EXHIBIT 10.7
ADMINISTRATIVE SERVICES AGREEMENT ***
THIS ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement") is entered into as of
January 1, 1996 (the "Effective Date") by and between GE Capital Services
Corporation, with an address of 000 Xxxx Xxxxx Xxxx, Xxxxxxxx, XX 00000, ("GECS"
or "Company"), and Network Management Services, Inc., with an address of 0000
Xxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxxxxxxxxxx, XX 00000-0000 ("NMS").
RECITALS
WHEREAS, GECS desires to retain NMS to provide certain administrative Services
for certain employee benefit plans maintained by GECS; and
WHEREAS, NMS desires to provide such services on the terms and conditions set
forth in this agreement,
NOW THEREFORE, in consideration of the foregoing and the mutual promises
contained herein, and subject to the terms and conditions set forth below, NMS
and GECS hereby agree as follows:
ARTICLE 1. CERTAIN DEFINITIONS
-------------------------------
As used in the Agreement, the following terms shall have the following meanings:
1. "BEN-NET"(TM) shall mean NMS' proprietary technology services software
program providing services including but not limited to group set-up,
Vendor set-up, enrollment management, enrollment data edits, eligibility
distribution to Vendors, retroactive enrollment adjustments, payments to
Vendors, and other direct individual billing administration.
2. "Company" or "GECS" shall mean GE Capital Services Corporation and those
subsidiary companies which participate in the Plan.
3. "Employee" shall mean an individual employee or retiree of GECS
participating in or who may by eligible to participate in one of more of
GECS's Plans.
4. "Enrollment Form" shall mean the application an Employee completes to
participate in a Vendor sponsored by GECS.
5. "Vendor" shall mean a licensed organization chartered to provide or arrange
for health care or other employee welfare services and shall include but
not be limited to health maintenance organizations, preferred provider
organizations, pharmacy benefits managers, indemnity insurance
organizations, third party administrators, mental health/substance abuse
service organizations, short and long term disability managers, life
insurance organizations, retiree plan administrators, flexible benefit
administrators,
***Pursuant to Rule 406 of the Securities Act of 1933, as amended, confidential
portions of Exhibit 10.7 have been deleted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment.
COBRA/HIPAA (as those terms are hereinafter defined) administrator, and
employee assistance program administrators.
6. "Plan" or "Plans" shall mean any of the employee benefit plans of GECS with
respect to which NMS provides services, as defined in Appendix A to this
Agreement, which is attached hereto and made a part hereof or any amendment
or supplement thereto.
ARTICLE 2. NMS RESPONSIBILITIES
--------------------------------
1. NMS shall be responsible for ensuring that all services, reports, program
and information are rendered according to the highest industry standards.
2. Wherever possible, and when indicated by size, NMS will interact with GECS
and Vendors on a fully electronic basis for the transmission of
eligibility, enrollment and financial data.
3. NMS shall maintain all appropriate regulatory approval necessary to provide
the services specified in this Agreement. NMS will promptly notify GECS of
the institution of any disciplinary proceeding against it or any of its
principal persons or employees relating to any state or federal regulatory
issue.
4. Vendor Management. To the extent directed by GECS, NMS shall provide
overall management of Company's Vendors relating to matters of enrollment,
eligibility distributions, payment, reconciliation, customer service and
general communications.
5. Enrollment Processing.
a) Processing: NMS shall process completed Enrollment Forms within three
(3) business days of receipt. NMS will contact the GECS business for
clarification of all forms that are not properly completed and NMS
cannot determine the correct information. The GECS business unit will
provide NMS with corrected information within three business days. NMS
win process all corrections within one (1) business day of receipt.
b) Electronic Files: NMS shall process GECS's electronic eligibility
files within two (2) business days of receipt. NMS and Company shall
develop a mutually agreed to process for managing records identified
by the BEN-NET(TM) System's edit processing routines. NMS will provide
GECS or the appropriate business unit with an enrollment edit within
three (3) business days of original receipt. This edit will be
communicated to GECS or the appropriate business unit either via
facsimile or e-mail.
c) Notice to Vendors: NMS shall notify each Vendor servicing GECS of new
enrollments and of the date on which coverage will be effective via
electronic file
-2-
transfer if possible. If a Vendor is unable to accept an electronic
file or a smaller number of Company's Employees are enrolled, new
enrollment information will be sent via a paper enrollment report. NMS
shall use its best efforts to assure that the Vendors receive
notification of such enrollment as soon as possible. NMS shall provide
notice, in the first weekly transmission of eligibility information
after NMS' receipt of information, to the appropriate Vendor when new
enrollments occur.
