BPA SUBCONTRACT

Exhibit 10.3

BPA SUBCONTRACT

THIS BPA SUBCONTRACT (this “Subcontract”) is made and entered into as of the l” day of April, 2005 by and between QuadraMed Corporation, a Delaware corporation, having a place of business at 12110 Sunset Hills Road, Suite 600, Reston, Virginia 20190 (“QuadraMed” or “Licensee”), and Document Storage Systems, Inc., a Florida corporation having a place of business at 12575 US Hwy I, Suite 200, Juno Beach, FL 33408 (“DSS” or “Licensor”).

WITNESSETH

WHEREAS , QuadraMed is engaged in providing healthcare information systems and health information management product suites and services including such major brands as Affinity HIS ^® ; Quantim HIM ^® ; and TempusOne ^® ; and

WHEREAS , DSS designs, manufactures, and licenses healthcare software solutions for the healthcare market including one of which QuadraMed has marketed to the Veterans Administration Health Care System as the claim scrubber module of Encoder Product Suite (“EPS”) defined below

WHEREAS , QuadraMed was awarded and administers a United States General Services Administration (“GSA”) Federal Supply Service Multiple Award Schedule contract identified as GS-35F-0171L and further, under this GSA contract, QuadraMed has been awarded a Blanket Purchase Agreement (“BPA”) Number 101-049AH-005 by the Department of Veterans Affairs that identifies certain products and services available for sale or license, as appropriate, to the Department of Veterans Affairs and/or other United States Government agencies identified in the BPA (individually or collectively, “Customer”); and

WHEREAS , QuadraMed wishes to license certain DSS products and services for integration and use in its EPS products that are sublicensed to the specific government entities under the BPA and such other services as are necessary to install and maintain and support such EPS products; and

WHEREAS , DSS wishes to license its software and provide its Services to QuadraMed for sublicense and resale respectively to Customer, as the opportunity arises, in accordance with the terms of this Subcontract, which constitutes the entire agreement between the parties with respect to the subject matter of this Agreement.

NOW THEREFORE , be it, and it hereby is, agreed that in consideration of the mutual promises set forth herein, the receipt and sufficiency of which are hereby acknowledged, QuadraMed and DSS agree as follows:

According to the terms and conditions of this Subcontract, Licensor hereby grants Licensee a nonexclusive, non-transferable, and restricted license to use the product(s) as specified in Exhibit A solely to provide the EPS products to Customer and provide related services to Customer specified at Exhibit A (collectively “Products”), inclusive of Software in object code form only (“Software”) training, technical and maintenance manuals (“Documentation”), and installation, maintenance and support services (“Services”), as specifically identified in Exhibit A (collectively “Products”).

A. Licensor will provide pursuant to license under this Subcontract to Licensee, according to a reasonable distribution procedure specified by Licensee, the Products for integration into and sublicense to the Customer solely for QuadraMed’s EPS products licensed to government entities as specifically identified in and strictly pursuant to the BPA.

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B. Licensor will provide pursuant to license under this Subcontract to Licensee, and to Licensee’s subcontractors, such Products solely to be used as needed for Licensee’s internal use in developing, integrating and supporting the Products solely for the purpose of sublicensing the Product to the Customer as determined by Licensor.

A. Initial Term . This Subcontract shall be effective as of the date first above written (the “Effective Date”) and, unless otherwise terminated in accordance with the provisions hereof, shall remain in effect through the expiration, termination, or cancellation of the BPA (“Term”).

B. GSA Schedule . The underlying QuadraMed GSA Schedule expires on November 10, 2006. QuadraMed expects GSA to exercise the fiscal year options contained in the QuadraMed GSA Schedule. In the event any option is not exercised, then the BPA will be terminated and this Subcontract similarly terminated subject to the surviving obligations set forth below.

C. Renewal Terms . Unless otherwise terminated in accordance with the terms of this Subcontract, this Subcontract shall be renewed at the end of the Initial Term, in the event that the BPA is extended by the Customer beyond the Initial Term. If the BPA is extended for an additional term, then at the expiration of the Initial Term this Subcontract may, subject to Article 2.D below, be renewed and at the end of any renewal term (each a “Renewal Term”), for a period of one year from the execution date or the anniversary date thereof.

