EXHIBIT 10.27
*** TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(b)(4),
200.83 AND 240.24b-2
INFORMATION TECHNOLOGY SERVICES AGREEMENT
BETWEEN
PACIFICARE HEALTH SYSTEMS, INC.
AND
INTERNATIONAL BUSINESS MACHINES CORPORATION
DECEMBER 31, 2001
TABLE OF CONTENTS
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1. DEFINITIONS AND CONSTRUCTION............................................................... 1
1.1 Definitions....................................................................... 1
1.2 Interpretation.................................................................... 1
1.3 Order of Precedence............................................................... 2
2. TERM....................................................................................... 2
2.1 Initial Term...................................................................... 2
2.2 Renewal Term; Extension Period.................................................... 2
3. SERVICES................................................................................... 3
3.1 Base Services..................................................................... 3
3.2 Improved Technology............................................................... 4
3.3 Governmental Approvals; Changes in Laws........................................... 4
3.4 Third Party Consents.............................................................. 5
3.5 Technical Architecture and Product Standards...................................... 6
3.6 Knowledge Sharing................................................................. 6
3.7 Break/Fix and Technology Refresh.................................................. 6
3.8 Asset Transfer.................................................................... 6
3.9 Reports........................................................................... 6
3.10 Right to Use Third Parties........................................................ 7
4. TRANSITION................................................................................. 8
4.1 Transition Services............................................................... 8
4.2 Transition Milestones............................................................. 8
5. NEW SERVICES............................................................................... 8
5.1 New Services...................................................................... 8
5.2 Third Party Services in Connection with New Services.............................. 9
6. PACIFICARE RESPONSIBILITIES................................................................ 9
6.1 PacifiCare Supplier Relationship Manager.......................................... 9
6.2 PacifiCare Resources.............................................................. 10
6.3 Use of PacifiCare Facilities...................................................... 10
6.4 PacifiCare Policies and Procedures................................................ 10
7. THIRD PARTY AGREEMENTS..................................................................... 11
7.1 Assigned Agreements............................................................... 11
7.2 Managed Agreements................................................................ 11
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7.3 Performance Under Agreements...................................................... 12
8. SERVICE LEVELS............................................................................. 12
8.1 Base Service Levels............................................................... 12
8.2 Service Levels for New Services................................................... 12
8.3 Adjustment of Service Levels...................................................... 13
8.4 Root-Cause Analysis............................................................... 13
8.5 Measurement and Monitoring Tools.................................................. 13
8.6 Continuous Improvement and Best Practices......................................... 13
8.7 Service Level Credits............................................................. 14
9. PACIFICARE SATISFACTION AND BENCHMARKING................................................... 14
9.1 Satisfaction Survey............................................................... 14
9.2 Benchmarking...................................................................... 14
10. SERVICE LOCATIONS.......................................................................... 15
10.1 Service Locations................................................................. 15
10.2 Safety and Security Procedures.................................................... 15
10.3 Data Security..................................................................... 15
10.4 Data Security Breaches............................................................ 16
10.5 Security Relating to Competitors.................................................. 16
11. HUMAN RESOURCES............................................................................ 16
12. SUPPLIER STAFF............................................................................. 16
12.1 Supplier Client Relationship Manager.............................................. 16
12.2 Key Personnel..................................................................... 17
12.3 Project Staff..................................................................... 17
12.4 Subcontractors.................................................................... 17
12.5 Conduct of Supplier Personnel..................................................... 18
12.6 Non-Competition................................................................... 19
13. MANAGEMENT AND CONTROL..................................................................... 19
13.1 Steering Committee................................................................ 19
13.2 Oversight and Management Process; Relationship with Xxxxx......................... 19
13.3 Policy & Procedures Manual........................................................ 21
13.4 Change Control Procedures......................................................... 21
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14. PROPRIETARY RIGHTS......................................................................... 22
14.1 Background Technology............................................................. 22
14.2 PacifiCare Software............................................................... 22
14.3 Supplier Software................................................................. 22
14.4 Supplier Tools.................................................................... 23
14.5 Work Product...................................................................... 23
14.6 Policies and Procedures Manual.................................................... 23
14.7 Upgrades to Software; Refresh of Supplier Equipment............................... 23
15. DATA....................................................................................... 23
15.1 Ownership of PacifiCare Data...................................................... 23
15.2 Use of PacifiCare Data............................................................ 23
15.3 Correction and Reconstruction..................................................... 24
15.4 Return of Data.................................................................... 24
16. CONTINUED PROVISION OF SERVICES............................................................ 24
16.1 Disaster Recovery Plan............................................................ 24
16.2 Force Majeure..................................................................... 25
16.3 Alternate Source.................................................................. 25
16.4 Allocation of Resources........................................................... 25
17. PAYMENTS AND INVOICING..................................................................... 26
17.1 Base Fees......................................................................... 26
17.2 Base Fees......................................................................... 26
17.3 Variable Fees and Baseline Adjustments............................................ 26
17.4 Variable Fee Report............................................................... 26
17.5 Time of Payment................................................................... 27
17.6 Detailed Invoices................................................................. 27
17.7 Fee Dispute....................................................................... 27
17.8 Substantial Change in Baselines................................................... 27
17.9 Adjustments to Fees............................................................... 27
17.10 Expenses.......................................................................... 27
17.11 Rights of Set-Off................................................................. 28
17.12 Proration......................................................................... 28
17.13 Unused Credits.................................................................... 28
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17.14 [...***...]....................................................................... 28
18. TAXES...................................................................................... 28
18.1 ................................................................................. 28
18.2 ................................................................................. 28
18.3 ................................................................................. 29
18.4 ................................................................................. 29
18.5 ................................................................................. 29
18.6 ................................................................................. 29
19. AUDITS..................................................................................... 29
19.1 Services.......................................................................... 29
19.2 Fees.............................................................................. 30
19.3 Omnibus Reconciliation Act........................................................ 30
19.4 Record Retention.................................................................. 31
19.5 Facilities........................................................................ 31
19.6 Audit Software.................................................................... 31
19.7 Relief............................................................................ 31
20. CONFIDENTIALITY............................................................................ 31
20.1 General Obligations............................................................... 31
20.2 Exceptions........................................................................ 31
20.3 Attorney-Client Privilege......................................................... 32
20.4 Unauthorized Acts................................................................. 32
20.5 Injunctive Relief................................................................. 33
20.6 Residual Information.............................................................. 33
21. REPRESENTATIONS AND WARRANTIES............................................................. 33
21.1 By PacifiCare..................................................................... 33
21.2 By Supplier....................................................................... 34
21.3 Disclaimer........................................................................ 34
22. ADDITIONAL COVENANTS....................................................................... 35
22.1 By PacifiCare..................................................................... 35
22.2 By Supplier....................................................................... 35
23. DISPUTE RESOLUTION......................................................................... 36
23.1 Resolution Procedures............................................................. 36
* CONFIDENTIAL TREATMENT REQUESTED
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23.2 Exclusions........................................................................ 36
23.3 Continuity of Services............................................................ 36
24. TERMINATION................................................................................ 37
24.1 Termination for Convenience....................................................... 37
24.2 Termination for Change in Control................................................. 37
24.3 Termination for Cause............................................................. 37
24.4 Termination for Failure to Provide Critical Services.............................. 37
24.5 Termination in Part............................................................... 38
25. TERMINATION FEES........................................................................... 38
25.1 Early Termination Fee............................................................. 38
25.2 Asset Purchase.................................................................... 38
25.3 No Other Fees..................................................................... 38
26. TERMINATION ASSISTANCE..................................................................... 38
26.1 Termination Assistance Services................................................... 38
26.2 Termination Assistance Services Fees.............................................. 39
26.3 Exit Duties and Exit Rights....................................................... 40
27. INDEMNITIES................................................................................ 41
27.1 Indemnity by PacifiCare........................................................... 41
27.2 Indemnity by Supplier............................................................. 42
27.3 Indemnification Procedures........................................................ 44
27.4 Obligation to Replace............................................................. 44
28. DAMAGES.................................................................................... 45
28.1 Consequential Damages............................................................. 45
28.2 Direct Damages.................................................................... 45
28.3 Basis of the Bargain.............................................................. 45
28.4 Exclusions........................................................................ 46
29. INSURANCE.................................................................................. 46
29.1 Types and Amounts................................................................. 46
29.2 Supplier Agents................................................................... 47
29.3 Documentation..................................................................... 47
29.4 Self Insurance.................................................................... 47
29.5 Intentions........................................................................ 47
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30. Miscellaneous Provisions.......................................................... 48
30.1 Amendments........................................................................ 48
30.2 Assignment........................................................................ 48
30.3 Assignment of Claims.............................................................. 48
30.4 Bankruptcy........................................................................ 48
30.5 Conflict of Interest.............................................................. 48
30.6 Consents, Approvals and Requests.................................................. 49
30.7 Corporate Integrity............................................................... 49
30.8 Counterparts...................................................................... 49
30.9 Covenant of Further Assurances.................................................... 49
30.10 Entire Agreement.................................................................. 49
30.11 Export............................................................................ 49
30.12 Good Faith and Fair Dealing ...................................................... 49
30.13 Governing Law and Venue........................................................... 50
30.14 Notices........................................................................... 50
30.15 Publicity......................................................................... 51
30.16 Relationship...................................................................... 51
30.17 Severability...................................................................... 51
30.18 Survival.......................................................................... 52
30.19 Third Party Beneficiaries......................................................... 52
30.20 Timing and Cumulative Remedies.................................................... 52
30.21 Waivers........................................................................... 52
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INFORMATION TECHNOLOGY SERVICES AGREEMENT
THIS INFORMATION TECHNOLOGY SERVICES AGREEMENT (the "AGREEMENT"), dated
as of December 31, 2001 (the "EFFECTIVE DATE"), is between PACIFICARE HEALTH
SYSTEMS, INC., a Delaware corporation with its principal place of business at
0000 X. Xxxx Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx, 00000 ("PACIFICARE"), and
INTERNATIONAL BUSINESS MACHINES CORPORATION, a New York corporation with its
principal place of business at Xxxxx 000, Xxxxxx, Xxx Xxxx 00000 ("SUPPLIER").
RECITALS
WHEREAS, the PacifiCare Entities (defined below) currently receive
information technology ("IT"), data processing and related services from
internal staff and certain third party providers;
WHEREAS, the PacifiCare Entities desire to centralize the delivery of
their IT services to maximize efficiency, improve the speed of delivering IT
solutions for new business opportunities and improve IT service levels;
WHEREAS, PacifiCare desires for the PacifiCare Entities to obtain from
Supplier, and Supplier desires to provide to the PacifiCare Entities, certain
IT, data processing and related services whereby the PacifiCare Entities shall
be provided with a stable and robust operating environment with sufficient
capacity and scalability to meet business objectives on a proactive, rather than
reactive, basis, in accordance with the terms and conditions of this Agreement;
and
WHEREAS, PacifiCare and Supplier have engaged in extensive negotiations
and discussions that have culminated in the formation of the relationship
described in this Agreement whereby Supplier shall provide to the PacifiCare
Entities certain information technology, data processing and related services,
in accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, for and in consideration of the agreements set forth
below, PacifiCare and Supplier agree as follows:
AGREEMENT
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. Capitalized terms used in this Agreement shall have
the meanings set forth in Exhibit A.
1.2 INTERPRETATION.
(a) The schedules and exhibits attached to this Agreement are
hereby incorporated into and deemed part of this Agreement and all references to
"Agreement" include the schedules and exhibits to this Agreement.
1
(b) The headings preceding the text of sections, the headings
to schedules and exhibits, the table of contents and the table of schedules
included in or attached to this Agreement are used for convenience only and are
not to be considered in construing or interpreting this Agreement.
(c) The use of the terms "including," "include" or "includes"
shall in all cases herein mean "including without limitation," "include without
limitation" or "includes without limitation," respectively.
(d) Words importing the singular include the plural and words
importing the masculine include the feminine and vice versa where the context so
requires.
(e) References to any Law shall mean references to the Law as
it exists on the Effective Date as well as in changed or supplemented form or to
a newly adopted Law.
(f) The Parties acknowledge and agree that they have mutually
negotiated the terms and conditions of this Agreement and that any provision
contained herein with respect to which an issue of interpretation or
construction arises shall not be construed to the detriment of the drafter on
the basis that such Party or its professional advisor was the drafter, but shall
be construed according to the intent of the Parties as evidenced by the entire
Agreement.
1.3 ORDER OF PRECEDENCE. Except as otherwise expressly set forth in the
body of this Agreement or in any schedules or exhibits, in the event of a
conflict, ambiguity or inconsistency between the provisions in the body of this
Agreement and any schedule or exhibit, the provisions in the body of this
Agreement shall prevail.
2. TERM.
2.1 INITIAL TERM. The initial term of this Agreement (the "INITIAL
TERM") shall commence on the Effective Date and continue until 23:59 (Pacific
Time) on December 31, 2011 (the "INITIAL TERM EXPIRATION DATE"), or such earlier
date upon which this Agreement may be terminated in accordance with the
provisions hereof.
2.2 RENEWAL TERM; EXTENSION PERIOD.
(a) Unless this Agreement is terminated in accordance with the
provisions hereof, PacifiCare shall notify Supplier at least one hundred and
eighty (180) days prior to the Initial Term Expiration Date as to whether or not
PacifiCare desires to renew this Agreement. If PacifiCare provides Supplier with
notice that it desires to renew this Agreement for a specified period (the
"RENEWAL TERM") and the Parties agree on the terms and conditions applicable to
the Renewal Term at least sixty (60) days prior to the Initial Term Expiration
Date, then this Agreement shall continue in effect beyond the Initial Term
Expiration Date in accordance with the terms and conditions agreed upon by the
Parties for the Renewal Term. If PacifiCare provides Supplier with notice that
it does not desire to renew this Agreement, this Agreement shall expire on the
Initial Term Expiration Date, subject to Supplier's obligation to provide
Termination Assistance Services as set forth in this Agreement.
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(b) If PacifiCare provides Supplier with notice that it
desires to renew this Agreement and the Parties have not agreed on the terms and
conditions applicable to a Renewal Term at least sixty (60) days prior to the
Initial Term Expiration Date, then the term of this Agreement shall extend for a
period determined by PacifiCare of up to twelve (12) months beyond the Initial
Term Expiration Date (the "EXTENSION PERIOD"), at the charges, terms and
conditions in effect as of the Initial Term Expiration Date. If, during the
Extension Period, the Parties are able to reach agreement on the terms and
conditions applicable to a Renewal Term, then this Agreement shall continue in
effect beyond the end of the Extension Period in accordance with the terms and
conditions agreed upon by the Parties for the Renewal Term. If, during the
Extension Period, the Parties are unable to reach agreement on the terms and
conditions applicable to a Renewal Term, this Agreement shall expire at the end
of the Extension Period, subject to Supplier's obligation to provide Termination
Assistance Services as set forth in this Agreement.
3. SERVICES.
3.1 BASE SERVICES. Commencing on the Effective Date and continuing
throughout the Initial Term and any Renewal Term or Extension Period, if
applicable (collectively, "TERM"), Supplier shall be responsible for providing
to the PacifiCare Entities (with respect to each PacifiCare Entity, as requested
by PacifiCare) the following services (collectively, the "BASE SERVICES"):
(a) the services, functions, tasks and responsibilities
described in this Agreement (including the services, tasks, functions,
responsibilities and projects described in Exhibit B (Statement of Work));
(b) the services, functions, tasks and responsibilities being
performed prior to the Effective Date by the Affected Employees set forth in
Schedule 3.1(b)(i) and the Affected Contractors set forth in Schedule 3.1(b)(ii)
or such other PacifiCare Entities' employees and contractors whose services,
functions or responsibilities were eliminated as a result of this Agreement, in
each case, if such service, function, task or responsibility could reasonably be
characterized as inherent to a service, function, task or responsibility
described in Exhibit B (Statement of Work), even if the service, function, task
or responsibility is not specifically described in this Agreement;
(c) any services, functions, tasks or responsibilities that
are not specifically described in this Agreement, but that are required for the
proper performance and delivery of the Services; and
(d) those services otherwise identified in this Agreement as
part of the Base Services.
Subject to Section 17.3, Supplier shall increase or decrease
the amount of the Base Services according to PacifiCare's request for the Base
Services. With respect to additional business units or entities that PacifiCare
may designate as PacifiCare Included Affiliates, PacifiCare and Supplier shall
negotiate in good faith any New Service associated with integrating such new
PacifiCare Included Affiliates, including applicable transition fees, if any.
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Notwithstanding the foregoing, PacifiCare is not obligated to obtain the
Services from Supplier with respect to any additional entity or business unit or
in connection with any acquisition or corporate combination.
3.2 IMPROVED TECHNOLOGY. Throughout the Term, Supplier shall: (a)
maintain a level of technology used to provide the Services that (i) allows the
PacifiCare Entities to take advantage of technological advances in order to
remain competitive in the markets that the PacifiCare Entities serve, (ii) is at
least current with the level of technology that Supplier uses in providing
services to its other customers who receive services comparable to the Services,
and (iii) is at least current with the level of technology generally adopted
from time to time in the PacifiCare Entities' industries; provided that Supplier
can maintain such level of technology through technology and resources available
to Supplier that do not require a level of investment not otherwise made or
contemplated by Supplier in providing services to similarly situated customers;
(b) jointly, with PacifiCare, on an ongoing basis identify and evaluate the
least cost/highest benefit methods to implement technology advancements and
improved methodologies and processes that represent advancements, improved
methods, and processes in addition to the level of technology evolution,
advancement and improvement otherwise contemplated by this Agreement ("IMPROVED
TECHNOLOGY"); (c) implement such Improved Technology after obtaining
PacifiCare's consent thereto (implementation of which may be effectuated
pursuant to Section 5.1, as agreed by the Parties); and (d) meet with
PacifiCare, upon PacifiCare's request and at least once during every ninety
(90)-day period, in accordance with the procedures agreed upon by the PacifiCare
Supplier Relationship Manager and the Supplier Client Relationship Manager to
inform PacifiCare of any new information technology Supplier is developing or
information technology trends and directions that Supplier, in the ordinary
course of its business, is aware of and that could reasonably be expected to
have an impact on the PacifiCare Entities' business, taking into consideration
the PacifiCare Entities' use of the Services.
3.3 GOVERNMENTAL APPROVALS; CHANGES IN LAWS.
(a) GOVERNMENTAL APPROVALS. PacifiCare shall, at its own cost
and expense, obtain and maintain all licenses, approvals, permits, consents and
authorizations of any Governmental Authority, and provide any notice to any
Governmental Authority, that PacifiCare is required by Law to obtain, maintain,
or provide, other than Supplier Governmental Approvals ("PACIFICARE GOVERNMENTAL
APPROVALS"). Supplier shall, at its own cost and expense, obtain and maintain
all licenses, approvals, permits, consents and authorizations of any
Governmental Authority, and provide any notice to any Governmental Authority,
that Supplier is required by Law to obtain, maintain, or provide, together with
any licenses, approvals, permits, consents, authorizations and notices required
by Law in connection with or as a result of the provision or receipt of the
Services ("SUPPLIER GOVERNMENTAL APPROVALS").
(b) CHANGES IN SUPPLIER LAWS AND PACIFICARE LAWS. PacifiCare
shall monitor and promptly identify and notify Supplier of all changes in Laws
applicable to PacifiCare that affect the provision or receipt of the Services,
other than Supplier Laws ("PACIFICARE LAWS"). Supplier shall monitor and
promptly identify and notify PacifiCare of all changes in Laws applicable to
Supplier that affect the provision or receipt of the Services,
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together with any changes in Laws applicable to either Party that apply to the
provision or receipt of information technology outsourcing services and that
affect the PacifiCare Entities or the provision or receipt of the Services
("SUPPLIER LAWS").
(c) EFFECT OF CHANGES IN LAWS. Supplier and PacifiCare shall
work together to identify the effect of changes in Laws on the provision or
receipt of the Services. PacifiCare shall notify Supplier of changes in
PacifiCare Laws and the Parties shall discuss modifications to the Services, if
any, necessary to comply with such changes in PacifiCare Laws. Supplier shall
promptly thereafter propose any adjustment to the applicable Fees associated
with such modifications. Upon PacifiCare's consent, Supplier shall implement
such modifications to the Services in a timely manner subject to the Change
Control Procedures. Supplier shall notify PacifiCare of changes in Supplier Laws
and Supplier shall implement in a timely manner, at its own cost and expense,
any changes in the Services required to comply with such changes in Supplier
Laws; provided, however, that if such changes have a material effect on the
provision or receipt of the Services, Supplier shall obtain PacifiCare's consent
before implementing such changes.
(d) DEPARTMENT OF MANAGED HEALTH CARE. Without limiting the
Parties' obligations under this Section 3, the Parties agree to cooperate with
each other to address any issues, concerns or requests regarding the provisions
of this Agreement or the provision or receipt of the Services with respect to
PacifiCare of California (DMHC File No. 933-0126), PacifiCare Behavioral Health
of California, Inc. (DMHC File No. 933-0301) and/or PacifiCare Dental (DMHC File
No. 933-0100), expressed by the California Department of Managed Health Care
("DMHC") arising from or related to DMHC File 933-0100, "Amendment to
Administrative and Solicitor Firm Services Agreement with Affiliate," which
PacifiCare submitted to the DMHC on December 17, 2001 (the "DMHC FILING"). To
the extent in responding to the DMHC Filing, the DMHC expresses requirements
that necessitate changes to the Agreement or to the Services, which changes
apply only because of the consummation of the transactions specified in this
Agreement ("DMHC REQUIREMENTS"), the Parties agree to negotiate in good faith
and to make equitable adjustments to this Agreement as may be necessary to
accommodate the DMHC Requirements. If any DMHC Requirements require a material
alteration to the Services, the Parties shall [...***...].
3.4 THIRD PARTY CONSENTS. Supplier shall obtain the Front-End Consents
and PacifiCare shall cooperate with Supplier in obtaining such consents upon
Supplier's request. With respect to any fees and expenses payable to third
parties in connection with obtaining the Front-End Consents, (i) Supplier shall
pay [...***...], (ii) PacifiCare shall pay [...***...].
* CONFIDENTIAL TREATMENT REQUESTED
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In the event Supplier demonstrates to PacifiCare's reasonable satisfaction that
Supplier is unable to obtain a Front-End Consent despite using all reasonable
efforts to obtain such consent, Supplier shall promptly develop a workaround
acceptable to PacifiCare that enables Supplier to perform its obligations under
this Agreement despite the lack of such consent, and, upon receiving
PacifiCare's approval, implement such workaround. The Parties shall [...***...].
The Parties shall use good faith efforts to minimize costs with regard to
Front-End Consents and with regard to workarounds, if any, including, as agreed
by the Parties, changing the classification of third party agreements subject to
Section 7 (e.g., from Assigned Agreement to Managed Agreement or vice versa).
The Parties shall agree on an appropriate adjustment to the Fees in connection
with any reclassification of such third party agreements prior to implementing
such reclassification. Each Party shall comply with the terms and conditions of
the Consents applicable to such Party.
3.5 TECHNICAL ARCHITECTURE AND PRODUCT STANDARDS. Supplier shall comply
with PacifiCare's information management technical architecture and product
standards set forth in Schedule 3.5, as the same may be modified through the
Change Control Procedures by PacifiCare from time to time during the Term and
the Termination Assistance Period.
3.6 KNOWLEDGE SHARING. At least [...***...] every Contract Year, or
upon request after at least fifteen (15) days notice from PacifiCare, Supplier
shall provide knowledge sharing assistance to PacifiCare, including meeting with
representatives of PacifiCare, in order to explain how the Systems work and
should be operated and how the Services are provided. In connection with such
knowledge sharing, Supplier will also provide copies of existing information and
documentation as PacifiCare may require for PacifiCare to understand, operate,
maintain and enhance the Systems and provide the Services. PacifiCare shall not
make more than [...***...] requests in any Contract Year for such knowledGe
sharing.
3.7 BREAK/FIX AND TECHNOLOGY REFRESH. As part of the Base Services,
Supplier is responsible for all necessary procurement activities and charges for
break/fix and technology refresh described in Exhibit B (Statement of Work).
3.8 ASSET TRANSFER. On the Effective Date, Supplier shall purchase the
Assets upon payment to PacifiCare of twenty five million dollars ($25,000,000)
in cash by wire transfer to an account specified by PacifiCare, and the issuance
of a promissory note in the amount of seventeen million dollars ($17,000,000) in
the form attached as Schedule 3.8(a). Supplier shall be responsible for, and
shall pay, all sales, use and other similar taxes arising out of or in
connection with, the transfer of the Assets by PacifiCare to Supplier. Upon
receipt of the twenty five million dollar ($25,000,000) payment specified above,
PacifiCare shall assign and transfer to Supplier the Assets by delivery of a
general assignment and xxxx of sale in the form of Schedule 3.8(b), duly
executed by PacifiCare and Supplier.
3.9 REPORTS.
(a) ANNUAL PLAN.
(i) One hundred twenty (120) days preceding the end
of each calendar year, PacifiCare shall provide to Supplier a proposed set of
estimated baselines for anticipated
* CONFIDENTIAL TREATMENT REQUESTED
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PacifiCare IT requirements for the subsequent calendar year (the "PACIFICARE
ESTIMATED BASELINE REQUIREMENTS"). The PacifiCare Estimated Baseline
Requirements may include: business requirements; long and short-term goals; IT
strategy revisions; capital projects; facility changes (if any); technology
enhancements or changes (including, hardware, software, networks, systems and
PCs); PC support changes; regional changes; IMAC changes; and an annual budget
plan.
(ii) Supplier shall provide to PacifiCare its written
response to the PacifiCare Estimated Baseline Requirements within sixty (60)
days of receipt ("SUPPLIER'S REPLY"). Where appropriate, Supplier's Reply shall
address: technology strategies, operational plans (as necessary) and any program
management changes; changes to standard configurations for hardware, software,
networks and systems; changes within the organization, including new employees
and new subcontractors; changes in geographical location of subcontractors;
Supplier Fees including any retained expenses; changes in the Base Services;
changes in Service Levels and Service Level Credits; and new or added value
projects.
(iii) Within thirty (30) days after PacifiCare's
receipt of Supplier's Reply, the Parties shall formulate a written plan to meet
PacifiCare's anticipated needs for the subsequent calendar year (the "ANNUAL
PLAN"). The Parties shall use good faith efforts to review, approve and adopt
the Annual Plan prior to the end of each calendar year. After the Annual Plan is
adopted, the Parties may negotiate in good faith to make equitable adjustments
as necessary. Such equitable adjustments shall be in writing and signed by both
Parties. Supplier shall maintain all approved changes in writing and shall
notify PacifiCare of such changes in writing.
(b) In addition to the Annual Plan, Supplier shall provide to
PacifiCare, in a format approved by PacifiCare, a set of reports, including
performance, utilization, billing and status reports, as set forth in Schedule
3.9(b) and as otherwise reasonably available to Supplier. Supplier shall provide
all reports as frequently as PacifiCare reasonably requires.
3.10 RIGHT TO USE THIRD PARTIES. PacifiCare may perform itself, or
contract with one or more third parties to perform (in either case, "INSOURCE"),
all or any portion of the Services, provided that any portion of the Services
Insourced shall represent an entire baseline or baselines for a particular
Resource Unit described in Schedule 17, and not a portion thereof. Supplier
shall reduce the Fees proportionately in accordance with Section 17.3 upon the
effective date of the Insourcing, provided that, during each Contract Year,
PacifiCare shall be obligated to pay Supplier a minimum of [...***...] oF the
Base Fees specified in Schedule 17 (as such schedule exists on the Effective
Date) for such Contract Year. PacifiCare shall pay Wind Down Costs, if any,
associated with such Insourcing only with respect to assets dedicated solely to
providing the Services in connection with the Insourced Resource Unit's
baselines. In connection with any Insourcing, Supplier agrees to cooperate in
good faith with PacifiCare and/or any third party provider to the extent
reasonably required by PacifiCare, including provision of (a) written
requirements, standards, and procedures for PacifiCare systems maintained by
Supplier so that the enhancements or developments of such third party may be
operated in conjunction with Services, (b) assistance and support services to
such third party at competitive market prices and (c) access to the Software and
the Equipment as may be reasonably required by such third party and PacifiCare
in connection with Services.
* CONFIDENTIAL TREATMENT REQUESTED
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4. TRANSITION AND CONSOLIDATION.
4.1 TRANSITION SERVICES. Supplier shall perform all functions and
services necessary to accomplish the transition and consolidation of the
PacifiCare Entities' information technology operations and capabilities (the
"TRANSITION SERVICES"). The Transition Services shall be performed in accordance
with the Transition Plan attached hereto as Schedule 4.1 (as may be amended by
Supplier and PacifiCare following the Effective Date) and without causing a
material disruption to the PacifiCare Entities' business. The Transition
Services shall commence on the Effective Date and shall continue for the period
specified in the Transition Plan (the "TRANSITION PERIOD"). Supplier shall
designate one of its Key Personnel (as specified in Schedule 12.2), and notify
PacifiCare of the identity of such individual, for each of the PacifiCare
Entities' facilities and functions being transitioned in accordance with this
Agreement who shall be responsible for managing and implementing the Transition
Services with respect to such functions or services. Until the completion of the
applicable Transition Services, each such individual shall review with the
PacifiCare Supplier Relationship Manager the status of the Transition Services
for which that individual is responsible as often as may be reasonably requested
by the PacifiCare Supplier Relationship Manager.
4.2 TRANSITION MILESTONES. The Transition Plan includes a list of
milestones and deliverables relating to Supplier's obligations pursuant to this
Section 4, together with, for each such milestone or deliverable a start date
and the time period in which Supplier must complete such milestone or deliver
such deliverable. The amount of the Base Fees subject to Service Level Credits
in relation to certain transition milestones and deliverables is set forth in
Schedule 8. PacifiCare's right to receive Service Level Credits under Schedule 8
shall not limit PacifiCare's right to recover other damages incurred by
PacifiCare as a result of the performance failure that caused the Service Level
Credit to be incurred [...***...].
5. NEW SERVICES.
5.1 NEW SERVICES. PacifiCare may, from time to time during the Term,
request that Supplier perform a New Service. Within ten (10) business days of
Supplier's receipt of such a request from PacifiCare, or within another time
period acceptable to the Parties, Supplier shall, and to the extent applicable,
jointly with Xxxxx, provide PacifiCare with a written proposal for such New
Service that shall include:
(a) a description of the services, functions and
responsibilities Supplier anticipates performing in connection with such New
Service;
(b) a schedule for commencing and completing such New Service;
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8
(c) Supplier's prospective fees for such New Service,
including a detailed breakdown of such fees, together with proposed Service
Levels for such New Service;
(d) when appropriate, a description of any new Software or
Equipment to be provided by Supplier in connection with such New Service;
(e) when appropriate, the Software and Equipment and run-time
requirements necessary to develop and operate any new Software;
(f) a description of the human resources necessary to provide
the New Service;
(g) when appropriate, a list of any existing Software or
Equipment included in or to be used in connection with such New Service;
(h) when appropriate, acceptance test criteria and procedures
for any new Software or any products, packages or services; and
(i) such other information requested by PacifiCare.
PacifiCare shall not be obligated to pay for any New Service
and Supplier shall not be obligated to perform any New Service until the
PacifiCare Supplier Relationship Manager has provided Supplier with the
authorization to perform the New Service.
5.2 THIRD PARTY SERVICES IN CONNECTION WITH NEW SERVICES.
Notwithstanding any request made by PacifiCare to Supplier pursuant to Section
5.1 or any other provision of this Agreement, PacifiCare shall have the right to
perform itself, or to contract with a third party to perform, any New Service.
Upon PacifiCare's request, Supplier shall assist PacifiCare in identifying
qualified third party suppliers to provide New Services. In the event PacifiCare
performs itself, or contracts with a third party to perform, any New Service,
Supplier shall cooperate in good faith with PacifiCare and/or any such third
party to the extent reasonably required by PacifiCare. If such cooperation
related to third parties not subject to a Managed Agreement requires Supplier to
use resources not included within the Fees, Supplier shall, before providing
such cooperation, notify PacifiCare that Supplier believes that it is entitled
to additional compensation for providing such cooperation, and advise PacifiCare
of the proposed additional compensation. PacifiCare and Supplier shall negotiate
in good faith with regard to the amount of any additional compensation
applicable to such cooperation.
6. PACIFICARE RESPONSIBILITIES.
6.1 PACIFICARE SUPPLIER RELATIONSHIP MANAGER. PacifiCare shall appoint
an individual (the "PACIFICARE SUPPLIER RELATIONSHIP MANAGER") who, from the
Effective Date, shall serve as the primary PacifiCare representative under this
Agreement. The PacifiCare Supplier Relationship Manager shall (a) have overall
responsibility for managing and coordinating the performance of PacifiCare's
obligations under this Agreement and (b) be authorized to act for and on behalf
of the PacifiCare Entities with respect to all matters relating to this
Agreement. Notwithstanding the foregoing, the PacifiCare Supplier Relationship
9
Manager may, upon notice to Supplier, delegate such of his or her
responsibilities to other PacifiCare employees as the PacifiCare Supplier
Relationship Manager deems appropriate.
6.2 PACIFICARE RESOURCES. Commencing on the Effective Date and
continuing for so long as Supplier requires the same for the performance of the
Services, PacifiCare shall provide to Supplier, at no charge to Supplier and
subject to Section 6.3, the same or similar access to and use of certain space
in PacifiCare's premises, together with reasonable office furnishings,
janitorial services and utilities, to the extent PacifiCare otherwise provides
to its employees and subcontractors performing work for PacifiCare at such
facilities. Supplier's use of such premises shall be in accordance with
PacifiCare's policies and procedures in effect from time to time.
6.3 USE OF PACIFICARE FACILITIES.
(a) Except as expressly provided in this Agreement, Supplier
shall use the PacifiCare Service Locations for the sole and exclusive purpose of
providing the Services. Use of such facilities by Supplier does not constitute a
leasehold interest in favor of Supplier or any of Supplier's customers. Use of
PacifiCare Service Locations shall be subject to the rules and regulations
attached as Schedule 6.3(a).
(b) Supplier shall use the PacifiCare Service Locations in an
efficient manner. To the extent that Supplier operates the space in a manner
that unnecessarily and materially increases facility costs incurred by
PacifiCare, PacifiCare shall notify Supplier of such costs and Supplier shall
take such steps as may be necessary to reduce such facility costs to a level
acceptable to PacifiCare.
(c) Supplier and Supplier Agents shall keep the PacifiCare
Service Locations in good order, not commit or permit waste or damage to such
facilities (ordinary wear and tear excepted), not use such facilities for any
unlawful purpose or act.
(d) Supplier shall permit the PacifiCare Entities and the
PacifiCare Entity Agents to enter into those portions of the PacifiCare Service
Locations occupied by Supplier's staff at reasonable times to perform
facilities-related services.
(e) Supplier shall not make any improvements or changes
involving structural, mechanical or electrical alterations to the PacifiCare
Service Locations without PacifiCare's prior consent. Any additions,
improvements or changes made by Supplier shall be deemed the property of
PacifiCare without further consideration.
(f) When the PacifiCare Service Locations are no longer
required for performance of the Services, Supplier shall return such locations
to PacifiCare in substantially the same condition as when Supplier began using
such locations, as the same may be modified in accordance with Section 6.3(e),
ordinary wear and tear excepted.
6.4 PACIFICARE POLICIES AND PROCEDURES. Supplier shall, and shall cause
all Supplier Agents to, comply with the PacifiCare policies and procedures
(including physical security procedures, such as bag searches) made available to
the Supplier Client Relationship Manager from time to time during the Term and
Termination Assistance Period, including those policies and procedures available
at the URL designated for such purpose by PacifiCare. New policies
10
and procedures, and any Changes caused by changes to existing policies and
procedures, will be subject to the Change Control Procedures.
7. THIRD PARTY AGREEMENTS.
7.1 ASSIGNED AGREEMENTS. As of Effective Date, Supplier shall assume
all responsibility (including all obligations and post assignment liability) for
the Assigned Agreements as set forth in Schedule 7.1.
(a) ONGOING RESPONSIBILITIES. Supplier may, to the extent
permitted by any Assigned Agreement, renew, modify, terminate or cancel, or
request or grant any consents or waivers under, any such Assigned Agreement.
Supplier shall have financial and administrative responsibility with respect to
the Assigned Agreements, including responsibility for performance of all
obligations under the Assigned Agreements.
(b) ASSIGNED AGREEMENT INVOICES. PacifiCare and Supplier shall
arrange for Supplier to receive the Assigned Agreement invoices directly from
the applicable third party. Supplier shall be responsible for payment of
invoiced amounts submitted by third parties for expenses incurred pursuant to
the Assigned Agreements after the Effective Date, including any associated late
fees. If PacifiCare receives any invoices for amounts incurred under the
Assigned Agreement invoices after the Effective Date, PacifiCare shall provide
those invoices to Supplier within a reasonable time period to permit timely
payment by Supplier or, if a discount for payment is offered, the date on which
Supplier may pay such Managed Agreement Invoice with a discount. Supplier shall
be responsible for payment of such invoices, except for any late fees associated
therewith that are incurred because of PacifiCare's failure to comply with the
preceding sentence. Additionally, Supplier shall be responsible for payment of
any modification, termination or cancellation fees or charges imposed upon the
PacifiCare Entities in connection with any modification, termination or
cancellation of, or consent or waiver under, any Assigned Agreement. If, prior
to the Effective Date, PacifiCare prepaid any amounts under any Assigned
Agreements which apply to expenses incurred after the Effective Date, then
Supplier shall reimburse or credit PacifiCare for such amounts on the next
invoice delivered by Supplier for the Services. In the event Supplier receives
during the Term any refund, credit or other rebate (including deposits) in
connection with any Assigned Agreement that is attributable to periods prior to
the Effective Date, then Supplier shall promptly notify PacifiCare of such
refund, credit or rebate and shall promptly pay to PacifiCare the full amount of
such refund, credit or rebate.
7.2 MANAGED AGREEMENTS. Supplier shall, as an agent of PacifiCare,
administer the operational aspects of the Managed Agreements, such as
monitoring, reviewing and managing third party performance under such
agreements, escalating performance issues, initiating Managed Agreement review
meetings with PacifiCare on a regular basis, and performing any other tasks set
forth in this Section 7.2.
(a) ONGOING RESPONSIBILITIES. Supplier shall have
administrative (but not financial) responsibility during the Term with respect
to the Managed Agreements, and Supplier shall provide PacifiCare with reasonable
notice of all renewal, termination or cancellation dates and fees with respect
to the Managed Agreements. Except as reasonably required to provide the Services
in accordance with the applicable Service Levels, Supplier shall not renew,
modify,
11
terminate or cancel, or request or grant any consents or waivers under any
Managed Agreements without the consent of the PacifiCare Supplier Relationship
Manager. Supplier shall pay or discharge, as applicable, any fees or charges or
other liability or obligation imposed upon PacifiCare in connection with (i) any
renewal, modification, termination or cancellation of, or consent or waiver
under the Managed Agreements obtained or given without PacifiCare's consent as
required under the foregoing sentence or (ii) Supplier's failure to comply with
the terms of the Managed Agreements.
(b) MANAGED AGREEMENT INVOICES. Supplier shall (i) receive all
Managed Agreement Invoices, (ii) review and correct any errors in any such
Managed Agreement Invoices in a timely manner and (iii) submit such Managed
Agreement Invoices to PacifiCare within a reasonable period of time prior to the
due date or, if a discount for payment is offered, the date on which PacifiCare
may pay such Managed Agreement Invoice with a discount. PacifiCare shall pay the
Managed Agreement Invoices received and approved by Supplier. PacifiCare shall
only be responsible for payment of the Managed Agreement Invoices and shall not
be responsible to Supplier for any management, administration or maintenance
fees of Supplier in connection with the Managed Agreement Invoices. PacifiCare
shall be responsible for any late fees in respect of the Managed Agreement
Invoices, provided that Supplier submitted the applicable Managed Agreement
Invoices to PacifiCare for payment within a reasonable period of time prior to
the date any such Managed Agreement Invoice is due. If Supplier fails to submit
a Managed Agreement Invoice to PacifiCare for payment in accordance with the
preceding sentence, Supplier shall be responsible for any discount that would
have been received had Supplier complied with the preceding sentence or any late
fees with respect to such Managed Agreement Invoice.