6. Changes in Enrollment.
a) Records of Changes: NMS shall receive, administer and record any
changes in enrollment status within two (2) business days of receipt.
b) Notice to Vendors: NMS shall provide notice, in the first weekly
transmission of eligibility information after NMS' receipt of
information, to the appropriate Vendor when enrollment changes occur.
The parties shall mutually agree on increasing the frequency of
eligibility information transmissions.
c) HIPAA/COBRA: Based on the eligibility information supplied by Company,
NMS shall provide to Company's Vendor, ABR CobraServ, Inc. ("ABR"),
data feeds required by ABR to generate (1) notices for new hires
regarding their rights under the Consolidated Omnibus Reconciliation
Act of 1985 ("COBRA"); (2) qualifying event notice letters for
participants as required by COBRA; and (3) certificates of creditable
coverage as required by the Health Insurance Portability and
Accountability Act of 1996 ("HIPAA"). NMS shall comply with the
reasonable requirements of ABR in providing such services. In
addition, NMS shall provide notice to Vendor benefits administrators
of participant COBRA elections in the same manner as other records of
changes required to be provided pursuant to this section.
7. Enrollment Edits. NMS shall apply Company specific and general edits to
incoming enrollment data. Edit protocols and corrections will either be
made by NMS or NMS and Company will jointly determine how corrections
should be made. Enrollment edits NMS will provide shall include but not be
limited to "Enrollment Tape Fall Offs", "Duplicates within Family",
"Missing Birth dates", "Missing SSNs", "Questionable Relationship", "Non-
Qualifying Event People", and "Coverage Tier Discrepancies".
8. Primary Care Physician Management. NMS will either receive primary care
physician selection from Company electronically or receive and load
selections via paper applications completed by employees. In cases where
Vendor procedures allow, NMS will validate primary care physician selection
against a file supplied to NMS by Vendors.
9. Disenrollment. NMS shall provide notice, in the first weekly transmission
of eligibility information after NMS' receipt of information, to the
appropriate Vendor when a member terminates coverage. The parties shall
mutually agree on increasing the frequency of
-3-
eligibility information transmissions.
10. Electronic Transfer. NMS shall have the capability to accept Company's
payments by automated clearinghouse, and to transmit premium payments to
Vendors by electronic fund transfer.
11. Distribution Reports. NMS shall provide to the Vendors distribution reports
containing summary and detailed enrollment and premium payment information
on a monthly basis. These distribution reports shall contain full
retroactivity data according to Company and Vendor payment rules.
12. (Intentionally omitted.)
13. Customer Service Phone Lines. NMS shall provide a toll free customer
service telephone number for use by GECS benefits staff between 8:00 a.m.
and 6:00 p.m. (Central Time) each business day. The toll free number shall
be staffed with personnel trained to answer eligibility, premium and
service fee payment, invoice and status questions. This customer service
phone line shall not be published of communicated in any way to Company's
Employees who will be directed to contact Company or Vendors as their
primary source of problem resolution. Telephone use reports that detail the
types of calls NMS' customer service unit receives relating to Company,
shall be available to Company on a quarterly basis.
14. Company and Vendor Inquiries. NMS shall promptly respond to all inquiries
from Company and Vendors regarding eligibility, premium, service fees,
invoice and status questions. NMS will promptly refer inquiries not related
to its duties under this Agreement (e.g., coverage issues) to the
appropriate Vendor. Employees will be directed by Company to call their
selected Vendor or Company for service issues whereas NMS is not considered
the first point of contact for Employees.
15. Vendor Inquiries. NMS shall be the primary source of contact for most
Vendor issues with respect to day-to-day administration of the Plan but not
concerning Plan interpretations, appeals or other fiduciary issues and
shall promptly respond to all inquiries from Vendors, whether directly from
the Vendor or Company, regarding the status of enrollees, billing and/or
receipt and disbursement of premium, and reconciliation issues. NMS shall
promptly notify Company of any unresolved concerns or problems identified
by a Vendor.