D. Review of BPA .

1. Notwithstanding the foregoing, in the event an annual review of the BPA by the Department of Veterans Affairs results in a written determination solely by the Department of Veterans Affairs and/or any other agencies of the United States Government (“Government”), that the BPA or this Subcontract is no longer in the best interest of the Government, and (in the absence of a material breach of this Subcontract by DSS) without a continuation of the BPA by QuadraMed using itself or a third party to perform DSS’ technological role under this Subcontract, then the BPA and/or this Subcontract may be cancelled by the Customer or by QuadraMed, as the case may be. Upon termination or cancellation of the BPA for any reason other than a material breach by DSS, QuadraMed must pay all outstanding undisputed invoices as determined pursuant to Section 7(G), and must reimburse those costs directly related to DSS’ performance of orders under this Subcontract, all incurred in connection with a Purchase Order or Work Order prior to the date of such termination or cancellation that would be permitted under the applicable Federal Acquisition Regulation (“FAR”) for a similarly situated government contractor. Upon termination, cancellation, or expiration of this Subcontract, DSS shall invoice QuadraMed for any costs or fees owed by QuadraMed under this Subcontract. QuadraMed shall pay any and all undisputed invoiced amounts in full within thirty (30) days of the date of such invoice.

2. To assist QuadraMed in preparing for the Department of Veterans Affairs annual review QuadraMed and DSS shall perform an annual review to provide QuadraMed with ‘appropriate information for QuadraMed’s use during the Department of Veterans Affairs’ annual review. QuadraMed and DSS shall review whether a need for the Subcontract still exists and whether this Subcontract would still be considered a Best Value by the Government. DSS shall provide updated price list information in all instances reflecting the continuation of discounts as agreed upon pursuant to this Subcontract and relied upon

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by QuadraMed in establishing QuadraMed’s pricing in the BPA. Following the Government’s review, QuadraMed shall advise DSS of any decision by the Government that impacts this Subcontract.

A. Purchase Orders . Upon receipt by QuadraMed of orders for EPS products from the Customer under the BPA, QuadraMed shall order such Products from DSS pursuant to written firm fixed price purchase orders in accordance with the Fees and other prices set forth in Exhibit B (each, a “Purchase Order”). Each Purchase Order shall contain an order number, the Fees or price, the date of the order, the quantity of Products ordered, the requested delivery date, the term of the license and any other special conditions of the particular order as agreed to by both parties. All Purchase Orders shall be governed by the terms and conditions of this Subcontract, unless otherwise agreed by both parties in writing. Each Purchase Order that is in accordance with the terms and conditions of this Subcontract shall be accepted by DSS. All Purchase Orders shall be incorporated into, and made a part of, this Subcontract.

B. Delivery . Licensor will deliver the ordered Product, including maintenance updates and Product upgrades within a reasonable time after general release by DSS, on CD’s to QuadraMed’s specified representative for further integration and sublicense to the Customer in object code only and solely in accordance with this Subcontract. QuadraMed is responsible for delivering the Product to the Customer in object code form only. Risk of loss of the Product passes to QuadraMed upon delivery to QuadraMed.

C. [Reserved]

D. Title and License . Title to the Products, including any and all ownership rights to patents, copyrights, trademarks, trade secrets, and source code in connection therewith, shall remain the exclusive property of DSS or QuadraMed, as the case may be, in accordance with the ownership rights as they existed on the day before this Subcontract’s effective date. QuadraMed hereby acknowledges and agrees that QuadraMed shall not have or accrue any title or ownership interests to the Products including any ownership rights to patents, copyrights, trademarks, trade secrets, and source code therein. The Products shall not be deemed a “work made for hire” under the U.S. Copyright Act, 17 U.S.C. §101, et seq. QuadraMed hereby assigns, transfers and conveys to DSS any and all rights, title and interests QuadraMed may have or accrue in the Products including (without limitation) any and all copyrights, trade secrets, patents, and source code in connection therewith. QuadraMed shall not remove, alter, cover or obfuscate any appropriate copyright notice or other proprietary rights notice placed in or on machine language or human readable form as deemed appropriate by DSS in the context of this Subcontract. DSS reserves the right to require QuadraMed to make reasonable changes to such notices, to be implemented by QuadraMed at the next reasonable opportunity.

A. Fees for Products . QuadraMed shall pay DSS the Annual License Fee as set forth on Exhibit B on the Effective Date and on or before each subsequent anniversary of the Effective Date during the Term, including any extensions or renewals thereof. QuadraMed shall pay DSS the Sublicense Fee for each of the Products licensed by DSS under this Subcontract as set forth in Exhibit B (“Fees”), which is based on either royalties set forth or on other fixed bases such as fixed hourly rates or fixed price per action. Fees to QuadraMed for the Products are inclusive of all taxes, are in U.S. Dollars, excluding income tax of QuadraMed or any other taxes based on

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QuadraMed’s net income. Fee increases are limited to these set forth in Exhibit B. Any other products or services provided by DSS shall be provided at the price/fees as set forth in Exhibit B. If such other products or services are not identified in Exhibit B and are not expressly provided free of charge as set forth in this Subcontract, such products or services shall be provided at DSS’ standard time and material rates or fees/prices as applicable.