7.3 PERFORMANCE UNDER AGREEMENTS. Supplier and PacifiCare shall
promptly notify the other of any breach of, or misuse or fraud in connection
with, any PacifiCare Third Party Contracts of which such Party becomes aware and
shall cooperate with the other to prevent or stay any such breach, misuse or
fraud. Supplier shall pay all amounts due for any penalties or charges
(including amounts due to a third party as a result of Supplier's failure to
promptly notify PacifiCare pursuant to the preceding sentence), associated
taxes, legal expenses and other incidental expenses incurred by PacifiCare as a
result of Supplier's non-performance of its obligations under this Agreement
with respect to the PacifiCare Third Party Contracts. Any notice provided by
Supplier to PacifiCare pursuant to this Section 7.3 shall also be provided by
Supplier to the individual designated in Section 30.14 for such purpose.
8. SERVICE LEVELS.
8.1 BASE SERVICE LEVELS. During the Term and the Termination Assistance
Period, Supplier shall perform the Services in accordance with the applicable
Service Levels. The Base Service Levels shall be specified in Schedule 8, or,
for Base Service Levels not specified in Schedule 8 as of the Effective Date,
determined in accordance with the process in Schedule 8 for establishing Base
Service Levels.
8.2 SERVICE LEVELS FOR NEW SERVICES. Supplier shall provide the New
Services in accordance with the Service Levels established by the Parties in
accordance with Section 5.1 and adjusted pursuant to Section 8.3 ("NEW SERVICES
SERVICE LEVELS").
12
8.3 ADJUSTMENT OF SERVICE LEVELS. Without limitation of the automatic
adjustment process specified in Section I.N of Schedule 8, the Steering
Committee (a) shall review the Service Levels for the preceding twelve (12)
months during the last calendar quarter of every Contract Year, (b) with respect
to any Service Levels that require periodic adjustment pursuant to this
Agreement or are no longer appropriate because of an increase, decrease or
change to the Services, shall, as appropriate, increase or otherwise modify the
Service Levels for the subsequent Contract Year and (c) with respect to all
other Service Levels, may increase the Service Levels for the subsequent
Contract Year. In addition, either Party may, at any time upon notice to the
other Party, initiate negotiations to review and, upon agreement by the Steering
Committee, adjust any Service Level that such Party in good faith believes is
inappropriate at the time.
8.4 ROOT-CAUSE ANALYSIS. With respect to Supplier's failure to provide
the Services in accordance with the applicable Service Levels, Supplier shall,
as soon as reasonably practicable, but not later than five (5) days after such
failure (except as provided below in this Section 8.4), (a) perform a root-cause
analysis to identify the cause of such failure, (b) provide PacifiCare with a
report detailing the cause of, and procedure for correcting, such failure, (c)
implement such corrective procedure, including obtaining PacifiCare's consent to
such implementation where such procedure has a material effect on the PacifiCare
Entities' receipt of the Services, and (d) provide PacifiCare with a written
action plan satisfactory to PacifiCare that specifies the steps Supplier has
taken, or shall take, to prevent such failures following the implementation of
the procedure. If Supplier, using all reasonable efforts, cannot complete its
obligations under clauses (a), (b), (c) or (d) above within the five (5)
day-period, Supplier shall, on a regular basis until such obligations are
completed, review with PacifiCare Supplier's progress in completing such
obligations (and provide written summaries thereof and a schedule for
completion). Supplier shall address and resolve any concerns raised by
PacifiCare in connection with such reviews.
8.5 MEASUREMENT AND MONITORING TOOLS. As of the Effective Date,
Supplier shall implement the measurement and monitoring tools and procedures
required to measure and report (as contemplated by this Section 8.5 and Section
3.9) Supplier's performance of the Services against the applicable Service
Levels. Supplier may use the PacifiCare measurement and monitoring tools and
procedures existing as of the Effective Date for this purpose provided such
tools and procedures enable Supplier to measure and report Supplier's
performance as required by this Agreement. Such measurement, monitoring and
procedures shall (a) permit reporting at a level of detail sufficient to verify
compliance with the Service Levels and (b) be subject to audit by PacifiCare or
its designee pursuant to Section 19. Supplier shall provide PacifiCare and its
designees with information concerning access to such measurement and monitoring
tools and procedures upon request for inspection and verification purposes.
8.6 CONTINUOUS IMPROVEMENT AND BEST PRACTICES. Supplier shall, on an
ongoing basis, (a) review the delivery of the Services and identify ways to
improve the Service Levels and (b) identify proven techniques and tools from
other installations within its operations that would benefit PacifiCare either
operationally or financially, and (c) implement such techniques and tools
provided that such implementation does not require a level of investment not
otherwise made or contemplated by Supplier in providing services to similarly
situated customers. Supplier shall, from time to time, include updates with
respect to such improvements, techniques
13
and tools in the reports provided to PacifiCare pursuant to Section 3.9 and
shall discuss its progress in identifying and applying such improvements,
techniques and tools in the knowledge sharing discussions with PacifiCare
pursuant to Section 3.6.
8.7 SERVICE LEVEL CREDITS. In the event of a failure to provide the
Services in accordance with the applicable Service Levels, Supplier shall incur
the Service Level Credits identified in and according to Schedule 8. The Service
Level Credits shall not limit PacifiCare's right to recover, in accordance with
this Agreement, other damages incurred by PacifiCare as a result of such
failure. Where (a) Service Level Credits are incurred for failures of the
Service Levels specified in Schedule 8.7, (i) in [...***...] consecutive months
for the same such Service Level, or (ii) in [...***...] out of any twelVe (12)
months for the same such Service Level, PacifiCare may, upon notice to Supplier,
terminate this Agreement, in whole or in part, without regard to Section 24.3(a)
or Section 25; provided that PacifiCare notifies Supplier of PacifiCare's
election to terminate this Agreement pursuant to this Section 8.7 within thirty
(30) days after the earlier of 1) PacifiCare's determination that a termination
event described in this Section 8.7 has occurred and 2) PacifiCare's receipt of
notice from Supplier that such a termination event has occurred. Nothing in this
Section 8.7 shall be deemed to limit or obviate PacifiCare's right to terminate
this Agreement pursuant to Section 24.3(a). In addition to the foregoing, within
ten [...***...] days following the completion of root-cause analysis as required
in Section 8.4, at PacifiCare's option, following the incurrence of a Service
Level Credit, Supplier's Delivery Project Executive shall meet in person with
the PacifiCare Supplier Relationship Manager and other members of PacifiCare's
management at a time, date and location specified by PacifiCare to summarize and
present the results of the root-cause analysis required by Section 8.4 and
specify the steps Supplier has taken, or shall take, to prevent the further
incurrence of Service Level Credits, and, at PacifiCare's option, a Supplier
Senior Vice President shall be made available by phone at a reasonable time
specified by PacifiCare to discuss such results.
9. PACIFICARE SATISFACTION AND BENCHMARKING.
9.1 SATISFACTION SURVEY. Supplier shall conduct baseline and ongoing
customer satisfaction surveys.
9.2 BENCHMARKING.
(a) BENCHMARKER. During the Term, to ensure that PacifiCare is
obtaining competitive pricing, PacifiCare may, at Supplier's and PacifiCare's
equally shared cost and expense, designate an independent third party (the
"BENCHMARKER") from among a list of mutually agreed prospective Benchmark
providers (as set forth in Schedule 9.2(a)) to measure Supplier's performance
and pricing under this Agreement in accordance with the Benchmark Process (each
a "BENCHMARK"). The Benchmarker shall use the Benchmark Process to measure
Supplier's performance and pricing [...***...].
(b) BENCHMARK PROCESS. PacifiCare may not require any
Benchmarks until [...***...] after the Effective Date, and thereafter may not
require a Benchmark [...***...] after the completion of such Benchmark. After
receiving the results of each Benchmark, PacifiCare shall share the
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14
results of such Benchmark with Supplier and, within thirty (30) days of
PacifiCare's sharing such results, the Parties shall complete their review of
such results.
(c) BENCHMARK RESULTS. With respect to undisputed Benchmark
results, if the applicable Fees are (i) within [...***...]% of the Benchmark
results, the Fees shall not be adjusted; (ii) if the applicable Fees are between
[...***...]% and [...***...]% higher than the Benchmark results, then the
applicable Fees shall be adjusted automatically [...***...] to be within
[...***...]% of the Benchmark results; or (iii) if the applicable Fees are more
than [...***...]% higher than the Benchmark results, then the applicable Fees
shall be reduced automatically (on a Tower-by-Tower basis) by [...***...]%, and
the Parties shall promptly discuss any further Fee or other adjustments. If,
after completing their reviews of the Benchmark results, the Parties are unable
to resolve any issue regarding such results, including Fee or other adjustments
related to such results, within thirty (30) days after either Party determines
that the Parties are unable to resolve such issue, [...***...].
10. SERVICE LOCATIONS.
10.1 SERVICE LOCATIONS. The Services shall be provided to the
PacifiCare Entities from (a) the PacifiCare Service Locations, (b) the Supplier
Service Locations and (c) any other location for which Supplier has received
PacifiCare's consent, to be given in PacifiCare's sole discretion. Any
incremental expenses incurred by PacifiCare as a result of a relocation to, or
use of, any location other than the locations set forth in Schedule 10.1 shall,
at PacifiCare's sole discretion, be paid by Supplier or reimbursed to PacifiCare
by Supplier, unless the provision of Services at such other location has been
requested or otherwise directed by PacifiCare. Supplier and Supplier Agents may
not provide or market services to a third party from a PacifiCare Service
Location without PacifiCare's consent, to be given in PacifiCare's sole
discretion.
10.2 SAFETY AND SECURITY PROCEDURES. Supplier shall maintain and
enforce at the Supplier Service Locations safety and security procedures that
are at least equal to the most stringent of the following: (a) standard Supplier
internal security and safety procedures for Supplier's service locations similar
to the Supplier Service Locations, (b) the standards set forth in Schedule 10.2,
and (c) any higher standard otherwise agreed upon by the Parties. With respect
to PacifiCare Service Locations, Supplier shall comply with the PacifiCare
procedures applicable to such locations, including the safety and security
procedures set forth in Schedule 10.2. Supplier shall, [...***...], provide to
PacifiCare the results of an annual SAS 70 security audit, or an equivalent
audit approved by PacifiCare, of the Service Locations.
10.3 DATA SECURITY. Supplier shall (a) establish and maintain
environmental, security, and other safeguards against the destruction, loss or
alteration of PacifiCare Data in the possession of Supplier and during the
electronic transmission, storage and shipping thereof (the "DATA SAFEGUARDS")
that shall comply with and be no less rigorous than (i) those data security
policies in effect as of the Effective Date at each applicable PacifiCare
Service Location in respect of such PacifiCare Service Location and Supplier
Service Location, and (ii) as may be required by Supplier Laws and other Laws
identified to Supplier by PacifiCare from time to time in accordance with
Section 3.3(b), and (b) provide dedicated storage devices for PacifiCare Data
secured against any shared access with the data of any Supplier's data or Data
of Supplier's
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15
other customers. Supplier shall revise and maintain the Data Safeguards
[...***...]. In the event Supplier intends to implement a change to the Data
Safeguards (including pursuant to PacifiCare's request), Supplier shall notify
PacifiCare and, upon PacifiCare's consent, implement such change.
10.4 DATA SECURITY BREACHES. In the event Supplier or Supplier Agents
discover or are notified of a breach of security, or a potential breach of
security that could have a material adverse effect on PacifiCare or any other
PacifiCare Entity, relating to PacifiCare Data, Supplier shall immediately
notify the PacifiCare Supplier Relationship Manager and the PacifiCare Director
of Information Security of such breach or potential breach. Supplier shall
provide PacifiCare with a written action plan satisfactory to PacifiCare that
specifies, with respect to actual security breaches, the steps Supplier has
taken or shall take to prevent such actual breaches from recurring, and, with
respect to potential breaches, the steps Supplier has taken or shall take to
prevent such breaches from occurring. With respect to actual breaches of
security, if the PacifiCare Data subject to such breach was in the possession of
Supplier or Supplier Agents at the time of such breach, Supplier shall promptly
investigate [...***...] the effects of such breach. To the extent any actual
breach is attributable to Supplier or Supplier Agents, including Supplier's
failure to perform its obligations pursuant to this Section 10 or Exhibit B
(Statement of Work), [...***...]. In addition, Supplier shall review the Data
Safeguards on a regular basis and notify PacifiCare of security concerns of
which Supplier becomes aware that may have a material adverse effect on
PacifiCare or any other PacifiCare Entity, and Supplier shall thereafter provide
PacifiCare with a written action plan satisfactory to PacifiCare that addresses
such security concerns.
10.5 SECURITY RELATING TO COMPETITORS. Prior to the Cutover Date, the
Parties shall agree on procedures that Supplier will implement at Supplier
Service Locations if: (a) Supplier intends to provide the Services from a
Service Location that is shared with a third party or third parties; or (b) any
part of the business of Supplier or any such third party is now or in the future
competitive with the PacifiCare Entities' business. Such procedures shall, at a
minimum, restrict access in any such shared environment to PacifiCare's
Confidential Information so that Supplier's employees or Supplier Agents
providing services to such third parties do not have access to PacifiCare
Confidential Information.
11. HUMAN RESOURCES. Supplier shall offer employment to the Affected
Employees, and the transitioning to Supplier of such Affected Employees who
accept such offers (the "TRANSITIONED PERSONNEL") shall be effected in
accordance with the terms and conditions set forth in Schedule 11.
12. SUPPLIER STAFF.
12.1 SUPPLIER CLIENT RELATIONSHIP MANAGER. Supplier shall appoint an
individual (the "SUPPLIER CLIENT RELATIONSHIP MANAGER") who from the Effective
Date shall serve, on a full-time basis, as the primary Supplier representative
under this Agreement. Supplier's appointment of any Supplier Client Relationship
Manager shall be subject to PacifiCare's prior consent. The Supplier Client
Relationship Manager shall (a) have overall responsibility for managing and
coordinating the performance of Supplier's obligations under this Agreement and
(b) be
* CONFIDENTIAL TREATMENT REQUESTED
16
authorized to act for and on behalf of Supplier with respect to all matters
relating to this Agreement.
12.2 KEY PERSONNEL. With respect to Key Personnel set forth in Schedule
12.2, except as otherwise agreed by PacifiCare, the Parties agree as follows:
(a) The Key Personnel shall be dedicated to the PacifiCare
account on a full-time basis.
(b) Before assigning an individual to a Key Personnel
position, whether as an initial assignment or as replacement, Supplier shall (i)
notify PacifiCare of the proposed assignment, (ii) introduce the individual to
appropriate representatives of the PacifiCare Entities, (iii) subject to
applicable Law, provide PacifiCare with any information regarding the individual
that may be reasonably requested by PacifiCare and (iv) obtain PacifiCare's
consent for such assignment. Supplier shall only assign an individual to a Key
Personnel position who is approved by PacifiCare.
(c) Supplier shall not replace or reassign an individual
designated as Key Personnel for [...***...] from the date on which such
individual is designated as Key Personnel, unless PacifiCare in its sole
discretion consents to such reassignment or replacement of individual, or such
individual (1) voluntarily resigns from Supplier, (2) is dismissed by Supplier
for misconduct, (3) fails to perform his or her duties and responsibilities, or
(4) dies or is otherwise unable to work due to his or her disability.
(d) If PacifiCare in good faith decides that any Key Personnel
should not continue in that position, then PacifiCare may, in its sole
discretion and upon notice to Supplier, require immediate removal of such Key
Personnel from the Project Staff. Supplier shall, as soon as reasonably
practicable, replace such Key Personnel in accordance with this Section 12.2.
(e) Supplier shall maintain backup procedures and conduct the
replacement procedures for any Key Personnel in such a manner so as to provide
for an orderly succession for Key Personnel who are replaced.
12.3 PROJECT STAFF. Supplier shall appoint to the Project Staff
individuals with suitable training and skills to perform the Services, as
applicable. Supplier shall provide PacifiCare with a list of all Supplier
personnel dedicated full-time to the Project Staff at the end of every 90-day
period after the Effective Date. Except as otherwise approved by PacifiCare (in
its sole discretion), those Supplier personnel located on PacifiCare's premises
may only provide services on such premises that support PacifiCare's operations.
Supplier shall notify PacifiCare as soon as practicable after dismissing or
reassigning any member of the Project Staff whose normal work location is at a
PacifiCare Service Location.
12.4 SUBCONTRACTORS.
(a) Except with respect to those subcontractors set forth in
Schedule 12.4, prior to subcontracting the Services or any portion thereof,
Supplier shall: (i) notify PacifiCare of the proposed subcontract; (ii) provide
the name of the proposed subcontractor, a description of the work to be
subcontracted, an explanation of why that work is to be subcontracted and
* CONFIDENTIAL TREATMENT REQUESTED
17
descriptive information about each subcontractor's ability to perform the work;
(iii) obtain PacifiCare's consent to such subcontract. the PacifiCare Entities
shall not be bound by the provisions of any agreements entered into between
Supplier and its subcontractors. Except with respect to those subcontractors set
forth in Schedule 12.4, prior to amending, modifying or otherwise supplementing
any subcontract relating to the Services in a manner that materially affects the
scope or nature of the services provided by a subcontractor, Supplier shall
notify PacifiCare of the proposed amendment, modification or supplement and
shall obtain PacifiCare's consent thereto.
(b) No subcontracting shall release Supplier from its
responsibility for its obligations under this Agreement. Supplier shall be
responsible for the work and activities of each of its subcontractors, including
compliance with the terms of this Agreement.
(c) Supplier shall be responsible for all payments to its
subcontractors. Supplier shall promptly pay for all services, materials,
equipment and labor used in providing the Services and Supplier shall keep the
PacifiCare Entities' premises free of all liens related thereto.
(d) Those subcontractors who, as of the Effective Date, have
been pre-approved by PacifiCare are set forth in Schedule 12.4.
(e) For Non-Critical Services (defined below) for which
Supplier wishes to engage subcontractors, Supplier may comply with Section
12.4(a) by providing PacifiCare with notice as soon as practicable after
engaging such subcontractor, provided that all other provisions of this Section
12.4 shall apply. For purposes of this Section 12.4, "NON-CRITICAL SERVICES"
means services performed by a subcontractor that do not require interaction
between the PacifiCare Entities and such subcontractor (including its
employees), that are administrative in nature, and that are performed outside of
the PacifiCare Service Locations. Non-Critical Services include, for example,
memory tape replacement activities.
(f) If PacifiCare in good faith objects to the continued use
of a subcontractor, or the scope of the duties of a particular subcontractor,
even if such subcontractor has been previously approved pursuant to Section
12.4(a), is a provider of Non-Critical Services, or is listed on Schedule 12.4,
upon notice from PacifiCare of such objection containing reasonable details
concerning the basis of such objection, Supplier shall attempt to resolve such
objections as soon as possible. If the Parties have not resolved such objections
within [...***...] of PacifiCare's notice of its objection, Supplier shall cause
such subcontractor to cease providing Services to PacifiCare and shall replace
such subcontractor with another subcontractor acceptable to PacifiCare.
12.5 CONDUCT OF SUPPLIER PERSONNEL. While at the PacifiCare Service
Locations, Supplier and Supplier Agents agree at all times to, and shall cause
the Project Staff to, (a) comply with the requests, standard rules and
regulations of PacifiCare regarding safety and health, personal and professional
conduct (including adhering to general safety practices and procedures)
generally applicable to such PacifiCare Service Locations, (b) otherwise conduct
themselves in a businesslike manner and (c) maintain and enforce Section 20 of
this Agreement. If PacifiCare notifies Supplier that a particular member of the
Project Staff is not conducting himself or herself in accordance with this
Section 12.5, Supplier shall promptly: (y) investigate
* CONFIDENTIAL TREATMENT REQUESTED
18
the matter and take appropriate action that may include (i) removing the
applicable person from the Project Staff, (ii) providing PacifiCare with prompt
notice of such removal and (iii) replacing the applicable person with a
similarly qualified individual; or (z) take other appropriate disciplinary
action to prevent a recurrence. In the event of multiple violations of this
Section 12.5 by a particular member of the Project Staff, Supplier shall
promptly remove the individual from the Project Staff.
12.6 NON-COMPETITION. Supplier shall not assign any Key Personnel to
the account of any competitor of the PacifiCare Entities without PacifiCare's
prior consent for [...***...] following the date such KEY Personnel ceases to
provide Services to PacifiCare pursuant to this Agreement.
13. MANAGEMENT AND CONTROL.
13.1 STEERING COMMITTEE. Prior to the Cutover Date, the PacifiCare
Supplier Relationship Manager and the Supplier Client Relationship Manager shall
determine the composition of a steering committee and each shall appoint an
equal number of representatives to serve on such committee (the "STEERING
COMMITTEE"). PacifiCare shall designate one of its representatives on the
Steering Committee to act as the chairperson of the Steering Committee. The
Steering Committee shall be authorized and responsible for (a) advising with
respect to PacifiCare's tactical and strategic decisions regarding the
establishment, budgeting and implementation of PacifiCare's priorities and plans
for the Services and (b) monitoring and, without limitation of the dispute
resolution procedures set forth in Section 23, resolving disagreements regarding
the provision of the Services and the Service Levels. A Party may change any of
its representatives on the Steering Committee upon notice to the other Party;
provided that such change may be effected without causing any delays in the
dispute resolution procedures set forth in Section 23.
13.2 OVERSIGHT AND MANAGEMENT PROCESS; RELATIONSHIP WITH XXXXX.
Supplier shall perform the Services and manage its relationship with Xxxxx, Inc.
("XXXXX") in accordance with this Section 13.2, the Operational Agreement, and
the Oversight and Management Process set forth in Schedule 13.2 ("OVERSIGHT AND
MANAGEMENT PROCESS").
(a) RELATIONSHIP WITH XXXXX; OPERATIONAL AGREEMENT. Supplier
and Xxxxx shall cooperate and interact with each other to the extent necessary
for the PacifiCare Entities to receive the Services and the Xxxxx Services in
accordance with the terms and conditions of this Agreement and the Xxxxx
Agreement, respectively. PacifiCare shall, as PacifiCare deems appropriate,
control and be the primary interface for the PacifiCare Entities with Supplier,
Xxxxx and third parties. Supplier shall work closely with Xxxxx to deliver the
Services and the Xxxxx Services in a seamless manner through an integrated
service delivery team, as described in the Oversight and Management Process,
including, for example, the utilization of integrated tools, processes and
methodologies, where applicable. In furtherance of the foregoing, as of the
Effective Date, Supplier and Xxxxx shall execute and deliver an agreement,
acceptable in form and substance to PacifiCare (the "OPERATIONAL AGREEMENT"),
which shall include, among other things, provisions that address the following
items:
* CONFIDENTIAL TREATMENT REQUESTED
19
(i) Supplier and Xxxxx shall establish an integrated
Program Office (the "PROGRAM OFFICE") and procedures (e.g., the customer
satisfaction methodology described on Schedule 13.2) acceptable to PacifiCare
for use by Xxxxx and Supplier to (1) permit Supplier to provide the Services and
Xxxxx to provide the Xxxxx Services to PacifiCare in a seamless manner, (2)
promptly investigate and resolve any performance failures that occur, and (3)
determine the accountability as between Supplier and Xxxxx for such failures.
The initial Program Office shall consist of the individuals and positions set
forth in Schedule 13.2. Members of the Program Office shall be deemed to be Key
Personnel.
(ii) With respect to Xxxxx'x failure to provide the
Xxxxx Services in accordance with applicable service levels, Supplier shall
cause Xxxxx to perform a root cause analysis in accordance with Section 8.4 of
the Xxxxx Agreement, to implement corrective procedures in accordance with the
Xxxxx Agreement, and to provide PacifiCare with the applicable reports and
action plans as required by Section 8.4 of the Xxxxx Agreement. With respect to
1) actions by Supplier that cause a service level failure by Xxxxx, 2) actions
by Xxxxx that cause a service level failure by Supplier, or 3) service level
failures attributable to both Supplier and Xxxxx or for which the cause is not
clear, Supplier will coordinate with Xxxxx to perform a joint root cause
analysis and provide to PacifiCare the reports and action plans specified in
Section 8.4 of this Agreement. Supplier shall implement measurement and
monitoring tools and procedures that permit integrated reporting of compliance
with applicable service levels, and the incurrence of service level credits,
with respect to the Services and the Xxxxx Services. In the event that service
level failures by Supplier or Xxxxx result in the incurrence of a service level
credit (as provided in Section 8.8 of this Agreement or in Section 8.8 of the
Xxxxx Agreement, as applicable), service level credits shall be apportioned
among, or incurred by each of, Supplier and Xxxxx, in accordance with the
Operational Agreement.
(iii) Supplier and Xxxxx shall establish efficient
means of communication between Supplier, Xxxxx and PacifiCare, including through
a governance structure incorporating executive and operational committees
described on Schedule 13.2, such that both routine operational information and
information relating to any issues or problems with, or any interruptions (other
than in connection with scheduled downtime set forth Schedule 8) or degradations
to, the Services and any other Supplier or Xxxxx obligations to PacifiCare flow
between Supplier, Xxxxx and PacifiCare without material delay and without
requiring coordination by, or intervention of, PacifiCare, except as PacifiCare
otherwise requires.
(iv) Supplier and Xxxxx, working with PacifiCare to
the extent PacifiCare deems appropriate, shall in good faith attempt to resolve
all disputes between Supplier and Xxxxx relating to the provision of the
Services, the Xxxxx Services, or any other Supplier or Xxxxx obligations to
PacifiCare, as soon as possible and without involving PacifiCare; provided that
in the event that Supplier and Xxxxx do not resolve such disputes themselves,
Supplier and Xxxxx may jointly request that PacifiCare, at no cost or expense to
PacifiCare, resolve such dispute and, if so requested, such resolution shall be
final and binding on Supplier and Xxxxx.
(v) Supplier and Xxxxx shall provide for the
integration of tools, processes and methodologies where applicable in accordance
with the Operational Agreement.
20
(vi) Supplier and Xxxxx shall provide for any other
provisions necessary for Supplier and Xxxxx to provide PacifiCare with the
Services (including the Termination Assistance Services) and the Xxxxx Services
in a seamless manner.
Supplier shall not modify or amend the Operational Agreement in a manner that
would have a material adverse effect on PacifiCare, the provision of the
Services, the provision of the Xxxxx Services or PacifiCare's ability to enforce
its rights and remedies under this Agreement, without PacifiCare's prior
consent.
(b) [...***...].
13.3 POLICY & PROCEDURES MANUAL. An initial outline of a management
Policy & Procedures Manual for the Services is set forth in Schedule 13.3.
Within [...***...] after the Effective Date, Supplier shall deliver to
PacifiCare, for PacifiCare's review, comment and consent, a management Policy &
Procedures Manual based on the outline set forth in Schedule 13.3 that shall
include, among other things, annual and quarterly objectives, annual plan and
performance goals (the "POLICY & PROCEDURES MANUAL"). Supplier shall
periodically prepare and provide to PacifiCare, for PacifiCare's review, comment
and consent, updates to such Policy & Procedures Manual to reflect any changes
in the procedures described therein as soon as practicable after such changes
are made at PacifiCare's request or with PacifiCare's consent.
13.4 CHANGE CONTROL PROCEDURES. Supplier shall deliver to PacifiCare,
for its review, comment and consent, the Change Control Procedures. The Change
Control Procedures shall provide, at a minimum, that:
(a) no Change shall be implemented without PacifiCare's
consent (which may be given in a mutually e-mailed or other electronic format),
except as may be necessary on a temporary basis to maintain the continuity of
the Services, and any projected adverse effect of any Change with respect to the
Services, Service Levels or Fees shall be a reasonable basis for disapproval of
such proposed Change;
*CONFIDENTIAL TREATMENT REQUESTED
21
(b) with respect to all Changes, Supplier shall (i) schedule
Changes, other than those Changes made on a temporary basis, to maintain the
continuity of the Services so as not to unreasonably interrupt the PacifiCare
Entities' business operations, (ii) prepare and deliver to PacifiCare each month
a rolling schedule for ongoing and planned Changes for the next twelve (12)
month period and (iii) monitor the status of Changes against the applicable
schedule; and
(c) with respect to any Change made on a temporary basis to
maintain the continuity of the Services, Supplier shall document and provide to
PacifiCare notification of the Change no later than the next business day after
the Change is made.
Supplier shall update the Change Control Procedures as
necessary and shall provide such updated Change Control Procedures to PacifiCare
for its consent.
14. PROPRIETARY RIGHTS.
14.1 BACKGROUND TECHNOLOGY. Supplier shall have and retain exclusive
ownership of all of Supplier's Background Technology and intellectual property
rights therein. Prior to including any Supplier Background Technology in any
Work Product that Supplier shall use or deliver to any PacifiCare Entities in
connection with the Services, Supplier must set forth in writing such Background
Technology to be included and obtain PacifiCare's consent. Each Party shall have
and retain exclusive ownership of all of its Background Technology and
intellectual property rights therein. All rights not expressly granted herein
with respect to Background Technology are reserved to the owner thereof.
14.2 PACIFICARE SOFTWARE. Subject to the terms and conditions of this
Agreement, PacifiCare hereby grants to Supplier, during the Term and the
Termination Assistance Period, solely to provide the Services to the PacifiCare
Entities, a global, fully-paid, royalty-free, non-exclusive, non-transferable
license to (a) use the PacifiCare Proprietary Software (and Related
Documentation in PacifiCare's possession), and (b) use, to the extent
permissible under the applicable third party agreements, the PacifiCare Third
Party Software. Supplier may sublicense, to the extent permissible under any
applicable third party agreements, to Supplier Agents the right to use the
PacifiCare Software solely to provide those Services that such Supplier Agents
are responsible for providing. As between the Parties, PacifiCare shall retain
all rights of ownership in the PacifiCare Software. All rights not expressly
granted to Supplier in this Agreement with respect to the PacifiCare Software
are reserved to PacifiCare.
14.3 SUPPLIER SOFTWARE. Supplier shall obtain PacifiCare's consent
prior to using any Supplier Software (and any of Supplier's Background
Technology included in the Supplier Software) to provide the Services. A current
list of Supplier Software is attached hereto as Schedule 14.3. Subject to the
terms and conditions of this Agreement, Supplier hereby grants to PacifiCare a
global, fully-paid, royalty-free, non-exclusive, non-transferable license to
use, and to sublicense and to permit third parties to use, during the Term and
Termination Assistance Period, solely in connection with the receipt or use of
the Services, (a) the Supplier Proprietary Software (and any of Supplier's
Background Technology included in the Supplier Software) and (b) to the extent
permissible under the applicable third party agreements, the Supplier Third
Party Software. Upon PacifiCare's request, Supplier shall provide PacifiCare
with a list of all
22
Supplier Software being used to provide the Services as of the date of such
request. As between the Parties, Supplier shall retain all rights of ownership
in the Supplier Software. All rights not expressly granted to the PacifiCare
Entities in this Agreement with respect to the Supplier Software are reserved to
Supplier.
14.4 SUPPLIER TOOLS. Supplier shall obtain PacifiCare's consent prior
to using any Supplier Tools (and any of Supplier's Background Technology
included in such Tools) to provide the Services. Subject to the terms and
conditions of this Agreement, Supplier hereby grants to the PacifiCare Entities
a global, fully-paid, royalty free, non-exclusive, non-transferable license to
use, and to sublicense and to permit a third party to use, during the Term and
Termination Assistance Period, solely in connection with the receipt or use of
the Services, the Supplier Tools (and any of Supplier's Background Technology
included in such Tools) used to provide the Services. All rights not expressly
granted to the PacifiCare Entities in this Agreement with respect to the
Supplier Tools are reserved to Supplier.
14.5 WORK PRODUCT. PacifiCare shall own all right, title and interest
in and to the Work Product and all copies thereof.
14.6 POLICIES AND PROCEDURES MANUAL. Supplier shall own the Policy and
Procedures Manual. Supplier hereby grants to PacifiCare a global, fully paid-up,
royalty free, non-exclusive, non-transferable, perpetual and irrevocable license
to use, reproduce and create derivative works of the Policies and Procedures
Manual, and to sublicense the same rights to third parties solely in connection
with such third parties' provision of services similar to the Services to
PacifiCare Entities. All rights not expressly granted to PacifiCare Entities in
this Agreement with respect to the Policy and Procedures Manual are reserved to
Supplier. Notwithstanding the foregoing, Supplier shall not use or disclose to
third parties any documentation, materials or other information provided by the
PacifiCare Entities to Supplier for use in the Policy and Procedures Manual in
any manner that could identify a PacifiCare Entity as the source of such
documentation, material or information.
14.7 UPGRADES TO SOFTWARE; REFRESH OF SUPPLIER EQUIPMENT. Supplier
shall upgrade Software and refresh the Supplier Equipment in accordance with
Exhibit B (Statement of Work).
15. DATA.
15.1 OWNERSHIP OF PACIFICARE DATA. All PacifiCare Data is, or shall be,
and shall remain the property of PacifiCare. Supplier hereby irrevocably
assigns, transfers and conveys, and shall cause Supplier Agents to assign,
transfer and convey, to PacifiCare without further consideration all of its and
their right, title and interest in and to PacifiCare Data.
15.2 USE OF PACIFICARE DATA. Without PacifiCare's consent (subject to
PacifiCare's sole discretion) or as otherwise directed by PacifiCare, PacifiCare
Data shall not be (a) used, disclosed, monitored, analyzed, individualized,
anonymized, aggregated, stored, copied, or otherwise provided to third parties
by Supplier or Supplier Agents, (b) sold, assigned, or leased by Supplier or
Supplier Agents, or (c) commercially exploited in any form (including any
individualized, anonymized or aggregated form) by or on behalf of Supplier or
Supplier Agents.
23
Supplier shall at all times comply with all PacifiCare data retention, use and
privacy standards and all Laws relating to Supplier's access to PacifiCare Data.
15.3 CORRECTION AND RECONSTRUCTION.
(a) Supplier shall, [...***...] promptly correct any errors or
inaccuracies in the reports delivered to PacifiCare under this Agreement that
are attributable to Supplier or Supplier Agents.
(b) Supplier shall develop and maintain procedures regarding
the storage (including regular back up) and restoration of PacifiCare Data.
Supplier shall, [...***...] recover any lost PacifiCare Data in The event that
such losses are attributable to Supplier's failure to perform its obligations
under this Agreement, provided that PacifiCare provides Supplier with reasonable
assistance in recovering such lost data. For losses of PacifiCare Data that are
not attributable to Supplier as specified in the preceding sentence, Supplier
shall restore such losses by using the most recent back up of the lost
PacifiCare Data, including any related computer journals, in accordance with
this Agreement.
15.4 RETURN OF DATA. Upon request by PacifiCare at any time during the
Term and upon expiration or termination of this Agreement, or at any time when
Supplier no longer requires any portion of the PacifiCare Data to provide the
Services, Supplier shall (a) promptly return to PacifiCare, in the format and on
the media on which it exists, all PacifiCare Data (or such portion as requested
by PacifiCare or that is no longer necessary to provide the Services) and (b)
erase or destroy all PacifiCare Data (or such portion of PacifiCare Data as
requested by PacifiCare or that is no longer necessary to provide the Services)
in Supplier's possession. Supplier and Supplier Agents shall use any archival
tapes containing PacifiCare Data solely for back-up purposes and shall maintain
such back-up copies of PacifiCare Data as Confidential Information of
PacifiCare. [...***...].
16. CONTINUED PROVISION OF SERVICES.
16.1 DISASTER RECOVERY PLAN. PacifiCare's current disaster recovery
plans (collectively, the "DRP") are set forth in Schedule 16.1, which DRP shall
be effective under this Agreement until PacifiCare approves of any successor DRP
to be developed pursuant to this Section 16.1. Promptly following the Effective
Date, Supplier shall: (a) evaluate PacifiCare's current DRP and submit
recommended DRP improvements for PacifiCare's review and approval and, if
PacifiCare approves of the DRP improvements, implement a revised DRP acceptable
to PacifiCare [...***...], or within another time period agreed to by the
Parties; (b) update and test the operability of the DRP [...***...] during the
Term; and, (c) during the period in which Supplier will provide disaster
recovery services in lieu of the services that are provided under [...***...]
certify in writing to PacifiCare [...***...] during the Term that the DRP is in
place and executable in accordance with its terms. Supplier shall immediately
notify PacifiCare of the occurrence of events that Supplier becomes aware of
that could reasonably be considered a disaster (as defined in the DRP) and
implement the DRP upon the declaration of a disaster by PacifiCare in
*CONFIDENTIAL TREATMENT REQUESTED
24
accordance with the DRP. Without limiting Supplier's other obligations under
this Agreement, including the Service Levels, in the event of an interruption in
services described as "critical" in Schedule 16.1 ("CRITICAL SERVICES"),
Supplier shall use all reasonable efforts to reinstate the Critical Services as
promptly as possible, but in any event within the number of hours identified in
Schedule 16.1 with respect to each of the Critical Services. In the event of a
disaster (as such term is defined in the DRP), PacifiCare shall continue to pay
the then-current Base Fees, and Supplier shall not increase its Fees under this
Agreement or charge PacifiCare usage or other incremental fees in addition to
the Base Fees or the Variable Fees.
16.2 FORCE MAJEURE. If and to the extent that a Party's performance of
any of its obligations pursuant to this Agreement is prevented, hindered or
delayed by fire, flood, earthquake, elements of nature or acts of God, acts of
war, terrorism, riots, civil disorders, rebellions or revolutions, or any other
similar cause beyond the reasonable control of such Party (but specifically
excluding [...***...] (each, a "FORCE MAJEURE EVENT"), and such non-performance,
hindrance or delay could not have been prevented by reasonable precautions, then
the non-performing, hindered or delayed Party shall be excused for such
non-performance, hindrance or delay, as applicable, of those obligations
affected by the Force Majeure Event for as long as such Force Majeure Event
continues and such Party continues to use all reasonable efforts to recommence
performance whenever and to whatever extent possible without delay, including
through the use of alternate sources, workaround plans or other means. The Party
whose performance is prevented, hindered or delayed by a Force Majeure Event
shall immediately notify the other Party of the occurrence of the Force Majeure
Event and describe in reasonable detail the nature of the Force Majeure Event.
The occurrence of a Force Majeure Event does not excuse, limit or otherwise
affect Supplier's obligation to provide either normal recovery procedures or any
other disaster recovery services described in Section 16.1.
16.3 ALTERNATE SOURCE. If any Force Majeure Event or any Precluded
Performance Event prevents, hinders or delays performance of any Services, for
the time identified on Schedule 16.1 in the case of any Critical Service, or for
more than [...***...] in the case of all other Services, Supplier shall,
[...***...] arrange for an alternate source to provide the affected Services to
the PacifiCare Entities. If the Force Majeure Event or Precluded Performance
Event continues to prevent, hinder or delay performance of the Services, for
more than [...***...] in the case of Critical Services, or more than [...***...]
in The case of all other Services, PacifiCare may terminate this Agreement, in
whole or in part (in the case of partial termination, only the portion of this
Agreement affected by the Force Majeure Event or Precluded Performance Event,
unless such event affects a substantial portion of this Agreement), as of a date
specified by PacifiCare in a termination notice to Supplier, without regard to
Section 24.3(a), and shall pay applicable Wind Down Costs, if any.
16.4 ALLOCATION OF RESOURCES. Whenever a Force Majeure Event or a
disaster causes Supplier to allocate limited resources between or among
Supplier's customers, Supplier shall not provide to any other customers of
Supplier priority over PacifiCare. In addition, in no event shall Supplier
re-deploy or reassign any Key Personnel to another account in the event of a
Force Majeure Event. If a Force Majeure Event affects another Supplier customer
and does not affect PacifiCare, Supplier may request that PacifiCare allow
Supplier, subject to Supplier's obligations to perform the Services in
accordance with the applicable Service Levels, to allocate certain Key
*CONFIDENTIAL TREATMENT REQUESTED
25
Personnel to such other customer temporarily. PacifiCare shall consider such
request in good faith and determine, in its sole discretion, whether to permit
such reallocation.