16. Funds Transfers. NMS shall send to Company via facsimile an invoice that
provides a detailed accounting of the payments to be made to the Vendors
and NMS. Company shall review the invoice and contact NMS to resolve
questions. NMS shall use best efforts to respond to such inquiries within
one (1) business day. Company shall then notify NMS of the amounts to be
withdrawn from the fiduciary account(s) for transmission to the
-4-
following parties: (a) the Vendors for premiums, ASO fees or claims
payments due, and (b) NMS for administrative fees due. Payments to Vendors
and NMS shall be made to the extent possible via electronic transfer to the
accounts designated by each party. Premiums and other service fees shall be
billed monthly while claims funding requests submitted by Vendors shall be
billed weekly, unless otherwise agreed by the parties.
17. Financial Reporting. NMS shall report to Company, with each invoice,
current and annual cumulative premium, service fee and claims expenditures
according to Company's specific division and group structure reporting
needs as instructed by Company.
18. Materials Fulfillment. NMS shall store, collate and mail to Company
locations enrollment materials relating to the Plan. NMS shall maintain an
adequate supply of such materials to meet anticipated demand and shall
contact the appropriate Vendor or Company to replenish its supply. These
materials shall include but not be limited to medical provider directories,
enrollment forms, summary plan descriptions and other information relating
to the Plan.
19. Performance Reporting. NMS shall report to Company, on a quarterly basis,
its standard information package relating to the performance of Vendors.
This report shall include measures of cost, quality, access and service and
shall compare Vendor performance to industry averages for normal and
exception- performance. Each quarterly report shall contain data pertaining
to the most recent quarter along with year to date data. As a part of the
fourth quarter report, NMS shall also perform a summary of each Vendor's
performance for the entire year. This summary will be used by NMS to
calculate and adjudicate the financial risk arrangements with each Vendor.
Quarterly reports shall be provided to GECS within fifteen (15) days of
receipt of relevant data from Vendors. NMS shall provide to Company an
annual comparison of each Vendor's HEDIS data. This report will be provided
thirty (30) days following receipt of data from Vendors.
20. BEN-NET System. NMS shall utilize the BEN-NET system for performing its
obligations under this Agreement. NMS hereby represents that such system
will be fully capable of performing all systems functions necessary to
fulfill NMS' responsibilities under this Agreement. NMS shall be solely
responsible for the upkeep and maintenance of the BEN-NET system.
21. Enhancements to BEN-NET System. NMS will release system enhancements which
can be used as a standard feature of BEN-NET across clients at no charge.
Company will be fully responsible for the cost, if approved in advance, of
enhancements which are made to accommodate the unique requirements of its
operations and which are generally not to be incorporated into BEN-NET as
standard features to be used by other clients.
22. Specific Services and Vendors. NMS shall provide the services, reports,
programs and
-5-
information as outlined herein subject to the number and types of Vendors
and other vendors as outlined in Appendix B which is attached hereto and
made a part hereof
23. GECS Service Team. The parties shall agree on the staffing level and
credentials of personnel providing or coordinating NMS's services pursuant
to this Agreement (the "GECS Service Team"). GECS shall have the right to
interview and approve all members of the GECS Service Team. NMS will
provide GECS access to 7 day, 24-hour voice mail systems, which shall
include direct dial telephone numbers for GECS Service Team members. The
GECS service team shall include, but not be limited to, an executive lead,
account manager, business analyst, and data integrator.
24. Representations and Warranties of NMS. NMS warrants and represents that:
a) it has and will continue to conduct its activities in accordance and
compliance with all applicable laws, regulations, ordinances,
Executive Orders, codes, standards, permits and liens;
b) to the best of its knowledge, all information it has submitted
heretofore and contemporaneously is true and accurate in every
material respect;
c) it has requisite personnel, competence, skill and physical resources
necessary to perform the services herein set forth. NMS further
warrants that services performed by or delivered through NMS shall be
in accordance with the highest generally accepted standards of the
profession at the time services are performed;
d) it will comply with the stated standards, policies and practices of
GECS, including but not limited to GECS's standards, policies and
practices relating to integrity, and to require the same stringent
standards, policies and practices for its employees or other workers
in regard to its services hereunder;
e) it will require each member of the GECS service team to execute the
acknowledgment form referenced on Appendix C, attached hereto and made
a part hereof, acknowledging such person's agreement to comply with
certain policies of GECS designated therein. NMS shall solicit the
execution of such acknowledgment by each such person, and NMS shall
not permit any member of the GECS service team that does not execute
such acknowledgment to perform any services hereunder. NMS shall
furnish GECS with a copy of such acknowledgment that has been executed
by each member of the GECS service team prior to the start of such
performance by such person; and
f) it shall promptly provide any information or materials relating to
services provided hereunder to GECS at its request.