B. Invoicing . DSS will submit an invoice to QuadraMed upon receipt by DSS of a Purchase Order from QuadraMed for Product. A proper invoice may be prepared on letterhead or standard commercial form, and shall include: (1) DSS’ name and invoice date, (2) The Purchase Order number or Delivery Order Number; (3) Description of Product licensed or provided, the applicable Customer location, the Fee per Product and the total Fee of the invoice; (4) Credits as applicable; (5) Name (if applicable), title, complete mailing address where payment is to be sent; and (6) Other substantiating documentation or information as agreed to between the parties. All invoices shall be mailed to the address first written above: Attention: Accounts Payable.

C. Payment Terms . Unless otherwise agreed in writing, QuadraMed shall pay the Fees and/or price for Products specified in a proper invoice, in U.S. Dollars, within ten (10) days after receipt of the related payment from the Customer, not to exceed ninety (90) days after receipt of a proper invoice by QuadraMed. If QuadraMed fails to pay DSS, in whole or in part, within ninety (90) days after QuadraMed’s receipt of a proper invoice from DSS, QuadraMed will pay DSS interest on the undisputed unpaid balance at the rate of 1% per month until paid.

The Products and any software provided herein is licensed to QuadraMed and sublicensed to Customer pursuant to and in strict accordance with the Software License Agreement set forth at Exhibit C (“Software License”) attached hereto and by this reference incorporated herein. The terms and conditions set forth in the Software License are in addition to, and do not supplant, the terms and conditions set forth in this Subcontract.

A. Noncompete . During the Term of this Subcontract, including any Renewal Term, neither Party shall, independently or as a member of another proposal team, engage in activities that are competitive with the EPS portions provided under this Subcontract to the Department of Veterans Affairs during the Term, except in the case of the Department of Veterans Affairs directing the use of another

B. No Representation . QuadraMed shall not make any representation, guaranty or warranty concerning the Products except as expressly authorized in writing by DSS whether in this Subcontract, in materials provided by DSS in connection with this Subcontract, or otherwise.

C. Price Quotation . QuadraMed will quote only prices, terms and conditions associated with the DSS Products to the Customer as specified herein. QuadraMed will not make representations with respect to DSS that are not within the reasonable capability of DSS. QuadraMed may assume that any representations made by DSS in this Subcontract, in materials provided by DSS in connection with this Subcontract, or otherwise in writing, are considered by DSS to be “within the reasonable capability of DSS”.

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D. Trade Shows . Upon receipt of a written request from DSS, QuadraMed will assist with appropriate trade shows. QuadraMed agrees to keep DSS informed of any potential opportunities to display and participate in forthcoming exhibitions. In no event will QuadraMed be liable or responsible for any and all costs incurred by DSS for such participation.

E. Notifications . DSS agrees to permit QuadraMed to use its name, logos, product names, address, telephone number, and other similar information in all advertisements, mailers, and related promotional materials, as well as on performance-related documentation and client communications.

F. Privity . The BPA is a contract by and between QuadraMed and the U. S. Government. Consequently, DSS shall have no direct discussions, correspondence, meetings, or other similar contacts with the U.S. Government with respect to the BPA except: (1) as authorized by QuadraMed or in conjunction with QuadraMed; and (2) as part of a routine installation/deinstallation or maintenance of the Products; or (3) as reasonably necessary to enable DSS to perform its duties under this Subcontract. DSS shall not remit invoices to the Customer nor receive any payments from the Customer with respect to the BPA.

G. Advertisements . DSS shall not use nor make mention of the BPA, this Subcontract, nor the QuadraMed name in any commercial advertisements or public relations materials without the express written permission of QuadraMed. In the event that such permission is granted, the advertising copy shall not state or imply that (1) the BPA is held by DSS; (2) the DSS Products are, in any way, endorsed or approved, by the U. S. Government; or (3) the DSS Products furnished under the BPA are considered by the Government to be superior to other similar Products on another BPA or other GSA Schedules.

H. Unauthorized Use/Access : QuadraMed shall use its reasonable best efforts to prevent unauthorized users from accessing the Product. QuadraMed shall use its best efforts to prevent unauthorized access to the Product.

I. Records, Reports and Audit . Within thirty (30) days after the end of each calendar quarter, QuadraMed shall forward a report indicating sublicense sales made during such quarter and payment of the applicable fees. QuadraMed shall maintain accurate records relating to sales of Product so as to establish the Sublicense fee payments due to DSS herein. Such books and records shall be available for a reason stated at their place of keeping for inspection by an independent auditor chosen and paid by DSS during normal business ours for the purposes of determining whether the correct fees have been paid to DSS.