17. PAYMENTS AND INVOICING.
17.1 BASE FEES. In consideration of Supplier providing the Base
Services, and in accordance with Section 17.2, PacifiCare shall pay to Supplier
the Base Fees as such fees are specified in Schedule 17. Except as expressly set
forth in this Agreement, there shall be no charge or fees payable by PacifiCare
in respect of Supplier's performance of its obligations pursuant to this
Agreement.
17.2 BASE FEES. On or before the tenth (10th) day of each month,
Supplier shall provide PacifiCare with an invoice for the Fees associated with
the Base Services performed during such month, including, after the first month
of the Term, adjustments to such Fees based on the Variable Fee Report that
accompanies such invoice. The Base Fees for each month in which PacifiCare
receives such invoice in accordance with the preceding sentence shall be due and
payable to Supplier on the last day of the month in which Supplier received the
invoice. Invoices received after the tenth (10th) day of the month will be paid
within thirty (30) days after PacifiCare's receipt of such invoices.
17.3 VARIABLE FEES AND BASELINE ADJUSTMENTS. At the end of every month,
Supplier shall review the amount of the Base Services used by PacifiCare during
the preceding month. In the event PacifiCare's use of such services (a)
increases above the resource baselines set forth in Schedule 17, PacifiCare
shall pay to Supplier, in addition to the Base Fees, an amount equal to the
Additional Resource Charges in connection with the services as set forth in
Schedule 17 or (b) decreases below the resource baselines set forth in Schedule
17, Supplier shall credit PacifiCare an amount equal to Reduced Resource Credits
in connection with the services as set forth in Schedule 17. All such payments
and credits shall be made in accordance with Section 17.4. Upon notice to
Supplier, and no more than once each Contract Year, PacifiCare may adjust the
resource baselines set forth in Schedule 17 and PacifiCare and Supplier shall
implement an appropriate adjustment to the Fees to reflect the adjustment of the
resource baselines.
17.4 VARIABLE FEE REPORT. Beginning after the first month of the Term,
Supplier shall provide PacifiCare with the Variable Fee Report at the same time
Supplier provides the invoice for the Base Fees as specified Section 17.2. In
the event the Reduced Resource Credits specified in such report are in excess of
the Additional Resource Charges specified in such report, Supplier shall provide
PacifiCare with a credit in the amount of such excess on the invoice for the
Base Fees for that month. In the event the Additional Resource Charges specified
in such report are in excess of the Reduced Resource Credits specified in such
report, Supplier shall increase the amount owed under the Base Fee invoice for
that month in the amount of such excess. In the event PacifiCare disapproves of
any of the Variable Fees set forth in the Variable Fee Report, PacifiCare shall
provide Supplier with a list of any Variable Fees of which PacifiCare
disapproves and Supplier shall adjust the Variable Fee Report to reflect the
changes indicated by PacifiCare and agreed to by Supplier.
26
17.5 TIME OF PAYMENT. Any sum due Supplier pursuant to this Agreement
for which payment is not otherwise specified shall be due and payable
[...***...] after receipt by PacifiCare of an invoice from Supplier. If any
payments or portion thereof are not received by Supplier within [...***...]
after the dAte by payment is due, PacifiCare shall pay Supplier interest on such
overdue amount equal to the lesser of (i) [...***...], and (ii) the maximum
amount permissible by applicable Law ("LATE PAYMENT INTEREST"), as follows: if
the payment is received between [...***...] after the due date, PacifiCare shall
pay an amounT equal to the Late Payment Interest calculated on the entire first
[...***...] of the month; if the paymenT is received between [...***...] after
the due date and the end of that month, PacifiCare shall pay an amoUnt equal to
the Late Payment Interest calculated on the entire number of days in that month.
Payments received more than [...***...] after the due date will be subject to
the same semi-monthly calculation foR each month such payments are overdue after
the first month. Payments disputed in accordance with Section 17.7 are not
subject to this Section 17.5.
17.6 DETAILED INVOICES. Supplier shall provide detailed invoices as
agreed by PacifiCare and Supplier pursuant to Schedule 17.
17.7 FEE DISPUTE. PacifiCare may withhold invoiced amounts that
PacifiCare disputes in good faith up to an amount equal to [...***...]. Disputed
amounts in excess of [...***...] shall be deposited in an interest-bearing
escrow account under the custody and control of a federally chartered bank until
the Dispute is finally resolved, at which time the escrowed amounts and interest
shall be promptly paid to the Party entitled thereto. PacifiCare shall pay
disputed amounts in excess of [...***...] to Supplier under protest and in
accordance with Section 17.5. The payment by either Party of any disputed
amounts shall not constitute a waiver of such Party's rights under this
Agreement or applicable Law. The Parties shall diligently pursue resolution of
any fee Dispute in accordance with Section 23. PacifiCare shall notify Supplier
of all such Disputes in writing and shall provide in reasonable detail an
explanation of the facts underlying the Dispute. PacifiCare shall pay the amount
of any invoice not in dispute in accordance with the terms of this Agreement.
17.8 SUBSTANTIAL CHANGE IN BASELINES. In the event that PacifiCare's
use of the Base Services with respect to a then-current baseline described in
Schedule 17 decreases by more than [...***...] percent ([...***...]%) (other
than decreases attributable to PacifiCare's exercise of its rights under Section
3.10) for any consecutive ninety (90)-day period during the Term, PacifiCare and
Supplier shall negotiate and implement an appropriate adjustment to the
applicable Fees. In the event that PacifiCare's use of the Base Services with
respect to a then-current baseline described in Schedule 17 substantially
increases, upon PacifiCare's request, PacifiCare and Supplier shall negotiate
and implement an appropriate adjustment to the applicable Fees.
17.9 ADJUSTMENTS TO FEES. There shall be no periodic adjustments to the
Fees except as set forth in Schedule 17.
17.10 EXPENSES. Except as expressly set forth in this Agreement, all
costs and expenses relating to the Services (including all costs and expenses
related to the acquisition, maintenance
*CONFIDENTIAL TREATMENT REQUESTED
27
and enhancement of the Software and Equipment) are included in the Fees and
shall not be charged to or reimbursed by PacifiCare.
17.11 RIGHTS OF SET-OFF. With respect to any amount that (a) should be
reimbursed to PacifiCare or (b) is otherwise payable to PacifiCare, in each case
pursuant to this Agreement, PacifiCare may deduct the entire amount owed to
PacifiCare against the Fees or against the expenses owed by PacifiCare to
Supplier under this Agreement.
17.12 PRORATION. All periodic Fees under this Agreement are to be
computed on a calendar month basis and shall be prorated on a per diem basis for
any partial month.
17.13 UNUSED CREDITS. Any unused credits against future payments owed
to either Party by the other pursuant to this Agreement shall be paid to the
applicable Party within thirty (30) days after the earlier of the expiration or
termination of this Agreement.
17.14 [...***...]. As part of its proposal under Section 5.1, Supplier
shall (a) identify the solution and technology proposed to deliver the New
Service, including alternatives that may provide improved cost or performance
advantages, and (b) upon PacifiCare's authorization in accordance with Section
5.1, implement the agreed upon New Service. Supplier shall, where the
acquisition of New Equipment or Software is required in connection with a New
Service, upon PacifiCare's request, (x) purchase such New Equipment and recover
such purchase as a one-time charge, (y) lease, or arrange for a third party to
lease, such New Equipment, and/or (z) license, or arrange for a third party to
license, any Software contained in such New Equipment to PacifiCare. PacifiCare
shall pay to Supplier the amounts agreed by the Parties in connection with such
purchase, lease and/or license. Except as otherwise agreed by the Parties or as
otherwise provided in this Agreement, (i) all rights in and title to any New
Equipment purchased by Supplier and paid for by PacifiCare shall belong to
PacifiCare and all New Equipment shall be newly manufactured, and (ii) all
leases and license procured under this Section 3.7(b) shall be in PacifiCare's
name.
17.15 FUNDS TRANSFER. PacifiCare shall pay Supplier amounts due
pursuant to Section 17.2 and Section 17.4 by wire transfer to the account
specified in Schedule 17.
18. TAXES.
18.1 Subject to Section 18.2, each Party shall be responsible for any
personal property taxes on property it owns or leases, for franchise and
privilege taxes on its business, and for taxes based on its net income or gross
receipts.
18.2 The Fees paid to Supplier are inclusive of, and Supplier shall be
responsible for, any applicable sales, use, gross receipts, excise, value-added,
services, consumption, withholding or other taxes attributable to periods on or
after the Effective Date based upon or measured by Supplier's cost in acquiring
or providing equipment, materials, supplies or services furnished or used by
Supplier in performing or furnishing the Services, including all personal
property and sales or use taxes, if any, due on the Supplier Equipment.
*CONFIDENTIAL TREATMENT REQUESTED
28
18.3 PacifiCare shall be responsible for any sales, use, gross
receipts, excise, value-added, services, consumption, withholding or other tax
in effect as of the Effective Date on the provision of the Services by Supplier
to PacifiCare, however levied or assessed, and pay the amount of any such tax.
To the extent that any sales, use, gross receipts, excise, value-added or
services tax is required by Law to be separately identified in Supplier's
invoices to PacifiCare, Supplier shall separately identify the tax and assume
any and all responsibility for non-compliance, including interest and penalty
assessments.
18.4 In the event that any new sales, use, gross receipts, excise,
value-added, services, consumption, withholding or other taxes (collectively,
"NEW TAXES") are assessed on the provision of any of the Services, or in the
event that any tax described in Section 18.3 is increased, [...***...].
18.5 Any taxes assessed, as determined by PacifiCare, including a
gross-up thereon, on the provision of the Services for a particular site
resulting from Supplier's relocating or rerouting the delivery of Services for
Supplier's convenience to, from or through a location other than the Service
Location used to provide the Services as of the Effective Date shall be
Supplier's responsibility; provided that, PacifiCare may pay such taxes and
PacifiCare shall receive a credit with respect to the Fees invoiced under this
Agreement equal to such payments made pursuant to this Section 18.4.
18.6 PacifiCare and Supplier shall cooperate to segregate the Fees into
the following separate payment streams: (a) those for taxable Services; (b)
those for non-taxable Services; (c) those for which a sales, use or other
similar tax has already been paid; and (d) those for which Supplier functions
merely as a paying agent for PacifiCare in receiving goods, supplies or services
(including leasing and licensing arrangements) that otherwise are nontaxable or
have previously been subject to tax. In addition, each of PacifiCare and
Supplier shall reasonably cooperate with the other to more accurately determine
a Party's tax liability and to minimize such liability, to the extent legally
permissible. Each of PacifiCare and Supplier shall provide and make available to
the other any resale certificates, information regarding out-of-state sales or
use of equipment, materials or services, and any other exemption certificates or
information requested by a Party.
19. AUDITS.
19.1 SERVICES. Upon notice from PacifiCare, Supplier and Supplier
Agents shall provide PacifiCare, PacifiCare Agents and any of the PacifiCare
Entities' regulators or other reviewing bodies (including the National Committee
for Quality Assurance (NCQA), Department of Insurance (DOI), and Department of
Managed Healthcare (DMHC)) with access to and any assistance that they may
require with respect to the Service Locations and the Systems for the purpose of
performing audits or inspections of the Services and the business of the
PacifiCare Entities relating to the Services. If any audit by an auditor
designated by PacifiCare, a PacifiCare Agent or a regulatory authority results
in Supplier being notified that Supplier or
*CONFIDENTIAL TREATMENT REQUESTED
29
Supplier Agents are not in compliance with any Law or audit requirement,
Supplier shall, and shall cause Supplier Agents to, comply with such Law or
audit requirement promptly after such notification, and in no event later than
required by a Governmental Authority. Supplier shall bear the expense of any
such response that is (a) required by a Law or audit requirement relating to
Supplier's business or (b) necessary due to Supplier's noncompliance with any
Law or audit requirement imposed on Supplier, including as set forth in this
Agreement. To the extent the expense is not payable by Supplier pursuant to the
preceding sentence, PacifiCare shall bear the expense of any such compliance
that is required by any Law or audit requirement relating to the PacifiCare
Entities' business or that is necessary due to the PacifiCare Entities'
noncompliance with any Law or audit requirement imposed on the PacifiCare
Entities.
19.2 FEES. Upon notice from PacifiCare, Supplier shall provide
PacifiCare and PacifiCare Agents with access to such financial records and
supporting documentation as may be requested by PacifiCare and PacifiCare and
PacifiCare Agents may audit the Fees charged to PacifiCare to determine if such
Fees are accurate and in accordance with this Agreement (including Section
17.11).
(a) If, as a result of such audit, PacifiCare determines that
Supplier has overcharged PacifiCare, PacifiCare shall notify Supplier of the
amount of such overcharge and Supplier shall promptly pay to PacifiCare the
amount of the overcharge, plus Interest calculated from the date of receipt by
Supplier of the overcharged amount until the date of payment to PacifiCare.
(b) In addition to PacifiCare's rights set forth in Section
19.2(a), in the event any such audit reveals an overcharge of [...***...] or
more, Supplier shall, at PacifiCare's option, issue to PacifiCare a credit
against the Base Fees or reimburse PacifiCare for the cost of such audit.
19.3 OMNIBUS RECONCILIATION ACT. Without limiting the foregoing, until
the expiration of four (4) years after the End Date, Supplier agrees that the
Secretary of the Department of Health and Human Services (the "SECRETARY") and
the Comptroller General of the United States, or the designee or duly authorized
representative of either of them, shall have access to all books and records of
Supplier directly pertaining to the subject matter of this Agreement and the
provision of Services under it, in accordance with the criteria presently or
hereafter developed by the Department of Health and Human Services ("HHS") as
provided in Section 1861 of the Social Security Act, 42 U.S.C. Section
1395x(v)(1)(I), et seq. ("OBRA") and in accordance with Operational Policy
Letter #77 as currently issued and as revised from time to time by the Centers
for Medicare and Medicaid Services (formerly the Health Care Financing
Administration). Upon request of the Secretary, and in accordance with criteria
presently or hereafter developed by HHS as provided in OBRA, the Comptroller
General, the designee or the authorized representative of either of them,
Supplier shall make available (at reasonable times and places during normal
business hours) this Agreement, and all books, documents, and records of
Supplier that are necessary to verify the nature and extent of the costs of the
Services provided by Supplier and furnished in connection with this Agreement.
Supplier
*CONFIDENTIAL TREATMENT REQUESTED
30
further agrees that if Supplier carries out any of the duties of this Agreement
through a subcontract with a value or cost of [...***...] or more, such
subcontract shall contain a clause to the effect that until the expiration of
four (4) years after the furnishing of such services pursuant to such
subcontract, the subcontracting party shall make available, upon written request
of the Secretary, or upon request of the U.S. Comptroller General or any of
their duly authorized representatives, the subcontract, and the books, documents
and records of such organization that are necessary to verify the nature and
extent of such costs of the Services provided by such subcontracting party and
furnished in connection with this Agreement. Supplier shall promptly inform
PacifiCare of any requests for information made pursuant to this provision.
19.4 RECORD RETENTION. Supplier shall retain records and supporting
documentation sufficient to satisfy the requirements set forth in this Section
19 and to document the Services and the Fees paid or payable by PacifiCare under
this Agreement in accordance with PacifiCare's retention policies and
procedures, as in effect from time to time.
19.5 FACILITIES. Supplier shall provide to PacifiCare and PacifiCare
Agents, on Supplier's premises (or, if the audit is being performed of a
Supplier Agent, the Supplier Agent's premises if necessary), space, office
furnishings (including lockable cabinets) and utilities as PacifiCare or such
PacifiCare Agents may reasonably require to perform the audits described in this
Section 19.
19.6 AUDIT SOFTWARE. Supplier shall operate and maintain such audit
software as PacifiCare may request from time to time during the Term.
19.7 RELIEF. In the event that the frequency or scope of PacifiCare's
audits of Supplier's records under Sections 19.1 and 19.2 above are such that
Supplier can demonstrate to PacifiCare that Supplier's compliance with the
requirements of the aforesaid sections will have a material adverse effect on
Supplier's ability to provide the Services, including in accordance with the
applicable Service Levels, the Parties will negotiate in good faith to determine
an appropriate duration and level of applicable Service Level relief or other
consideration to enable Supplier to comply with its obligations under Sections
19.1 and 19.2.
20. CONFIDENTIALITY.
20.1 GENERAL OBLIGATIONS. All Confidential Information relating to or
obtained from the PacifiCare Entities or Supplier shall be held in strict
confidence by the recipient to the same extent and in at least the same manner
as the recipient protects its own confidential information of similar importance
(and in no event with less than reasonable care). Neither PacifiCare nor
Supplier shall disclose, publish, release, transfer or otherwise make available
Confidential Information of, or obtained from, the other Party in any form to,
or for the use or benefit of, any person or entity without the disclosing
Party's consent.
20.2 EXCEPTIONS. Notwithstanding the foregoing, each of PacifiCare and
Supplier shall be permitted to disclose relevant aspects of the other's
Confidential Information to its officers, directors, agents, professional
advisors, contractors (including the Benchmarker), subcontractors and employees
and to the officers, directors, agents, professional advisors,
*CONFIDENTIAL TREATMENT REQUESTED
31
contractors, subcontractors and employees of its affiliates, to the extent such
disclosure is not restricted under any Assigned Agreements, any Managed
Agreements, any Consents or any Laws or Governmental Approvals and only to the
extent that such disclosure is reasonably necessary for the performance of its
duties and obligations or the determination, preservation or exercise of its
rights and remedies under this Agreement; provided, however, that the recipient
shall take all reasonable measures to ensure that Confidential Information of
the disclosing Party is not disclosed or duplicated in contravention of the
provisions of this Agreement by such officers, directors, agents, professional
advisors, contractors, subcontractors and employees. Furthermore, nothing in
this Agreement shall limit the ability of a Party in possession of the
Confidential Information of the other Party to disclose such Confidential
Information, and such Party shall have no liability for such disclosure, if such
disclosure is: (a) required to be made pursuant to Law, government authority,
duly authorized subpoena or court order, whereupon the receiving Party shall
provide prompt notice to the disclosing Party and give such Party an opportunity
to respond prior to such disclosure; (b) required to be made to a court or other
tribunal in connection with the enforcement of such Party's rights under this
Agreement; or (c) is approved by the prior consent of the disclosing Party.
20.3 ATTORNEY-CLIENT PRIVILEGE. Supplier recognizes that it may obtain
access to client documents, data and databases created by and for the PacifiCare
Entities and associated communications related thereto that are marked
"privileged" or that contain a similar marking or are otherwise identified by
PacifiCare as privileged (collectively, "PRIVILEGED WORK PRODUCT") that are
confidential attorney work product or subject to the attorney-client privilege.
Supplier shall not intentionally reveal Privileged Work Product to third parties
and Supplier shall institute adequate safeguards to prevent the unintentional
disclosure of Privileged Work Product to third parties. The only Project Staff
who may have access to Privileged Work Product shall be those for whom such
access is necessary for the purpose of providing services to the PacifiCare
Entities as provided in this Agreement. Supplier recognizes that Privileged Work
Product has been prepared in anticipation of litigation and that Supplier is
performing the Services in respect of Privileged Work Product as an agent of
PacifiCare, and that all matter related thereto is protected from disclosure by
Rule 26 of the United States Federal Rules of Civil Procedure (or any similar
Law in other local jurisdictions). Should Supplier ever be notified of any
judicial or other proceeding seeking to obtain access to Privileged Work
Product, Supplier shall (a) immediately notify PacifiCare and (b) subject to
applicable Law, take such reasonable actions as may be specified by PacifiCare
to resist providing such access. PacifiCare shall have the right and duty to
represent Supplier in such resistance or to select and compensate counsel to so
represent Supplier or to reimburse Supplier for reasonable attorneys' fees and
expenses incurred in resisting such access.
20.4 UNAUTHORIZED ACTS. Without limiting either Party's rights in
respect of a breach of this Section 20, each Party shall:
(a) promptly notify the other Party of any unauthorized
possession, use or knowledge, or attempt thereof, of the other Party's
Confidential Information by any person or entity that may become known to such
Party;
(b) promptly furnish to the other Party full details of the
unauthorized possession, use or knowledge, or attempt thereof, and assist the
other Party in investigating or preventing the recurrence of any unauthorized
possession, use or knowledge, or attempt thereof, of Confidential Information;
32
(c) cooperate with the other Party in any litigation and
investigation by the other Party against third parties to protect such Party's
proprietary rights; and
(d) promptly use all reasonable efforts to prevent a
recurrence of any such unauthorized possession, use or knowledge, or attempt
thereof, of Confidential Information.
Each Party shall bear the cost it incurs as a result of
compliance with this Section 20.
20.5 INJUNCTIVE RELIEF. The Parties acknowledge and agree that monetary
damages may be inadequate to compensate for a breach of the provisions contained
in this Section 20 or other confidentiality provisions of this Agreement. In the
event of such breach, the injured Party may seek injunctive relief and any and
all other remedies available at law or in equity. This Section 20.5 in no way
limits the liability or damages that may be assessed against a Party in the
event of a breach of this Section 20 by the other Party.
20.6 RESIDUAL INFORMATION. Except for [...***...] the Party receiving
Confidential Information may use in its business activities, in the case of
Supplier, the data processing ideas, concepts and know-how contained in such
Confidential Information, and in the case of PacifiCare, the general ideas,
concepts, and know-how contained in such Confidential Information, in each case
retained in the unaided memories of the receiving Party's employees involved in
the provision or receipt of the Services (and not intentionally memorized for
the purpose of later recording or use) ("RESIDUAL INFORMATION"). Nothing
contained in this Section 20.6 shall entitle the receiving Party to disclose the
source of the Residual Information. For purposes of this Section 20.6, the term
"business activities" shall mean, in the case of Supplier, the provision of
information technology products and services, and in the case of PacifiCare, the
provision of healthcare-related products and services.
21. REPRESENTATIONS AND WARRANTIES.
21.1 BY PACIFICARE. PacifiCare represents and warrants to Supplier
that:
(a) PacifiCare is a corporation duly incorporated, validly
existing and in good standing under the Laws of the State of Delaware;
(b) PacifiCare has all requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement;
(c) the execution, delivery and performance of this Agreement
by PacifiCare (i) has been duly authorized by PacifiCare and (ii) shall not
conflict with, result in a breach of or constitute a default under any other
agreement to which PacifiCare is a party or by which PacifiCare is bound;
*CONFIDENTIAL TREATMENT REQUESTED
33
(d) PacifiCare is duly licensed, authorized or qualified to do
business and is in good standing in every jurisdiction in which a license,
authorization or qualification is required for the ownership or leasing of its
assets or the transaction of business of the character transacted by it, except
where the failure to be so licensed, authorized or qualified would not have a
material adverse effect on PacifiCare's ability to fulfill its obligations under
this Agreement; and
(e) PacifiCare is in compliance with all Laws and has obtained
all applicable permits and licenses required of PacifiCare in connection with
its obligations under this Agreement, except 1) with respect to issues, concerns
or requests regarding PacifiCare or California (DMHC File No. 933-0126),
PacifiCare Behavioral Health of California, Inc. (DMHC File No. 933-0301) and/or
PacifiCare Dental (DMHC File No. 933-0100) that may be forthcoming from the
DMHC, arising from or related to the DMHC Filing, and 2) where the failure to
comply with such Laws or obtain such permits and licenses would not have a
material adverse effect on PacifiCare's or Supplier's ability to fulfill its
respective obligations under this Agreement.
21.2 BY SUPPLIER. Supplier represents and warrants to PacifiCare that:
(a) Supplier is a corporation duly incorporated, validly
existing and in good standing under the Laws of the State of New York;
(b) Supplier has all requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement;
(c) the execution, delivery and performance of this Agreement
by Supplier (i) has been duly authorized by Supplier and (ii) shall not conflict
with, result in a breach of or constitute a default under any other agreement to
which Supplier is a party or by which Supplier is bound;
(d) Supplier is duly licensed, authorized or qualified to do
business and is in good standing in every jurisdiction in which a license,
authorization or qualification is required for the ownership or leasing of its
assets or the transaction of business of the character transacted by it, except
where the failure to be so licensed, authorized or qualified would not have a
material adverse effect on Supplier's ability to fulfill its obligations under
this Agreement;
(e) Supplier is in compliance with all Laws applicable to
Supplier's obligations under this Agreement and has obtained all applicable
permits and licenses required of Supplier in connection with its obligations
under this Agreement;
(f) there is no outstanding litigation, arbitrated matter or
other dispute to which Supplier is a party that, if decided unfavorably to
Supplier, would reasonably be expected to have a material adverse effect on
Supplier's ability to fulfill its obligations under this Agreement; and
21.3 DISCLAIMER. EXCEPT AS SPECIFIED IN SECTION 21.1 AND SECTION 21.2,
NEITHER PACIFICARE NOR SUPPLIER MAKES ANY OTHER WARRANTIES WITH RESPECT TO THE
SERVICES OR THE SYSTEMS AND EACH EXPLICITLY DISCLAIMS ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED,
34
INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A SPECIFIC
PURPOSE.
22. ADDITIONAL COVENANTS.
22.1 BY PACIFICARE. PacifiCare covenants and agrees with Supplier that
during the Term and the Termination Assistance Period:
(a) PacifiCare shall comply with all Laws applicable to
PacifiCare, except where the failure to comply would not have a material adverse
effect on PacifiCare's or Supplier's ability to fulfill its respective
obligations under this Agreement; and
(b) PacifiCare shall not expressly direct Supplier, in
providing the Services, to take actions that violate PacifiCare Laws, provided
that to the extent Supplier knew or should have known that such action would
violate a PacifiCare Law, PacifiCare shall not have breached this Section
22.1(b), and Supplier shall not be entitled to assert such a breach.
22.2 BY SUPPLIER. Supplier covenants and agrees with PacifiCare that
during the Term and the Termination Assistance Period:
(a) in addition to meeting or exceeding all Service Levels,
Supplier shall at all times render the Services promptly and diligently and
perform in a professional and workmanlike manner;
(b) Supplier shall at all times use qualified individuals with
suitable training, education, competence and skill to perform the Services, as
applicable;
(c) Supplier shall comply with all Laws applicable to Supplier
except where the failure to comply would not have a material adverse effect on
Supplier's or PacifiCare's ability to fulfill its respective obligations under
this Agreement;
(d) from and after the Effective Date, in providing the
Services, Supplier shall comply with the Medical Confidential Information Laws,
including Medical Confidential Information Laws that PacifiCare, as a Covered
Entity, is required to require Supplier to comply with as a Business Associate,
and any measures PacifiCare adopts from time to time in order to comply with
Medical Confidential Information Laws (provided that PacifiCare provides notice
of such measures to the Supplier Client Relationship Manager). In the event that
the requirements of any Medical Confidential Information Laws are more
restrictive or protective of information than the confidentiality and
nondisclosure provisions of this Agreement, the Medical Confidential Information
Laws shall control;
(e) Supplier shall use all reasonable efforts to prevent the
introduction or coding of viruses or similar items into the Systems. In the
event a virus or similar item is introduced into the Systems, and such
introduction is not attributable to Supplier or Supplier Agents (including
Supplier's failure to perform its obligations under this Agreement), Supplier
shall use all reasonable efforts to assist the PacifiCare Entities in reducing
the effects of the virus or similar item, and, if the virus or similar item
causes a loss of operational efficiency or loss of data, to assist the
PacifiCare Entities to the same extent to mitigate and restore such losses,
35
provided that Supplier is not obligated to restore lost data resulting from such
introduction [...***...]. In the event a virus or similar item is introduced
into the Systems, and such introduction is attributable to Supplier or Supplier
Agents (including Supplier's failure to perform its obligations under this
Agreement), Supplier shall use all reasonable efforts to reduce the effects of
the virus or similar item, and, if the virus or similar item causes a loss of
operational efficiency or loss of data, to mitigate the loss of operational
efficiency and restore the loss of data [...***...]; and
(f) without the consent of PacifiCare, Supplier shall not
insert into the Software used to provide the Services any code that disables or
otherwise shuts down all or any portion of the Services. Supplier further
covenants that, with respect to any disabling code that may be part of the
Software used to provide the Services, Supplier shall not invoke such disabling
code at any time, including upon expiration or termination of this Agreement,
without PacifiCare's consent.
23. DISPUTE RESOLUTION.
23.1 RESOLUTION PROCEDURES. Except as otherwise provided below, the
Parties shall attempt to resolve any dispute arising under or related to this
Agreement (a "DISPUTE") in accordance with the procedures set forth in this
Section 23.1.
(a) CONTRACT MANAGERS. Within [...***...] after either Party
furnishes to the other notice of a Dispute, the PacifiCare [...***...] and the
Supplier [...***...] shall consider the Dispute in person or BY telephone and
shall attempt in good faith to resolve the Dispute for a period of [...***...],
or [...***...] in the event of a fee Dispute. If the Dispute is not resolved, as
agreed by the Parties in writing, within such period, the Dispute shall be
escalated in accordance with Section 23.1(b) below.
(b) VICE PRESIDENTS. If a Dispute is not resolved in
accordance with Section 23.1(a) above, Supplier's [...***...] (or any successor
position) shall meet with PacifiCare to discuss the Dispute with PacifiCare's
[...***...] or his or her designee at a PacifiCare Service Location or other
location specified by PacifiCare, and the Parties shall attempt in good faith to
resolve the Dispute for a period of [...***...], or [...***...] in the event of
a fee Dispute. Unless the Parties otherwise agree in writing, either Party may
pursue its rights and remedies under this Agreement after the expiration of such
period.
23.2 EXCLUSIONS. Notwithstanding the foregoing, Disputes relating to
Section 15.4, Section 20 or Section 26 shall not be subject to Section 23.1. In
addition, nothing in this Agreement shall limit either Party's right to seek
immediate injunctive or other equitable relief whenever the facts or
circumstances would permit a Party to seek such relief in a court of competent
jurisdiction.
23.3 CONTINUITY OF SERVICES. Supplier acknowledges that the timely and
complete performance of its obligations pursuant to this Agreement is critical
to the business and operations of the PacifiCare Entities. Accordingly, in the
event of a Dispute between PacifiCare
*CONFIDENTIAL TREATMENT REQUESTED
36
and Supplier, and provided that PacifiCare is in compliance with Section 17.7,
Supplier shall continue to so perform its obligations under this Agreement in
good faith during the resolution of such Dispute.
24. TERMINATION.
24.1 TERMINATION FOR CONVENIENCE. PacifiCare may terminate this
Agreement, effective any time after [...***...] by giving Supplier notice of the
termination at least one hundred and eighty (180) days prior TO the termination
date specified in the notice.
24.2 TERMINATION FOR CHANGE IN CONTROL. In the event of a Change in
Control of Supplier, PacifiCare or either Party's respective parent companies,
PacifiCare may terminate this Agreement, at its sole discretion, by giving
Supplier notice of the termination at least one hundred eighty (180) days prior
to the termination date specified in the notice.
24.3 TERMINATION FOR CAUSE.
(a) If Supplier defaults in the performance of any of its
material obligations (including by repeatedly defaulting in the performance of
any of its obligations which, when combined, constitute a breach of a material
obligation) under this Agreement (except as provided in Section 24.4), and does
not cure such default within [...***...] (the "SUPPLIER DEFAULT CURE PERIOD")
after receipt of a notice of default from PacifiCare (the "SUPPLIER DEFAULT
NOTICE"), then PacifiCare may, without limiting PacifiCare's other rights or
remedies under this Agreement, by giving notice to Supplier, terminate this
Agreement, in whole or in part, as of the termination date specified in the
Supplier Default Notice, such date to be no more than ninety (90) days after the
date of the Supplier Default Notice, unless otherwise agreed by the Parties.
(b) If PacifiCare fails to make undisputed payments due to
Supplier under this Agreement and does not pay such undisputed amounts within
[...***...] (the "PACIFICARE DEFAULT CURE PERIOD") of receipt of Supplier's
notice of PacifiCare's failure to pay such undisputed amounts (the "PACIFICARE
DEFAULT Notice"), then Supplier may, by giving notice to PacifiCare, terminate
this Agreement in whole as of the termination date specified in the PacifiCare
Default Notice. If PacifiCare disputes any amounts that are the subject of the
PacifiCare Default Notice and fails to pay such amounts in accordance with
Section 17.7 during the PacifiCare Default Cure Period (subject to the
resolution of such Dispute), then Supplier may, by giving notice to PacifiCare,
terminate this Agreement in whole as of the termination date specified in the
PacifiCare Default Notice.
24.4 TERMINATION FOR FAILURE TO PROVIDE CRITICAL SERVICES. If Supplier
fails to provide any Critical Service and does not, within [...***...] after
such failure identified on Schedule 24.4 with respect to such Critical Service,
cure such failure or, if such failure cannot be cured within [...***...]
identified on Schedule 24.4 with respect to such Critical Service, provide
PacifiCare with a workaround that allows PacifiCare to receive such Critical
Service in accordance with this Agreement, [...***...]
*CONFIDENTIAL TREATMENT REQUESTED
37
[...***...] Nothing in this Section 24.4 shall be deemed to limit or obviate
PacifiCare's right to terminate this Agreement pursuant to Section 24.3(a).
24.5 TERMINATION IN PART. If PacifiCare elects to terminate this
Agreement "in part" pursuant to its termination rights under this Agreement, the
part of the Agreement terminated must be [...***...]. If PacifiCare terminates
the [...***...] or Insources a portion of the [...***...], the Parties will
negotiate in good faith and implement an equitable adjustment to this Agreement
to accommodate such termination or Insourcing.
25. TERMINATION FEES.
25.1 EARLY TERMINATION FEE. If PacifiCare terminates this Agreement
pursuant to Section 24.1, then PacifiCare shall pay Supplier the early
termination fees set forth in Schedule 17 (the "EARLY TERMINATION FEE").
PacifiCare shall pay the Early Termination Fee within thirty (30) days of the
last day of the month in which Supplier is providing Termination Assistance
Services following termination pursuant to Section 24.1.
25.2 ASSET PURCHASE. Upon the expiration or termination of this
Agreement by either Party for any reason, at PacifiCare's sole discretion,
PacifiCare shall have the option to purchase from Supplier any Equipment,
Software or other materials purchased by Supplier or Supplier Agents to provide
the Services, or any portion thereof, at the lesser of fair market value or book
value.
25.3 NO OTHER FEES. Except as expressly set forth in this Section
25, Section [...***...], Section 16.3 and Section 26, PacifiCare shall have no
obligation to pay any termination fee or other fees to Supplier in connection
with the termination of this Agreement, and any recovery or remedy sought by
Supplier for such termination shall be limited to the Early Termination Fee set
forth in this Section 25 and the Termination Assistance Services Fees (as
described in Section 26.2). Supplier agrees that if PacifiCare terminates this
Agreement pursuant to Section 24.3(a) or Section 24.4, then Supplier shall not
be entitled to any Early Termination Fee, except for any payments due for any
Equipment, Software or other materials that PacifiCare elects to purchase
pursuant to Section 26.3 and for any Termination Assistance Services Fees as set
forth in Section 26 below.
26. TERMINATION ASSISTANCE.
26.1 TERMINATION ASSISTANCE SERVICES.
(a) Commencing up to six (6) months before the expiration
or any earlier termination of this Agreement, upon the request of and as
specified by PacifiCare, and in accordance with this Section 26, Supplier shall
provide the Termination Assistance Services described in Schedule 26.1 (the
"TERMINATION ASSISTANCE SERVICES") to facilitate the smooth transition of the
Services (and other functions being performed by Supplier and Supplier Agents
*CONFIDENTIAL TREATMENT REQUESTED
38
under this Agreement at the time of such expiration or termination) to
PacifiCare or another service provider of PacifiCare's choosing (the
"DESIGNEE").
(b) PacifiCare may also (i) upon the request of and as
specified by PacifiCare, and subject to Section 26.2 below, require Supplier to
provide the Termination Assistance Services up to twelve (12) months following
the effective date of expiration or any termination of this Agreement, and (ii)
at the end of such twelve- (12)-month period and upon the request of and as
specified by PacifiCare, require Supplier to provide the Termination Assistance
Services for an additional period of up to six (6) months following the end of
the twelve (12)-month period described above (collectively, the period of
Termination Assistance Services prior to the effective date of expiration or
termination of this Agreement and the periods referred to in clauses (i) and
(ii) above, the "TERMINATION ASSISTANCE PERIOD"). Without limiting Supplier's
obligations to provide the Termination Assistance Services in accordance with
this Section 26, following a request by PacifiCare that Supplier perform the
Termination Assistance Services, PacifiCare shall, as soon as reasonably
practicable, advise Supplier of the anticipated duration of the Termination
Assistance Period, and, to the extent reasonably possible, the types of
Termination Assistance Services that PacifiCare anticipates it will require
during such period.
(c) During the Termination Assistance Period, Supplier
shall provide the Termination Assistance Services until PacifiCare, in its sole
discretion, provides Supplier notice that the Services have been satisfactorily
transferred to PacifiCare or the Designee.
(d) The quality and level of Termination Assistance
Services and other services performed during the Termination Assistance Period
shall not be materially degraded from the level of service (including Service
Levels, where applicable) provided by Supplier and Supplier Agents for similar
services during the Term.
(e) After the expiration of the Termination Assistance
Period, Supplier shall (i) answer questions from the PacifiCare Entities
regarding the Services on an "as needed" basis at Supplier's then-standard
billing rates and (ii) deliver to PacifiCare any remaining PacifiCare
Entity-owned reports and documentation still in Supplier's possession.
26.2 TERMINATION ASSISTANCE SERVICES FEES.
(a) With respect to Termination Assistance Services that
are Services performed under this Agreement prior to the Termination Assistance
Period:
(i) During the Termination Assistance Period
prior to the expiration or termination of this Agreement, Supplier shall provide
Termination Assistance Services at no additional charge to PacifiCare to the
extent that such assistance can be provided through resources included in the
Base Fees without materially interfering with Supplier's ability to perform the
Services. To the extent that any Termination Assistance Services cannot be
provided using resources included in the Base Fees, PacifiCare shall pay
Supplier to provide such services in accordance with Section 17.3.
(ii) During the Termination Assistance Period
after the expiration or termination of this Agreement, if applicable, Supplier
shall provide Termination Assistance Services at the rates applicable under this
Agreement for such services.
39
(b) With respect to Termination Assistance Services that
are not Services performed under this Agreement prior to the Termination
Assistance Period, Supplier shall provide such services during the Termination
Assistance Period in accordance with Section 5.1 and Section 17.14.
(c) The fees paid for Termination Assistance Services
(the "TERMINATION ASSISTANCE SERVICES FEES") are to be paid in accordance with
the payment terms set forth in Section 17. Supplier shall have no obligation to
provide Termination Assistance Services if PacifiCare fails to comply with
Section 17.7.
26.3 EXIT DUTIES AND EXIT RIGHTS. Upon the later of the expiration
or termination of this Agreement and the last day of the Termination Assistance
Period (the "END DATE"):
(a) The rights granted to Supplier and Supplier Agents in
Section 14.2 shall immediately terminate and Supplier shall, and shall cause
Supplier Agents to, (i) deliver to PacifiCare, at no cost to PacifiCare, a
current copy of the PacifiCare Software in the form in use as of the End Date
and (ii) destroy or erase all other copies of the PacifiCare Software in
Supplier's or Supplier Agents' possession. Supplier shall, upon PacifiCare's
request, certify to PacifiCare that all such copies have been destroyed or
erased.
(b) Supplier shall promptly deliver to PacifiCare a copy
of any Software that is subject to a Back-End Consent in the form in use for
performance of the Services as of the End Date. If the Software subject to this
Section 26.3(b) is Supplier Proprietary Software, Supplier shall also provide to
the PacifiCare Entities support and maintenance services for such Software and
Tools on terms, conditions and prices agreed upon by the Parties, which shall in
no event [...***...].