ARTICLE 3. COMPANY RESPONSIBILITIES
------------------------------------
-6-
1. Company shall supply to NMS, according to a mutually agreed to schedule,
regular electronic files or paper reports relating to Employee's selection
of Vendors. If Company does not transmit data in a timely fashion or sends
incomplete or inaccurate data, Company shall recognize that NMS may not be
able to administer its services in complete conformity to the standards and
content contained in this Agreement.
2. Company shall respond to inquiries, including enrollment edits referenced
in section 5b of Article 2, from NMS, relating to administering the
services contained in this Agreement, in a manner sufficient to allow NMS
to fulfill its obligations herein.
3. Company shall reasonably communicate to Employees instructions for
completing enrollment information and otherwise communicating with NMS.
Company shall consider NMS requests to improve Company's communication and
general human resource policies relating to administrative services
provided by NMS.
4. Company shall execute all requests for fund transfers from NMS to Vendors
and NMS by the end of the following business day unless, in Company's
opinion, the request is inaccurate, incomplete or otherwise does not meet
reasonable standards for completeness and documentation.
5. Company, not NMS, shall be responsible for any late payment or
reinstatement fees levied by Vendors relating to improper or late payment
of premiums, service fees of claims funding requests if such improper or
late payments are not the fault or error of NMS. If such improper or late
payments are due to the fault or error of NMS, NMS shall be responsible for
such fees.
6. Company shall reimburse NMS according to Appendix D of this Agreement and
also subject to the following:
a) Fees for routine administrative services, including but not limited to
Employees Enrollment, distribution of enrollment data to Vendors,
payment of fees and reconciliation of payment to Vendors, Customer
Service and general program management shall be immediately and fully
payable to NMS on a monthly basis at the time GECS reimburses Vendors
(unless alternative schedule(s) are mutual agreed upon by the
applicable parties).
b) NMS will be responsible for providing services to GECS in relation to
only those Vendors specifically listed in Appendix D. Services and
fees relating to Vendors not listed in Appendix D must be jointly
agreed to in writing by both parties.
c) Fees services and expenses not reimbursed to NMS on a regular monthly
basis, including but not limited to special projects, are due to NMS
forty five (45) days after the invoice date.
-7-
d) GECS shall reimburse NMS for all approved and reasonable travel
related expenses including but not limited to airfare, ground
transportation, and hotel and meal expenses. Expense reimbursements
are due to NMS forty five (45) days after the invoice date.
e) All bank charges imposed in connection with the establishment and
maintenance of banking accounts shall be paid by GECS
f) Any costs for printing, mailing and overnight delivery charges
relating to the distribution of information to Company, Employees or
Vendors are the sole responsibility of Company unless otherwise
described in Appendix D.
ARTICLE 4. INDEMNIFICATION, INSURANCE AND FIDUCIARY STATUS
-----------------------------------------------------------
1. Indemnity. Each party (the "Indemnifying Party") shall indemnify and hold
harmless the other party (the "Indemnified Party") from and against any
costs, claims, damages, liabilities, or losses (including costs and
expenses and attorney fees incurred in connection therewith) ("Claims")
arising from injuries, including death, or damage to property resulting
from the negligence or willful misconduct of the indemnifying Party, its
employees, contractors or agents. The Indemnified Party shall notify the
Indemnifying Party promptly of any Claim. The Indemnifying Party may, but
shall not be required to, assume the defenses of any such Claims. The
Indemnified Party shall cooperate with the Indemnifying Party in the
defense of any such claim, and shall not settle or compromise such Claim
without the prior written consent of the Indemnifying Party.
2. Insurance. During the term of this Agreement, NMS shall maintain in force
the following insurance coverage:
a) Workers' Compensation and related insurance as prescribed by the law
of the state(s) in which the work is to be performed
b) General comprehensive liability coverage, with limits of *** per
occurrence and *** in the aggregate
c) Property damage coverage in the amount of *** per occurrence
d) E&O insurance with limits of ***
e) Upon GECS's request, NMS shall provide certificates of insurance
evidencing the aforementioned coverages.