J. Indemnification . Each party shall indemnify and hold the other party harmless from any liabilities, damages or costs (including reasonable attorneys’ fees), or expense incurred by the indemnified party (“Indemnitee”) for any claim, demand, proceeding or action based on infringement of a United States patent or copyright as a result of the indemnified party’s or Customer’s use of Software to the extent such claim, demand, proceeding or action is based on any portion(s) of the Software owned or developed by the indemnifying party (“Indemnitor”), provided that the Indemnitee: (I) has notified Indemnitor promptly in writing of any such claim or suit against Indemnitee or Customer and Indemnitee cooperates fully with Indemnitor, and permits Indemnitor to defend or settle such claim or suit on behalf of Indemnitee; (2) has not used the Software with other software except as permitted by Indemnitor’s then-current published specifications or by this or any other valid agreement between the parties; and (3) has complied with all of the terms and conditions of this Subcontract with respect to the Software. Indemnitor shall have no liability or obligation to Indemnitee with respect to any infringement claim based

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upon (a) the use of a superseded or altered release of the Software or Documentation if the infringement would have been avoided by the use of a current or an unaltered release of the Software or Documentation that Indemnitor makes available to Indemnitee and Customer; or (b) the combination, operation or use of any Software or Documentation furnished under this Subcontract with software, hardware or other materials not furnished by Indemnitor if such infringement would have been avoided by the use of the Software or Documentation without such software, hardware or other materials, except where this Subcontract allowed for use with such software, hardware or other materials. The foregoing states the entire liability of each party with respect to the infringement of any United States patent or copyright by the Software or Documentation it owns or develops. Further, if any Software becomes or, in Indemnitor’s opinion, is likely to become the subject of any injunction preventing its use as contemplated herein, Indemnitor may, at its option: (a) procure for Indemnitee and/or Customer the right to continue using such Software; (b) replace or modify such Software so that it becomes non-infringing without substantially compromising its functionality; or, if(a) and (b) are not reasonably available to Indemnitor, then (c) terminate Indemnitor’s or Customer’s license to the allegedly infringing Software and pay to such licensee(s) an amount not to exceed the amount of license fees paid by such licensee(s) for the license to the applicable Software.

K. Documentation : (1) Should DSS develop documentation based upon QuadraMed documentation, DSS will use published formats from QuadraMed. DSS will review QuadraMed documentation as published from time to time and make updates to DSS-produced documentation as appropriate. DSS will provide draft copies for review by QuadraMed at least two weeks prior to publishing its revised documentation and will incorporate any QuadraMed feedback before distributing the documentation to Customer. (2) Should QuadraMed develop documentation based upon DSS documentation, QuadraMed will use published formats from DSS. QuadraMed will review DSS documentation as published from time to time and make updates to QuadraMed-produced documentation as appropriate. QuadraMed will provide draft copies for review by DSS at least two weeks prior to publishing its revised documentation and will incorporate any DSS feedback before distributing the documentation to Customer. (3) Documentation shall carry a legend noting that QuadraMed and/or DSS as the case may be, is/are the owner(s) of their respective works used to derive the documentation and that each such owner retains all rights to its intellectual property.

A. Product Maintenance Support . QuadraMed will provide first-level support to the Customer for the Products. DSS shall provide support to QuadraMed in accordance with Exhibit D (“DSS Product Support Services”).

B. Technical and Maintenance Manuals . DSS will make available to QuadraMed those training, technical and maintenance manuals regarding their Products which it has available. All material will be in the English language. Prices for such publications will be DSS’ then-published prices.

C. Training and Support . QuadraMed agrees that it will require special assistance from DSS in developing and marketing the Products as agreed to by both parties. During the term of this Subcontract, DSS shall provide QuadraMed with technical support consisting of: (a) reasonable hardware and software technical consultation, including the designation of a DSS account manager with primary responsibility for support of QuadraMed and (b) routine maintenance and revision of DSS furnished publications. These DSS activities shall be furnished at no additional cost to QuadraMed.

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D. Product Refreshment . DSS agrees to continually develop reasonable product enhancements to the Product that enable the EPS product to remain competitive in the Department of Veterans Affairs marketplace. Such product enhancements will be provided to QuadraMed at either (as determined by DSS) (1) no additional cost, or (2) according to a price estimate which includes a complete Statement of Work and which is agreed to by QuadraMed in writing in advance. Should DSS make such enhancements available to its other customers, the price charged to QuadraMed shall not exceed DSS’ then-current standard fees for its other customers. Any deliver