(c) Upon PacifiCare's request, for a period of
[...***...] after the End Date, with respect to any Supplier Software or Tools
that Supplier is using to provide the Services as of the date of termination or
expiration of this Agreement and that Supplier operates on equipment located at
one or more Supplier Service Locations, Supplier shall provide to the PacifiCare
Entities or PacifiCare's designees remote access to and use of such Supplier
Software and Tools, together with all hosting, maintenance, support and other
services required for the PacifiCare Entities or PacifiCare's designees to use
such Supplier Software and Tools to continue the Services, all on terms,
conditions and prices agreed upon by the Parties, which shall in no event be
[...***...]. Supplier shall provide such additional assistance as may be
necessary to permit PacifiCare to establish the same or similar functions on
equipment at PacifiCare's or another service provider's locations.
(d) Supplier shall (i) deliver to PacifiCare a copy of
all of the Work Product, in the form in use as of the End Date, and (ii) destroy
or erase all other copies of the Work Product in Supplier's possession.
(e) [...***...]. Upon PacifiCare's request, Supplier
shall assist the PacifiCare Entities in obtaining directly from third
*CONFIDENTIAL TREATMENT REQUESTED
40
parties any third party Software or services used in the provision of the
Services, which Software and services are not subject to a Back-End Consent.
(f) Upon PacifiCare's request, Supplier shall sell to
PacifiCare or its Designee (i) the Supplier Equipment being used by Supplier or
Supplier Agents solely to perform the Services as of the End Date and (ii) any
other assets transferred by the PacifiCare Entities to Supplier or Supplier
Agents and used to provide the Services as of the End Date, free and clear of
all liens, security interests or other encumbrances at the lesser of the fair
market value, as shall be determined by an agreed-upon appraisal, and the book
value. Supplier shall also furnish to the PacifiCare Entities all user and other
documentation in its possession that relates to such Equipment.
(g) PacifiCare shall have the right to extend offers of
employment to all Supplier and Supplier Agent personnel who have been or are
assigned to or have or are performing any Services or other work on behalf of
Supplier or Supplier Suppliers with respect to PacifiCare. Supplier and Supplier
Suppliers shall provide reasonable access to such personnel and shall not
interfere in any way with any such solicitation by PacifiCare.
Where any of the foregoing rights under this Section 26.3 may
be requested by PacifiCare, PacifiCare may request such rights either before or
after the End Date.
27. INDEMNITIES.
27.1 INDEMNITY BY PACIFICARE. PacifiCare shall indemnify Supplier
from, and defend and hold Supplier harmless from and against, any Losses
suffered, incurred or sustained by Supplier or to which Supplier becomes
subject, resulting from, arising out of or relating to any claim:
(a) that the PacifiCare Software infringes upon the
proprietary rights of any third party (except as may have been caused by a
modification by Supplier or Supplier Agents, or by written directions or
specifications provided to PacifiCare by Supplier or Supplier Agents);
(b) relating to the inaccuracy, untruthfulness or breach
of any representation or warranty [...***...];
(c) relating to (i) a violation by the PacifiCare
Entities or PacifiCare Agents of Law for the protection of persons or members of
a protected class or category of persons, including unlawful discrimination,
(ii) work-related injury (except as may be covered by PacifiCare's workers'
compensation plan) or death caused by the PacifiCare Entities or PacifiCare
Agents, (iii) accrued employee benefits not expressly assumed by Supplier, (iv)
any representations, oral or written, made by PacifiCare or PacifiCare Agents to
the Affected Employees and (v) any other aspect of the Affected Employees'
employment relationship with PacifiCare or termination of such employment
relationship with PacifiCare (including claims for breach of an express or
implied contract of employment);
*CONFIDENTIAL TREATMENT REQUESTED
41
(d) relating to any amounts, including taxes, interest
and penalties, assessed against Supplier that are the obligation of PacifiCare
pursuant to Section 18;
(e) relating to personal injury (including death) or
property loss or damage resulting from PacifiCare's acts or omissions;
(f) relating to a breach of Section 20;
(g) relating to PacifiCare's failure to comply with the
Consents and Governmental Approvals applicable to PacifiCare, PacifiCare's
failure to obtain and maintain the PacifiCare Governmental Approvals,
[...***...];
(h) relating to a breach of PacifiCare's obligations
under Section 22.1(a); [...***...]; and
(i) relating to a breach of PacifiCare's obligations
under Section 30.3.
[...***...].
27.2 INDEMNITY BY SUPPLIER. Supplier shall indemnify the PacifiCare
Entities from, and defend and hold the PacifiCare Entities harmless from and
against, any Losses suffered, incurred or sustained by the PacifiCare Entities
or to which the PacifiCare Entities become subject resulting from, arising out
of or relating to any claim:
(a) that the Work Product, Supplier Tools, Supplier
Software, Supplier Equipment, any enhancements or modifications to the
PacifiCare Software performed by Supplier or Supplier Agents or any other
resources or items provided to the PacifiCare Entities by Supplier or Supplier
Agents infringe upon the proprietary or other rights of any third party (except
as may have been caused by a modification by the PacifiCare Entities or
PacifiCare Entity Agents, or by written directions or specifications provided to
Supplier by PacifiCare or the PacifiCare Entities);
(b) relating to any duties or obligations of Supplier or
Supplier Agents in respect of a third party or any subcontractor of Supplier;
(c) by a third party customer of Supplier arising from
services or systems provided by Supplier or Supplier Agents from a Service
Location that is shared with customers of Supplier [...***...];
*CONFIDENTIAL TREATMENT REQUESTED
42
(d) relating to the inaccuracy, untruthfulness or breach
of any representation or warranty specified in Section 21.2; [...***...];
(e) relating to Supplier's failure to obtain, maintain or
comply with the Consents, obtain and maintain Supplier Governmental Approvals,
comply with Governmental Approvals applicable to Supplier, [...***...];
(f) relating to (i) a violation by Supplier or Supplier
Agents of Law for the protection of persons or members of a protected class or
category of persons, including unlawful discrimination, (ii) work-related injury
(except as may be covered by Supplier's workers' compensation plan) or death
caused by Supplier or Supplier Agents, (iii) accrued employee benefits not
expressly retained by the PacifiCare Entities, (iv) any representations, oral or
written, made by Supplier or Supplier Agents to the PacifiCare Entities'
employees, including the Affected Employees and (v) any other aspect of the
Affected Employees' employment relationship with Supplier or the termination of
the employment relationship with Supplier (including claims for breach of an
express or implied contract of employment);
(g) relating to any amounts, including taxes, interest
and penalties, assessed against the PacifiCare Entities that are the obligation
of Supplier pursuant to Section 18;
(h) relating to personal injury (including death) or
property loss or damage resulting from Supplier's or Supplier Agents' acts or
omissions;
(i) relating to a breach of Supplier's obligations with
respect to Section 15.1, Section 15.2 and Section 15.4;
(j) relating to a breach of Section 20;
(k) relating to a breach of Supplier's obligations under
Section 22.2(c) and 22.2(d); [...***...]; and
(l) [...***...].
[...***...].
* CONFIDENTIAL TREATMENT REQUESTED
43
27.3 INDEMNIFICATION PROCEDURES. If any claim is commenced against
a person or entity entitled to indemnification under Section 27.1 or Section
27.2 (the "INDEMNIFIED PARTY"), notice thereof shall be given to the Party that
is obligated to provide indemnification (the "INDEMNIFYING PARTY") as promptly
as practicable. If, after such notice, the Indemnifying Party shall acknowledge
that this Agreement applies with respect to such claim, then the Indemnifying
Party shall be entitled, if it so elects, in a notice promptly delivered to the
Indemnified Party, but in no event less than ten (10) days prior to the date on
which a response to such claim is due, to immediately take sole control of the
defense and investigation of such claim and to employ and engage attorneys
reasonably acceptable to the Indemnified Party to handle and defend the same, at
the Indemnifying Party's sole cost and expense. The Indemnified Party shall
cooperate, at the cost of the Indemnifying Party in all reasonable respects with
the Indemnifying Party and its attorneys in the investigation, trial and defense
of such claim and any appeal arising therefrom. The Indemnified Party may, at
its own cost and expense, participate, through its attorneys or otherwise, in
such investigation, trial and defense of such claim and any appeal arising
therefrom, provided that such participation does not unreasonably interfere with
the Indemnifying Party's ability to defend such claim. No settlement of a claim
that involves a remedy other than the payment of money by the Indemnifying Party
shall be entered into without the consent of the Indemnified Party. After notice
by the Indemnifying Party to the Indemnified Party of its election to assume
full control of the defense of any such claim, the Indemnifying Party shall not
be liable to the Indemnified Party for any legal expenses incurred thereafter by
such Indemnified Party in connection with the defense of that claim. If the
Indemnifying Party does not assume full control over the defense of a claim
subject to such defense as provided in this Section 27, the Indemnifying Party
may participate in such defense, at its sole cost and expense, and the
Indemnified Party shall have the right to defend the claim in such manner as it
may deem appropriate, at the cost and expense of the Indemnifying Party.
27.4 OBLIGATION TO REPLACE.
(a) SUPPLIER. In the event that the use of the Work
Product, the Supplier Software, the Supplier Tools, the Supplier Equipment or
any modifications or enhancements to the PacifiCare Software or the Tools
performed by Supplier or Supplier Agents, (each, as applicable, the "SUPPLIER
INDEMNIFIED COMPONENT"), pursuant to an indemnifiable claim according to 27.2(a)
is found to infringe upon the intellectual property or proprietary rights of any
third party or is enjoined, Supplier shall provide PacifiCare with a written
plan detailing how Supplier shall, at Supplier's cost and expense and to the
extent possible in such a manner that does not materially affect PacifiCare's
business activities: (i) obtain the right to continue using the Supplier
Indemnified Component; (ii) modify the Supplier Indemnified Component so that it
is no longer infringing while maintaining the substantially similar
functionality; or (iii) replace the Supplier Indemnified Component with a
non-infringing replacement with the same functionality. Supplier shall obtain
PacifiCare's consent to such plan before implementing the plan. Supplier shall
provide to PacifiCare at Supplier's cost and expense and as soon as practicable
any training of Supplier personnel necessary to enable Supplier personnel to use
the modified or replaced Supplier Indemnified Component.
(b) PACIFICARE. In the event that the use of the
PacifiCare Software (each, as applicable, the "PACIFICARE INDEMNIFIED
COMPONENT"), pursuant to an indemnifiable claim according to 27.1(a) is found to
infringe upon the intellectual property or proprietary rights of
44
any third party or is enjoined, and to the extent such infringement materially
hinders Supplier's ability to provide the Services, PacifiCare shall, at
PacifiCare's cost and expense and in such a manner as to minimize disturbances
to Supplier's provision of the Services: (i) obtain for Supplier the right to
continue using the PacifiCare Indemnified Component; (ii) modify the PacifiCare
Indemnified Component so that it is no longer infringing; or (iii) replace the
PacifiCare Indemnified Component with a substantially similar non-infringing
component.
28. DAMAGES.
28.1 CONSEQUENTIAL DAMAGES. Subject to Section 28.4, in no event
shall either the PacifiCare Entities or Supplier be liable for any indirect,
incidental, special or consequential damages, arising out of or relating to its
performance or failure to perform under this Agreement, even if advised of the
possibility of such damages.
28.2 DIRECT DAMAGES. Each of the Parties shall be liable to the
other for any direct damages arising out of or relating to its performance or
failure to perform under this Agreement; [...***...].
28.3 BASIS OF THE BARGAIN. Each Party acknowledges that the
foregoing limitations are an essential element of this Agreement between the
Parties and that in the absence of such limitations the pricing and other terms
set forth in this Agreement would be substantially different.
* CONFIDENTIAL TREATMENT REQUESTED
45
28.4 EXCLUSIONS. The limitations or exculpations of liability set
forth in Section 28.1 and Section 28.2 shall not apply to: [...***...].
29. INSURANCE.
29.1 TYPES AND AMOUNTS. During the term of this Agreement, Supplier
shall procure and maintain, at Supplier's sole cost and expense, the following
insurance coverages:
(a) COMMERCIAL GENERAL LIABILITY INSURANCE, including
premises, products (if products are being provided) /completed operations (if
services are being provided) and contractual liability with limits of not less
than [...***...] per occurrence and [...***...] aNNUAL aggregate for bodily
injury and property damage. Said insurance shall be provided on an "occurrence"
form.
(b) AUTOMOBILE LIABILITY INSURANCE (if performing any
activities on PacifiCare's premises) with limits of not less than [...***...]
per occurrence, combined single limit for bodily injury and property damage,
covering owned non-owned and hired vehiclES.
(c) WORKERS COMPENSATION AND EMPLOYERS LIABILITY. If the
Supplier is an employer of one or more employees, workers compensation and
employers liability coverage with minimum limits of:
(i) Workers Compensation - statutory as required
by law
(ii) Employers Liability-
bodily injury by accident: $[...***...] each accident
bodily injury by disease: $[...***...] each employee
bodily injury by disease: $[...***...] policy limit
(d) If Supplier has a claims-made based policy (or
policies) and such policy (or policies) are cancelled or not renewed, Supplier
agrees to exercise any option contained in said policy (or policies) to extend
the reporting period to the maximum period permitted; provided, however, that
Supplier need not exercise such option if the superseding insurer shall accept
all prior claims.
(e) Supplier may satisfy the coverage minimums set forth
in 29.1(a)-(d) by any combination of primary or umbrella coverage, provided that
any umbrella coverage used to meet the coverage minimums set forth in
29.1(a)-(d) must meet or exceed the aggregate coverage minimums for all claims
covered by such umbrella coverage.
* CONFIDENTIAL TREATMENT REQUESTED
46
29.2 SUPPLIER AGENTS. Supplier shall require that each Supplier
Agent carry Commercial General Liability insurance, including premises,
products, completed operations and contractual liability insurance, and in
addition, carry Automobile Liability insurance (if performing on PacifiCare's
premises), Workers Compensation and Employers Liability insurance, and
Consultant's Errors and Omission Liability insurance with the same minimum
limits as required herein for Supplier. Except with regard to the Affected
Contractors engaged by Supplier pursuant to this Agreement, Supplier shall
require that all Supplier Agents shall carry the aforementioned insurance with
the same minimum limits as required for Supplier in Section 29.1 above.
29.3 DOCUMENTATION. Each of Supplier's and Supplier Agents'
insurance policies shall:
(a) be issued by companies that are admitted insurers in
the jurisdiction in which the services or products are being provided;
(b) be issued by companies that have an A. M. Best rating
of not less than "A-", and are in a size category which is not lower than
"VIII";
(c) be primary and noncontributory with any of
PacifiCare's insurance;
(d) name PacifiCare as an additional insured; (except
Workers Compensation, Employers Liability and Errors and Omissions coverages)
and
(e) provide PacifiCare with thirty (30) days prior notice
of cancellation, non-renewal or material change in the form or limits of
coverage.
(f) Supplier and Supplier Agents shall cause its
insurance carriers, brokers or agents to issue to PacifiCare certificates of
insurance evidencing all insurance coverages, and any renewals thereof, required
by this Section 29.
(g) Notwithstanding any other provision of this
Agreement, failure to provide the certificates of insurance shall be grounds for
immediate termination of this Agreement.
29.4 SELF-INSURANCE. If any of the required coverages are provided
by a self-insurance arrangement, a wholly owned insurance subsidiary (captive)
or a risk retention group, the above requirement may be waived at the sole
discretion of PacifiCare, but only after review of the self-insured's, captive's
or risk retention group's most current audited financial statement and actuarial
report. In addition Supplier agrees, during the Term of this Agreement, to
provide PacifiCare with updated financial statements and actuarial reports
within a reasonable time after the close of each of the self-insurance program's
plan year.
29.5 INTENTIONS. None of the foregoing requirements as to the type
and limits of insurance to be maintained by Supplier and Supplier Agents are
intended to and shall not in any manner limit or qualify the liabilities and
obligations assumed by Supplier under this Agreement.
47
30. MISCELLANEOUS PROVISIONS.
30.1 AMENDMENTS. No amendment to, or change, waiver or discharge
of, any provision of this Agreement shall be valid unless in writing and signed
by, in the case of PacifiCare, the PacifiCare Supplier Relationship Manager, and
in the case of the Supplier, the Supplier Client Relationship Manager.
30.2 ASSIGNMENT.
(a) Neither Party shall, without the consent of the other
Party, assign this Agreement, except that PacifiCare may assign this Agreement
to a PacifiCare Included Affiliate or another entity or business unit of
PacifiCare or pursuant to a reorganization or Change in Control of PacifiCare
without such consent. Without limitation of any of its obligations under this
Agreement, Supplier may assign its right to payment under this Agreement to an
affiliate Controlled by Supplier, provided that PacifiCare shall not be liable
to make any payments directly to such assignee. Upon PacifiCare's assignment of
this Agreement to a PacifiCare Included Affiliate or another PacifiCare entity
or business unit or pursuant to a reorganization or Change in Control of
PacifiCare, and upon such entity's assumption of PacifiCare's obligations under
this Agreement, PacifiCare shall be released from any obligation or liability
under this Agreement provided that, except with respect to a Change in Control
of PacifiCare, Supplier consents to such release (which consent may only be
withheld based on reasonable good faith considerations relating to the
assignee's ability to perform PacifiCare's financial obligations under this
Agreement). The consent of a Party to any assignment of this Agreement shall not
constitute such Party's consent to further assignment. This Agreement shall be
binding on the Parties and their respective successors and permitted assigns.
Any assignment in contravention of this Section 30.2 shall be void.
(b) In the event that PacifiCare divests an entity or
business unit of PacifiCare, Supplier shall, for a period of up to two (2) years
from the effective date of such divestiture, at PacifiCare's request, continue
to provide the Services to such divested PacifiCare entity or business unit at
the applicable Fees then in effect. The applicable Fees attributable to that
portion of the Services of such divested PacifiCare entity or business unit
shall be paid to Supplier, at PacifiCare's discretion, by the successor entity
owning or controlling such divested entity or business unit and the same amount
shall be deducted for the Fees payable by PacifiCare to Supplier.
30.3 ASSIGNMENT OF CLAIMS. PacifiCare agrees that any and all
claims against Supplier arising from this Agreement shall be brought solely by
PacifiCare and that the other PacifiCare Entities shall assign such claims to
PacifiCare.
30.4 BANKRUPTCY. The Parties acknowledge and agree that this
Agreement constitutes a license of an intellectual property right by Supplier to
the PacifiCare Entities as such term is used in Section 365(n) of Title 11 of
the United States Code.
30.5 CONFLICT OF INTEREST. Neither Party shall pay any salaries,
commissions, fees or make any payments or rebates to any employee of the other,
or to any designee of such employee, or favor any employee of the other, or any
designee of such employee, with gifts or
48
entertainment of significant cost or value or with services or goods sold at
less than full market value. Supplier agrees that its obligation to the
PacifiCare Entities under this Section 30.5 shall also be binding upon Supplier
Agents. Supplier further agrees to insert the provisions of this Section 30.5 in
each contract with a Supplier Agent.
30.6 CONSENTS, APPROVALS AND REQUESTS. Except as specifically set
forth in this Agreement, all consents and approvals to be given by either Party
under this Agreement shall not be unreasonably withheld or delayed and each
Party shall make only reasonable requests under this Agreement.
30.7 CORPORATE INTEGRITY. Supplier acknowledges that PacifiCare
operates under a compliance program known as the "PACIFICARE ETHICS AND
INTEGRITY PROGRAM." Supplier further acknowledges that, notwithstanding anything
contained herein, PacifiCare shall not be required to engage in any conduct that
may violate any policies, procedures or directives of the PacifiCare Ethics and
Integrity Program or its Medical Confidential Information Laws-related policies
and procedures. Supplier further represents that it neither has been, nor
currently is, excluded from participation in government funded healthcare
programs, including Medicare, Medicaid, CHAMPUS and FEHP.
30.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one single agreement between the Parties.
30.9 COVENANT OF FURTHER ASSURANCES. PacifiCare and Supplier
covenant and agree that, subsequent to the execution and delivery of this
Agreement and without any additional consideration, each of PacifiCare and
Supplier shall execute and deliver any further legal instruments and perform any
acts that are or may become necessary to effectuate the purposes of this
Agreement.
30.10 ENTIRE AGREEMENT. This Agreement and the Schedules and
Exhibits to this Agreement represent the entire agreement between the Parties
with respect to its subject matter, and there are no other representations,
understandings or agreements between the Parties relative to such subject
matter. Notwithstanding the foregoing, neither PacifiCare nor Supplier shall be
relieved of any of its respective obligations with regard to any information
subject to the terms of any confidentiality agreement executed between
PacifiCare and Supplier prior to the Effective Date.
30.11 EXPORT. Supplier shall not knowingly export or re-export any
personal computer system, part, technical data or sub-elements under this
Agreement, directly or indirectly, to any destinations prohibited by the United
States Government. The term "technical data" in this context, means such data as
is defined as technical data by applicable United States export regulations.
30.12 GOOD FAITH AND FAIR DEALING. PacifiCare and Supplier
acknowledge and agree that all aspects of the business relationship and dealings
between PacifiCare and Supplier contemplated by this Agreement, including the
performance of all obligations and the exercise of
49
all rights hereunder, shall be governed by the fundamental principle of good
faith and fair dealing.
30.13 GOVERNING LAW AND VENUE. The rights and obligations of the
parties under this Agreement shall be governed in all respects by the laws of
the State of [...***...] exclusively, as such laws apply to contracts between
[...***...] residents performed entiRElY within [...***...]. Supplier agrees
that it shall only bring any action or proceeding arising from or relating to
this Agreement in a federal court in the [...***...] or in state court in
[...***...], and Supplier irrevocably submits to the personal jurisdictioN aND
VENUE of any such court in any such action or proceeding or in any action or
proceeding brought in such courts by PacifiCare.
30.14 NOTICES. Except as otherwise specified in this Agreement, all
notices, requests, consents, approvals, agreements, authorizations,
acknowledgements, waivers and other communications required or permitted under
this Agreement shall be in writing. Wherever under this Agreement one Party is
required to give notice to the other, such notice shall be deemed effective: (a)
five (5) calendar days after deposit in the United States Mail, postage prepaid,
certified or registered mail, return receipt requested; (b) three (3) calendar
days after deposit with a national overnight courier; (c) if given by telex,
telegraph or facsimile, one (1) day after transmission, provided confirmation of
such notice is also sent by national overnight courier or delivered in person;
or (d) upon delivery if delivered in person or by messenger, in each case,
addressed to the following addresses (or such other address as either party may
be notified of as described above):
To PacifiCare: PacifiCare Health Systems, Inc.
0000 X. Xxxx Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Attention - Chief Information Officer;
With copies to: PacifiCare Health Systems, Inc.
0000 X. Xxxx Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Attention - Chief Financial Officer;
Konowiecki & Rank LLP 000 Xxxxx Xxxxx
Xxxxxx, Xxxxx 0000 Xxx Xxxxxxx, XX 00000
Attention - Xxxxxx Xxxxxxxxxx, Esq.;
Cooley Godward LLP
Five Palo Alto Square, 0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attention - Xxxxxx X. Xxxxxxx, Esq.;
To Supplier: ______________________________
* CONFIDENTIAL TREATMENT REQUESTED
50
______________________________
______________________________
Attention - [Title of Officer];
With copies to: ______________________________
______________________________
______________________________
Attention - [Title of Officer];
______________________________
______________________________
______________________________
Attention - [Outside Counsel];
Supplier shall also provide a copy of any notice provided by Supplier
to PacifiCare pursuant to Section 7.3 to the following individual (or his or her
successor, as specified by PacifiCare):
Attention - Xxxxxx Xxxxxxx
Director of Ethics and Legal Operations
PacifiCare Health Systems, Inc.
M.S. LCO1-307, 0000 Xxxx Xxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Either Party may change its address or telecopy number for notification
purposes by giving the other Party ten (10) days notice of the new address or
telecopy number and the date upon which it shall become effective.
30.15 PUBLICITY. Each Party shall (a) submit to the other all
advertising, written sales promotions, press releases and other publicity
matters relating to this Agreement in which the other Party's name or xxxx is
mentioned or that contain language from which the connection of said name or
xxxx xxx be inferred or implied and (b) not publish or use such advertising,
sales promotions, press releases or publicity matters without the other Party's
consent.
30.16 RELATIONSHIP. The Parties intend to create an independent
contractor relationship and nothing contained in this Agreement shall be
construed to make either the PacifiCare Entities or Supplier partners, joint
venturers, principals, agents (except as expressly set forth in Section 7) or
employees of the other. No officer, director, employee, agent, affiliate or
contractor retained by Supplier to perform work on the PacifiCare Entities'
behalf under this Agreement shall be deemed to be an employee, agent or
contractor of the PacifiCare Entities. Neither Party shall have any right, power
or authority, express or implied, to bind the other.
30.17 SEVERABILITY. If any provision of this Agreement is held by a
court of competent jurisdiction to be contrary to Law, then the remaining
provisions of this Agreement, if capable of substantial performance, shall
remain in full force and effect.
30.18 SURVIVAL. The terms of Section 14, Section 15, Section 17.7,
Section 18, Section 19.3, Section 19.4, Section 19.5, Section 20, Section 21,
Section 23, Section 26, Section 27, Section 28 and Section 30 shall survive the
expiration or termination of this Agreement.
30.19 THIRD PARTY BENEFICIARIES. Each Party intends that this
Agreement shall not benefit, or create any right or cause of action in or on
behalf of, any person or entity other than the Parties and the PacifiCare
Entities.
30.20 CUMULATIVE REMEDIES. No right or remedy herein conferred upon
or reserved to either Party is intended to be exclusive of any other right or
remedy, and each and every right and remedy shall be cumulative and in addition
to any other right or remedy under this Agreement, or under applicable Law,
whether now or hereafter existing, provided that through the exercise of its
rights and remedies under this Agreement a Party shall not be entitled to any
financial recovery that is duplicative of any other financial recovery
hereunder.
30.21 WAIVERS. No delay or omission by either Party to exercise any
right or power it has under this Agreement shall impair or be construed as a
waiver of such right or power. A waiver by any Party of any breach or covenant
shall not be construed to be a waiver of any succeeding breach or any other
covenant. All waivers must be signed by the Party waiving its rights.
IN WITNESS WHEREOF, each of PacifiCare and Supplier has caused this
Agreement to be executed and delivered by its duly authorized representative.
PACIFICARE HEALTH SYSTEMS, INC.
By: /s/ Xxxxx Xxxxxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: Senior Vice President/Chief
Information Officer
By: /s/ Xxxx Xxxxxx
----------------------------------------
Name: Xxxx Xxxxxx
Title: Executive Vice President/Chief
Strategic Officer
INTERNATIONAL BUSINESS MACHINES CORPORATION
By: /s/ Xxxxxx X. Xxxxxx, III
----------------------------------------
Name: Xxxxxx X. Xxxxxx, III
Title: General Manager, Public Sector,
IBM Global Services
TABLE OF EXHIBITS AND SCHEDULES
Exhibit A Definitions
Exhibit B Statement of Work
Exhibit C PacifiCare Included Affiliates
Schedule 3.1(b)(i) Affected Contractors
Schedule 3.1(b)(ii) Affected Employees
Schedule 3.5 Technical Architecture and Product Standards Procedures
Schedule 3.8(a) Promissory Note
Schedule 3.8(b) Form of General Assignment and Xxxx of Sale
Schedule 3.9(b) Reports
Schedule 4.1 Transition Plan
Schedule 4.2 Critical Transition Milestones
Schedule 6.3(a) PacifiCare Regulations
Schedule 7.1 Assigned Agreements
Schedule 7.2 Managed Agreements
Schedule 8 Service Levels and Service Level Credits
Schedule 8.7 Service Levels that Trigger Termination Rights
Schedule 9.2(a) Approved Benchmark Providers
Schedule 10.1 Service Locations
Schedule 10.2 Safety and Security Procedures
Schedule 11 Human Resources Provisions
Schedule 12.2 Key Personnel
Schedule 12.4 Approved Subcontractors
Schedule 13.2 Oversight and Management Process
Schedule 13.3 Policy & Procedures Manual
Schedule 14.2(a) PacifiCare Proprietary Software
Schedule 14.2(b) PacifiCare Third Party Software
Schedule 14.3 Supplier Software
Schedule 16.1 Disaster Recovery Plan(s) and Critical Services
Schedule 17 Fees
Schedule 17.15 Funds Transfer Information
Schedule 24.4 Failure to Provide Critical Services
Schedule 26.1 Termination Assistance Services
EXHIBIT A
DEFINITIONS
"ADDITIONAL RESOURCE CHARGES" OR "ARC" means the resource charges for
the use of Services above the resource baselines as set forth in Schedule 17.
"AFFECTED CONTRACTORS" means those PacifiCare contractors identified in
Schedule 3.1(b)(i).
"AFFECTED EMPLOYEES" means those PacifiCare employees identified in
Schedule 3.1(b)(ii).
"AGREEMENT" means this Information Technology Services Agreement
between PacifiCare and Supplier, including all schedules and exhibits attached
hereto.
"ANNUAL PLAN" means the plan described in Section 3.9(a)(iii).
"ASSETS" means the assets described in Schedule 3.8(b).
"ASSIGNED AGREEMENTS" means the third party agreements that are
assigned, in whole or in part, to Supplier and that are set forth in Schedule
7.1.
"BACK-END CONSENTS" means all third party licenses, approvals, permits,
consents and authorizations that are necessary to allow: (a) the PacifiCare
Entities and PacifiCare Entity Agents (i) to use the Supplier Third Party
Software and Supplier third party Tools, (ii) to use the Supplier Equipment to
the extent that PacifiCare acquires such Equipment, (iii) to use any assets
owned or leased by Supplier or Supplier's Agents and used solely to perform the
Services to the extent that PacifiCare acquires such assets, and (iv) to assign
any contracts with respect to third party services used by Supplier or Supplier
Agents to provide the Services to the extent requested by PacifiCare (and to the
extent Supplier to obtain such assignments using all reasonable efforts), in
each case for PacifiCare's use after the expiration of termination of this
Agreement; and (b) Supplier and Supplier Agents to assign to PacifiCare the Work
Product.
"BACKGROUND TECHNOLOGY" of a Party means all algorithms, designs,
drawings, formula, know-how, protectable business methods, inventions, software,
materials, works of authorship, tools, and other technology that (a) is owned by
such Party and is in existence in electronic or written form on or prior to the
Effective Date or (b) is developed, acquired or licensed by such Party after the
Effective Date independently of the work undertaken pursuant to this Agreement.
"BASE FEES" means the fees for the Base Services.
"BASE SERVICE LEVELS" means the service levels and standards (both
initial and final) for the performance of the Base Services as described in, or
determined in accordance with, Schedule 8.
..
"BASE SERVICES" has the meaning specified in Section 3.1.
1
"BENCHMARKER" has the meaning specified in Section 9.2(a).
"BENCHMARK PROCESS" means the objective measurement and comparison
process established by the Parties utilizing baselines, standards and
normalization factors agreed by PacifiCare and Supplier.
"BUSINESS ASSOCIATE" has the meaning given in HIPAA.
"CHANGE(S)" means any change to (a) the Services, (b) the Software used
to provide the Services or (c) the Equipment used to provide the Services, that
would materially alter the functionality, performance standards or technical
environment of the Software used to provide the Services or the Equipment used
to provide the Services, the provision of the Services, the Service Levels, the
composition of the Services, or the cost to PacifiCare of the Services.
"CHANGE CONTROL PROCEDURES" has the meaning specified in Section 13.4.
"CHANGE IN CONTROL" means any event or series of events that results
directly or indirectly in a change in the management or Control of a Party.
Without limiting the generality of the foregoing, each of the following shall be
considered a Change in Control: (a) the consolidation or merger of a Party with
or into any entity; (b) the sale, transfer or other disposition of all or
substantially all of the assets of a Party; (c) any change in the beneficial
ownership of [...***...] or more (or such lesser percentage that constitutes
Control) of the outstanding voting securities or other ownership interests of a
Party; or (d) the resignation, removal appointment or election of a majority of
the members of a Party's board of directors or management team within a
[...***...].
"CONFIDENTIAL INFORMATION" of the PacifiCare Entities or Supplier means
all information and documentation of the PacifiCare Entities and Supplier,
respectively, whether disclosed to or accessed by the PacifiCare Entities or
Supplier in connection with this Agreement, including (a) with respect to the
PacifiCare Entities, all PacifiCare Data and all information of the PacifiCare
Entities or their respective customers, suppliers, contractors and other third
parties doing business with the PacifiCare Entities, (b) with respect to the
PacifiCare Entities all IIHI, PHI and all other data and information of or
relating to patients, (c) with respect to the PacifiCare Entities and Supplier,
the terms of this Agreement and (d) any information developed by reference to or
use of the PacifiCare Entities' or Supplier's Confidential Information;
provided, however, that except to the extent otherwise provided by Law, the term
"Confidential Information" shall not include information that (w) is already
known by the recipient at the time of disclosure (other than through
unauthorized disclosure), as demonstrated by the recipient's written records,
and the recipient has no obligation of confidentiality other than pursuant to
this Agreement or any confidentiality agreements between the PacifiCare Entities
and Supplier entered into before the Effective Date, (x) is independently
developed by the recipient, as demonstrated by the recipient's written records,
without violating the disclosing Party's proprietary rights, (y) is or becomes
publicly known (other than through unauthorized disclosure) or (z) is rightfully
received by a Party free of any obligation of confidentiality.
"CONSENTS" means the Front-End Consents and the Back-End Consents,
collectively.
* CONFIDENTIAL TREATMENT REQUESTED
2
"CONTRACT YEAR" means each twelve- (12)-month period commencing, in the
case of the first Contract Year, on the Effective Date and thereafter upon the
completion of the immediately preceding Contract Year.
"CONTROL" means, with respect to any entity, the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such entity, whether through the ownership of voting securities
(or other ownership interest), by contract or otherwise.
"COVERED ENTITY" has the meaning given in HIPAA.
"CRITICAL SERVICES" means those services described as Critical Services
in Schedule 16.1.
"CRITICAL TRANSITION MILESTONE" means a milestone specified in Schedule
4.2.
"CUTOVER DATE" means [...***...].
"DATA SAFEGUARDS" means the data safeguards specified in Section 10.2.
"DEFAULT CURE PERIOD" means the PacifiCare Default Cure Period or the
Supplier Default Cure Period, as applicable.
"DEFAULT NOTICE" means the PacifiCare Default Notice or the Supplier
Default Notice, as applicable.
"DISPUTE" has the meaning specified in Section 23.1.
"DMHC FILING" has the meaning specified in Section 3.3(d).
"DRP" means the disaster recovery plan described in Section 16.1.
"EFFECTIVE DATE" means December 31, 2001.
"END DATE" has the meaning specified in Section 26.3.
"END-USER" means a user of the Services, as specified by PacifiCare.
"EQUIPMENT" means computers and related equipment, including central
processing units and other processors, controllers, moderns, communications and
telecommunications equipment (voice, data and video), cables, storage devices,
printers, terminals, other peripherals and input and output devices, and other
tangible mechanical and electronic equipment intended for the processing, input,
output, storage, manipulation, communication, transmission and retrieval of
information and data.
"EXTENSION PERIOD" has the meaning specified in Section 2.2(b).
"FEES" means the Base Fees, the Additional Resource Charges and any
other amounts payable by PacifiCare to Supplier pursuant to this Agreement.
* CONFIDENTIAL TREATMENT REQUESTED
3
"FORCE MAJEURE EVENT" means a force majeure event as defined in Section
16.2.
"FRONT-END CONSENTS" means all third party licenses, approvals,
permits, consents and authorizations that are necessary to allow: (i) Supplier
and Supplier Agents to use (1) the PacifiCare Entities' owned and leased assets,
(2) the services provided for the benefit of the PacifiCare Entities under
PacifiCare's third party services contracts (other than PacifiCare Third Party
Contracts), (3) the PacifiCare Software and PacifiCare Tools, (4) the Supplier
Software and Supplier Tools and (5) any assets owned or leased by Supplier and
used to provide the Services; (ii) PacifiCare to assign the Assigned Agreements
to Supplier pursuant to Section 7.1 and Supplier to manage and administer the
Managed Agreements pursuant to Section 7.2; (iii) Supplier and Supplier Agents
to use any third party services required by Supplier to provide the Services
during the Term and the Termination Assistance Period; and (iv) the PacifiCare
Entities and PacifiCare Entity Agents to use the Supplier Third Party Software
and Tools.
"GOVERNMENTAL AUTHORITY" means any Federal, state, municipal, local,
territorial, or other governmental department, regulatory authority, judicial or
administrative body, whether domestic, foreign or international.
"GOVERNMENTAL APPROVALS" means the PacifiCare Governmental Approvals
and the Supplier Governmental Approvals, collectively.
"HIPAA" means the Health Care Insurance Portability and Accountability
Act of 1996, as amended and as may be further amended, including all rules and
regulations promulgated thereunder.
"IIHI" has the meaning specified in HIPAA.
"IMPROVED TECHNOLOGY" has the meaning specified in Section 3.2.
"INDEMNIFIED PARTY" has the meaning specified in Section 27.3.
"INDEMNIFYING PARTY" has the meaning specified in Section 27.3.
"INITIAL TERM" has the meaning specified in Section 2.1.
"INITIAL TERM EXPIRATION DATE" has the meaning specified in Section
2.1.
"INTEREST" means the rate of interest announced by Citigroup Inc. at
its principal office in the United States as its prime commercial lending rate
plus [...***...], but in no event to exceed the highest lawful rate of interest.
"XXXXX" means Xxxxx, Inc., which will provide service to PacifiCare in
accordance with the Xxxxx Agreement.
"XXXXX AGREEMENT" means the agreement between PacifiCare and Xxxxx of
even date herewith pursuant to which Xxxxx will provide the Xxxxx Services.
* CONFIDENTIAL TREATMENT REQUESTED
4
"XXXXX SERVICES" means the application maintenance and enhancement
services that Xxxxx will provide to the PacifiCare Entities in accordance with
the Xxxxx Agreement.
"KEY PERSONNEL" means the individuals or positions identified by
PacifiCare in Schedule 12.2, as such schedule is updated by PacifiCare from time
to time, including the Supplier Client Relationship Manager.
"XXXXX SUBCONTRACT" has the meaning specified in Section 13.2(b).
"LAW" means any law, statute or other legislative enactment,
declaration, decree, directive, order, ordinance, regulation, rule or other
binding restriction of or by any Governmental Authority, including any Medical
Confidential Information Laws.
"LOSSES" means any and all damages, fines, penalties, deficiencies,
losses, liabilities (including settlements and judgments) and expenses
(including interest, court costs, reasonable fees and expenses of attorneys,
accountants and other experts and professionals or other reasonable fees and
expenses of litigation or other proceedings or of any claim, default or
assessment).
"MANAGED AGREEMENT INVOICE(S)" means any invoice submitted by third
parties in connection with the Managed Agreements.
"MANAGED AGREEMENTS" means all agreements to be retained by PacifiCare,
but managed by Supplier, including those listed in Schedule 7.2.
"MEDICAL CONFIDENTIAL INFORMATION LAWS" means all Laws applicable to
the provision of healthcare services (including mental health services),
including HIPAA and all Laws governing medical confidentiality, including
disclosure of AIDS or human immunodeficiency virus-related information.
"NEW EQUIPMENT" means any Equipment or Software obtained by Supplier on
behalf of PacifiCare, as requested by PacifiCare pursuant to Section 3.7.
"NEW SERVICES" means any service that is outside of the scope of the
Base Services.
"NEW SERVICES SERVICE LEVELS" means the service levels applicable to
New Services.
"OPERATION AGREEMENT" has the meaning specified in Section 13.2(a).
"PACIFICARE AGENTS" means the agents, subcontractors and
representatives of PacifiCare, other than Supplier and Supplier Agents.
"PACIFICARE DATA" means (a) any data and information that is provided
or submitted to Supplier or Supplier Agents by or on behalf of the PacifiCare
Entities or the PacifiCare Entities' respective health-care providers, clients
or patients, (b) any data and information regarding the PacifiCare Entities or
the PacifiCare Entities' health-care providers, clients or patients that is
obtained, generated, developed, collected, processed or produced by Supplier or
Supplier Agents in connection with this Agreement, (c) any data and information
regarding the PacifiCare
5
Entities or the PacifiCare Entities' suppliers, clients or patients to which
Supplier or Supplier Agents have access in connection with the provision of the
Services and (d) any derivatives of subsections (a)-(c) of this definition.
