By Purchaser, if there is any fact or condition with respect to
Seller's interest in the Transferred Assets, or any obligation of Seller, which
materially and adversely affects such Assets.
(d) By Seller, if the terms, covenants or conditions of this Agreement
to be complied with or performed by Purchaser at or before the Closing Date
shall not have been complied with or performed and such noncompliance or
nonperformance shall not have been waived by Seller.
(e) By any party, if any action, suit or proceeding shall have been
instituted against any party to this Agreement by any third party to restrain or
prohibit, or to obtain substantial damages in respect of, this Agreement or the
consummation of the transactions contemplated herein, which, in the good faith
opinion of any party, makes consummation of the transactions herein contemplated
inadvisable.
5. MISCELLANEOUS.
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5.1 Notices.
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(a) All notices, demands or other communications required or permitted
to be given or made hereunder shall be in writing and delivered personally or
sent by pre-paid, first class, certified mail, return receipt requested, or by
facsimile transmission to the intended recipient thereof at its facsimile number
set out below. Any such notice, demand or communication shall be deemed to have
been duly given immediately (if given or made by confirmed facsimile), or three
days after mailing, and in proving same it shall be sufficient to show that the
envelope containing the same was duly addressed, stamped and posted, or that
receipt of a facsimile was confirmed by the recipient. The addresses and
facsimile numbers of the parties for purposes of this Agreement are:
(i) If to Purchaser: TIER TECHNOLOGIES, INC.
1350 Treat Blvd., Suite 250
Walnut Creek, CA 94596
Attn: Legal Dept.
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Fax: (925) 946-0923
(ii) If to Seller: HUMANA INC.
500 West Main St.
Louisville, KY 40202
Attn: George W. Vieth
Fax: (502) 580-3639
(b) Any party may change the address to which notices, requests,
demands or other communications to such parties shall be delivered or mailed by
giving notice thereof to the other parties hereto in the manner provided herein.
5.2 Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same instrument.
5.3 Entire Agreement. This Agreement supersedes all prior discussions and
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agreements between the parties with respect to the subject matter hereof, and
this Agreement contains the sole and entire agreement among the parties with
respect to the matters covered hereby. This Agreement shall not be altered or
amended except by an instrument in writing signed by or on behalf of the party
entitled to the benefit of the provision against whom enforcement is sought.
5.4 Governing Law. The validity and effect of this Agreement shall be
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governed by and construed and enforced in accordance with the laws of the State
of California, without regard to conflicts rules.
5.5 Successors and Assigns. This Agreement shall be binding upon and
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shall inure to the benefit of the parties hereto and their respective heirs,
executors, legal representatives, successors and assigns. This Agreement and
the rights and obligations of any party hereunder may not be assigned.
5.6 Partial Invalidity and Severability. All rights and restrictions
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contained herein may be exercised and shall be applicable and binding only to
the extent that they do not violate any applicable laws and are intended to be
limited to the extent necessary to render this Agreement legal, valid and
enforceable. If any term of this Agreement, or part thereof, not essential to
the commercial purpose of this Agreement shall be held to be illegal, invalid or
unenforceable by a court of competent jurisdiction, it is the intention of the
parties that the remaining terms hereof, or part thereof shall constitute their
agreement with respect to the subject matter hereof and all such remaining
terms, or parts thereof, shall remain in full force and effect. To the extent
legally permissible, any illegal, invalid or unenforceable provision of
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this Agreement shall be replaced by a valid provision which will implement the
commercial purpose of the illegal, invalid or unenforceable provision.
5.7 Waiver. Any term or condition of this Agreement may be waived at any
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time by the party which is entitled to the benefit thereof, but only if such
waiver is evidenced by a writing signed by such party. No failure on the part
of any party hereto to exercise, and no delay in exercising any right, power or
remedy created hereunder, shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or remedy by any such party
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. No waiver by any party hereto to any breach of or
default in any term or condition of this Agreement shall constitute a waiver of
or assent to any succeeding breach of or default in the same or any other term
or condition hereof.
5.8 Headings. The headings of particular provisions of this Agreement are
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inserted for convenience only and shall not be construed as a part of this
Agreement or serve as a limitation or expansion on the scope of any term or
provision of this Agreement.
5.9 Number and Gender. Where the context requires, the use of the
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singular form herein shall include the plural, the use of the plural shall
include the singular, and the use of any gender shall include any and all
genders.
5.10 Time of Performance. Time is of the essence.
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5.11 Definition of Knowledge. The words "known", "to the knowledge of,"
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"to the best knowledge of," "aware" or words of similar import employed in this
Agreement with reference to any individual or entity shall be conclusively
presumed to mean that the person or entity has made reasonable and diligent
efforts under the circumstances to become knowledgeable; in the case of any
person other than a natural person, the "knowledge" of such person shall be
deemed to be the knowledge of its directors and senior officers.
5.12 Updates or Enhancements. This sale does not include, and Seller has
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no obligation to transfer to Purchaser Seller's interest in, any changes,
additions, modifications, enhancements, or improvements, if any, made by Seller
to the Transferred Assets after the Closing Date.
5.13 No Maintenance or Support. Seller is not required to provide any
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maintenance or support services with respect to the Transferred Assets under
this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
PURCHASER:
TIER TECHNOLOGIES, INC.
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By: /s/ William Barton
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William Barton
President and CTO
SELLER:
HUMANA INC.
By: /s/ George W. Vieth
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George W. Vieth, Sr. Vice President
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EXHIBIT 1
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Quitclaim Bill of Sale
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Pursuant to Paragraph 1.5 of the Asset Purchase Agreement, dated May 17, 1999,
by and between Tier Technologies, Inc., a California corporation, as
"Purchaser", and Humana Inc., a Delaware corporation, as "Seller" (the
"Agreement"), Seller hereby sells, conveys and delivers to Purchaser, without
warranty, "as is," all of its rights, title and interest, whatever they be, in
and to all of the assets and properties of Seller in the Project Management
System ("PMS") as described in paragraph 1.1 of said Agreement, which PMS was
jointly developed by Seller and Purchaser.
Dated: ________________, 1999
Humana INC.
By
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George W. Vieth Jr.
Sr. Vice President
Market Segment Management