3. Intellectual Property Indemnification. NMS shall indemnify and hold GECS
harmless
***Pursuant to Rule 406 of the Securities Act of 1933, as amended, confidential
portions of Exhibit 10.7 have been deleted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment.
-8-
from any award of costs and damages in any action against GECS
based on a claim that any of the services or materials delivered to GECS in
connection- therewith, including without limitation any computer software,
infringe upon any United States patent right or copyright of any third
party, provided that (i) NMS is promptly notified in writing of any such
suit or claim; and (ii) GECS permits NMS to defend, compromise or settle
any such suit or claim, and gives NMS all available information, reasonable
assistance, and authority necessary to do so. Notwithstanding the
foregoing, NMS shall have no obligation to indemnify GECS with respect to
any claim of infringement pertaining solely to any portion of services or
material prepared in connection therewith modified or prepared by NMS to
conform to specific instructions or directions provided by GECS.
4. Fiduciary Status. GECS and NMS understand and intend that NMS shall not be
a fiduciary within the meaning of the Employee Retirement Income Security
Act of 1974 as amended, or any state law with respect to any Plan. NMS
shall not have any discretion with respect to the management or
administration of any Plan or with respect to determining or changing the
rules or policies pertaining to eligibility or entitlement of any
participant in any Plan to benefits under such Plan. NMS also shall not
have any control or authority with respect to any assets of any Plan,
including the investment or disposition thereof All discretion and control
with respect to the terms, administration or assets of any Plan shall
remain with GECS or with the named fiduciaries under such Plan.
ARTICLE 5. TERM AND TERMINATION
--------------------------------
1. The term of this Agreement will be two years (2) commencing on the
Effective Date hereof and will thereafter by automatically renewed for
successive terms of one (1) year each.
2. This Agreement may be terminated by either party without cause at any time
after first anniversary of the Effective Date upon one hundred twenty (120)
calendar days advance written notice to the other party.
3. In the event that a party materially breaches in the performance, of any of
its requirements under this Agreement, the other party may, at its sole
discretion, provide notice to the breaching party of its intent to
terminate this Agreement.
4. The breaching party shall have thirty (30) days to cure the default and
avoid termination. If the default is not cured within thirty (30) days of
the notice, the other party may execute its termination notice to be
effective thirty (30) days after the end of the expiration of the default
cure period.
5. For the purposes of this Agreement and without limiting the foregoing
generally, a material breach shall include but not be limited to the
following:
a) Failure by NMS to substantially provide the services outlined herein;
-9-
b) Failure by Company to reimburse NMS according to the terms of this
Agreement;
c) A party's filing a petition in bankruptcy or for reorganization or for
the adoption of an arrangement under the Bankruptcy Act (or similar
law of the United States or any other jurisdiction, which law relates
to the liquidation or reorganization of companies or the modification
or alteration of the rights of creditors) or an answer or other
pleading admitting or failing to deny the material allegations of such
a petition or seeking, consenting to or acquiescing in the relief
therein provided;
d) A party's making an assignment, or so called trust mortgage or the
like, for the benefit of its creditors or by its making a proposal to
its creditors under any bankruptcy act;
e) A party's consenting to the appointment of a receiver or a trustee (or
other person performing a similar function) for all or a substantial
part of its property;
f) A party's being adjudicated bankrupt;
g) The entry of a court order which has not been vacated, set aside or
stayed within thirty (30) days from the date of entry, either (i)
appointing a receiver or a trustee for all or a substantial part of
its property or (ii) approving a petition filed or application made
against it for, or effecting an arrangement in, bankruptcy or made
against it for, or effecting an arrangement in, bankruptcy or for a
reorganization or other relief pursuant to any bankruptcy act or for
any other judicial modification or alteration of the rights of
creditors;
h) The assumption of custody or sequestration by a court of competent
jurisdiction of all or substantially all of a party's property, which
custody or sequestration has not been suspended or terminated within
thirty (30) days from its inception; and/or
i) A party's insolvency, as defined by law.
6. Obligations Upon Termination. Upon any termination or non-renewal of this
Agreement, either party shall deliver to the other party any and all data
or information (in whatever form or media) that is owned or developed by or
licensed to the other party and that is supplied hereunder. Furthermore,
NMS shall cooperate with GECS in the transfer of NMS' obligations hereunder
to a replacement service provider.