PacifiCare Data includes reports, service level data, patterns of service
requirements and other data and information with respect to the businesses,
operations, facilities, health-care providers, clients, patients, products,
services, assets and finances of the PacifiCare Entities, or their respective
suppliers, clients or patients.
"PACIFICARE DEFAULT CURE PERIOD" has the meaning specified in Section
24.3.
"PACIFICARE DEFAULT NOTICE" has the meaning specified in Section 24.3.
"PACIFICARE ENTITIES" means PacifiCare and the PacifiCare Included
Affiliates, collectively.
"PACIFICARE ENTITY AGENTS" means agents, subcontractors and
representatives of the PacifiCare Entities, other than Supplier and Supplier
Agents.
"PACIFICARE ESTIMATED BASELINE REQUIREMENTS" has the meaning specified
in Section 3.9(a)(i).
"PACIFICARE INCLUDED AFFILIATES" means any person, firm, corporation,
partnership, associate, or other entity bound by the terms of this Agreement and
who (a) is Controlling, Controlled by or under common Control with PacifiCare,
(b) is managed or operated by PacifiCare, (c) is owned through stock ownership
or membership interest, in whole or in part, by a shareholder or member of
PacifiCare or (d) is listed as an affiliate of PacifiCare on Exhibit C, as the
same may be updated from time to time by PacifiCare.
"PACIFICARE PROPRIETARY SOFTWARE" means the Software provided to
Supplier by PacifiCare under this Agreement, including the Software set forth in
Schedule 14.2(a), and Related Documentation, that is owned, acquired or
developed by PacifiCare and used in connection with the provision of the
Services, including any modifications, enhancements, or derivative works
thereof, but specifically excluding PacifiCare Third Party Software.
"PACIFICARE SERVICE LOCATION(S)" means any PacifiCare service location
set forth in Schedule 10.1 and any other service location owned or leased by
PacifiCare from which Supplier has been authorized by PacifiCare to provide the
Services.
"PACIFICARE SOFTWARE" means the PacifiCare Proprietary Software and the
PacifiCare Third Party Software.
"PACIFICARE SUPPLIER RELATIONSHIP MANAGER" has the meaning specified in
Section 6.1.
"PACIFICARE THIRD PARTY CONTRACTS" means the Managed Agreements and the
Assigned Agreements, collectively.
"PACIFICARE THIRD PARTY SOFTWARE" means the Software set forth in
Schedule 14.2(b), and Related Documentation, that is licensed or leased to
PacifiCare from a third party and used in connection with the provision of the
Services.
6
"PARTIES" means PacifiCare and Supplier, collectively.
"PARTY" means either PacifiCare or Supplier, as the case may be.
"PERMITTED LIENS" means i) liens for current taxes not yet due and
payable or delinquent or that are being contested in good faith by appropriate
proceedings or that are not material; (ii) imperfections or irregularities in
title, if any, that have arisen in the ordinary course of business or consistent
with past practice and that individually or in the aggregate are not material or
that could not materially affect Supplier's use of the Assets; (iii) statutory
or common law liens in favor of carriers, warehousemen, mechanics and
materialmen, to secure claims for labor, materials or supplies and other like
liens; and (iv) deposits or pledges made in connection with, or to secure
payment of, workers' compensation, unemployment insurance, old age pension or
other social security programs mandated by applicable Law.
"PRECLUDED PERFORMANCE EVENT" means a prevention, hindrance or delay in
performance of the Services caused by Supplier's failure to perform its
obligations under Section 21.2(e), Section 21.2(f), Section 22.2(c), or Section
27.2(e).
"PRIVILEGED WORK PRODUCT" has the meaning specified in Section 20.3.
"POLICY & PROCEDURES MANUAL" means a listing of policies and procedures
that governs the delivery and receipt of the Services and that is based on the
outline set forth in Schedule 13.3.
"PROGRAM OFFICE" has the meaning specified in Section 13.2(a)(i).
"PROJECT STAFF" means the personnel of Supplier and Supplier Agents who
provide the Services.
"PROTECTED HEALTH INFORMATION" or "PHI" has the meaning given in HIPAA.
"REDUCED RESOURCE CREDITS" OR "RRC" means the credits in the amounts
equal to the Additional Resource Charges specified in Schedule 17 for the use of
Services below the resource baselines set forth in Schedule 17.
"REGULATORY REQUIREMENTS" means the Laws to which the PacifiCare
Entities are required to submit or voluntarily submit from time to time.
"RELATED DOCUMENTATION" means, with respect to Software and Tools, all
materials, documentation, specifications, technical manuals, user manuals, flow
diagrams, file descriptions and other written information that describes the
function and use of such Software or Tools, as applicable.
"SERVICE LEVEL CREDITS" means the performance credits set forth in
Schedule 8.
"SERVICE LEVELS" means the Base Service Levels and the New Services
Service Levels, collectively.
7
"SERVICE LOCATION(S)" means any PacifiCare Service Location or Supplier
Service Location, as applicable.
"SERVICES" means, collectively, the Base Services, the New Services
being provided by Supplier pursuant to this Agreement, and, during the
Termination Assistance Period, the Termination Assistance Services.
"SOFTWARE" means the object code versions of any applications programs,
operating system software, computer software languages, utilities, other
computer programs and Related Documentation, in whatever form or media,
including the tangible media upon which such applications programs, operating
system software, computer software languages, utilities, other computer programs
and Related Documentation are recorded or printed, together with all
corrections, improvements, updates and releases thereof.
"STEERING COMMITTEE" has the meaning specified in Section 13.1.
"SUPPLIER AGENTS" means the agents, subcontractors and representatives
of Supplier.
"SUPPLIER CLIENT RELATIONSHIP MANAGER" has the meaning specified in
Section 12.1.
"SUPPLIER DEFAULT CURE PERIOD" means the Supplier default cure period
defined in Section 24.3.
"SUPPLIER DEFAULT NOTICE" means the means the Supplier default notice
defined in Section 24.4.
"SUPPLIER EQUIPMENT" means that Equipment leased or owned by Supplier
and Supplier Agents that are used by Supplier and Supplier Agents to provide the
Services.
"SUPPLIER PROPRIETARY SOFTWARE" means the Software, including the
Software set forth in Schedule 14.3, and Related Documentation owned, acquired
or developed by or on behalf of Supplier and used in connection with the
Services, including any modifications, enhancements, or derivative works of such
Software, but specifically excluding any PacifiCare Software, Supplier Third
Party Software.
"SUPPLIER'S REPLY" has the meaning specified in Section 3.9.
"SUPPLIER SERVICE LOCATION(S)" means any Supplier service location set
forth in Schedule 10.1 and any other service location owned or leased by
Supplier from which Supplier has been authorized by PacifiCare to provide the
Services.
"SUPPLIER SOFTWARE" means the Supplier Proprietary Software and the
Supplier Third Party Software, collectively, of which a current list is attached
hereto as Schedule 14.3.
"SUPPLIER THIRD PARTY SOFTWARE" means the Software and Related
Documentation licensed, leased or otherwise obtained by Supplier from a third
party that is used in connection with the Services.
8
"SYSTEMS" means the Software and the Equipment, collectively, used to
provide the Services.
"TERM" has the meaning specified in Section 2.2.
"TERMINATION ASSISTANCE PERIOD" has the meaning specified in Section
26.1(b).
"TERMINATION ASSISTANCE SERVICES" has the meaning specified in Section
26.1(a).
"TOOLS" means any Software development and performance testing tools,
know-how, methodologies, processes, technologies or algorithms and Related
Documentation used by Supplier in providing the Services.
"TOWER" has the meaning specified in Exhibit B (Statement of Work), as
such exhibit is modified or amended by the Parties during the Term.
"TRANSITION PERIOD" has the meaning specified in Section 4.1.
"TRANSITIONED PERSONNEL" has the meaning specified in Section 11.
"TRANSITION PLAN" means the transition plan set forth in Schedule 4.1.
"TRANSITION SERVICES" has the meaning specified in Section 4.1.
"VARIABLE FEE REPORT" means the detailed invoice provided to PacifiCare
by Supplier on a monthly basis describing the Variable Fees incurred by
PacifiCare and Supplier during the preceding month.
"VARIABLE FEES" means the Additional Resource Charges and the Reduced
Resource Credits, collectively.
"WIND DOWN COSTS" means costs and expenses incurred by Supplier solely
as a result of PacifiCare's election to terminate this Agreement as specified in
Section 4.2, Section 9.2(c) or Section 16.3, or to Insource as specified in
Section 3.10, which costs and expenses are specified on an invoice in a
reasonable level of detail acceptable to PacifiCare, and which costs are limited
to: i) Supplier's actual cost to relocate or provide standard Supplier
relocation expenses or severance to Supplier personnel who are dedicated solely
to providing the Services and who must be relocated or dismissed from employment
solely as a result of PacifiCare's termination of the Agreement, provided that
Supplier uses all reasonable efforts to avoid relocating or dismissing such
personnel, ii) Supplier's actual cost of terminating contracts (including
licenses and service contracts) that must be terminated solely as a result of
PacifiCare's termination of this Agreement, provided that Supplier uses all
reasonable efforts to avoid terminating such contracts, and iii) Supplier's
actual cost of disposing of tangible assets owned or leased by Supplier that are
used solely to provide the Services, provided that Supplier uses all reasonable
efforts to re-deploy such assets within Supplier's organization or sell such
assets at fair market value. Wind Down Costs exclude the cost of any Equipment
purchased by PacifiCare from Supplier in connection with the termination of this
Agreement, costs related to any Supplier personnel hired by PacifiCare in
connection with the termination of this Agreement, as well as
9
any costs described above that Supplier could have eliminated or reduced given
the amount of notice Supplier received of the applicable termination or
Insourcing event or other relevant circumstances, either through the measures
described above or by using other good faith efforts to mitigate such costs.
"WORK PRODUCT" means literary works or other works of authorship
created under this Agreement, including manuals, training materials and
documentation, but excluding Software, Related Documentation, and the Policy and
Procedures Manual.
10
EXHIBIT B
PACIFICARE AND IBM-GLOBAL SERVICES AGREEMENT
================================================================================
STATEMENT OF WORK -
INFRASTRUCTURE
================================================================================
EXHIBIT B
[PACIFICARE LOGO]
I. Detailed Statement of Work:.................................................................... 1
A. General Provisions:................................................................... 1
B. Data Center (Midrange):............................................................... 3
1. General:..................................................................... 3
2. Operations:.................................................................. 3
3. Production Control and Scheduling:........................................... 6
4. Operation Support for New Services:.......................................... 8
5. External Storage Media Operations and Administration:........................ 10
6. Off-Site Media Storage:...................................................... 13
7. Equipment Maintenance and Support:........................................... 14
8. Data Center Planning and Operations:......................................... 15
9. Enterprise Storage Subsystem Management:..................................... 17
10. End-User Support:............................................................ 20
11. Administration:.............................................................. 21
12. Software Currency, Refresh, and Release Control:............................. 24
13. Back-up and Recovery Services:............................................... 26
14. Hours of Operation:.......................................................... 28
15. Physical Security Administration:............................................ 29
16. License Management and Compliance:........................................... 33
17. Technical Support:........................................................... 33
18. Database Support and Management:............................................. 41
C. Network:.............................................................................. 44
1. General:..................................................................... 44
2. Network Management:.......................................................... 44
3. Network Operations:.......................................................... 46
4. SNA, DECNet, and TCP/IP Technical Support:................................... 48
5. End-User Support:............................................................ 49
6. Network Engineering:......................................................... 49
7. Network Control and Connectivity Responsibility:............................. 52
8. Network Provisioning:........................................................ 53
9. Software Currency, Refresh, and Release Control:............................. 53
10. Regulatory Changes:.......................................................... 55
11. Telecommunications Billing and Financial Administration:..................... 56
12. Toll / Line Charges:......................................................... 57
13. Premise Voice Systems:....................................................... 58
14. Wireless Telecommunication:.................................................. 60
15. Audio and Videoconferencing:................................................. 61
16. Network Administration:...................................................... 62
17. Toll Fraud:.................................................................. 63
18. Phone Directories:........................................................... 64
19. Equipment Support:........................................................... 65
20. Electronic Data Interchange (EDI):........................................... 66
21. Circuit and Transport Costs:................................................. 67
22. Hours of Operation:.......................................................... 67
D. Distributed Computing:................................................................ 67
1. General:..................................................................... 67
i.
2. End-User Support:............................................................ 67
3. Installation and Removal:.................................................... 68
4. Infrastructure Maintenance:.................................................. 69
5. Equipment Maintenance and Support:........................................... 70
6. Software Support:............................................................ 72
7. Software Currency, Refresh, and Release Control:............................. 73
8. Operations Support for New Services:......................................... 74
9. Server Operations:........................................................... 75
10. Administration and Documentation:............................................ 78
11. Disaster Recovery Services:.................................................. 79
12. Media Operations and Administration:......................................... 79
13. Order Fulfillment:........................................................... 80
14. Technology (Equipment) Refresh:.............................................. 80
15. Standard Equipment and Software:............................................. 81
16. Lab Testing:................................................................. 81
17. Spares Inventory:............................................................ 82
E. Desktop............................................................................... 82
1. General:..................................................................... 82
2. End-User Support:............................................................ 82
3. Installation and Removal:.................................................... 84
4. Equipment Maintenance and Support:........................................... 85
5. Software Support:............................................................ 86
6. Software Currency, Refresh, and Release Control:............................. 87
7. Operations Support for New Services:......................................... 89
8. Systems Management:.......................................................... 89
9. Technology (Equipment) Refresh:.............................................. 90
10. Standard Equipment and Software:............................................. 90
11. Lab Testing:................................................................. 91
12. Spares Inventory:............................................................ 92
F. Customer Support Department (Help Desk)............................................... 92
1. Help Desk Support:........................................................... 92
2. Problem Management:.......................................................... 97
G. Information Distribution Center....................................................... 98
1. Print and Media Operations:.................................................. 98
2. Finishing Operations:........................................................ 101
3. Account Management:.......................................................... 103
4. Demand Print:................................................................ 104
5. Mail Processing.............................................................. 106
6. Admin Support Services....................................................... 108
7. Customer Service:............................................................ 109
8. Strategic Initiatives and Support:........................................... 109
H. Cross Functional Services:............................................................ 111
1. Change Management:........................................................... 111
2. Quality Assurance:........................................................... 113
3. Training and Education:...................................................... 114
4. Project Support:............................................................. 115
ii.
5. Business Metrics:............................................................ 116
6. New Technology and Automation:............................................... 116
7. Physical Security Administration:............................................ 117
8. Logical Security Administration:............................................. 118
9. On-going Business Divestitures and Acquisitions:............................. 121
10. Consolidation and Relation Services.......................................... 121
11. License Management and Compliance:........................................... 121
12. Installs, Moves, Adds, and Changes:.......................................... 122
13. Crisis Management:........................................................... 122
14. Collaborative Application.................................................... 122
15. Chargeback................................................................... 123
16. Effective Use of the Equipment............................................... 123
17. Redeployment and Disposal.................................................... 124
18. Project Management........................................................... 124
19. Virus Protection............................................................. 124
20. PacificCare Ongoing Project as of Effective Date............................. 126
21. Reporting.................................................................... 126
22. Meeting Between PacifiCare and Supplier...................................... 126
23. Long-range Information Systems Plan and Equipment Software Architecture...... 126
24. Potential Value Adds:........................................................ 127
25. Disaster Recovery............................................................ 129
26. Business Continuity Services:................................................ 136
27. Asset Inventory Management and Maintenance:.................................. 141
28. Operations Documentation:.................................................... 143
29. Order Fulfillment:........................................................... 148
30 Data Retention............................................................... 149
iii.
I. DETAILED STATEMENT OF WORK:
A. GENERAL PROVISIONS:
This Statement of Work, including any exhibits and attachments hereto
(the "STATEMENT OF WORK"), is an exhibit to that certain Information
Technology Services Agreement entered into and effective as of December
31, 2001 by and between PacifiCare and Supplier (the "AGREEMENT").
In the event of any conflict, confusion or ambiguity between this
Schedule and the Agreement, the Agreement shall control.
For the purposes of this Statement of Work, the term "PacifiCare" shall
mean "PacifiCare Entities."Terms used herein with initial capital
letters shall have the respective meanings set forth in the Agreement.
Terms used herein with initial capital letters but not otherwise
defined in the Agreement shall have the respective meanings set forth
in Schedule 8 or other Exhibits and Schedules to the Agreement. In
addition, the meanings for the following terms shall apply:
APPLICATION SUPPLIER shall mean the entity or entities which
shall provide application system maintenance, enhancement and
development services on behalf of PacifiCare. The Application Supplier
may include PacifiCare or Xxxxx.
BUSINESS CONTINUITY PLAN is defined in Section H. 26 (confirm
with definition in the Service Level Schedule).
PACIFICARE CLIENT RELATIONSHIP MANAGER shall mean an
individual or individuals appointed by PacifiCare who shall serve as
the primary PacifiCare representative under this Agreement.
CORPORATE CRISIS shall mean a critical event, which if not
handled in an appropriate manner, may dramatically impact on
PacifiCare's staff, profitability, reputation or ability to operate.
EXECUTIVE SUPPORT shall mean customized service for a select
set of End-Users ("Executive End-Users") which may include a different
greeting than the rest of the End-User population, paging of
appropriate Desktop support upon receipt of a call to the Help Desk,
and call back to the Executive End-User to close the call and determine
satisfaction of the Executive End-User. [...***...].
* CONFIDENTIAL TREATMENT REQUESTED
1.
PERIPHERAL shall mean approved Standard monitors, keyboard and
mouse associated with the Platform where applicable, that is refreshed,
acquired and supported by Supplier. Peripherals that are supported by
Supplier and are not subject to refresh include IOMega Zip and JAZZ
drives, external/internal modems, external CDROM/CDRW drives, scanners,
Palm/IPAQ devices, pager cradles and Blackberry devices.
PLATFORM shall mean a combination of approved Standard
computer and communications Equipment and Software that Supplier is
expected to refresh, acquire and support under the Agreement.
[...***...]. The Peripherals, internal memory, hard drive size, and
manufacture model number effects the quantity of Platforms.
PROBLEM MANAGEMENT shall mean the resolution and prevention of
incidents that affect the normal running of PacifiCare's IT services.
This includes ensuring that faults are corrected, preventing any
recurrence of these faults, and the application of preventative
maintenance to reduce the likelihood of these faults occurring in the
first instance. The effective practice of Problem Management shall
ensure that the availability of PacifiCare's IT services is maximized,
and could also protect the integrity and confidentiality of information
by identifying the root cause of a problem.
PROJECT MANAGEMENT shall mean a process defined by written
project management procedures used by the Parties through which
requested or suggested changes to Projects are controlled, which shall
be set forth in the Policy and Procedures Manual.
QUALITY ASSURANCE shall mean the process used to ensure
quality in the provision of the Services as further described in the
Policy and Procedures Manual. Until such time as the Policy and
Procedures Manual is complete, Quality Assurance shall mean that
process used by PacifiCare as of the Effective Date of the Agreement,
and in the case where there are no quality assurance processes in
effect for a particular service as of the Effective Date, such quality
assurance procedures as are standard in the relevant industry.
TOWER shall mean a logical set of services grouped around a
particular function.
TRADING PARTNER shall mean external entities that are
authorized to access PacifiCare networks and applications, including
companies such as [...***...].
VIRUS shall mean any computer code having the effect of or
designed to (a) disrupt, disable, harm or otherwise impede in any
manner the proper operation of a computer program or computer system or
(b) damage, destroy, hide or transmit any data residing on a computer
or computer system without the appropriate End-User's consent.
This SOW describes generally services, tasks, functions,
responsibilities and projects that constitute the Base Services which
Supplier must perform under the Agreement; this SOW does not describe
in complete detail each action that is or may become necessary for
Supplier to perform such services, tasks, functions, responsibilities
and projects.
The sections within this SOW entitled "Supplier's Solution Description"
describe certain services, tasks, functions, responsibilities and
projects to be performed by Supplier. For purposes of
* CONFIDENTIAL TREATMENT REQUESTED
2.
clarification, such descriptions add to, and do not replace, any of
PacifiCare's Functional Requirements, and Supplier is in no way
relieved from meeting or fulfilling such Functional Requirements to the
extent a particular Supplier's Solution Description omits any action
necessary to fulfill such Functional Requirements.
B. DATA CENTER (MIDRANGE):
1. GENERAL:
As of the Cutover Date, Supplier shall assume responsibility
for the operation, management and support of PacifiCare's Corporate and
Regional Data Center environment including Equipment of the types
described in Schedule 3.8(a) Transferred Assets.
Supplier shall work with PacifiCare to minimize the number of
Midrange processors [...***...], and to consolidate them or take other
actions to run the Midrange environment as efficiently as is
technically and commercially feasible, considering business needs of
PacifiCare. Supplier must demonstrate its reasonable efforts to
maximize Midrange Equipment efficiencies before PacifiCare approves any
additional Midrange processors.
2. OPERATIONS:
SUPPLIER'S SOLUTION DESCRIPTION:MASTER CONSOLE FUNCTIONS
AUTOMATION OF CONSOLE FUNCTIONS AND ANY PROCESSES, OR
PROCEDURES IN USE: Supplier shall use existing PacifiCare processes,
procedures, and tools in order to maintain continuity of service within
the PacifiCare environment. Supplier shall review, supplement, and
replace existing procedures with established Supplier procedures where
there shall be a benefit for PacifiCare. For servers that are located
in facilities that are not in the same physical locations as operations
staff, Supplier shall utilize remote control tools.
SYSTEMS PERFORMANCE (MONITOR AND MAINTENANCE): Supplier shall
analyze PacifiCare's existing tool sets and the functions they provide
to the service being delivered and implement proven Supplier tools,
which shall provide increased functionality and meet PacifiCare's
needs. Supplier shall provide PacifiCare with the best suited tool set
regardless of vendor. [...***...]. For most midrange platforms,
Supplier shall deploy the Server Resource Manager toolset to monitor
system resource consumption and monitor the performance of those
systems on that basis. [...***...].
ALARM SYSTEMS AND ENVIRONMENTAL MALFUNCTIONS: Supplier shall
augment PacifiCare's existing tools with Supplier's tool set to provide
central monitoring of alerts and pro-active procedures to streamline
and expedite problem determination and resolution. Supplier shall use
existing PacifiCare processes, procedures, and tools to monitor and
react to alarm systems and environmental malfunctions, installing new,
or replacing tools during the Transition Period. In PacifiCare Service
Locations, as well as in Supplier Service Locations, regardless of
whether or not computer operators monitor the alarms directly, or if
monitoring is performed by the facilities
* CONFIDENTIAL TREATMENT REQUESTED
3.
management group(s) and contracted to security, [...***...].
TRANSMISSION AND RECEPTION OF POLLING INFORMATION FROM OUTSIDE
ORGANIZATIONS: Supplier shall use existing PacifiCare processes,
procedures, and tools to monitor the transmission and reception of
polling information from outside organizations; augmenting this with
proven Supplier tools during the Transition Period, Term and
Termination Assistance Period.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier responsibilities to perform processing operations
Services on the data center Equipment shall include the following:
a. Issue network operator commands, display, start,
stop, restart and reset devices and lines.
b. Assume the responsibility for and perform all console
operations, including monitoring all PacifiCare
processing within PacifiCare's data center
environment, alarm systems and environmental controls
at the PacifiCare data center, and transmission and
reception of polling information from outside
organizations.
c. Monitor performance of on-line interactive traffic
and take appropriate action to resolve on-line
system-related problems consistent with the Problem
Management process, including escalating, as
appropriate, the problem to the proper second level
support group. Monitor transmission of files between
PacifiCare Service Locations and other parties as
designated by PacifiCare.
d. Manage, maintain, monitor, and control on-line and
batch process, both scheduled and unscheduled
(including a reasonable amount of on-request
processing, provided that PacifiCare gives Supplier
reasonable notice). [...***...]. The data shall be
usEd to formulate a recommendation to alleviate
bottlenecks and improve the production run times.
Recommended changes shall be implemented through the
Change Management Procedures.
e. Complete PacifiCare-defined batch processing and
backups in the correct sequence and within the time
periods designated by PacifiCare.
f. Maintain an emergency contact list and escalation
procedures to resolve system/application failures.
g. Assess impact of system/application failures on
End-Users and report assessment to both the affected
End-Users and appropriate PacifiCare
* CONFIDENTIAL TREATMENT REQUESTED
4.
Client Relationship Manager, take appropriate
corrective action and perform job restarts in
accordance with operational procedures.
h. On an ongoing basis, enhance processing capabilities
and efficiencies through system tuning and other run
time improvements. Supplier shall perform regular
monitoring of utilization needs and efficiencies and
report on tuning initiatives regularly.
i. Perform ID assignment.
j. Perform proactive failure trend analysis.
k. Perform load balancing.
l. Where practicable, provide for automated scheduling
of batch work and processes including backups.
m. Coordinate and process special processing requests.
n. Schedule batch jobs to achieve maximum performance as
long as requested batch completion times are met.
o. Produce trend reports to highlight production
problems, and establish predetermined action and
escalation procedures when batch window problems are
encountered.
p. Monitor, verify and make appropriate adjustments to
support proper applications executions. Notify
PacifiCare in accordance with the notification
procedures set forth in Section F, Customer Support
Department (Help Desk), Problem Management process
and the Policy and Procedures Manual, in the event
that applications do not execute properly.
q. Perform weekly and emergency systems maintenance in
accordance with procedures established by Supplier
and approved by PacifiCare or as applicable, in
accordance with existing procedures, to minimize the
impact to PacifiCare's business.
r. Perform computer shutdowns and restarts as required,
and execute customary data center utility functions.
s. Assimilate new work into the operational environment.
t. Maintain, administer, and provide necessary automated
tools and processes (i.e., to the extent available in
the PacifiCare-selected tool suite or required to be
delivered by the Supplier elsewhere in the Agreement,
maintain tables, calendars, parameters, definitions
for tools used to automate manual procedures or
automate and improve the quality of the operations
Service Levels) for systems management. With respect
to Equipment not located at the Supplier operated
data center, provide remote monitoring and
management.
u. Check job outputs and print queues, change job
priorities, take printers in and out of service, and
start, spool and drain printers.
5.
v. Resolve system/application failures caused by
conditions external to production programs. Repair
system/application failures when possible and perform
job restarts.
w. Force off End-Users in accordance with procedures
developed and documented with PacifiCare's input and
approval.
x. Provide operational support for data transmission
(send / receive) consistent with regulatory,
commercial or PacifiCare standards.
y. Maintain and update the operational documentation for
all operations procedures and services.
z. Provide feedback to PacifiCare regarding the impact
of potential architecture and design changes.
aa. Identify opportunities to PacifiCare to reduce
Equipment and Software costs and/or improve Midrange
system performance.
bb. Develop standards for system configurations,
operations, and metrics collection and reporting.
cc. Analyze system performance metrics and respond
proactively to potential problem areas.
dd. Identify requirements for System Upgrades and other
configuration design changes, and coordinate these
changes with PacifiCare.
ee. Work with PacifiCare to plan the deployment and
retirement of the computing systems.
ff. Provide operational support for computing systems
[...***...] located in the data centers.
gg. Operate system consoles.
hh. Run or terminate utilities upon Technical Support or
PacifiCare approval depending upon the impact to
End-Users.
ii. Perform changes per System Activity Requests
(SARs)/Change Request Authorizations.
jj. Proactively prepare for End-User deadlines per
customized user requirements.
kk. Perform regular storage backups on all systems.
3. PRODUCTION CONTROL AND SCHEDULING:
SUPPLIER'S SOLUTION DESCRIPTION:PRODUCTION CONTROL-BATCH
MONITORING
Supplier shall monitor Supplier or PacifiCare scheduled,
originated and/or initiated jobs and take specific documented actions
in the event of an abnormal condition. Supplier's
* CONFIDENTIAL TREATMENT REQUESTED
6.
application support personnel are responsible for creating and
maintaining documented recovery procedures to be used by the data
center in the event of an abnormal job termination. [...***...]. This
does not include the development of application-automated controls.
Supplier shall use the current production contROL system until
transitioned to a Supplier recommended system approved by PacifiCare.
PACIFICARE USER INITIATED JOB MONITORING
Supplier shall provide monitoring for PacifiCare initiated
jobs and take specific documented actions in the event of an abnormal
condition. [...***...], defining conditions under which Supplier shall
notify PacifiCare and /or Application SuppliEr, and documenting actions
to be taken by Supplier in the event that an abnormal condition arises.
This does not include the development of application-automated
controls.
Supplier is required to provide job recovery documentation as
part of the production request process. Supplier's production control
shall work with all requesting parties to ensure that appropriate
documentation is provided. [...***...].
JOB SCHEDULING AND AUTOMATION
Supplier shall provide platform automation and job scheduling.
Included are:
- Review and comment on PacifiCare's current batch job
procedures
- Administer the automation of batch jobs and repetitive
procedures
- Send automated alerts on critical application jobs to the
PacifiCare via pager
- Send automated alerts on system critical events to Supplier
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall be responsible for integrating all production
control and scheduling functions in conformity with PacifiCare's
End-User requirements. Supplier's responsibilities shall include the
following:
a. Establish, document and maintain standards for
production jobs.
b. Identify job dependencies, create and maintain job
dependencies on the master scheduling database,
prioritize and schedule batch jobs and report
distribution systems in accordance with PacifiCare's
schedule parameters to optimize use of processing
windows and scheduled availability of on-line
applications dependent on batch processing; provided,
however that batch completion times and Service
Levels are met. Take other
* CONFIDENTIAL TREATMENT REQUESTED
7.
necessary steps to prepare applications job streams
for production scheduling and execution. Develop,
distribute, and obtain PacifiCare's approval of
schedules prior to implementation.
c. Coordinate and modify schedules for special requests
and follow PacifiCare's priorities. Respond
expeditiously to requests from PacifiCare for
priority job execution.
d. Resolve scheduling conflicts.
e. Promptly notify PacifiCare if special requests shall
affect the timely completion of other tasks.
f. Provide schedule status updates.
g. Enter program control specifications into application
job streams as directed by End-Users. Document system
job streams indicating file usage, job
dependencies/priorities and program options
available.
h. Resolve system/application failures or interruptions
caused by conditions external to production programs,
such as disk or media problems. Execute re-runs as
requested by PacifiCare and restart jobs according to
Supplier-developed operational procedures (e.g.,
procedures for successful back-outs, etc.). Create
problem reports for job abnormalities using a single
integrated problem management application in
accordance with Supplier's problem management
obligations pursuant to Section F, Customer Support
Department (Help Desk), of this Statement of Work.
i. Monitor production scheduling cycles.
j. Perform documentation control on all operational
documentation.
4. OPERATION SUPPORT FOR NEW SERVICES:
SUPPLIER'S SOLUTION DESCRIPTION: INTERFACE BETWEEN THE GROUPS
IMPLEMENTING CHANGES AND THE PRODUCTION SUPPORT FUNCTION
Supplier's Change Management Procedures are a complete process
that includes key process metrics and shall fully integrate with
PacifiCare's process. Change management involves planning,
coordinating, monitoring, and communicating changes that affect
PacifiCare's systems environment. Supplier uses change management's
(described below) standardized procedures to minimize the negative
impact of changes to Service Level commitments. The Change Management
Procedures cover any change that can alter service delivery, including:
- Equipment - installations, discontinuances, and
relocation of Equipment in the data center or remote
locations. This includes miscellaneous Equipment
specifications (MES) activities and engineering
changes (ECs) that involve standalone time or those
that could impact availability or access to data.
- Software - Software changes including modifications
to the system operating code, access methods, program
products, or common system support modules.
- Application - application changes being phased into
the production system.
8.
[...***...]. This would include required
update/changes to production databases.
- Procedure - changes to procedures that may affect
systems availability or accessibility.
All changes to the production environment follow a defined
Change Management Procedure. Change management's objectives are:
- Provide a change management system that reduces or
eliminates disruptions caused by change
implementation
- Implement changes on schedule
- Eliminate or reduce the number of change back-outs
caused by ineffective change planning or
implementation
- Eliminate or reduce the number of problems caused by
change
- Eliminate or reduce the system outages caused by
change
Key indicators of success in change management are:
- Changes become operational on the first installation
attempt and do not need to be backed out, bypassed,
or modified
- Changes are installed according to the scheduled time
commitments
COMPLIANCE WITH STANDARD DOCUMENTATION
The Supplier Program Office has accountability for verifying
compliance with standard documentation for in-scope services. Standard
documentation is interpreted to mean either PacifiCare specific
documentation or Supplier specific documentation.
ORDERLY TURNOVER
Supplier shall use a dedicated transition manager and
transition team and the information that is acquired during the due
diligence period, along with Supplier's working knowledge of
PacifiCare; to provide an efficient, thorough, and orderly turnover and
transition of services.
SERVICE LEVEL STANDARDS
Supplier shall use its Service Level management approach,
which is based on Supplier's standardized processes, including the
following activities:
- Developing and maintaining service performance
standards for new and existing contracts
- Collecting and analyzing data to determine the
appropriate Service Level measurements
* CONFIDENTIAL TREATMENT REQUESTED
9.
- Developing Service Level document(s) that contain
Service Level commitments
- Reviewing service operations on a daily, weekly, and
monthly basis
- Addressing service delivery issues
- Gathering information/feedback from and communicating
pertinent information to PacifiCare, the account team
and the delivery team
- Processing Service Level billing impacts
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall interface between the groups implementing
changes and the production support function, assuring compliance with
standard documentation and orderly turnover. Supplier's
responsibilities for operations support for New Services shall include:
a. Obtain formal approvals of production testing and
installation timetables.
b. Assimilate new applications and batch jobs into the
environment.
c. Develop comprehensive operational documentation.
d. Facilitate orderly turnover for Equipment and
applications to include developing fallback
procedures.
e. Use standard platforms.
f. Support for the introduction of new platforms and
applications in accordance with the Change Management
Procedures and PacifiCare architectural standards,
and in a controlled manner by, among other things:
interfacing with the groups implementing the change
and the production support function; notifying
PacifiCare of incompatibilities believed by Supplier
to occur with other planned changes or business
events; facilitating the orderly turnover of systems,
platforms and applications; enforcing documentation
standards; updating task list and run sheets;
informing appropriate Supplier and PacifiCare staff
of the changes to the environment; and providing
coordination of the implementation, integration,
testing and acceptance of the new platforms and
applications into the production environment
properly.
5. EXTERNAL STORAGE MEDIA OPERATIONS AND ADMINISTRATION:
SUPPLIER'S SOLUTION DESCRIPTION: PROCESSES, TOOLS AND
PROCEDURES
[...***...] PacifiCare media library operations and media
management system responsibilities, including the shipping and
receiving of media to and from off-site facilities. Beginning on the
Effective Date, Supplier shall use current PacifiCare media operations
and administration processes, tools, and procedures shall. During the
Transition Period, Supplier shall evaluate these processes, tools, and
procedures for effectiveness; [...***...].
* CONFIDENTIAL TREATMENT REQUESTED
10.
Supplier shall also develop and utilize processes and
procedures to take advantage of new technology as it becomes available.
[...***...]. Supplier shall be responsible for the backup and restore
of data according to the Policies and Procedures Manual, and as
necessary to meet the Service Levels.
Supplier shall product reports of storage media [...***...].
Until Supplier and PacifiCare determine which reports best keep
PacifiCare informed of its storage media, [...***...].
MAINTAIN AND VERIFY AVAILABILITY DURING AGREED UPON ACCESS
TIMES
Maintenance and availability shall be verified through the
establishment of Service Levels.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
a. Supplier shall assume operational and financial
responsibilities for all external storage media
management functions, both on- and off-site, for
external storage media library operations and
administration performed in the data center
environment. Supplier's responsibilities for the
foregoing shall include the following:
b. Define off-site storage requirements.
c. Perform external storage media mounts as necessary to
support operational activities at sites staffed by
Supplier personnel. At sites not staffed by Supplier
personnel, Supplier shall direct PacifiCare personnel
performing external storage media mounts.
d. Operate and support the media library and library
management system.
e. Maintain a database cataloging the archival system
for the media library and maintain the library
management system.
f. Follow off-site external storage media storage
procedures, [...***...].
g. Monitor external storage media Equipment for
malfunction and initiate corrective action in
accordance with established procedures. Properly
clean and maintain Equipment at intervals established
to minimize problems and outages.
* CONFIDENTIAL TREATMENT REQUESTED
11.
h. Maintain the integrity of the external storage media
library system. Monitor external storage media for
reliability and minimizing of read/write errors
during the entire period of retention.
i. Monitor and report external storage media usage.
j. Recopy external storage media as necessary to support
minimizing of read/write errors.
k. Monitor PacifiCare's external storage media to comply
with PacifiCare and government requirements and
report on a monthly basis. Maintain adequate supplies
for the external storage media environment and
sufficient scratch media.
l. Retrieve archived external storage media from on-site
and off-site storage as requested by PacifiCare or as
required in an emergency and restore required files
and datasets in a timely manner.
m. Perform Equipment maintenance in accordance with the
manufacturer's specifications.
n. Prepare and ship media as requested by PacifiCare or
otherwise as required to off-site storage Suppliers
or third parties retained to provide off-site storage
services or to other third parties as requested by
PacifiCare.
o. Initialize new external storage media.
p. Perform backup procedures as required by the Business
Continuity Plan and as detailed in PacifiCare
Production Services Operations Documentation.
q. Follow, maintain and update procedures in the Policy
and Procedures Manual governing cycling/rotation of
external storage media, external storage media
management and external storage media retention
periods (including for auditing purposes) in
accordance with the Safety and Security Procedures
(Schedule 10.2). Dispose of retired media in an
environmentally sound manner.
r. Permit and provide adequate data to enable PacifiCare
to monitor compliance with retention and storage
requirements as defined in Schedule 10.2.
s. Periodically [...***...], retrieve a randomly
selected data file and application as a test and
verify that the data and application can be restored
in a usable fashion.
t. Maintain an inventory control system in place to
properly manage external storage media in storage and
prepare them for shipment to the contingency site.
u. Recycle media regularly, manage media replacement,
and recopy media to provide Data integrity and
quality.
* CONFIDENTIAL TREATMENT REQUESTED
12.
6. Off-Site Media Storage:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall leverage as much of the current PacifiCare
investment as possible regarding the processes, tools, and procedures
PacifiCare uses to perform off-site removable data storage media
responsibilities. Additionally, Supplier shall employ a bonded vaulting
service to provide secure, recoverable data management capability.
Supplier shall conduct the media library processes and
procedures at PacifiCare or Supplier Service Locations shall in
accordance with required security and audit controls and shall comply
with specific regulations for media management.
Supplier shall produce reports of off-site removable data
storage media [...***...]. Until Supplier and PacifiCare determine
which reports best keep PacifiCare informed of its off-site removable
data storage media, [...***...].
[...***...].
Supplier shall continue to use the products currently deployed
in the PacifiCare environment to the greatest extent possible.
[...***...].
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall assume operational and financial
responsibility for off-site media storage, including integrity
checking, defining storage requirements, and assuring compliance with
PacifiCare or government requirements. Supplier's support for off-site
media storage Services shall include the following:
a. Develop, in consultation with PacifiCare's individual
business units and the PacifiCare Business Continuity
coordinator, requirements, procedures, and standards
for off-site storage.
b. Store external storage media and business-recovery
related paper documentation at secure off-site vault
storage in a physically and environmentally
controlled and protected area with appropriate fire
protection and multiple layers of physical security
designed to prevent unauthorized access.
c. Execute off-site storage procedures, including
logging, shipping to, and receiving media from the
off-site Supplier.
d. Return media as required to the originating Service
Location.
e. Transport the materials to and from off-site storage
in unmarked, environmentally controlled vehicles
operated by bonded personnel.
* CONFIDENTIAL TREATMENT REQUESTED
13.
x. Xxxxx authorized PacifiCare representatives access to
inspect off site storage areas.
g. Maintain integrity of data shipped to off-site
storage.
h. Manage third party off-site storage suppliers and
notify PacifiCare of any problems. Advise PacifiCare
of any modifications to agreements with such third
party suppliers that would improve the efficiency of
the Services or otherwise benefit PacifiCare.
i. Pack and ship media for off-site storage.
j. Manage an inventory of off-site media.
k. Provide an emergency media return process.
l. Comply and review compliance with physical
specifications, retention periods, and security.
7. EQUIPMENT MAINTENANCE AND SUPPORT:
SUPPLIER'S SOLUTION DESCRIPTION: ENTERPRISE SYSTEMS MANAGEMENT
ARCHITECTURE (ESMA)
Supplier shall assume responsibility for [...***...], Supplier
shall begin implementing Supplier's standard service delivery practices
[...***...]. Modifications to both PacifiCare and Supplier processes
shall be done to leverage the best of both service delivery models in
order to meet PacifiCare's business needs. As each business is to some
degree unique, each Information Technology implementation is also
unique. [...***...]. The Exhibit 1 to this Statement of Work describes
[...***...].
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall provide, or arrange for qualified third parties
to provide maintenance for data center Equipment for which Supplier is
otherwise responsible hereunder as necessary to keep such Equipment in
good operating condition and in accordance with manufacturer's
specifications or other agreements as applicable, so that such
Equipment shall qualify for the manufacturer's standard maintenance
plan upon sale or return to a lessor. [...***...]. Such maintenance
shall be performed in accordance with the System Activity Request
(SAR)/Change Management Procedures, so as to minimize the disruption to
PacifiCare's normal business processes. Supplier's responsibility for
such functions shall also include the following:
a. Manage the third party service providers that provide
Equipment support.
* CONFIDENTIAL TREATMENT REQUESTED
14.
b. Plan, order, install, test and maintain all Equipment
at Supplier-operated data center and work with third
parties to resolve Equipment problems. Supplier's
responsibilities include tracking configurations of
Equipment and peripherals and maintaining complete
configuration documentation of the Supplier-operated
data center using CAD Software tools. In addition,
Supplier is expected to provide complete
Supplier-operated data center support for all
environmental Equipment at the Supplier data center.
c. With respect to distributed Equipment for which
Supplier is otherwise responsible hereunder, Supplier
shall provide break/fix, support, advice and
assistance to End-Users. Supplier shall correct all
problems associated with failure or maintenance of
such Equipment. Supplier shall install upgrades for
such distributed computing-related Equipment at the
Service Locations. Supplier shall maintain a level of
documentation that reflects the complexity and
diversity of the environment and facilitates the
Equipment support process.
d. Coordinate rollouts and upgrades of Equipment.
Supplier shall be responsible for coordinating any
testing, scheduling, and installation integration of
these products including any third parties if
required. Supplier shall also perform full testing
after installation and provide proper back-out
procedures. If installation occurs after hours,
Supplier shall also make available on-site support,
including required third party service providers, the
next working business day in order to provide the
necessary support.
e. Maintain an effective inventory of all spare parts
and Equipment used to support the Equipment for which
Supplier has maintenance responsibility, and track
such inventory in an inventory management database
system. This inventory shall be adequate to allow
Supplier to meet or exceed the PacifiCare Service
Levels.
f. Perform all operations required to support the
refresh and cascading of Equipment associated with
providing the Services throughout PacifiCare's
operations. This shall include: planning, associated
change management and problem management,
de-installation, reinstallation, configuration,
staging, and user orientation as otherwise specified
hereunder.
g. Provide complete documentation of the Data Center
using CAD Software tools.
h. Perform the design, installation, termination, and
documentation of all cabling for the Midrange
environments.
i. Planning installation of computer and environmental
Equipment in Data Center environment.
j. Resolve Equipment-related problems in the Data Center
environment.
k. Monitor Equipment leases in the Data Center
environment.
8. DATA CENTER PLANNING AND OPERATIONS:
15.
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall work with the site's facilities department and
PacifiCare to verify continued and comprehensive Physical Access
Control from the Effective Date through the completion of the
Transition Period and as applicable during the Term and Termination
Assistance Period. Supplier shall comply with and enforce PacifiCare's
Data Center Building Security Procedure policies that are within
Supplier's control. This includes identification of badge controls, as
well as the monitoring of security alarms, security video systems, and
alarm responses for all Supplier owned facilities. Supplier shall grant
approved PacifiCare personnel access to Service Locations in which the
Supplier is providing support for PacifiCare's services. Supplier shall
provide logical security for PacifiCare's intellectual and physical
property that is within Supplier's control.
Supplier shall comply with PacifiCare's Data Center Building
Security Procedures [...***...]. PacifiCare and Supplier shall
implement jointly agreed to procedures whereby Supplier shall respond
to alarms and abnormal conditions with the appropriate level of
intervention and corrective action and document such occurrences
sufficiently, in accordance with PacifiCare's Data Center Building
Security Procedures.
The Supplier Program Office shall work with PacifiCare's
Facilities Management team to proactively plan [...***...] by Supplier
as modifications are warranted.
TYPE OF GUIDANCE AND COORDINATION SUPPLIER SHALL PROVIDE
DURING EQUIPMENT INSTALLATIONS, ROUTINE MAINTENANCE, PROBLEM, AND
CRISIS MANAGEMENT
Supplier shall provide comprehensive guidance and coordination
through the Program Office in accordance with the Problem Management
process and Change Management Procedures in order to minimize
disruption to End-Users, [...***...]. Supplier shall monitor and
maintain the electrical power system, as well as the system for
controlling the temperature and humidity that are primary support for
the computer room(s) and any backups, secondary power, standby systems,
or excess capacity that is available for use in case of failure.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall provide physical access strategies and
standards for the Supplier Data Center environment, working with
PacifiCare's Facilities department as required. The Supplier shall
develop procedures with adequate controls, audit trails and shall
respond to security violations. The Supplier shall also initiate and
track requests for space, power and other Data Center modifications in
support of Equipment installations. The Supplier shall provide guidance
and coordination for all platforms activities during Equipment
installations, routine maintenance, problem and crisis management. The
Supplier shall manage and maintain the building and property electrical
systems, heating, ventilation, and air conditioning (HVAC) systems,
physical security services, and general custodial/landscape services.
Other specific Supplier responsibilities include:
* CONFIDENTIAL TREATMENT REQUESTED
16.
a. Monitor and maintain the Uninterruptible Power Supply
(UPS) system, air handlers and water chillers that
are primary support for the computer room(s).
b. Manage and maintain the employee badge, security
video and fire alarm systems.
c. Provide physical access strategies and standards for
the Data Center environment.
d. Keep security devices in working order, develop
procedures using adequate controls, audit trails,
respond to security violations and breeches in a
timely manner and resolve security breaches in
collaboration with and with the approval of
PacifiCare.
e. Initiate and track requests for space, power and
other Data Center modifications in support of
Equipment installations.
f. Maintain Equipment and cabinets.
g. Provide input into the design of contingency plans
from a physical aspect.
h. Provide guidance and coordination for all platforms
activities during Equipment installations, routine
maintenance, problem and crisis management including
interfacing with facilities and technology groups,
Suppliers and trades.
i. Maintain building electrical systems.
DEVELOPMENT LAB
[...***...]. Supplier shall maintain the development lab for
such use and shall not allow the installation or use of any Software
for which there is not a valid license. [...***...]. The Critical
Deliverable referred to as "Creation of New Development Lab" in
Schedule 8 to the Agreement states the measured level of performance
associated with the development lab. Supplier shall provide the
infrastructure Software and shall be responsible for the licenses and
maintenance thereof. Supplier shall implement the procedures for
providing access to the development lab provided or approved by
PacifiCare.
9. ENTERPRISE STORAGE SUBSYSTEM MANAGEMENT:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall monitor and control storage performance,
initialize storage volumes, establish and maintain storage standards,
and perform catalogue management and data migration management.
Supplier shall perform capacity planning for all storage Equipment and
shall maintain and publish capacity plans [...***...].
* CONFIDENTIAL TREATMENT REQUESTED
17.
Storage management encompasses [...***...]. This process
produces useful information for analyzing trends in performance,
capacity, availability, and load balancing as they are related to data
storage. [...***...].
This support includes the following:
- Identifying and maintaining the appropriate threshold
levels to reduce potential space constraints
- Communicating disk space availability, space-related
problems, and areas of potential problems
- Data movement
- Creating and maintaining plans for system and user
catalogue and for incremental and full-volume backup
and recovery
Supplier's processes utilize monitoring and data analysis to
look for proactive changes that could be made to improve the
environment. PacifiCare support teams are part of Supplier's global
team so they shall be able to compare notes from other accounts that
may be useful in the support of the PacifiCare account.
Supplier shall allocate storage pools as required by
PacifiCare for production, development and testing. [...***...].
Supplier shall report on storage utilization, allocation, and the
historical usage of datasets on direct access storage [...***...].
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier's responsibilities to protect the availability,
performance, and integrity of all PacifiCare data shall include the
following:
OPERATIONS AND PROCESSING.
a. Define off-site storage requirements. Supplier Global
Services shall follow offsite media storage
requirements at the Pacific Care Data Center. Offsite
media storage shall follow Pacific Care established
standards.
b. Remain current in knowledge of data storage
technology and management products.
c. Perform enterprise storage system tuning.
d. Assign and initialize storage as required for the
performance of the Services.
e. Determine file/data set and volume placement.
* CONFIDENTIAL TREATMENT REQUESTED
18.
f. Monitor End-User directories for file inactivity and
report monthly.
g. Initiate and complete required processing management
functions to preserve the integrity of PacifiCare
data.
h. Conduct routine monitoring via the use of Software
tools to measure the efficiency of storage access and
take corrective action [...***...].
i. Establish and perform verification procedures to
monitor the successful receipt of incoming production
files and the successful transmission of outgoing
production files.
BACKUP AND RESTORE.
a. Perform routine backup (both full and incremental)
and recovery procedures in accordance with the
requirements of applications or of the Disaster
Recovery Plan and so as not to adversely impact
scheduled operations, including regular backups on
all storage systems. Utilize automated backup
procedures wherever appropriate.
b. Provide recommendations to PacifiCare regarding
backup and recovery considerations, such as improved
levels of protection, efficiencies and cost
reductions.
c. Retrieve and return off-site stored data.
ADMINISTRATION.
a. Advise PacifiCare of file space required to meet
PacifiCare's forecast business and operational needs.
Establish and document storage and usage thresholds
and standards that optimize storage space and monitor
over-utilization of storage space.
b. Monitor PacifiCare's disk space utilization and
requirements and report on a monthly basis in
addition to reasonable numbers of on-demand
reporting.
c. Monitor the performance of storage and retrieval
tasks.
d. Monitor and maintain file directories and catalogs.
e. Monitor End-User directories for file inactivity and
report monthly.
f. Provide disk and file management and reorganization,
as reasonably requested by PacifiCare [e.g.,
disk-to-tape, disk to disk].
g. Provide data migration management.
* CONFIDENTIAL TREATMENT REQUESTED
19.
h. Maintain PacifiCare data and records in accordance
with regulatory requirements applicable to
PacifiCare, as identified to Supplier from time to
time in sufficient detail to enable Supplier to
fulfill its obligations.
MAINTENANCE.
a. Monitor storage systems for reliability and
malfunction.
b. Perform recovery procedures from disk failures.
c. Maintain established storage standards.
d. Maintain space requirements according to PacifiCare
business forecasts.
10. END-USER SUPPORT:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier's help desk solution for PacifiCare results in a
single-point-of-contact (SPOC) for all End-User problems. End-Users
shall submit problems to the help desk by placing a call to an Supplier
provided 1-800 number [...***...].
Supplier's [...***...]. A voice response unit (VRU) shall
receive End-User calls and utilize skill based routing, directing calls
to the most qualified and available help desk agent. The help desk
agent shall resolve the call if possible, otherwise the agent shall
pass non-resolvable problem tickets to the appropriate resolver group.
The help desk agent shall also maintain ownership for the problem
through problem resolution. Supplier shall implement this solution by
leveraging existing PacifiCare procedures, combined with proven
Supplier processes and procedures.
The help desk shall support [...***...].
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall provide support, advice and assistance to
End-Users in a manner consistent with current practices. Services shall
include the following:
a. Perform analysis to provide optimal use of production
resources.
b. Carry out mass job control changes for programmers,
data center and users.
c. Enforce job control and job naming standards.
* CONFIDENTIAL TREATMENT REQUESTED
20.
d. Provide technical support and administration for
various Data Center products and application
rollouts.
11. ADMINISTRATION:
SUPPLIER'S SOLUTION DESCRIPTION: COSTS AND VALUE
Supplier shall implement and follow the following processes in
managing the operation environments.:
- Problem Management
- Change Management
- Crisis Management
- Quality Assurance
[...***...]
The tools and strategies Supplier shall bring to PacifiCare
are also included. Based on the strategies, processes, and tools
Supplier expects to:
- Reduce cost and improve manageability in high-growth
environments
- Achieve Equipment price performance gains [...***...]
- Gain more efficient resource use through automation
for system maintenance
MAINTAINING INVENTORIES
[...***...]. As machines are purchased and deployed, or old
machines are decommissioned or redeployed, [...***...].
SECURITY ACCESS AND CONTROL
Supplier has established security and access policies and
practices that protect the data of each Supplier PacifiCare.
[...***...]. Supplier shall work with PacifiCare Security to verify
that the appropriate touch points are established to meet PacifiCare's
and Supplier's requirements. Supplier shall provide access to all
PacifiCare data in accordance with mutually agreed to policies and
standards that meet both of Supplier's objectives.
AUDITS
In addition to Section 19 of the Agreement, Suppliers Program
Office process owner is responsible and accountable for verifying that
the appropriate controls are in existence and
* CONFIDENTIAL TREATMENT REQUESTED
21.
operating effectively for their process. Metrics and inspections are
examples of ongoing activities to determine that controls are operating
effectively. Audits are used as further validation that controls are in
place and operating as intended.
The approach for responding to audits is the same for internal
and external audits, [...***...]. This includes performing the
following activities:
- Assigning a focal point to coordinate the audit
activities with the staff
- Providing communication announcing the audit
- Engaging the appropriate staff of the process being
audited
- Providing logistical support for the audit team
- Providing the initial information requests in the
pre-audit phase to the audit team
- Providing data as requested during the audit and
tracking information requests
- Scheduling meetings and providing management updates
through the focal point
Supplier's Program Office process owner is also responsible
for understanding the control issues that were identified in the audit.
Such process owner is required to assess the issues that are identified
and provide concurrence on them to the audit team. Supplier shall
communicate audit results to the appropriate management and staff.
Supplier's Program Office process owner is responsible for
understanding the root cause of the issues and developing the
appropriate action plans.
Supplier's Program Office process owner is responsible for
revising processes and procedures and implementing process improvements
to address issues that are identified through audits. Such process
owner shall respond to audit recommendations [...***...]. Such action
plans include assigned responsibilities and specific target dates to
verify that the audit recommendations are implemented on a timely
basis.
Supplier shall use management reviews and metrics are used to
determine that recommendations are implemented on a timely basis.
Supplier shall post audit inspections, to validate that all identified
issues, are closed and recommendations are implemented. In addition,
Supplier's Internal Audit and Business Controls have a follow up
process to verify that all recommendations and action plans have been
fully implemented.
SAFETY ISSUES
Supplier shall respond to all potential and actual safety
issues within Supplier Service Locations. Supplier shall interface with
PacifiCare's Real Estate Property Services organization for all safety
issues within PacifiCare Service Locations.
ETHICAL STANDARDS
* CONFIDENTIAL TREATMENT REQUESTED
22.
Supplier's Business Conduct Guidelines outline the ethical
standards which all Supplier employees are expected to meet and detail
the manner in which Supplier shall conduct business. Each year, all
Supplier employees certify that they have read and understood these
ethical standards. Supplier's Business Conduct Guidelines are expected
to be comparable with PacifiCare's employee guidelines.
[...***...]
Supplier shall manage all existing vendors and Equipment,
[...***...] and coordinate all installations and upgrades. [...***...].
PROJECT MANAGEMENT REPORTS
During the Transition Period Supplier shall begin to work with
PacifiCare to prioritize all initiatives through the Supplier Program
Office and an ongoing process shall be developed for us to jointly set
the priorities on all project work. Once initiatives and their
associated schedules are agreed to, Supplier shall manage such
initiatives and schedules shall using the Project Management
methodology and Change Management Procedures.
PERSONNEL PERFORMANCE REVIEWS
Supplier's delivery team shall implement a process that shall
allow PacifiCare's businesses to provide personnel performance
assessment input. Supplier shall work with PacifiCare to solicit input
from the employee, project, and overall perspective.
[...***...]. For those employees who are servicing the
PacifiCare account, Supplier shall implement Supplier's performance
assessment process (Personal Business Objectives) shall. [...***...]:
[...***...]
At the project level, the Supplier team shall:
- Clearly identify PacifiCare's conditions of
satisfaction for each specific project
* CONFIDENTIAL TREATMENT REQUESTED
23.
- Monitor PacifiCare's expectations in a regular and
normalized manner, rather than relying on intuition
or assumptions about the quality of the services
Supplier is providing
- Measure PacifiCare's level of satisfaction with
Supplier service delivery
At the overall level, Supplier shall solicit from PacifiCare
[...***...] specific conditions of satisfaction. [...***...]. In
addition, Supplier shall ask PacifiCare to provide an overall
satisfaction rating upon completion of the project. [...***...].
[...***...].
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall perform all administrative activities
associated with managing the Data, maintaining inventories of hard and
soft assets, responding to audits, responding to safety issues,
conforming to ethical standards, negotiating contracts, prioritizing
initiatives, producing management reports and conducting personnel
performance reviews. Such services shall include the following:
a. Respond to internal and external audits.
b. Acquire and manage human resources and conducting
periodic personnel performance reviews.
c. Negotiate and manage contracts with Suppliers.
d. Produce management reports.
e. Maintain inventories of hard and soft assets.
f. Manage Data Center costs and value.
g. Monitor performance internally and benchmark
activities.
h. Manage, prioritize and coordinate improvement
initiatives throughout the technology organization so
that they are consistent, achievable and are not
competing for scarce resources.
12. SOFTWARE CURRENCY, REFRESH, AND RELEASE CONTROL:
SUPPLIER'S SOLUTION DESCRIPTION:
* CONFIDENTIAL TREATMENT REQUESTED
24.
Supplier shall install, maintain, and upgrade Software for
which Supplier is responsible. [...***...]. However, should Supplier be
made aware of problems that have not been corrected in the Software
release, or if Supplier has reason to believe that the Software release
could adversely affect PacifiCare's or Supplier's ability to meet
Service Level targets, Supplier would notify PacifiCare of the concern
and work with PacifiCare to provide an appropriate course of action,
[...***...]. This would also include problems that are encountered
during system and integration testing.
[...***...]. The Supplier shall fully test any new release of
system Software before installing it for production use. Supplier shall
also fully test operating systems Software for PacifiCare and
coordinate with applications personnel and End-Users in accordance with
the Change Management Procedures methodology (Policy and Procedures
Manual. and the test plan for each Software modification.
PROCEDURES AND OR PROCESSES THAT ARE USED TO INSTALL SOFTWARE
CHANGES, UPGRADES, OR NEW RELEASES
When implementing changes, upgrades, or enhancements to the
PacifiCare Software environment, Supplier shall observe the Change
Management Procedures and shall perform installation planning, product
installation, testing, and verification. In addition, for any Software
changes, upgrades, or enhancements proposed to PacifiCare, Supplier
shall advise PacifiCare of any additional Equipment, LAN, or
environmental requirements, which are observed during integration
testing and/or are otherwise known to be necessary for implementation
of the changes, upgrades, or enhancements. As requested by PacifiCare,
Supplier shall provide the installation of department or End-User
specific Software in accordance with the Supplier Change Management
Procedures methodology. Supplier shall report to PacifiCare the
installation of such [...***...].
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Services shall include the following:
a. Unless otherwise directed by PacifiCare, Supplier
shall install, maintain and upgrade Software for
which Supplier is otherwise responsible hereunder so
that such Software remains within one generation of
the current release and remains on a supported
release. [...***...].
b. Coordinate, test, customize, install, maintain and
support systems and systems program products.
c. Test operating Systems Software, coordinating with
applications personnel and End-Users.
d. In implementing changes, upgrades, or enhancements to
the PacifiCare Software environment, Supplier shall
observe the Change Management Procedures and
* CONFIDENTIAL TREATMENT REQUESTED
25.
shall perform installation planning, product
installation, testing and verification. In addition,
Supplier shall, for any Software changes, upgrades,
or enhancements proposed to PacifiCare advise
PacifiCare of any additional Equipment, LAN,
environmental, etc. requirements observed during
integration testing and/or otherwise known to be
necessary for implementation of the changes, upgrades
or enhancement. Supplier shall also:
e. Demonstrate compliance with PacifiCare Corporate
Information Technology Architecture and Technical
Standards, if applicable.
f. Demonstrate compliance with data security policies
and standards as required hereunder.
g. Provide installation of department or
End-User-specific Software as requested by
PacifiCare. Supplier shall periodically (at least
monthly) report to PacifiCare the installation of
such Software.
h. Supplier shall provide support, advice and assistance
to End-Users for Software for which Supplier is
responsible hereunder.
i. [...***...].
j. To the extent enabled in the PacifiCare approved
enterprise management system provided by Supplier,
Supplier shall monitor use of licensed Software,
including license metering and tracking.
k. Administer and maintain the development-to-production
system.
l. Install and support interactive systems Software and
database Software.
13. BACK-UP AND RECOVERY SERVICES:
SUPPLIER'S SOLUTION DESCRIPTION: OFF-SITE VAULTING
[...***...]. Supplier shall continue to review processes with
PacifiCare as technology changes to provide PacifiCare with vaulting
processes that preserve data in a reliable, secure way. PacifiCare's
involvement is not required to verify that critical information is
being protected, but PacifiCare may need to assist with some of the
steps of recovery.
CATALOGUING OFF-SITE CONTENT
[...***...]. While Supplier does have a product that can
perform off-
* CONFIDENTIAL TREATMENT REQUESTED
26.
site cataloguing (both remote and local), Supplier believes the most
prudent course of action shall be to work with PacifiCare to determine
if an alternative or supplemental product is required.
RETRIEVING BACK-UP MEDIA AND RESTORING DATA FROM BACK-UPS
Control backup and recovery is the process of planning,
testing, and implementing the recovery procedures and standards that
are required to resume normal IT services in the event of a failure.
The Supplier storage management team handles both scheduled
and unscheduled requests for pre-authorized services. When a requester
is not on the pre-authorized list provided by PacifiCare, Supplier
shall contact PacifiCare to establish entitlement.
For unscheduled backup requests, Supplier must clearly
understand the nature of the request for backup before Supplier shall
execute the backup. Once a change record has been established, the
requester and other effected parties may receive a phone call for
clarification and/or approval to go ahead if the request for backup
conflicts with a previously scheduled backup. Supplier shall work with
PacifiCare to understand what activities shall need to be performed
once a backup completes successfully and what steps shall need to be
taken when the backup is unsuccessful.
In the case of a request for recovery, Supplier shall analyze
the request for recovery [...***...]. A problem record shall be
required to identify the recovery request and a change record shall
need to be approved to restore the Software to a previous state.
[...***...]. Supplier shall only be responsible for restoring data that
has been backed up by Supplier. All data that is backed up by
PacifiCare shall be PacifiCare's responsibility to restore. Upon
successful completion of a requested recovery, a member of the Supplier
Service Delivery team shall contact the requester to provide status.
Once concurrence from the requester is gained, the request shall be
closed. The Help Desk shall provide status to the End-User for the
request number that is provided.
Consideration for change and service requests is included in
the backup and recovery procedures. [...***...]. Supplier shall review
the proposed plan with all appropriate parties. Change or service
requests [...***...] need to be reviewed and approved by PacifiCare and
Supplier. If the plan is approved, it shall be implemented. If the plan
is not approved, then changes shall be made in an attempt to gain
approval for the plan, the request shall be deferred pending
resolution, or it shall be withdrawn.
[...***...].
[...***...] DAY-TO-DAY VAULTING PROCESS
The following is the vaulting process:
* CONFIDENTIAL TREATMENT REQUESTED
27.
[...***...]
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall assume responsibility for PacifiCare's data
back-up requirements, which includes daily off-site vaulting of data on
media, cataloging off-site content, retrieving back-up media and
restoring data from the back-ups. Services shall include the following:
[...***...]
14. HOURS OF OPERATION:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
All systems operation functions of the Services described in
this Section shall be provided 24 hours per day, 7 days per week as
appropriate (except for scheduled maintenance windows and non-scheduled
maintenance windows agreed to in advance by PacifiCare).
* CONFIDENTIAL TREATMENT REQUESTED
28.
15. PHYSICAL SECURITY ADMINISTRATION:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall monitor the security compliance of Service
Locations under Supplier's control through internal audits, reviews,
and key process control measurements. Additional precautions beyond
those provided for in the standard are generally implemented to take
into account special local conditions. Supplier's physical security
process includes the following:
[...***...]
During the Transition Period, Supplier shall be holding a
series of workshops with PacifiCare's information security and control
[...***...]. The result of these workshops shall be a document that is
structured on the standard Supplier information security controls, but
customized to account for PacifiCare's specific requirements.
[...***...]. Prior to the completion of the Transition Plan,
Supplier shall occupy and utilize the current PacifiCaRe data center
facilities and PacifiCare shall retain the costs for supporting those
facilities. For the duration of the time that processing is performed
in the current facilities:
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
29
Supplier shall comply with and enforce all of PacifiCare's
physical security policies that are within its control. [...***...].
Supplier shall grant approved PacifiCare personnel access to all
Service Locations in which Supplier Is providing support for
PacifiCare's services. Supplier shall safeguard PacifiCare's assets by
continually monitoring the physical environment for such things as
temperature and humidity. Supplier shall provide physical and logical
security for the data center and PacifiCare's physical and intellectual
property as provided in the Safety and Security Procedures, , Schedule
10.2.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier's responsibilities to provide physical security
administration shall include the following:
At PacifiCare Service Locations, Supplier shall comply with
all PacifiCare physical security policies, standards and
procedures, as they may be revised or updated.
Supplier's responsibility for physical security at Service
Locations under Supplier's control shall include:
Provide appropriate Equipment and system Software to implement
security standards that are no less stringent than those
customarily maintained by well-managed large outsourcing
organizations providing services similar to the Services.
Provide access upon request to PacifiCare or its designees,
[...***...].
Establish security processes that shall be no less rigorous
than those in effect at those Service Locations as of the Cut
Over Date and meet or exceed PacifiCare's security
requirements then practiced by PacifiCare, shall be at a
minimum consistent with standards at well-managed operations
performing functions similar to the Services, and shall
provide the necessary physical security to support Supplier's
obligations to provide Data security under the Agreement.
Perform all physical security functions [...***...] at
facilities under Supplier's control.
The Supplier shall also describe how it shall design, print,
and assemble employee, contractor and visitor badges.
Supplier shall assume full responsibility for the design,
print, and assembly of contractor and visitor badges as described in
the Physical Security Standards and practices/policies. These
procedures are based on the Supplier Global Standards, directed by
SECMAN (Supplier Security Requirements Manual) and ITCS 204 (Security
Standards For providers of Network and Computing Services) with
specific focus on data center operations. [...***...]:
[...***...]
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[...***...]
In addition, the following topics are reviewed and procedures
for timely, accurate, and acceptable responses are developed to
minimize risk or loss to both Supplier and PacifiCare.
SUPPLIER INTERNAL PROCESSES
- Emergency planning
- Incident management
- Information protection
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Verification and Audit Of Functions
To verify that the security practices/policies and procedures
are consistently followed, Supplier shall complete the following
internal audits/activities and necessary resolution follow-up as
indicated:
Daily Audits
[...***...]
Weekly Audits: [...***...]
[...***...]
Access Review
[...***...]
Asset Protection
[...***...]
Information Protection
[...***...]
Life Safety
[...***...]
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[...***...]
Verification of Process/Procedures
Supplier's [...***...] verify Supplier's compliance of the
physical security functions (based on Standards).
Recommendations shall be made based on the business need or
possible exposure and submitted for correction/resolution. In
addition, [...***...].
16. LICENSE MANAGEMENT AND COMPLIANCE:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall deploy consistent and uniform standards in
managing and maintaining license compliance. [...***...].
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall monitor, audit, and advise PacifiCare
concerning Software license compliance. Supplier is responsible for
providing Software for Supplier-provided applications development tools
and systems Software for running the PacifiCare servers, distributed,
and in-scope LAN infrastructure. Supplier shall be responsible to
acquire the correct number of the foregoing licenses to be compliant.
PacifiCare shall be responsible to acquire the appropriate number of
Software licenses used for distributed applications, and for
third-party End-User tools. Supplier shall advise PacifiCare of the
number of users that Supplier has become aware are using the licenses
for which PacifiCare is responsible and Supplier shall notify
PacifiCare if such number exceeds the number of End-User as provided by
PacifiCare. When Supplier becomes aware of the presence of unauthorized
Software on the Equipment, Supplier shall promptly notify PacifiCare.
Supplier shall monitor the servers and, to the extent enabled by the
Supplier-provided enterprise management system, Supplier shall monitor
the other Equipment for the presence of unauthorized Software.
Supplier's responsibilities shall include the following:
a. Provide periodic reporting of such license
information to PacifiCare, as required.
b. File and track Software license agreements.
c. Ensure compliance with Software licenses.
d. Proactively scan for pirated Software.
e. Report Software license anomalies.
17. TECHNICAL SUPPORT:
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SUPPLIER'S SOLUTION DESCRIPTION: CAPACITY PLANNING
[...***...] the scope of the Supplier capacity planning
process includes and involves the following:
[...***...]
[...***...]. Supplier shall work with PacifiCare to solicit
input from the business regarding potential performance and capacity
impacts.
The objectives of the capacity planning process are to
[...***...]. Many factors must be considered in the development of the
optimal solution and each factor must be weighed in terms of its
overall business impact. An optimal solution attempts to arrive at the
best counterbalance of factors. Two of the key factors that must be
considered, which may be mutually exclusive, are minimizing the cost of
providing sufficient resources, and maximizing the utilization of
resources.
PERFORMANCE MONITORING
The objectives of Supplier's performance monitoring process
are to optimize the response time and throughput of existing IT
resources, take corrective actions to alerts and problem requests, and
automate performance tuning and alerts. Supplier's process includes the
following capabilities:
[...***...]
[...***...]. During presentation of these performance reports,
Supplier shall provide recommendations as required tO manage the
resolution of performance issues.
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Requests to change performance measurements, thresholds, and
alerts are submitted via Change Management Procedures or a change order
(if outside the scope of the contract). For any performance request,
the appropriate calling process dictates the requirements needed from
the PacifiCare and the procedural steps performed by Supplier when
interfacing with the PacifiCare.
Supplier shall analyze the performance impact and handle
alerts as required, and shall invoke the Problem Management process to
resolve issues.
MAINTAIN SURVEILLANCE OF SYSTEM OPERATIONS AND PROVIDE
IMMEDIATE RESPONSE TO PROBLEMS WITH CONSTANT SUPPORT THROUGH RESOLUTION
The [...***...] operations process, developed by Supplier, is
an ongoing process throughout the life of the contract. [...***...].
Supplier's objectives of its run and monitor operations process are to:
[...***...]
Supplier shall perform the activities [...***...] support the
following operations:
- Systems Operations
- Batch Operations
- Tape Operations
- Network Operations
- Online Business Applications
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Supplier shall [...***...] process including the following
activities:
[...***...]
For Systems Operations Supplier shall:
[...***...]
For Batch Operations Supplier shall:
[...***...]
For Media Operations Supplier shall:
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[...***...]
For Network (LANs/MANs/WANs) Operations in-scope or as may be
required to provide the requested services Supplier shall:
[...***...]
For Online Business Applications Supplier shall:
[...***...]
PROVIDING CONFIGURATION MANAGEMENT:
Supplier shall work with PacifiCare to verify that a common
philosophy and definition are implemented specifically for PacifiCare
in the area of configuration management. Supplier's generic objectives
for the control configurations process are to:
[...***...]
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[...***...]
Supplier shall utilize four primary roles to execute the
control configurations process.
[...***...]
These roles are included in Supplier's Base Fees and shall be
performed by Supplier's staff.
[...***...]
[...***...]
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall provide all technical system support for
operations, including storage management, system programming,
teleprocessing systems, capacity planning, performance tuning, and
installation and maintenance of all system Software products. The
Supplier shall
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provide regular monitoring and reporting of system performance,
utilization and efficiency. The Supplier shall provide technical advice
and support to the applications maintenance and development staffs, as
may be required. Supplier's responsibilities to provide technical
support Services for the PacifiCare Data Center and Remote Server
environment shall include:
GENERAL TECHNICAL SUPPORT.
a. [...***...]
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[...***...]
PERFORMANCE.
[...***...]
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CAPACITY PLANNING.
[...***...]
CONFIGURATION PLANNING.
[...***...]
18. DATABASE SUPPORT AND MANAGEMENT:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall provide physical data and database management
for the PacifiCare environment. [...***...]
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[...***...]. Supplier's database system support staff shall be
available for consultation with the application development aNd
maintenance staff to assist in the logical design of databases for
maximum performance and utility, and other logical database management
issues as required.
Supplier's physical database management support for PacifiCare
shall include the following:
PHYSICAL DBA
DESCRIPTION OF STANDARD SERVICES
[...***...]
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[...***...]
This applies to IDC databases both in the Data Center and in
the IDC.
Logical DBA services shall be provided by the Applications
Supplier.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall be responsible for performing physical database
administration functions, including storage management services,
installation, maintenance, tailoring and monitoring of Database
Software products, backup and recovery, standards, and support for the
databases required by PacifiCare. Supplier's responsibilities to
provide such database support and file management for Data Center and
Remote Server Services shall include the following:
DATABASE MANAGEMENT. Supplier's responsibilities to provide
physical database management planning shall include the
following:
Perform physical database management system ("DBMS") database
control functions to support systems existing as of the Cut Over
Date and planned new systems development.
Plan for changes in the size of databases due to business growth
and project implementation based on information supplied by
PacifiCare, and review plans with PacifiCare on a regular basis
for PacifiCare's comment and approval.
Maintain, operate, and upgrade, as necessary. Automated
monitoring tools to monitor database performance.
Perform database shutdowns and restarts, as necessary.
Perform reorganizations when required to optimize performance.
DATABASE MAINTENANCE AND SUPPORT. Supplier's responsibilities to
maintain the databases as necessary to meet the performance
standards, maximize efficiency, and minimize outages for Data
Center and Remote Server Services shall include the following:
Provide physical database management support including providing
backups and restores of data in a timely manner.
Install, maintain and support database Software products.
Test and implement database environment changes as approved by
PacifiCare.
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Maintain, update, and implement database archive processes and
procedures to recover from an outage or corruption in a timely
manner so as to meet PacifiCare's business requirements.
Provide capacity planning and correct situations caused by lack
of capacity (e.g. dataset or table space capacity events, full
log files) in a timely manner.
ADMINISTRATIVE SUPPORT. Supplier's responsibilities to provide
administrative support for Data Center and Remote Server
Services shall include the following:
Employ database performance analysis to confirm physical
database requirements to support PacifiCare's business systems.
On request, provide PacifiCare with documentation of files
generated by the file management system, including name and
utilization statistics.
Provide technical advice to the application development and DBA
staffs and assist applications development and maintenance staff
in performing stress testing and operating system and database
performance tuning.
Develop, document, and maintain physical database standards and
procedures, including database tuning.
Participate in determining physical database changes and
impact of applications development and maintenance work, and implement
necessary changes to relevant databases after PacifiCare's review and
approval.
C. NETWORK:
1. GENERAL:
Supplier shall assume operational and management
responsibility for the network Services which [...***...] are described
herein. Except as otherwise expressly provided in this Statement of
Work, Supplier responsibilities shall [...***...] perform network
Services in accordance with the Service Levels. Supplier shall be
responsible for coordinating tHe network Services and [...***...] to
perform the network Services in accordance with the Service Levels.
Supplier shall use commercially reasonable measure to protect the
network against unauthorized access and fraudulent use. Supplier shall
provide Electronic Data Interchange ("EDI") support as specified herein
and interface with PacifiCare's selected Value Added Network ("VAN")
services providers. Supplier's operational and management
responsibility for the [...***...].
2. NETWORK MANAGEMENT:
SUPPLIER'S SOLUTION DESCRIPTION:
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Supplier shall implement the five system management control
(SMC) principles (availability, performance, capacity, problem, and
change management) to manage PacifiCare's networks. Supplier shall
utilize PacifiCare sniffers and network management tools, with the
Supplier provided network management tools, to monitor and manage the
WAN and LAN networks.
Supplier shall track each service activity through a change
management record. Supplier shall review the approved change record in
the context of other planned changes to verify that there are no
scheduling or other conflicts. [...***...]. Supplier shall remain in
contact with all involved parties until resolution is achieved. When
the activity is completed, Supplier shall perform standard testing
shall be performed to verify that there are no outstanding issues or
problems. Supplier shall update the original change management and
problem management records through the testing phase and shall be
closed only when PacifiCare notifies Supplier of final approval.
Supplier shall analyzes of the PacifiCare WAN traffic and
utilization early within the Open Enrollment period. Supplier shall
work with the PacifiCare WAN engineers and review network data
available [...***...] and PacifiCare tools to understand the bandwidth
requirements for the PacifiCare network. The Open Enrollment period
shall provide Supplier adequate time to install required WAN
connectivity, which includes the IDC.
Supplier shall [...***...] within the scope of the Base Fees.
Supplier shall supply maintenance support contracts in line
with agreed-to SLAs for site availability.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier's responsibilities to provide network management
Services shall include the following:
Manage and report on the capacity and configuration of the
network. Act as a single point of contact for the management of
the network. Supplier shall maintain Equipment inventories,
locations lists, and other network documentation and
information. Supplier shall provide such information to
PacifiCare upon request.
Perform the design, installation, termination, and documentation
of all intra-building copper and fiber optic cabling for
Ethernet, FDDI, ATM, and WAN environments.
For new PacifiCare Service Locations, Supplier shall manage the
physical survey of each such PacifiCare Service Location to
determine site features, implementation readiness, and specific
network installation needs. Physical surveys shall include:
current services; demarcations; demarcation extensions;
power/UPS requirements; Equipment issues; cabling and wiring.
Install and maintain WAN connections and upgrades.
Monitor WAN and leveraged LAN bandwidth.
Implement network strategies.
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Analyze and propose more cost effective network alternatives.
Provide management of Remote Access Service devices and
associated transport connected to WAN / LAN environments.
Proactively monitor routers supporting the RAS network
components.
Install all Remote Access Services Software in accordance with
the Change Management Procedures.
Conduct on-site visits to the Service Locations to review
condition of RAS Network Components at intervals agreed to by
both Parties.
Provide provisioning as following:
Order components and Transport Services per PacifiCare's
direction.
Configure components.
Test and install components.
Uninstall components.
Manage Managed Agreements.
Verify that components meet the design specifications.
Affix asset tag, register incremental component, and update
asset databases, as required.
Install System Software at component manufacturer supported
release levels or PacifiCare-specified release levels.
Provide regular status information on orders, as agreed.
At PacifiCare's expense and approval, manage spare inventory.
Supplier to provide [...***...] for purposes of out of band
management.
Handle return authorization of failed items.
3. NETWORK OPERATIONS:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall perform centralized network monitoring at the
Network Operations Center (NOC), which is located [...***...]. The NOC
shall utilize a simple network management protocol (SNMP)-based tool to
monitor the status of all LAN ANd WAN devices and connections
throughout the PacifiCare network on a 7x24x365 basis. [...***...] The
Network Operations CentER shall interface with the problem management
system and with on-site network support staff to resolve problems.
* CONFIDENTIAL TREATMENT REQUESTED
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Supplier shall utilize its problem management system to track
problems; coordinate resources, including third parties; and drive
problems to resolution. In the event that a network problem occurs,
[...***...]. When the repair activiTY is completed, Supplier shall
update and close the problem management record shall be updated and
closed with PacifiCare's final approval. Supplier shall also forward
this information to the Change Management Procedures and asset
management process to document any resulting premise configuration
changes.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall support in scope network operations
functions for the LAN and WAN networks. This includes production
monitoring, performance monitoring and problem resolution. Network
operations and monitoring shall include support through to the end user
device. [...***...]. Supplier's responsibilities to provide network
operations Services shALl include the following:
Perform operational management of PacifiCare's [...***...].