ARTICLE 6. CONFIDENTIALITY AND PROPERTY RIGHTS
-----------------------------------------------
1. Confidential Information. Confidential Information shall include all
information disclosed by one party (the "Discloser") to the other (the
"Recipient") in writing and marked "Confidential" or disclosed visually or
orally and subsequently confirmed writing to be confidential within 20 days
after the first disclosure. Confidential Information shall
-10-
not, however, include the following:
a) Information which is now or hereafter comes into the public domain
b) Information learned by the Recipient from third parties
c) Information known to the Recipient or developed by the Recipient
independently of information disclosed by the Discloser or
d) Information required to be disclosed by Recipient pursuant to
requirements of law.
2. Confidential Treatment. The Recipient shall treat the Confidential
Information as confidential, using the same standard of care that it uses
to protect its own proprietary or confidential information (but not less
that a reasonable standard of care), and shall use reasonable measure to
prevent disclosure of the Confidential Information to any third party
without the Recipient's consent. The Recipient shall disclose the
Confidential Information only to those of its employees, agents or
subcontractors who have a reasonable need for access thereto for.
3. Return of Information. All Confidential Information shall remain the
property of the Discloser. Upon the Discloser's request, the Recipient
shall promptly return the Confidential Information, provided, however, that
the Recipient may retain copies solely for archival purposes only.
4. NMS Intellectual Property. Nothing contained in this Agreement shall confer
to GECS any property rights, proprietary interest or licenses in the
software, written materials, techniques, or know how used by NMS and its
BEN-NET System.
5. Employee Data. All of the Employee-specific data and any other materials
pertaining to the GECS's requirements or the Plans and provided to NMS by
GECS pursuant to this Agreement shall at all times remain the property of
GECS. NMS shall return all such data to GECS upon GECS's request.
6. Warranty of Title. NMS warrants that it has, or will have as of the date of
delivery to GECS of each item deliverable hereunder, free and clear title
to, and the right to possess, use, sell, transfer, license, lease, and
assign any and all of such deliverable items.
7. Non-Solicitation. For the term of this Agreement and a period of one (1)
year thereafter, neither party shall, in any way, solicit an employee of
the other party to seek employment without the written consent of the other
party.
-11-
ARTICLE 7. ARBITRATION OF DISPUTES
-----------------------------------
Any dispute, controversy or claim that cannot be resolved by the parties arising
out of or relating to this engagement letter or the services covered by this
letter shall be settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association ("AAA"), and judgment
upon the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof The arbitration shall be held in New York, NY, or in such
other location as the parties may mutually agree upon. The arbitration will be
conducted before a panel of three arbitrators, with one arbitrator named by each
party and the third named by the two party-appointed arbitrators, or (if they
should fail to agree on the third) by the AAA. The arbitrators may not award
non-monetary or equitable relief of any sort. They shall have no power to award
punitive damages or any other damages not measured by the prevailing party's
actual damages. All aspects of the arbitration shall be treated as confidential.
Neither the parties nor the arbitrators may disclose the existence, content or
results of the arbitration, except as necessary to comply with legal or
regulatory requirements. Before making any such disclosure, a party shall give
written notice to all other parties and shall afford such parties a reasonable
opportunity to protect their interests.
ARTICLE 8. BOOKS AND RECORDS
-----------------------------
1. GECS shall have the right, but not the obligation, to audit the books and
records of NMS pertaining to NMS' services rendered hereunder no more than
once every 12 months, upon reasonable notice to NMS. Such right to audit
shall survive the termination of this Agreement for two (2) years. All
audits shall be at GECS's expense.
2. NMS will make available for audit by either GECS or its designee
("Auditor") its files, books, procedures and records (including computer
terminal access to same) pertaining to the services provided by NMS under
this Agreement during the hours of 8 a.m. to 6 p.m. Monday through Friday,
but excluding holidays. NMS shall fully cooperate with such audit and shall
make available for interview with the Auditor those personnel with material
involvement or responsibility with respect to the services provided by NMS
under this Agreement. GECS will give NMS reasonable notice of each audit
prior to commencement of the audit. The audit shall be conducted at NMS'
offices.
3. NMS shall have the opportunity, prior to the release of the audit report,
to review the draft and to include in the report its responses to issues
raised by the report.
ARTICLE 9. NOTICES
-------------------
1. General. All notices, requests, demands and other communications required
to be given hereunder shall be in writing and shall be deemed to have been
duly given one day after delivery by hand or via a nationally recognized
overnight courier or five days after mailing, certified or registered mail,
return receipt requested to the party for whom intended at the address
specified in this Article. Either party may designate an alternated
-12-
address for notices by given written notice thereof in accordance with the
provisions of this Article.
2. Notices to NMS. All notices to NMS shall be directed as follows:
Network Management Services
0000 Xxxxxxx Xxxx., Xxxxx 0000
Xxxxxxxxxxx, XX 00000-0000
Attn: Chief Financial Officer
3. Notices to GECS. All notices to client shall be directed as follows:
GE Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx, Manager, Health Care
ARTICLE 10. QUALITY
--------------------
NMS shall devote appropriate personnel and resources to participate in the
GECS's "Six Sigma" quality improvement efforts as required by GECS, including
but not limited to identifying and measuring critical-to-quality ("CTQ")
characteristics, developing projects designed to improve process and outcomes
quality and measuring and reporting such efforts.
ARTICLE 11. GENERAL PROVISIONS
-------------------------------
1. Control of Work. NMS shall be solely responsible for the conduct and
control of the work to be performed under this Agreement by NMS and its
agents or employees.
2. NMS Employees. It is expressly understood and agreed that for all purposes,
including but not limited to workers' compensation insurance, unemployment
insurance, FICA, and federal and state tax withholding, NMS and any of its
agents, contractors or employees performing services under this Agreement
shall not be deemed employees of GECS. NMS shall indemnify GECS from and
against any, taxes imposed on GECS as a result of any determination of any
taxing authority that the agents of NMS performing services hereunder are
employees of GECS. NMS and its employees shall not be entitled to any of
the benefits that GECS provides to its employees and NMS shall provide all
legally required insurance coverage for NMS's employees.
3. No Agency. NMS shall perform its services hereunder as an independent
contractor. This Agreement shall not be deemed or construed to create any
association, partnership, joint venture, or relationship of principal and
agent or master and servant between the parties hereto or any affiliates or
subsidiaries thereof, or to provide either party with the right, power, or
authority, whether express or implies, to create any such duty or
-13-
obligation on behalf of the other party.
4. Applicable Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New York.
5. Publicity. Each party shall obtain the prior written consent of the other
party concerning the content and plan of distribution of any public
announcement, press release or advertisement concerning this Agreement,
provided that NMS may include references to GECS in client lists,
proposals, and other non-public communications concerning NMS or its
services. No prior consent shall be required regarding the inclusion of the
other party's name in notices, disclosure documents, or other filing or
publications required by law or regulations.
6. Paragraph Headings. Section headings are for convenience only and shall not
be considered part of the terms and conditions of this Agreement.
7. Modification. No modification, waiver or amendment of any term or condition
of this Agreement shall be effective unless and until it shall be reduced
to writing and signed on behalf of NMS and GECS
8. Waiver. Failure by either party at any time to require full performance by
the other party or to claim a breach of any term of this Agreement will not
(a) be construed as a waiver of any right under this Agreement, (b) affect
any subsequent breach, or (c) affect the validity of this Agreement or any
part thereof
9. Severability. If any term or provision of this Agreement should be declared
invalid by a court of competent jurisdiction, the remaining terms and
conditions of this Agreement shall be unimpaired.
10. Complete Agreement. The Agreement, including the Appendices, constitutes
the entire agreement between the parties with respect to the subject matter
hereof and j supersedes all prior proposals, negotiations, conversations,
discussions and agreements between the parties. This Agreement may be
modified only by a written instrument executed on behalf of both of the
parties hereto.
11. Assignment. Neither party may assign any of its rights under this Agreement
without the prior written consent of the other party. Subject to the
foregoing, all of the terms and provisions of this Agreement shall be
binding upon and insure to the benefit of and be enforceable by the
successors and permitted assigns of GECS and NMS.
12. Survival. The respective obligations of each party that would be their
nature continue after the termination or expiration of this Agreement,
including without limitation those contained in Confidentiality,
Indemnification, and Intellectual Property Indemnification,
-14-
and shall survive the termination or expiration of this Agreement.