Provide network connectivity at PacifiCare Service Locations.
[...***...].
Perform the following in respect of installing, upgrading and
maintaining the network Equipment:
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
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[...***...]
4. SNA, DECNET, AND TCP/IP TECHNICAL SUPPORT:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall provide logical design and connectivity to
PacifiCare and PacifiCare [...***...]. Supplier shall woRK with
communication carriers to monitor communications line usage and
capacity to verify that sufficient bandwidth is provided to support
PacifiCare's business and IS projects. As part of Supplier's long-range
plan, all aspects of this environment shall be evaluated [...***...] to
address PacifiCare's overall requirements. Changes and upgrades shall
be coordinated by the Supplier change management team following
established the Change Management Procedures, including presentation to
PacifiCare IT for review and sign-off prior to implementation.
[...***...].
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall provide logical design and connectivity to
PacifiCare and external client locations for the PacifiCare SNA and
TCP/IP network, including support of all front-end processors and third
party protocol conversion boxes. The Supplier shall monitor capacity,
implement upgrades, and make SNA and TCP/IP modifications through the
Change Management Procedures. [...***...]:
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
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[...***...]
5. END-USER SUPPORT:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall work with PacifiCare and other vendors on
behalf of PacifiCare to support End-Users. Supplier's help desk shall
provide a single point of contact (SPOC) for supporting End-Users.
End-Users shall submit problems to the Help Desk by placing a
call to a Supplier provided 1-800 number [...***...].
Supplier shall deliver the support consistent with current
practices. This shall include resource, problem, and requirements
analysis; and technical support for End-Users.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall provide support, advice and assistance to
End-Users in a manner consistent with current practices in effect as of
the Cutover Date. [...***...]:
[...***...]
6. NETWORK ENGINEERING:
SUPPLIER'S SOLUTION DESCRIPTION:
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Supplier shall use [...***...] to monitor PacifiCare's premise
environment and gather system responsiveness and resource utilization
data to determine particular trends and patterns in Equipment
performance.
[...***...]
Supplier has developed metrics that assist in determining when
configuration and/or architecture changes are needed to create a more
efficient network design and when Equipment upgrades are necessary.
When Supplier identifies Equipment that is malfunctioning, is
over-utilized, or which experiences poor response time and
availability, Supplier shall take steps are taken to fix the network
configuration or the Equipment.
To more accurately assess the growth potential of PacifiCare's
current premise environment, Supplier's network engineers shall develop
a plan for analysis [...***...]. This plan shall be updated through the
Termand as applicable the Termination Assistance Period. [...***...].
At the conclusion of the effort, Supplier shall provide PacifiCare with
a recommendation of the Equipment, design, and connectivity
requirements necessary to sustain optimum performance levels.
Supplier shall recommend the appropriate changes or upgrades
to the network for PacifiCare's final approval. If approved, the
recommendations shall be implemented by Supplier through the standard
Supplier Change Management Procedures and tracked until completion.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall provide network engineering functions as
required to meet PacifiCare's communications needs during the Term and
during the Termination Assistance Period, including network design,
capacity and configuration management, network optimization, efficiency
tuning, third-party Supplier coordination, ordering and installing
circuits and Equipment, conducting site surveys, and performing
upgrades for network Equipment. Supplier's responsibilities to provide
such network engineering functions shall include the following:
Supplier shall monitor and tune the Network for efficiency and
cost-effectiveness, intra-location Network bandwidth sizing,
configuring requirements and coordinate with other suppliers.
With respect to these requirements, Supplier is expected to work
cooperatively with the third parties and PacifiCare staff to
facilitate effective communication and implementation of the
Services. Supplier shall coordinate all Network technical issues
with such third parties and PacifiCare staff.
Perform engineering functions in accordance with the Change
Management Procedures.
Evaluate and test network, terminal and interface Equipment.
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Develop acceptance test procedures for installation and changes
to the networks, and for verifying restoration of availability
following problems with network circuits (premise cabling) or
Equipment. [...***...].
Provide adequate technical resources to support the development
of a clear, concise, strategic direction for the voice and data
networks within the scope of the Services.
Supplier shall implement performance management and monitoring
tools to be used in conjunction with the trouble ticketing
system and the asset management database to monitor the
performance of the data network. [...***...].
Tune and manage the network to meet requirements and Service
Levels. [...***...].
Perform, on an on-going basis, regular network optimization
analyses. [...***...].
Identify future loads on the network as requested by PacifiCare
(but at a minimum annually) that could impact performance and to
develop forecasts of network growth and other changes in
response to the projected business and operational needs of
PacifiCare. [...***...].
Conduct network performance sampling, to include peak and
average hour periods, as reasonably requested by PacifiCare.
Develop network implementation plan.
Carry out additional network design activities.
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7. NETWORK CONTROL AND CONNECTIVITY RESPONSIBILITY:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall [...***...]. Upon approval from PacifiCare,
Supplier shall order and coordinate the installation of bandwidth from
either PacifiCare or Supplier's suppliers, depending on the procurement
relationship that is in place. Supplier [...***...], Supplier shall
perform acceptance testing and turnover to PacifiCare's production
network.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier is responsible for maintenance and support of all
network communications related Equipment and connectivity used to
provide the Services. [...***...]. PacifiCare's review and approval
shall be required prior to SupplieR establishing connections to
Supplier's facilities or external networks. Supplier shall identify
bandwidth requirements to provide the services. Supplier shall
coordinate network technical issues with other third party suppliers.
Supplier's responsibilities to provide network control Services shall
include the following:
Perform Network planning, design and supervision of local
Service Location network backbone circuits, Networks, office
cabling, network circuit layout and cable plant integration.
Provide PacifiCare with single point-of-contact for PacifiCare's
network inquiries and requests.
Provide protocol conversion and translation as reasonably
requested by PacifiCare.
Install, configure, and maintain dial-up Equipment.
Verify operation and connectivity of PC Network adapters, and
all other directly network-connected devices. Supplier shall
assist and support PacifiCare in specifying the appropriate
configuration and installation process for in-scope PacifiCare
premises Equipment that shall be attached to, and shall
communicate over, the network. Supplier also shall perform
configuration testing of in-scope systems.
Provide network management services to proactively monitor
PacifiCare's network for service degradation, [...***...].
Coordinate network addressing. Supplier shall manage
PacifiCare's Network address scheme and notify PacifiCare of
limitations or capacity issues.
Monitor physical and logical connections.
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Provide redundant connections as required.
8. NETWORK PROVISIONING:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall provide technology refresh [...***...]
Equipment listed in Schedule 3.8(a), Transferred Assets. [...***...].
Supplier shall provide procurement services through Supplier's standard
procurement procedure and provide thE necessary retirement and
replacement through standard IMAC process.
Supplier shall create a database of all in-scope premise
Equipment and associated peripherals. Supplier shall then update this
database to reflect all on-going IMAC and preventive maintenance
activity.
Supplier shall also track PacifiCare's premise assets
[...***...].
[...***...].
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall be responsible for Equipment procurement,
Equipment retirement and asset management support. Included is
troubleshooting and repair of network devices at all PacifiCare
locations at the level provided by PacifiCare as of the Cutover Date,
[...***...]. Other Supplier responsibilities include:
Procure network Equipment and identifying bandwidth
requirements.
Maintain network Equipment.
Troubleshoot new network devices.
Track and manage network assets.
Perform network Equipment installations.
9. SOFTWARE CURRENCY, REFRESH, AND RELEASE CONTROL:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall use its standard system management control
(SMC) processes and procedures in working with third party suppliers to
maintain equal or better services and minimize business interruptions.
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[...***...]
Supplier shall leverage its established working relationships
with PacifiCare's existing vendors and suppliers with their change and
problem management disciplines, to coordinate IMAC and maintenance
activity. [...***...]. Supplier shaLl also provide a test plan that
shall be used to verify the expected operation and results.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier's responsibilities shall include installing,
maintaining, upgrading and supporting all network Software (including
for network, routers and bridges), including firmware. Supplier shall
interface with third party suppliers to promote compatibility of such
connectivity products. Supplier's responsibilities to provide Software
currency for network Services shall include the following:
Unless otherwise directed by PacifiCare, Supplier shall install,
maintain and upgrade Software [...***...]. Prior to the start of
each calendar quarter, Supplier shall give notice to PacifiCare
of all upgrades of Software that are planned to occur in the
quarter for which notice is being given. [...***...].
Coordinate, test, install, and support Systems and systems
program products.
Test operating Systems Software, coordinating with applications
personnel and End-Users.
In implementing changes, upgrades, or enhancements to the
PacifiCare Software environment, Supplier shall observe the
Change Management Procedure and shall perform installation
planning, product installation, testing and verification. In
addition, Supplier shall, for any Software changes, upgrades, or
enhancements proposed to PacifiCare advise PacifiCare of any
additional Equipment, LAN, environmental, etc. requirements
observed during integration testing and/or otherwise known to be
necessary for implementation of the changes, upgrades or
enhancement. Supplier shall also:
Demonstrate compliance with PacifiCare Corporate Information
Technology Architecture and Technical Standards, if applicable,
and as may be revised by PacifiCare from time to time.
Demonstrate compliance with data security policies and standards
as required hereunder.
Supplier shall be responsible for network Software, [...***...]
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[...***...].
Provide installation of department or End-User-specific Software
as requested by PacifiCare. Supplier shall periodically (at
least monthly) report to PacifiCare the installation of such
Software.
Supplier shall provide support, advice and assistance to
End-Users for Software for which Supplier is responsible
hereunder.
[...***...].
[...***...].
Negotiate site license for network Software.
Answer level 2 and 3 Software questions and problems. The Help
Desk shall answer all level 1 support questions and problems.
10. REGULATORY CHANGES:
SUPPLIER'S SOLUTION DESCRIPTION:
As part of the ongoing management of PacifiCare's overall
network services environment, [...***...].
As part of this process, Supplier shall:
[...***...]
Evaluate and recommend options for responding to the changes
Perform required voice network modifications by managing
PacifiCare's local and long distance as well as Equipment
service providers
Any large-scale network changes that are required [...***...]
shall be handled and managed on an individual project basis.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
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Supplier shall identify, evaluate and recommend network
modifications as required to maintain compliance with local, regional
and international regulatory changes applicable to telecommunications.
Supplier shall perform, if requested by PacifiCare such network
modifications and shall be responsible for performing such network
modifications within proposed timeframes. Where third party suppliers
must make modifications to their service or technology platform to
achieve compliance, Supplier shall upon PacifiCare's request, and
oversee these activities, and verify that they are performed within
acceptable timeframes, and provide progress reports to PacifiCare at
regular intervals. Supplier's responsibilities to regulator change
Services shall include the following:
Stay current on emerging governmental regulations.
11. TELECOMMUNICATIONS BILLING AND FINANCIAL ADMINISTRATION:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall work with PacifiCare during the Transition
Period to understand PacifiCare's specific requirements, processes, and
procedures that are in place; and the number of invoices that
PacifiCare manages at this time. Once this has been accomplished,
Supplier shall work with PacifiCare management to establish and provide
the required processes and procedures for Supplier to follow in
handling these bills. [...***...].
As part of transition, Supplier shall review the existing
leased circuits, and work with PacifiCare to determine requirements for
consolidating the billing of leased circuits.
[...***...]. During the Transition Period Supplier shall set
up a process that is consistent with the PacifiCare requirement for the
administration and payment of these bills.
[...***...]. Supplier shall also advise PacifiCare of any
known fraudulent billing caused by improper calling or abusive use of
telephone Equipment or the network.
Supplier shall not be responsible for any charges caused by
fraudulent calling by PacifiCare.
Supplier shall maintain a database that shall include all
information relating to the PacifiCare Service Locations. Supplier
shall do the following:
[...***...]
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[...***...]
TELECOMMUNICATIONS FINANCIAL REPORTS
Supplier shall maintain all invoice information in a database.
[...***...]. Supplier shall provide exception reports.
Using Supplier's vendor, Supplier shall review [...***...].
PACIFICARE'S FUNCTIONAL REQUIREMENT:
If requested by PacifiCare, Supplier shall establish and
follow telecommunications procedures, including receipt of invoices,
verification of charges by PacifiCare Service Location, research and
resolution of billing discrepancies, preparation of internal chargeback
documents and electronic files for accounting and preparation of
invoices for approval and payment. Supplier shall support the
technology chargeback process within PacifiCare by providing all
necessary information to support usage/demand based technology
charging. Supplier's responsibilities to billing and financial
administration Services shall include the following:
Consolidate billing for leased circuits utilizing existing
PacifiCare tools.
Provide information to support PacifiCare chargeback system.
12. TOLL / LINE CHARGES:
SUPPLIER'S SOLUTION DESCRIPTION:
The initial plan for the provisioning of telecommunications
services shall be through the current PacifiCare carriers using the
agreements that are in place.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
PacifiCare currently receives an aggressively discounted rate
for toll service, frame relay, ATM, and dedicated line facilities from
telecommunications carriers. The Supplier may elect to provide these
services on its own or through a third party telecommunications
carrier, provided that there is a benefit to PacifiCare. Due to the
agreements already in place, the Supplier may continue to provide toll
service, frame relay, ATM, and dedicated line charges through
PacifiCare's agreements on a pass through basis with the mutual
agreement of PacifiCare. Other Supplier responsibilities include:
Review long distance charges.
Review and report abuses of long distance services.
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13. PREMISE VOICE SYSTEMS:
SUPPLIER'S SOLUTION DESCRIPTION:
During the Transition Period, Supplier shall work with
PacifiCare to understand the processes and procedures in place to
support premise voice systems. During the Transition Period and during
the Term and Termination Assistance Period, [...***...].
Supplier's Help Desk solution for PacifiCare results in a
single-point-of-contact (SPOC). The SPOC shall provide support for voice
service and trouble requests from End-Users who are calling on behalf of
the employees as defined by PacifiCare. For example, these callers may
be reporting a repair problem, requesting a change in their phones or
features, or requesting information on the use of a feature or new
technology.
Supplier shall manage maintenance and installation activities,
including changes on these systems. This shall include managing the
process to complete the IMACs. PacifiCare shall be responsible for
charges incurred with these vendors and for any New Equipment. Supplier
shall respond to all IMAC work orders and shall submit them to the
appropriate vendors for work order completion.
[...***...]
Supplier shall manage the maintenance, [...***...].
Supplier shall help evaluate site improvements and system
replacements based on a cooperatively developed priority list. System
replacements shall be approved and paid for by PacifiCare.
Supplier shall manage the [...***...].
Supplier shall interface with all telecom vendors [...***...].
The Supplier voice team shall help PacifiCare evaluaTe new technologies
from the perspective of solving business problems, not changing
technology for its own sake. [...***...].
Supplier shall work with the required personnel to continue
support of PacifiCare's voice response systems environment.
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Division of responsibilities between the Supplier and
PacifiCare is described in the following table:
--------------------------------------------------------------
SUPPLIER PACIFICARE RETAINED
--------------------------------------------------------------
ASPECT ACD [...***...] [...***...]
--------------------------------------------------------------
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall be responsible for the planning,
installation and maintenance of all premise voice systems.
[...***...]. Other Supplier responsibilities include:
Plan, implement, and administer voice systems [...***...].
[...***...].
Manage and maintain voice mailboxes.
Manage cellular phone assets and third party providers.
Manage calling card providers.
Administer calling card distribution.
Manage pager assets and third party providers.
[...***...].
[...***...].
Document changes to the Network topology during the Term and
during the Termination Assistance Period as the Network changes
as a result of change activities;
[...***...];
Plan Voice Systems and transport provisioning [...***...].
Perform the following Voice Systems and transport order
management functions: ordering, installation, scheduling,
tracking, delivery and acceptance
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Use existing tools and processes to perform capacity planning
for the voice Components and voice transport as requested by
PacifiCare.
Notify PacifiCare of unusual traffic patterns.
Use existing tools and processes to provide PacifiCare with
reports as agreed upon on performance trends.
[...***...].
Identify capacity related troubles [...***...].
Develop recommendations to resolve capacity related troubles;
Provide PacifiCare with timely notification of performance
related troubles.
For remote system maintenance, PacifiCare shall provide, as
mutually agreed and at its expense, telephone lines [...***...].
14. WIRELESS TELECOMMUNICATION:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall work with PacifiCare to project manage the
[...***...] pilot project for wireless electronic mail AND pager
communications. This project is currently being managed by PacifiCare
voice head count, which shall be transferred to Supplier for voice
support. Supplier would use in-scope resource to continue management of
this project.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Support covers engineering, design, procurement, programming,
burn-in, installation, preventative maintenance, and upgrades for the
following: hand-held radios, mobiles (including trunked), radio
repeaters, associated Equipment (antennas, coax, duplexers, combiners,
power supplies, etc.), peripherals (batteries, chargers, microphones,
etc.), etc. Other Supplier responsibilities include:
Provide wireless communication engineering and design.
Procure, at PacifiCare's expense, install and maintain wireless
communication Equipment and Peripherals (batteries, chargers,
etc.).
Program wireless communication Equipment.
Perform burn-in of wireless communication Equipment.
Provide preventive maintenance on wireless communications
Equipment
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Comply with RF regulations.
Perform maintenance on connecting Equipment (antennas, coax,
duplexers, combiners, towers, etc.)
15. AUDIO AND VIDEOCONFERENCING:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall [...***...]. The Supplier needs to understand
PacifiCare's current processes and procedures for auDIo and video
conferencing support. This would need to be accomplished during the
Transition period.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
On a daily basis, Supplier shall be responsible for the
availability and functionality of all Video Conference Equipment.
Supplier's responsibility shall include call set-up, testing, and
implementation of changes, bridge operation, problem determination,
repair dispatch, and escalation of problems. Over the Term and during
the Termination Assistance Period, as applicable, and with PacifiCare's
approval, Supplier shall recommend automated procedures to improve on
the processes in place as of the Cutover Date and implement these
procedures as approved by PacifiCare. Supplier responsibilities to
provide Video Conference services shall include:
Interface and assist with all End-User requests for scheduling
facilities, support, or any special needs including premises
testing, public conference room assistance, or help with adjunct
conference Equipment. [...***...]. SupplIEr shall provide user
training as appropriate and approved by PacifiCare.
To the extent available from the current systems, provide
monthly utilization reports showing usage by location.
Coordinate with PacifiCare's videoconference scheduler personnel
and performing the following: call set-up, testing, monitoring,
first level problem determination and repair dispatch for the
videoconferencing network. Equipment and connectivity testing,
using testing procedures, shall be performed on a daily basis to
validate that the individual video components are working
correctly.
Provide capacity planning, traffic analysis (to the extent
traffic analysis data is available from the current
videoconferencing systems), interfacing with third party video
suppliers and providing the services of a videoconferencing
operations team. This shall include engineering design/support,
managing second-level problem determination, providing on-site
support to supervise and support Video Conferences,
coordination, testing, problem management policies and process,
documentation of new or changed procedures and installation of
vendor supplied fixes to video problems.
Set up and monitor network bridge.
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Perform daily testing.
Dispatch repair teams.
Perform engineering and design support for
audio/videoconferencing.
Manage third party product suppliers.
Perform daily operations of audio/videoconferencing Equipment.
Perform maintenance and problem management to ensure all
videoconference rooms are fully functional on a daily basis.
Schedule audio and videoconferences.
During transition, the Supplier shall document PacifiCare's
processes, procedures, tools in place, and staffing for video
and audio conferencing support. [...***...].
16. NETWORK ADMINISTRATION:
SUPPLIER'S SOLUTION DESCRIPTION:
During the Transition Period, Supplier shall work with
PacifiCare to understand the network administration environment. This
includes PacifiCare's specific requirements, tools, processes, and
procedures currently in place for support of network administration.
Once this is completed, Supplier shall support network administration;
[...***...].
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall administer all network requirements and
activities including processing change requests, administering
passwords, monitoring performance, and supplier invoices. The Supplier
shall administer the issuance and tracking of calling cards for
PacifiCare. Other Supplier responsibilities include:
Perform Data Network Software upgrades.
Administer passwords.
Perform weekly back up. [...***...]
Monitor performance.
Perform capacity management.
Monitor and test Private Lines.
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Interface with third party suppliers.
[...***...].
Perform trunk testing.
Coordinate home access.
Administer remote access card distribution.
17. TOLL FRAUD:
SUPPLIER'S SOLUTION DESCRIPTION:
During the Transition Period, Supplier shall work with
PacifiCare to understand the current toll fraud environment. This shall
include PacifiCare's specific requirements and the tools, processes,
and procedures that are currently in place for monitoring toll fraud.
Once this is completed, Supplier shall continue monitoring toll fraud
at the current levels.
[...***...]. These service providers design their networks to
reduce the fraudulent use of the services they provide to PacifiCare,
including:
- Outbound long distance
- Inbound toll-free
- Calling card
[...***...]
The fraud protection program shall include Supplier's management
of monitoring and reporting for the following:
[...***...]
The Supplier fraud protection program shall include the
following:
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[...***...]
Due to the fact that Supplier does not know the capabilities of
all of the switches, which are in place at PacifiCare Service
Locations, and to what extent toll fraud can be limited,
[...***...].
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall monitor toll fraud. Investigations shall
occur whenever PacifiCare exceeds a threshold and is made aware of this
by the long distance supplier. Escalation within PacifiCare shall occur
based upon existing standards. [...***...]. Other Supplier
responsibilities include:
Monitor toll usage.
Monitor and report on calling card usage.
Report toll abuses.
18. PHONE DIRECTORIES:
SUPPLIER'S SOLUTION DESCRIPTION:
During the Transition Period, the Supplier team shall work
with PacifiCare to understand the current systems, tools, processes,
and procedures in use to support the PacifiCare online directory
application. Once this has been accomplished, the Supplier team shall
maintain the current online directory as it is currently being
supported. [...***...]. In order to maintain the online directory, the
Supplier team shall require that the necessary PacifiCare demographic
and HR information be supplied in an electronic form via a programming
interface or similar mechanism. As part of the process of maintaining
the online directory, the Supplier team shall require PacifiCare to
validate the accuracy of the directory information being supplied.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The supplier shall provide daily updates to the directory
database for access through the PacifiCare Intranet. Other Supplier
responsibilities include:
Perform directory updates and support the HR [...***...]
interface.
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19. EQUIPMENT SUPPORT:
SUPPLIER'S SOLUTION DESCRIPTION:
During the Transition Period, Supplier shall work with
PacifiCare to understand the current systems, tools, processes, and
procedures that support the compatibility and reliability of
connectivity products. [...***...].
Supplier shall review PacifiCare's current telecommunications
related databases and bills, as well as the procurement of customer
service records (CSRs) from all telecommunications service providers
for all locations. [...***...].
[...***...]. The plan shall establish relationships and
monitor service level agreements (SLAs) with current solutIon
administration service providers.
Supplier shall cooperate with existing vendors to optimize the
voice infrastructure at PacifiCare Service Locations.
STEADY STATE
The established telecommunications services baseline shall be
managed by Supplier at a central PacifiCare Service Location. All
telecommunications services shall be reviewed against the
telecommunications baseline, approved by the Supplier billing
specialist, and presented to PacifiCare Accounts Payable for payment to
the telecommunications service providers. Supplier shall implement a
centralized Change Management Procedure, and be responsible for
ordering and terminating all telecommunications services. The
centralized Change Management Procedure shall enable Supplier to
maintain the telecommunications baseline on an ongoing basis. The
telecommunications baseline shall allow Supplier to create trend
reports for monitoring the misuse of long distance services.
Supplier shall research new offerings to identify the quality
of proposed products and services from existing vendors.
In addition, Supplier shall project manage each system change
out and shall monitor the testing and early working state of new
systems.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall be responsible for all network Equipment.
Supplier shall interface with other PacifiCare suppliers to insure the
compatibility and reliability of connectivity products. The Supplier
shall be responsible for preventive maintenance and shall supply a test
plan and conform
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to all existing change management policies and procedures before
implementation including a complete fallback scenario. Other specific
Supplier responsibilities include:
Plan installation of network and environmental Equipment.
Support and train account staff on New Equipment and scheduling
installation.
Resolve Equipment-related problems.
Interface with Equipment Suppliers for planning and problem
resolution.
Monitor Equipment leases.
Perform regular maintenance on network Equipment.
20. ELECTRONIC DATA INTERCHANGE (EDI):
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall manage PacifiCare's existing network
connectivity for EDI services, [...***...].
Electronic EDI transmissions, both to and from external
Trading Partners, shall be [...***...] scripting shall be developed and
maintained by the EDI application team. Where appropriate, magnetic
media and diskettes shall be received at a centralized location.
Supplier understands that currently most tapes and diskettes are
received by the IDC. Supplier shall review this process and suggest
changes to enhance data security and integrity. [...***...]. Some
diskettes may be handled by PacifiCare's Regional EDI teams.
[...***...]. Data translation shall be done by a standard
translation Software package. This function, as well as all Trading
Partner Communications, shall be the responsibility of the Regional EDI
departments. [...***...]. Maintenance Of the scripts that move this
data to and from the transaction applications is the responsibility of
the application support teams.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall process all Electronic Data Interchange
(EDI) tapes and communications. This includes sending/receiving data
to/from Value Added Networks (VANs), direct connects and other regional
PacifiCare EDI processing centers, [...***...]. Other Supplier
responsibilities include:
Process EDI tapes.
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Manage bandwidth and line speeds for effective EDI transfers.
21. CIRCUIT AND TRANSPORT COSTS:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall act as PacifiCare's agent to obtain
long-distance in-bound/out-bound telephone service, credit card
services, 800 services, and cellular phones. As such, Supplier shall
monitor Supplier staff to preclude toll charges unrelated to provision
of Services and also obtain:
Long-distance in-bound and out-bound telephone service.
Credit card services.
800 services.
Cellular phone services.
Pager services.
22. HOURS OF OPERATION:
ALL SYSTEMS OPERATION FUNCTIONS OF THE SERVICES DESCRIBED IN THIS
SECTION SHALL BE PROVIDED 24 HOURS PER DAY, 7 DAYS PER WEEK AS
APPROPRIATE (EXCEPT FOR SCHEDULED MAINTENANCE WINDOWS AND NON-SCHEDULED
MAINTENANCE WINDOWS AGREED TO IN ADVANCE BY PACIFICARE).
D. DISTRIBUTED COMPUTING:
1. GENERAL:
As of the Cutover Date, Supplier shall assume responsibility
for the operation, management and support of PacifiCare's Distributed
Computing and LAN environments, including [...***...]. Supplier shall
participate in and support PacifiCare's project management and
technology planning and management operations.
2. END-USER SUPPORT:
SUPPLIER'S SOLUTION DESCRIPTION:
The Help Desk shall be Supplier's single-point-of- contact
(SPOC). This Help Desk shall be the primary focal point for
PacifiCare's End-Users to access all services provided by Supplier,
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whether from Campus, Remote, or home office locations. These calls
include proprietary applications, voice, data, problems, and requests,
as required.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall utilize a [...***...]. Supplier's
responsibilities to provide End-User support Services shall include the
following:
Monitor system operations (24x7) and provide appropriate
response to problems and continue support through resolution as
required to meet scheduled availability.
Provide problem management, including second-level support
through the Help Desk and dispatch of support specialists to the
End-User location as necessary to identify and resolve problems.
Perform maintenance on Equipment and Software as necessary for
the Equipment and Software to operate in accordance with its
specifications
Supplier shall perform trouble shooting in the appropriate
manner to effectively identify the problem and its scope.
[...***...].
Manage Supplier subcontractors responsible for problem
resolution.
Provide support for End-Users (including End-Users who are
traveling or remotely accessing LAN-based services or a
non-connected site), including access to the Help Desk second
level technical support.
Provide End-User support and problem resolution for standard
(approved list) and non-standard Software as defined in Schedule
14.2(a) and 14.2(b).
Coordinate with Managed Agreements suppliers to resolve
Equipment and Software problems.
[...***...]
3. INSTALLATION AND REMOVAL:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall provide the requested Services as defined via
the Supplier IMAC processes/services detailed in Schedule 17 of the
Agreement. Supplier shall coordinate LAN cabling and wiring projects.
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PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall deploy new file servers, print servers,
infrastructure Equipment and related Software as required under the
Agreement. [...***...]. Supplier shall configure the Equipment within tHe
pre-defined technology standards for the business, transport the Equipment
to the location where it shall be installed, coordinate with the
appropriate departments (internal. and/or external to PacifiCare) to
validate that proper network connectivity is obtained, install the
necessary Software and Data, test the Equipment after implementation to
include file open and print routing capabilities, install/connect
associated Peripherals, implement an appropriate backup mechanism and
coordinate the installation with the designated PacifiCare personnel.
Supplier shall affix an asset identifier tag to the asset and enter the
asset management information as described in Section H.27, Asset Inventory
Management and Maintenance, of this Statement of Work. Supplier's
responsibilities for installation and removal shall include the following:
[...***...].
[...***...].
[...***...].
4. INFRASTRUCTURE MAINTENANCE:
SUPPLIER'S SOLUTION DESCRIPTION:
As of Cutover Date, the Supplier shall be responsible for the
performance of the following activities:
- Supplier shall keep the Software current [...***...] based on
PacifiCare standards.
- As part of the problem management process, if a Software
problem is detected in one area of the Enterprise that may be
applicable to others, Supplier shall work with PacifiCare to
schedule Software fixes to all appropriate copies of that
Software in an effort to avoid future issues. [...***...]
- Supplier shall monitor the distributed computing
infrastructure to keep track of problems within it. Through
monitoring, [...***...]
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[...***...]. The physical cable plant can be monitored BY analyzing
LAN capacity and performance. Non-intelligent hubs can be monitored
by checking for devices on either side of the Hub.
- Supplier shall use [...***...] for the LAN/Desktop distributed
computiNg environment that shall aid in problem identification
and resolution activities.
- Supplier shall provide PacifiCare with Equipment maintenance
services. Equipment/Break/Fix problems shall be logged by the
Help Desk and an Supplier dispatch/coordinator shall schedule
with PacifiCare user.
- During the Transition Period, Supplier shall work with
PacifiCare to identify and document the mix of Software
products and versions currently running within the
organization. Following this data collection process, Supplier
shall work with PacifiCare to define a subset of those
products that shall form the approved list of Software
products and shall be documented in Schedules 14.2(a) and
14.2(b).
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall recommend solutions and implement mutually agreed
upon processes and procedures to improve the efficiency and reliability of
the Distributed Computing and to optimize the overall infrastructure and
to monitor network/server/workstation parameters. Supplier shall be
responsible for correction of Distributed Computing problems resulting
from malfunctions in system Software and/or Equipment. [...***...].
Supplier's responsibilities for installation and removal shall include the
following:
Coordinate maintenance services for network LAN server wiring with
Managed Agreement.
Providing maintenance services for user Equipment wiring.
Analyze expected life of the Equipment versus technology
refresh.
5. EQUIPMENT MAINTENANCE AND SUPPORT:
SUPPLIER'S SOLUTION DESCRIPTION:
Through the problem determination process, the Help Desk agent shall
determine support required for the Equipment. A ticket shall be opened by
Supplier and a Supplier technician dispatched to the End-User's location.
The technician shall contact the End-User and verify the
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problem through documented processes and available tools. When necessary,
the technician shall coordinate a visit to the End-User's workstation to
resolve the problem. After problem resolution, the technician shall
complete the problem ticket and update its status.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall provide maintenance for Equipment for which Supplier
is otherwise responsible hereunder as necessary to keep such Equipment in
good operating condition and in accordance with manufacturer's
specifications or other agreements as applicable, so that such Equipment
shall qualify for the manufacturer's standard maintenance plan upon sale
or return to a lessor. [...***...]. Such maintenance shall be performed
in accordance with the Change Management Procedures, so as to minimize
the disruption to PacifiCare's normal business processes. Supplier's
responsibility for such functions shall also include the following:
Supplier shall manage the third party service providers that provide
support.
With respect to distributed Equipment for which Supplier is
otherwise responsible hereunder, Supplier shall provide break/fix,
support, advice and assistance to End-Users. Supplier shall correct
all problems associated with failure or maintenance of such
Equipment. Supplier shall install PacifiCare-supplied upgrades for
such distributed computing-related Equipment at the Service
Locations. Supplier shall maintain a level of documentation that
reflects the complexity and diversity of the environment and
facilitates the Equipment support process.
Supplier shall be responsible for coordinating rollouts and upgrades
of Equipment. Supplier shall be responsible for coordinating any
testing, scheduling, and installation integration of these products.
Supplier shall also perform full testing after installation and
provide proper back-out procedures. If installation occurs after
hours, Supplier shall also make available on-site support the next
working business day in order to provide the necessary support.
Supplier shall procure in accordance to the Change Control
Procedures or Change Management Procedures as appropriate (if
requested by PacifiCare), install and maintain Equipment,
Peripherals, file servers, gateways, and network / communications
Equipment. With respect to Equipment connected to the network,
Supplier shall maintain Equipment, Peripherals, file servers, and
gateways.
[...***...].
Supplier shall maintain an effective inventory of all spare parts
and Equipment used to support the Equipment for which Supplier has
maintenance responsibility, and track such inventory in an inventory
management database system. This inventory shall be adequate to
allow Supplier to meet or exceed the Service Levels.
Supplier shall perform in scope operations required to support the
cascading of Equipment associated with providing the Services
throughout PacifiCare's operations in accordance with the Refresh
Schedule. [...***...].
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[...***...]
Supplier shall monitor and report on Equipment leases to the extent
the current lease information is supplied by PacifiCare.
6. SOFTWARE SUPPORT:
SUPPLIER'S SOLUTION DESCRIPTION:
The Supplier team's Software support is initiated through the
single-point-of-contact (SPOC) Help Desk.
As necessary, the Supplier's or PacifiCare's level 2 Software
support technicians shall be engaged if more in-depth support is required.
[...***...] for support of in-scope PacifiCare developed applications. If
there are [...***...] from PacifiCare, as these shall be borne by
PacifiCare.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall provide infrastructure support including level 1
Help Desk for PacifiCare Software, distributed computing productivity tool
development, NOS support for all environments, server-based application
support, and computing Software infrastructure support (e.g., shared
resources, menu systems, etc.). Supplier's responsibilities for Software
support include the following :
Provide Software support and install third-party supplied
corrections for third party Software problems, install third party
provided Software patches as required. Provide support for
PacifiCare Software, distributed computing productivity tools, NOS
(Network Operating System) support and firmware for all Services,
server-based application support, and computing Software
infrastructure support (e.g., shared resources, menu systems, etc.).
With respect to PacifiCare-developed applications, this shall
include installing upgrades, distributing Software and providing
first level support from the Help Desk.
Install Software for which Supplier is responsible according to the
applicable specifications as well as PacifiCare Standards.
To the extent enabled by the PacifiCare-approved enterprise
management system provided by Supplier, define and check for
particular Software signatures, to monitor the use of Software
developed by the applications development and maintenance group, and
to check the presence and version of Software present on a
particular device.
[...***...].
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Coordinate any testing, scheduling, or systems integration on the
Supplier-controlled systems of PacifiCare Software, which have been
unit tested but not integration tested. Supplier shall coordinate
rollouts and upgrades and provide proper back-out procedures of all
Supplier- introduced third party Software as well as for all
upgrades and new releases of any internally developed applications.
Supplier, with PacifiCare's cooperation, shall fully test the
applications before rollout.
Recommend appropriate methods and tools to improve and increase
automation in PacifiCare's distributed computing environments, and
work with PacifiCare to research, evaluate and implement such tools
and methods. Supplier shall utilize productivity tools, utilities,
and create batch file.
Maintain master copies of the PacifiCare Standard Software suite in
a secure, central location.
Support PacifiCare Software.
Support the network operating system and server-based applications.
Develop productivity tools and utilities.
Test for compatibility between third party products and LAN NOS.
Coordinate and implement application rollouts and /or upgrades of
PacifiCare Software. This includes: documentation of application
roll-out in change control system, coordination of proper testing
for given environment, scheduling implementation times and on-site
support after the release has been accomplished.
7. SOFTWARE CURRENCY, REFRESH, AND RELEASE CONTROL:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier's responsibilities shall include installing, maintaining,
upgrading and supporting all distributed systems Software including
firmware. Supplier shall interface with third party suppliers to promote
compatibility of such distributed systems products. Supplier's
responsibilities to provide Software currency Services shall include the
following:
Unless otherwise directed by PacifiCare, Supplier shall install,
maintain and upgrade Software for which Supplier is otherwise
responsible hereunder so that such Software remains within one
generation of the current release and remains on a supported
release. Prior to the start of each calendar quarter, Supplier shall
give notice to PacifiCare of all upgrades of Software that are
planned to occur in the quarter for which notice is being given. The
Parties shall mutually agree on the timing for implementation of
upgrades.
Coordinate, test, install and support Systems and systems program
products.
Test operating Systems Software, coordinating with Application
Supplier and End-Users.
In implementing changes, upgrades, or enhancements to the PacifiCare
Software environment, Supplier shall observe the Change Management
Procedures and shall perform installation planning, product
installation, testing and verification. In addition,
73.
Supplier shall, for any Software changes, upgrades, or enhancements
proposed to PacifiCare advise PacifiCare of any additional
Equipment, LAN, environmental, etc. requirements observed during
integration testing and/or otherwise known to be necessary for
implementation of the changes, upgrades or enhancement. Supplier
shall also:
Adhere to PacifiCare Corporate Information Technology Architecture
and Technical Standards, if applicable.
Adhere to data security policies and standards as required
hereunder.
In the telecommunications environment for which Supplier is
responsible, Supplier shall be responsible for network Software,
including those Software products required for connectivity.
Supplier shall interface with other PacifiCare suppliers to promote
compatibility of connectivity products, and shall manage the
subcontractors that provide Software support to network products for
which Supplier is otherwise responsible hereunder. Unless otherwise
directed by PacifiCare, Supplier shall manage its upgrades to be at
the current level or one generation below the current level for each
Software component for which Supplier is responsible, provided that
such components that are at such level as of the Effective Date
shall, at PacifiCare's option, be upgraded to that level of
currency.
Provide installation of department or End-User-specific Software as
requested by PacifiCare. [...***...].
Supplier shall provide support, advice and assistance to End-Users
for Software for which Supplier is responsible hereunder.
[...***...].
To the extent enabled in the PacifiCare approved enterprise
management system provided by Supplier, Supplier shall monitor use
of licensed Software, including license metering and tracking.
8. OPERATIONS SUPPORT FOR NEW SERVICES:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall interface between the groups implementing changes
and the production support function in accordance with the Change
Management Procedures, assuring compliance with standard documentation,
necessary scheduling, and orderly turnover. Supplier's responsibilities
for operations support for New Services shall include:
Obtaining approvals of production testing and installation
timetables from designated PacifiCare representatives.
* CONFIDENTIAL TREATMENT REQUESTED
74.
Develop comprehensive operational documentation.
Facilitate orderly turnover for Distributed Systems and applications
to include developing fallback procedures.
Support for the introduction of new Platforms and applications in
accordance with the Change Management Procedures: [...***...].
Interface between the groups implementing changes and the production
support function and designated PacifiCare support groups.
Facilitate orderly turnover for servers and applications to
designated PacifiCare representatives.
Maintain documentation standards, task lists and run sheet updates.
Inform all affected operations staff and designated PacifiCare
representatives of changes to the environment.
Provide project management and technical expertise to optimize
available resources.
Provide coordination and integration of New Services.
9. SERVER OPERATIONS:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall implement a standard set of tools across the LAN
server environment that shall allow for server up/down monitoring (24x7),
performance and capacity management, and remote control. This standard
toolset shall be based on the [...***...], which ties into the Help Desk
process for sending system status and error alerts.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall be responsible for server operations Services. The
Supplier shall assume all LAN server operations responsibilities. This
includes monitoring all LAN processes, alarms, environmental controls, and
transmissions/reception of polling information to and from outside
organizations. [...***...]. Supplier's responsibility for server Services
shall include the following:
Maintain PacifiCare-supplied spare servers to be properly
configured, fully functional and operationally ready for use when
needed.