13. Counterparts. This Agreement may be executed in one or more counterparts
each of which shall be deemed to be an original and all of which, taken
together, shall constitute a single instrument.
14. Benefit of the Parties. This Agreement is for the sole and exclusive
benefit of the parties hereto and is not intended to, nor does it, confer
any benefit upon any third party.
15. Contract Benefits Extensions. From time to time, GECS may identify
opportunities for NMS to lower its costs by taking advantage of terms GECS
has negotiated with GECS's suppliers of goods and services. NMS agrees to
cooperate with GECS in identifying such opportunities, and to use its best
efforts to obtain such cost savings when they are available. NMS and GECS
agree that any mutually determined cost savings realized by NMS will be
shared equally between GECS and NMS. NMS also agrees to consider making the
terms of this Agreement available to GECS's customers and suppliers, when
identified by GECS, and to cooperate with GECS to identify opportunities
for GECS's customers and suppliers to reduce their benefit plan
administration costs.
16. Competitiveness Efforts. GECS and NMS shall meet no less than annually to
specifically review the pricing and productivity improvements NMS has
implemented to both ensure NMS's competitive position in the marketplace
and that GECS's agreement with NMS reflects NMS's competitiveness.
IN WITNESS WHEREOF, the parties hereto, by their duly authorized
representatives, have executed this Agreement effective as of the day and year
first set forth above.
NETWORK MANAGEMENT SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
GE CAPITAL CORPORATION
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Xxxxx X. Xxxxx
Manager, Health Care
-15-
APPENDIX A-GECC PLANS
GE Capital Services Medical Plan-Traditional and Point-of-Service
GE Capital Services Dental Plan
A-1
APPENDIX B- REPORTS AND OTHER SERVICES
Health Care Vendors Consolidated Report - Quarterly/Annually
Consolidated Claims, Service Fee and Enrollment Report - Monthly
Monthly Cash Flow Report - Monthly
Employee Count by Health Plan - Monthly *
Employee Count with Medical Coverage - Monthly *
Employee Count with Dental Coverage - Monthly *
Employees with Medical Coverage Only - Monthly *
Employees with Dental Coverage Only - Monthly *
Coordination of Benefits Report - Quarterly
Over Age Dependent Report - Monthly
* These reports will be consolidated into one (1) report in 1998.
B-1
APPENDIX C-GE INTEGRITY FORM
ACKNOWLEDGEMENT
Date: ________________
Reference: Agreement entered into as of January 1, 1996, between GENERAL-
ELECTRIC CAPITAL SERVICES COMPANY ("GECC") and Network Management
Services, Inc.
I, ____________________, will be performing services pursuant to the above-
referenced Agreement. I have received previously or concurrently with this
Acknowledgment a copy of General Electric Company ("GE") policies 20.4, 20.5,
20.7, 20.10, 30.5, and 30.10. I have read these policies, understand them, and
agree to comply with them. Further, I am familiar with and agree to comply with
the Office of Federal Procurement Policy Act Amendments of 1988 (the Act), its
applicable implementing regulations, and GE guidelines regarding the Act, and I
will report immediately to my contact in the GE any information concerning a
violation or possible violation of the Act or its implementing regulations.
____________________________________
Signature
____________________________________
Printed or Typed Name of Signer
C-1
APPENDIX D
1. NMS shall provide the services contained herein for the following Vendors:
Met Life Dental
ABR CobraServ, Inc.
MetraHealth/United HealthCare
USHealthCare
HealthPartners
ComPsych
2. Services for other Vendors shall be subject to a mutually agreeable fee.
3. Company shall reimburse NMS in accordance with the table below for services
rendered by NMS hereunder.
January 1996 through December 1996 *** per employee per month
January 1997 through May 1997 *** per employee per month
June 1997 through December 1997 *** per employee per month
Pricing for future periods of the Agreement shall be mutually agreed to by the
parties. All other fees must be approved in writing by Company.
4. Expenses, to the extent billable hereunder, will be invoiced at cost. NMS
shall adhere to GE travel policy and shall utilize, when made available to NMS,
the GE Travel Center for all travel arrangements pursuant to this Agreement.
Notwithstanding anything to the contrary in the foregoing, automobile travel win
be invoiced at the applicable Internal Revenue Service limit.
*** Pursuant to Rule 406 of the Securities Act of 1933, as amended, confidential
portions of Exhibit 10.7 have been deleted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment.
D-1