* CONFIDENTIAL TREATMENT REQUESTED
75.
Install new LAN Equipment (including the LAN and file servers) based
on a PacifiCare-specified refresh cycle and Software, as requested
or approved by PacifiCare. [...***...].
Maintain, install upgrades, configure and fine-tune LAN network
operating system Software.
Repair problems in a manner consistent with the problem management
process and provide repair and performance reports.
Install PacifiCare-provided backup server, gateway, tape, disk and
other Equipment required to maintain a LAN support level as
necessary to meet PacifiCare's business requirements and in
accordance with applicable Service Levels.
Update and maintain shared-use file server libraries of PacifiCare's
DOS, Windows, and NT Software.
Install and provide operational support for PacifiCare's standard
office applications Software as [...***...].
Install and support sufficient data storage and processing capacity
provided by PacifiCare to facilitate the use of such applications
Software.
To the extent enabled by the PacifiCare-approved enterprise
management system provided by Supplier, monitor use of licensed
Software, including metering and license tracking.
[...***...].
Provide routine administrative services, such as End-User and print
queue setup, print table setup, rights, administration and password
administration, to enable shared use of departmental data and
applications.
Audit LAN file server rights and privileges on at least a quarterly
basis, and report the results to PacifiCare. Supplier shall
facilitate audits by PacifiCare's internal and/or external auditors.
Assist individual departments and End-Users in lost or damaged file
recovery from the file server backups, if the End-User's backup is
corrupted or unavailable. Reset, or, with respect to Service
Locations where Supplier is not obligated to provide on-site
personnel, assist PacifiCare's on-site staff to reset, security
passwords for End-Users according to security procedures approved by
PacifiCare.
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
76.
Deploy new distributed computing and LAN services, on a project
basis, including providing Services to support distributed computing
environment initiatives, remote computing, and Internet / Intranet
usage.
Continue automating the operational environment in an effort to
reduce errors and increase efficiency. Supplier shall cooperate with
PacifiCare to research and implement automated tools to improve
Service Levels and/or performance of the distributed computing
environment. Tool selection shall be influenced by PacifiCare
standards and technical direction. [...***...].
Maintain and update the operational documentation for in scope
operations procedures and services.
Proactively prepare for user deadlines per customized user
requirements.
Operate contingency servers at contingency sites and support
contingency tests.
Provide node/host information to Suppliers, check and reset ports.
Reset modems.
Perform LAN traffic measurements.
Interface with other networks and Suppliers to provide problem
resolution.
Analyze and correct in scope distributed computing and/or LAN
problems.
Develop tools and processes to provide automated systems management.
Provide remote control Software distribution.
SYSTEMS MANAGEMENT:PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall develop tools and processes to allow automated
and remote systems management of the distributed computing environment.
Processes shall include Software distribution, backups, performance
measurement, tuning, license and asset management, etc. The Supplier may
adopt/adapt any of PacifiCare's existing management tools. The Supplier
shall maintain servers, as well as monitor for and control Viruses.
Supplier's responsibility for systems management Services shall include
the following:
Consistent with the Transition Plan and during the Term and during
the Termination Assistance Period, evaluate (when requested)
implement and maintain tools and processes for automated and remote
systems management and restoration of LAN servers and client
distributed computing machines. [...***...]
* CONFIDENTIAL TREATMENT REQUESTED
77.
[...***...].
Measure LAN traffic and make load-balancing recommendations.
Install, update, operate and maintain Virus protection
Software as described in the Section H.19, Virus Protection of
this SOW.
Provide level two and three network management support.
Provide technical assistance on communication protocols and systems.
Monitor in scope network devices, including file servers, bridges,
and communications servers.
Provide tuning to improve performance and utilization.
10. ADMINISTRATION AND DOCUMENTATION:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall establish and then maintain documentation, with
PacifiCare's concurrence.
During the Transition Period, transfer of knowledge relating to
procedures that are specific to PacifiCare shall be merged with current
Supplier procedures and then documented for use in support of PacifiCare.
[...***...]. During this time Supplier shall also produce documentation
that shall detail the processes for [...***...].
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier is responsible for supporting in scope aspects of
administration and documentation for the distributed computing
environment. This includes ID and password administration for the LAN,
electronic mail and applications environment, setting up new user accounts
and groups with appropriate security access, synchronizing electronic mail
accounts, assigning/resetting passwords, modifying accounts, deleting
accounts, and assigning and maintaining network addresses. Supplier's
responsibilities for administration and documentation shall include the
following:
Perform LAN administration functions, including: development,
establishment, installation, and maintenance of directories,
directory structures and naming conventions; purging records, file
and old user accounts, as appropriate, and restoration of deleted
files upon PacifiCare's request.
Perform user-ID administration for the LAN, electronic mail, and the
database applications and applications environment for which
Supplier is otherwise responsible hereunder, setting up of new user
accounts with appropriate security access, synchronization of
* CONFIDENTIAL TREATMENT REQUESTED
78.
electronic mail accounts, assigning/resetting of passwords,
modification of accounts, deletion of accounts, the dial-up access
to the LAN, and assignment of IP addresses.
As soon as practicable, create and maintain reasonable documentation
for in scope applications and End-User procedures that affect
operations.
Support in-scope network operations functions, [...***...].
Perform in-scope network administration and documentation functions,
[...***...].
Interface between the groups implementing changes and the production
support function, to support compliance with standard documentation
processes and orderly turnover.
Maintain and update on an on-going basis, and deliver to PacifiCare,
in-scope network Equipment inventories, logical topology diagrams,
and other network documentation and information.
Maintain a comprehensive network management cross-reference
database.
Manage, prioritize and coordinate improvement initiatives throughout
the technology organization so that they are consistent, achievable
and are not competing for scarce resources.
11. DISASTER RECOVERY SERVICES:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Refer to same named section in the Cross Functional Services portion
of this SOW.
12. MEDIA OPERATIONS AND ADMINISTRATION:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall leverage as much of the current PacifiCare investment
as possible regarding the processes, tools, and procedures PacifiCare uses
to perform off-site removable data storage media responsibilities. In
addition, Supplier shall [...***...].
The media library processes and procedures at PacifiCare or Supplier
locations shall be conducted in accordance with required security and
audit controls and shall comply with the specific regulations for media
management.
* CONFIDENTIAL TREATMENT REQUESTED
79.
Reports of off-site removable data storage media shall be produced
[...***...], as mutually agreed to by PacifiCare and Supplier. [...***...]
informing PacifiCare of its off-site removable data storage media,
Supplier shall use the respective tools of the vendor tape storage
products to produce reports.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall assume in scope media management system, and
media library operations responsibility. The Supplier shall be responsible
for operating and supporting a media management system, media library
operations, shipping and receiving media to and from off-site facilities.
The Supplier shall assume operational and financial responsibility for
off-site media storage, [...***...]. Other specific Supplier
responsibilities include:
Respond to media mount requests.
Maintain integrity of media library system.
Monitor media Equipment for malfunction.
Monitor media usage.
Perform daily media Equipment maintenance.
Prepare and mail media.
Initialize new media.
Perform backups and restores.
Execute off-site storage procedures.
Define off-site storage requirements.
Coordinate off-site storage functions.
Comply with physical specifications, retention periods, and
security.
Review compliance with physical specifications, retention periods
and security.
Assure compliance with PacifiCare or government requirements.
13. ORDER FULFILLMENT:
Refer to same named section in the Cross Functional Services portion
of this SOW.
14. TECHNOLOGY (EQUIPMENT) REFRESH:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
* CONFIDENTIAL TREATMENT REQUESTED
80.
The Supplier shall refresh the distributed computing environment
according to the Refresh Schedule.
The Supplier shall deploy new distributed computing technology and
services to meet PacifiCare's business requirements as required, requested
and approved by PacifiCare on a project basis. Supplier shall perform such
technology refresh functions in accordance with the Refresh Schedule and
in general accordance with the following:
Upgrade, maintain, and support Supplier's distributed computing
Equipment.
Coordinate comprehensive technology refresh.
Deploy new distributed computing Equipment and LAN services to meet
business requirements.
Analyze emerging distributed computing and LAN Equipment.
15. STANDARD EQUIPMENT AND SOFTWARE:
SUPPLIER'S SOLUTION DESCRIPTION:
As a transition activity, Supplier shall work with PacifiCare to
define and deploy PacifiCare standard images. Images shall be maintained
by Supplier using a pool of dedicated resources to verify both their
currency and validity. Changes to the defined images shall be addressed
through the Change Management Procedures.
Supplier staff shall distribute image changes according to a
mutually agreed to Software distribution process.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall work with PacifiCare to design standard Equipment and
Software configurations for the Distributed Computing environment, and
assume responsibility for collecting necessary input from PacifiCare
personnel. The PacifiCare Standard in effect as of the Effective Date and
may be modified and amended as approved or requested by PacifiCare and
there may be more than one standard in effect at the same time. Once
approved by PacifiCare, Supplier shall document, implement and communicate
the standard throughout the supported environment. The implementation plan
shall include the necessary Supplier and PacifiCare testing and systems
integration with in-scope applications in the current environment.
Supplier shall perform such standard Equipment and Software functions in
accordance with the following:
Identify areas of non-compliance.
Evaluate new and emerging standards and business requirements.
16. LAB TESTING:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
81.
The Supplier shall be responsible for thorough testing of new
versions of Equipment and Software prior to recommending the
implementation of these products. This includes the construction and
maintenance of laboratory systems that simulate PacifiCare's production
environment. Supplier shall provide results of testing upon request.
Supplier shall perform such laboratory testing functions in accordance
with the following:
Provide laboratory environments that simulate PacifiCare's
production environment.
Provide unit testing, systems integration testing, LAN/WAN
connectivity testing, load testing and application interconnectivity
testing on new versions of Equipment and Software.
Provide a test plan for New Equipment.
17. SPARES INVENTORY:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall populate its inventory database with PacifiCare's
current Equipment and Software inventory. Supplier shall update and verify
this inventory through calls to the Help Desk (information about the end
user's workstation shall be verified), auto discovery, and the IMAC
process.
[...***...], Supplier shall use existing spare inventory, if
available.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier's responsibilities include maintaining an inventory of
spare parts for in scope Equipment (which includes printers, desktops,
laptops and servers) for which Supplier is otherwise responsible to
maintain hereunder in a quantity that is sufficient to provide replacement
Equipment and associated Peripherals as required and provide periodic
reports on same.
E. DESKTOP
1. GENERAL:
[...***...], Supplier shall assume responsibility for the operation,
management and support of PacifiCare's Desktop environment, including
PacifiCare's Desktop / Laptop PC Equipment and Software. [...***...],
Supplier shall be responsible for Services relating to Desktop
environment.
2. END-USER SUPPORT:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
* CONFIDENTIAL TREATMENT REQUESTED
82.
The Supplier shall provide services that are tailored to the
individual needs of internal clients in a Campus, Remote and home office
environment. [...***...]. Supplier's responsibilities to provIDe End-User
support Services shall include the following:
Monitor system operations and provide appropriate response to
problems and continue support through resolution as required to meet
scheduled availability.
Provide problem management, including second-level support through
the Help Desk and dispatch of support specialists to the End-User
location as necessary to identify and resolve problems.
Supplier shall provide quotes for desktop Equipment to PacifiCare
customers, as requested per specified Service Levels. Manage the
fulfillment process, including order receipt, order entry, order
procurement, order status, and reporting. Oversee the services of
the value added reseller, who, under a separate agreement, fills the
order, images the system, installs any additional Equipment or
Software and delivers the system to the customer. Supplier will
utilize current Standard technology and desktops to be replaced
according to the Refresh Schedule.
Perform maintenance on Equipment and Software as necessary for the
Equipment and Software to operate in accordance with its
specifications.
Supplier shall perform trouble shooting in the appropriate manner to
effectively identify the problem and its scope. In the event
Supplier must replace a PC in order to conduct a repair, the
Supplier shall be responsible for copying data from the hard drive
of the malfunctioning PC and updating the asset management system
accordingly.
Provide break-fix field service at the PacifiCare Service Locations
and home office environments. [...***...].
Supplier shall be responsible for problem resolution.
Provide support for End-Users (including End-Users who are traveling
or remotely accessing LAN-based services or a non-connected site),
including access to the Help Desk second level technical support.
Supplier shall provide that, at a minimum, LAN-connected PCs,
[...***...].
Provide End-User support and problem resolution for standard and
non-standard Software, listed in Schedules 14.2(a) and 14.2(b).
Coordinate with third party suppliers to resolve Equipment and
Software problems.
* CONFIDENTIAL TREATMENT REQUESTED
83.
Perform End-User reporting - including feedback on problem tracking,
request tracking, project updates and chargeback information and
technology budget planning (provide capital expense plans in
anticipation of upgrades)
3. INSTALLATION AND REMOVAL:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall provide the requested services as described in the
IMAC process, Schedule 17 of the Agreement.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall deploy new PCs, related Software, file servers, print
servers and infrastructure Equipment, per the Agreement, to meet
PacifiCare's business and Application requirements and otherwise in
accordance with the Service Levels, requested and approved by PacifiCare.
These activities shall include the design (where appropriate) and
installation of Supplier-owned new desktop, laptop and printer
environments.
These activities also shall include the implementation of a single
workstation for a new End-User, installation of PacifiCare-supplied
replacements for workstations for an entire department, implementation of
a single network (segment, ring) for a new Application or user community,
installation of PacifiCare-supplied upgrades, upgrades to a new networking
environment, or installations/upgrades (as provided by PacifiCare) to
other synchronous and asynchronous network services. Installation of the
upgrades that are outside the scope of the Services as described in the
Agreement, Section 3.1. shall be considered a new project.
For each PC that replaces an existing PC, Supplier shall copy
applications and data from the existing PC's internal hard drive onto the
internal hard drive of the replacement PC. Supplier shall configure the
Equipment within the pre-defined technology standards for the business,
transport the Equipment to the location where it shall be installed,
coordinate with the appropriate departments (internal. and/or external to
PacifiCare) to validate that proper network connectivity is obtained,
install the necessary Software and Data, test the Equipment after
implementation to include file open and print routing capabilities,
install/connect associated Peripherals, implement an appropriate backup
mechanism and coordinate the installation with the designated PacifiCare
personnel.
Supplier shall affix an asset identifier tag to the asset and enter
the asset management information as described in Section H.27 of this
Statement of Work.
[...***...]. Supplier's responsibilities for installation and
removal shall include the following
Arrange for non-network Remote site installation and install
non-network Software for the users in Remote sites.
* CONFIDENTIAL TREATMENT REQUESTED
84.
Coordinate the installation of personal computers, Peripherals, and
LAN-based Equipment.
Provide a channel to dispose or cascade Supplier Equipment and
Software no longer required.
4. EQUIPMENT MAINTENANCE AND SUPPORT:
SUPPLIER'S SOLUTION DESCRIPTION:
To obtain desktop support, End-Users shall place calls to the
Supplier Help Desk for problems or service requests.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall provide, or arrange for qualified third parties to
provide maintenance for Equipment for which Supplier is otherwise
responsible hereunder as necessary to keep such Equipment in good
operating condition and in accordance with manufacturer's specifications
or other agreements as applicable, so that such Equipment shall qualify
for the manufacturer's standard maintenance plan upon sale or return to a
lessor. PacifiCare shall be responsible for additional costs and expenses,
if any, to bring PacifiCare-supplied Equipment up to such standards if
such Equipment doesn't meet such standards on the Effective Date. Such
maintenance shall be performed in accordance with the Change Management
Procedures, so as to minimize the disruption to PacifiCare's normal
business processes. Supplier's responsibility for such functions shall
also include the following:
Supplier shall manage the third party service providers that provide
support until termination of Managed Agreement.
With respect to distributed Equipment for which Supplier is
otherwise responsible hereunder, Supplier shall provide break/fix,
support, advice and assistance to End-Users. Supplier shall correct
problems associated with failure or maintenance of such Equipment.
Supplier shall install PacifiCare-supplied upgrades for such
distributed computing-related Equipment at the Service Locations.
Supplier shall maintain a level of documentation that reflects the
complexity and diversity of the environment and facilitates the
Equipment support process.
Supplier shall be responsible for coordinating rollouts and upgrades
of Equipment. Supplier shall be responsible for coordinating any
testing, scheduling, and installation integration of these products.
Supplier shall also perform testing after installation and provide
proper back-out procedures. If installation occurs after hours,
Supplier shall also make available on-site support the next working
business day in order to provide the necessary support.
Supplier shall procure in accordance with the Change Control
Procedures or Change Management Procedures as appropriate (if
requested by PacifiCare), install and maintain Equipment,
Peripherals, file servers, gateways, and network / communications
Equipment. With respect to Equipment connected to the network,
Supplier shall maintain Equipment, Peripherals, file servers, frame
relay circuits, gateways, network / communications Equipment.
85.
[...***...].
Supplier shall maintain an effective inventory of spare parts and
Equipment used to support the Equipment for which Supplier has
maintenance responsibility, and track such inventory in an inventory
management database system. This inventory shall be adequate to
allow Supplier to meet or exceed the Service Levels.
Supplier shall perform operations required to support the refresh
and cascading of Supplier's Equipment associated with providing the
Services throughout PacifiCare's operations in accordance with the
Refresh Schedule. This shall include: planning, associated change
management and problem management, de-installation, reinstallation,
configuration, staging, and user orientation as otherwise specified
hereunder.
Supplier shall monitor and report on Equipment leases.
5. SOFTWARE SUPPORT:
SUPPLIER'S SOLUTION DESCRIPTION:
The Supplier team's Software support is initiated through the
single-point-of-contact (SPOC) Help Desk.
As necessary, the Supplier team [...***...] expertise and support iN
order to resolve the Software problem, or the application management team
for support of in-scope PacifiCare developed applications. [...***...].
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall provide Software support, correct Software
problems, provide support for PacifiCare Software, distributed computing
productivity tool development, NOS support, and computing Software
infrastructure support (e.g., shared resources, menu systems, etc.).
Supplier's responsibilities for Software support include the following:
[...***...]
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
86.
Install Software for which Supplier is responsible according to the
applicable specifications as well as PacifiCare standards.
To the extent enabled by the PacifiCare-approved enterprise
management system provided by Supplier, define and check for
particular Software signatures, to monitor the use of Software
developed by the applications development and maintenance group, and
to check the presence and version of Software present on a
particular device.
Install upgrade, provide maintenance and support for in-scope
Desktop related Software. Supplier shall also maintain a list of
documentation that reflects the complexity and diversity of the
environment and enhances the Software support process. Supplier
shall maintain a library of Supplier-supplied and Supplier-developed
documentation.
Coordinate any testing, scheduling, or systems integration on the
Supplier-controlled systems of PacifiCare Software, which have been
unit tested but not integration tested. Supplier shall coordinate
rollouts and upgrades and provide proper back-out procedures of
Supplier-introduced third party Software as well as for Supplier
upgrades and new releases of any internally developed applications.
Supplier shall test PacifiCare Software products before
implementation. Supplier, shall assist in testing the applications
before rollout
Recommend appropriate methods and tools to improve and increase
automation in PacifiCare's distributed computing environments, and
work with PacifiCare to research, evaluate and implement such tools
and methods. Supplier shall utilize productivity tools, utilities,
and create batch files.
Perform the installation of a Software refresh for the PacifiCare
standard Software suite (including operating systems, Virus
protection Software and browser) for desktop and laptop systems as
required by PacifiCare approved projects. [...***...].
Maintain master copies of the PacifiCare standard Software suite in
a secure, central location with back-up copies stored in a separate
location.
Support PacifiCare Software and provide technical assistance for
developed applications.
Support productivity tools/utilities/batch files in support of
providing desktop services.
Maintain compatibility between third party products and LAN NOS and
test them.
Coordinate and implement application rollouts and /or upgrades of
PacifiCare Software. This includes: documentation of application
roll-out in Change Management Procedures, coordination of proper
testing for given environment, scheduling implementation times and
on-site support after the release has been accomplished.
6. SOFTWARE CURRENCY, REFRESH, AND RELEASE CONTROL:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
* CONFIDENTIAL TREATMENT REQUESTED
87.
Supplier's responsibilities shall include installing, maintaining,
upgrading and supporting in-scope distributed systems Software including
firmware. Supplier shall interface with third party suppliers to promote
compatibility of such distributed systems products. Supplier's
responsibilities to provide Software currency Services shall include the
following:
Unless otherwise directed by PacifiCare, Supplier shall install,
maintain and upgrade Software for which Supplier is otherwise
responsible hereunder [...***...].
Coordinate, test, install and support Systems and systems program
products.
Test operating Systems Software, coordinating with applications
personnel and End-Users.
In implementing changes, upgrades, or enhancements to the PacifiCare
Software environment, Supplier shall observe the Change Control
Procedures and shall perform installation planning, product
installation, testing and verification. In addition, Supplier shall,
for any Software changes, upgrades, or enhancements proposed to
PacifiCare advise PacifiCare of any additional Equipment, LAN,
environmental, etc. requirements observed during integration testing
and/or otherwise known to be necessary for implementation of the
changes, upgrades or enhancement. Supplier shall also:
Demonstrate compliance with PacifiCare Corporate Information
Technology Architecture and Technical Standards, if applicable.
Demonstrate compliance with data security policies and standards as
required hereunder.
In the telecommunications environment for which Supplier is
responsible, Supplier shall be responsible for network Software,
including those Software products required for connectivity.
Supplier shall interface with other PacifiCare suppliers to promote
compatibility of connectivity products, and shall manage the
subcontractors that provide Software support to network products for
which Supplier is otherwise responsible hereunder. Unless otherwise
directed by PacifiCare, Supplier shall manage its upgrades to be at
the current level or one generation below the current level for each
Software component for which Supplier is responsible, provided that
such components that are at such level as of the Effective Date
shall, at PacifiCare's option, be upgraded to that level of
currency.
Provide installation of department or End-User-specific Software as
requested by PacifiCare. Supplier shall periodically (at least
monthly) report to PacifiCare the installation of such Software.
Supplier shall provide support, advice and assistance to End-Users
for Software for which Supplier is responsible hereunder.
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
88.
[...***...].
To the extent enabled in the PacifiCare approved enterprise
management system provided by Supplier, Supplier shall monitor use
of licensed Software, including license metering and tracking.
7. OPERATIONS SUPPORT FOR NEW SERVICES:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall interface between the groups implementing changes
and the production support function, assuring compliance with standard
documentation, necessary scheduling, and orderly turnover. Supplier's
responsibilities for operations support for New Services shall include:
Obtaining formal approvals of production testing and installation
timetables.
Develop comprehensive operational documentation.
Facilitate orderly turnover for Desktop Equipment and applications
to include developing fallback procedures.
Support for the introduction of new Platforms and applications in
accordance with the Change Control Procedures and in a controlled
manner by, among other things: [...***...]
Interface between the groups implementing changes and the production
support function.
Maintain documentation standards, task lists and run sheet updates.
Inform affected operations staff of changes to the environment.
Provide project management and technical expertise to optimize
available resources.
Provide coordination and acceptance of New Services.
8. SYSTEMS MANAGEMENT:
SUPPLIER'S SOLUTION DESCRIPTION:
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
89.
[...***...].
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall develop tools and processes to allow automated
and remote systems management of the distributed computing environment.
Processes shall include Software distribution, backups, performance
measurement, tuning, license and asset management, etc. The Supplier may
adopt/adapt any of PacifiCare's existing management tools. The Supplier
shall install Virus Software on PCs and maintain its currency. Supplier's
responsibility for systems management Services shall include the
following:
Consistent with the Transition Plan and during the Term and during
the Termination Assistance Period, evaluate (when requested)
implement and maintain tools and processes for automated and remote
systems management and restoration of client desktop computing
machines. Such tools and processes shall include broadcast Software
distribution, license management tools, performance measurement,
tuning, backup/Business Continuity, and automatic alerting. During
the Term and Termination Assistance Period, as applicable, Supplier
shall implement tools with the goal of moving PacifiCare's
environment from reactive to proactive monitoring and management
tools to enhance the stability and function of the environment.
Install, update, operate and maintain Virus protection Software.
Provide tuning to improve performance and utilization.
9. TECHNOLOGY (EQUIPMENT) REFRESH:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall provide technology (Equipment) refresh per the
Refresh Schedule.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall refresh the desktop environment according to the
Refresh Schedule.
The Supplier shall cascade new desktop technology and services to
meet PacifiCare's business requirements as required, requested and
approved by PacifiCare. Supplier shall perform such technology refresh
functions in accordance with the following:
Upgrade, maintain, and support in-scope desktop computers,
Peripherals, and LAN based Equipment.
Coordinate comprehensive technology refresh.
Deploy new desktop Equipment and services to meet business
requirements.
Analyze emerging desktop Equipment.
10. STANDARD EQUIPMENT AND SOFTWARE:
* CONFIDENTIAL TREATMENT REQUESTED
90.
SUPPLIER'S SOLUTION DESCRIPTION:
As a transition activity, Supplier shall work with PacifiCare to
define and deploy PacifiCare standard images. These images shall be
maintained by Supplier using a pool of dedicated resources to manage their
currency and validity. Changes to the defined images shall be addressed
through the Change Management Procedures and shall be processed as
follows:
[...***...].
[...***...]. Exceptions must be jointly approved.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall work with PacifiCare to design standard Equipment and
Software configurations for the PCs, and assume responsibility for
collecting necessary input from PacifiCare departments. The basis of such
standardization shall be the PacifiCare standard office environment. The
PacifiCare standard in effect as of the Effective Date and may be modified
and amended as approved or requested by PacifiCare and there may be more
than one standard in effect at the same time. Once approved by PacifiCare,
Supplier shall document, implement and communicate the standard throughout
the supported environment. The implementation plan shall include the
necessary Supplier and PacifiCare testing and systems integration with
applications in the current environment. Supplier shall perform such
standard Equipment and Software functions in accordance with the
following:
Identify areas of non-compliance.
Evaluate new and emerging standards and business requirements.
11. LAB TESTING:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall be responsible for thorough testing of
Supplier-installed new versions of Equipment and Software prior to
recommending the implementation of these products. This includes the
construction and maintenance of laboratory systems that simulate
PacifiCare's production environment. Supplier shall provide results of
testing upon request. Supplier shall perform such laboratory testing
functions in accordance with the following:
* CONFIDENTIAL TREATMENT REQUESTED
91.
Provide laboratory environments that simulate PacifiCare's
production environment.
Provide unit testing, systems integration testing, LAN/WAN
connectivity testing, load testing and application interconnectivity
testing on Supplier-installed new versions of Equipment and
Software.
Provide a test plan for Supplier-installed Equipment.
12. SPARES INVENTORY:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall populate its inventory database with PacifiCare's
current Equipment and Software inventory. Supplier shall update and verify
this inventory via calls to the Help Desk (information about the end
user's workstation shall be verified), auto discovery, and the IMAC
process. [...***...].
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier's responsibilities include maintaining an inventory of
spare parts for in-scope Equipment (including associated Peripherals) for
which Supplier is otherwise responsible to maintain hereunder in a
quantity that is sufficient to provide replacement Equipment and
associated Peripherals as required and provide periodic reports on same.
PacifiCare is responsible for providing a sufficient number of Laptop PCs
to be used in support of the "mail in" repair of Laptop PCs when the
End-User requires an interim Laptop PC while their Laptop PC is being
repaired.
F. CUSTOMER SUPPORT DEPARTMENT (HELP DESK)
1. Help Desk Support:
SUPPLIER'S SOLUTION DESCRIPTION:
As of the Cutover Date and the expiration or early termination of
the current Managed Agreement, Supplier shall provide Customer Support
Department Services in accordance to Schedule 13.3, Policy and Procedures
Manual and as defined below. The Policy and Procedures Manual shall
describe level 1, level 2 and level 3 Help desk.
The Help Desk solution for PacifiCare results in a
single-point-of-contact (SPOC) for End-User Service Requests relating to
in-scope Services. [...***...]. Supplier shall implement this solution by
* CONFIDENTIAL TREATMENT REQUESTED
92.
leveraging the experience and proficiency of PacifiCare's current
processes and procedures combined with Supplier's experience; and by
implementing an integrated Service Request management tool, and
introducing greater efficiencies through Web-enablement and automation.
Furthermore, the Help Desk shall enhance end user satisfaction and
realize significant efficiencies [...***...] to receive, close, and update
tickets.
[...***...]. Supplier shall validate use of the system by
implementing PacifiCare approved end user authentication procedures.
HELP DESK ARCHITECTURE
Supplier shall utilize Supplier's shared network infrastructure
(SNI) to be used to connect the SPOC and Service Delivery Center
infrastructure to PacifiCare's network.
SHARED NETWORK INFRASTRUCTURE
In order to provide global capabilities in support of commercial
customers, Supplier has designed a network infrastructure that securely
links individual customer networks to Supplier's delivery centers.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall be responsible for management and resolution of
Service Requests to the extent they involve Services.
Supplier shall be responsible to provide reactive and proactive Help
Desk support. The Help Desk shall be located in a Supplier Data
Center or other Supplier location. This multi-disciplinary Help Desk
function shall, upon completion of the Transition Plan, provide both
reactive and proactive Service Request determination, resolution
and /or tracking, as applicable, with respect to applications
functions or Equipment within Supplier's scope of responsibility.
The Service Request management process implemented by Supplier shall
be flexible and shall facilitate effective coordination/
communication across Service Request management groups, Service
Locations, regions and other Suppliers providing service to
PacifiCare. Supplier shall be responsible for maintaining Service
Request ownership throughout the resolution process with regular and
timely progress updates communicated back to the End-User in an
effective manner. Ownership of the Service Request should revolve
around the client's needs and to minimize handoffs.
Provide improved control and tracking of IS service requests,
including consolidation of IT service requests and streamlined and
automated process methodologies to reduce labor and administrative
costs. In respect of the Equipment, Software and functions for which
* CONFIDENTIAL TREATMENT REQUESTED
93.
Supplier is otherwise responsible hereunder, Supplier's
responsibilities shall include the following:
Establish a virtual single point of contact (SPOC), including one
telephone number, email account, and Intranet access for the
End-User to report a Service Request or for questions relating to
Help Desk Services. The Help Desk shall provide assistance for
End-User Service Requests acting as the initial point-of-contact and
coordinating Service Request tickets. [...***...]
As described in detail elsewhere in this Statement of Work, Supplier
shall implement acceptable policies and procedures for proactive
monitoring, escalation, review and reporting (historical and
predictive) of all Service Requests. [...***...] If existing
procedures need to be refined, or in the case where none exist, the
Supplier shall develop and PacifiCare shall approve the procedures.
Until such procedures are established and agreed to (using the
format set forth in Policy and Procedures Manual, Schedule 13.3),
Supplier shall follow PacifiCare's policies and procedures
[...***...] in effect as of the Effective Date.
Supplier's approach to this responsibility shall reflect a client
service focus. [...***...] Supplier shall align resources and skilL
sets with business unit requirements by balancing continuity of
staffing with assignment rotation.
The Help Desk Services described in this Agreement shall be provided
24 hours per day, seven days per week through a toll-free
Supplier-provided telephone number. [...***...] Provide appropriatE
second level Service Request resolution and support to End-User
Service Locations.
Provide on-site field service to Service Locations as required
during normal business hours, End User local time, and during other
hours through on-call availability of field service personnel.
[...***...]. Upon identification of a Service Request requiring
on-site field service, Supplier personnel shall follow the notice
and verification procedures set forth in Schedule 13.3 Policy and
Procedures Manual, Schedule 13.3 and as otherwise required to meet
the Service Levels. [...***...]
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
94.
[...***...]
As of the Effective Date, Supplier has such a tool installed and in
use and provides similar support to its other customers. In an
appropriate and timely manner, communicate pertinent information
regarding Service Requests and associated progress and communicate
such information to affected End Users on a proactive and timely
basis. Implement processes to record and track Service Requests
reported directly to on-site personnel in high service areas.
Provide PacifiCare and its designees access to [...***...]
Provide appropriate Supplier [...***...]training for PacifiCare's
Information Services staff, as needed.
Log reported Service Requests upon receipt from End-User or
automated alarm and monitor, control and report on each Service
Request until it is resolved and PacifiCare confirms such resolution
and completeness. Implement methodologies to prevent recurrence of
problems. Perform problem root cause analysis, identify preventive
measures, and make recommendations to fix root causes.
With respect to calls that relate to functions within Supplier's
scope of responsibility, [...***...]
With respect to calls that do not relate to functions within
Supplier's scope of responsibility, [...***...]
In all cases, Supplier shall provide initial Service Request
determination and tracking, even with respect to calls that do not
relate to functions within Supplier's scope of responsibility. In
such instances, Supplier shall cooperate with other internal or
external parties to resolve the Service Request.
Support End-Users by providing a timely and clear indication of the
nature of the Service Request, the estimated time to completion, and
potential short-term alternatives.
* CONFIDENTIAL TREATMENT REQUESTED
95.
Subject to PacifiCare's review and approval, develop and
periodically update Service Request escalation procedures and
distribute such procedures to End-Users.
[...***...]
Develop and maintain common Service Requests and resolutions guide.
[...***...]
Strive toward the automation of processes to facilitate Service
Request management with third parties.
Implement a process for tracking and reporting Help Desk activity,
including, at a minimum, [...***...]. In this regard, Supplier shalL
perform the following functions:
[...***...]. Reports shall be calculated in accordance with requireD
Service Levels and stated in Schedule 3.8(b).
[...***...]
Supplier's Help Desk personnel shall possess appropriate Service
Request management capabilities and qualifications to support the
Help Desk functions. Supplier shall provide the Help Desk personnel
with adequate training on new products and services as may become
part of Supplier's responsibilities from time to time.
For failures reported to the Help Desk or known to Supplier that
affect provision of the Services, Supplier shall comply with the
notification procedures and contacts set forth in Policy and
Procedures Manual, Schedule 13.3.
Develop and document processes regarding interfaces and interaction
between second-level support groups and the Help Desk.
Proactively identify potential Service Requests and take appropriate
action to report occurrence of Service Requests so identified.
Measure Help Desk performance and report the results to PacifiCare
in accordance with Schedule 3.8(b).
* CONFIDENTIAL TREATMENT REQUESTED
96.
Conduct random surveys of End-Users immediately after using the Help
Desk services and report the results to PacifiCare.
Provision of Help Desk support in English.
Coordinate tours of the Help Desk with PacifiCare for PacifiCare's
End-Users, provided that such tours shall be (i) reasonable in
frequency; and (ii) subject to reasonable prior notice.
2. Problem Management:
Escalate unresolved Service Requests according to established
procedures and automatically prioritize high-impact systems and
Equipment such that, when outages occur, they are treated with the
highest priority. For all classes of Service Requests that are or
become problems, such escalation procedure must reflect (1) the
severity of the problem and (2) the complexity of the environment.
The escalation procedure shall describe [...***...]. If existing
procedures need to be refined, or in the case where none exist, the
Supplier shall develop and PacifiCare shall approve the procedures.
Until such procedures are established and agreed to (using the
format set forth in Policy and Procedures Manual, Schedule 13.3),
Supplier shall follow PacifiCare's definition of Severity Levels and
Problem Management escalation procedures in effect as of the
Effective Date.
Provide a mechanism for expedited handling and immediate
notification to PacifiCare of system outages on critical systems
that are of high business priority to PacifiCare, and provide
progress updates as set forth in Policy and Procedures Manual,
Schedule 13.3. Provide appropriately trained systems personnel for
outage resolution and provide appropriate personnel back-ups.
Correct problems within the scope of Supplier's responsibility.
Correction may include modification or restoration of a file,
procedure, or program. Corrections shall be subject to verification
by the PacifiCare affected End-User or control person.
[...***...]
Provide troubleshooting and 1st/2nd level Service Request resolution
for system and network devices including bridges, file servers,
communications servers, mail servers, workstation interface boards,
cabling, and telecommunications.
Provide temporary on-site support to resolve repetitive problems of
an extended nature that cannot be resolved remotely.
Conduct, at PacifiCare's request, meetings to address Supplier's
Problem Management and resolution activities in the event that there
is a recurrent problem.
* CONFIDENTIAL TREATMENT REQUESTED
97.
Provide reports on problems including statistics on total number of
problems, outstanding problems and resolution time. Investigate,
verify, record and report Equipment and system non-performance or
downtime, and Software errors.
Coordinate reported problems between third party telecommunications
providers and internal PacifiCare teams to resolve issues escalated
by the Help Desk. This may include coordination of on-site meetings
between appropriate third-party Suppliers.
G. INFORMATION DISTRIBUTION CENTER
Supplier shall [...***...] in Supplier's operation of the IDC.
1. PRINT AND MEDIA OPERATIONS:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall assume responsibility for high-speed production
print, media (fiche, diskettes, microfilm, CD ROM), and encounter
operations services as they exist as of the Cutover Date, during the Term
and over the Termination Assistance Period. Supplier's responsibilities
shall include:
Assist PacifiCare in providing secure environment in accordance with
Schedule 10.2. Provide assistance in the testing of UPS and building
generator(s) for power availability during power outages.
Maintain job procedures for PacifiCare's IDC and Disaster Recovery
locations in accordance with Managed Agreements.
[...***...].
For print/disk duplicating/CD burning and storage, tape mounting,
microfilm indexing, media processing and backup generator Equipment:
Coordinate with external third party providers.
Identify and manage third-party supplier relationships to correct
problems with Equipment
Schedule preventive maintenance on Equipment based on reviews,
analysis of Equipment performance records, and original equipment
manufacturer recommendations .
For IDC print/disk duplicating/CD burning and storage:
* CONFIDENTIAL TREATMENT REQUESTED
98.
Support, maintain, coordinate and deliver output (print/disk
duplicating/CD burning) activities. Current environment includes:
[...***...] check printing.
Provide 7 x 24 print operation to meet business needs.
Deliver output per production schedule.
Operate output devices, including high speed color, black/white,
MICR printers with laser cut sheet printed output, impact printers,
CD burners and disk duplicating.
Manage print/disk duplicating/CD burning queues.
Perform QC of output.
Maintain audit logs/chain of custody recording.
Prepare printed output (e.g. checks, reports, ID cards, letters, and
other documents: EOBs, EOPs) for distribution and distribute them.
Prepare diskettes and CDs for distribution and distribute them.
Perform weekly backups of fileshares to CD-ROM.
Develop, maintain and store via Change Management Procedures print
output forms libraries and required printer fonts.
Identify and correct problems with forms, fonts, fileshare output.
Maintain, order and store print, CD, diskette inventories and
supplies
Proactively monitor and maintain appropriate level of production
support materials (e.g. paper, forms, toner, etc.) and office
supplies needed to accomplish job duties.
Design and store laser print and standard output forms.
Provide testing for new or changed applications and stock (e.g.
check or ID card stock) t for compatibility with standards and
technical environment.
For Microfilm/Microfiche services:
Support, maintain, coordinate and deliver microfilm and microfiche
activities.
Coordinate and interface with users and outside providers, as
needed, to support the production of microfiche and microfilm.
[...***...]
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
99.
Receive and send boxes of paper to vendor for filming , and manage
document destruction certificates.
Identify problems with microfilm application to technical support.
[...***...]
Receive and log CD, diskettes, tapes and paper.
Load and validate encounter data media for Data Center processing.
Return media with reports to source.
[...***...]
Load and/or schedule incoming enrollment data from diskette,
CD or tape media to production server location for access during
nightly batch Data Center processing.
[...***...]
Coordinate and interface with the Managed Agreements suppliers to
support DR plan and readiness to meet recovery time objectives.
Prepare for, and participate in [...***...]
[...***...]
Participate with DR plan coordinator [...***...] to maintain Print
Operations DR Plan.
Create and maintain Media Operations and encounters processing DR
Plan.
Proactively maintain sufficient capacity to meet business needs and
changes in business model per the Change Management Procedures.
[...***...]
Consult on related Equipment and technology investments across
PacifiCare.
[...***...]
Provide (combined with Finishing and Account Management) functional
subject matter expertise on business applications for which output
is provided. [...***...]
* CONFIDENTIAL TREATMENT REQUESTED
100.
Gather, maintain and report key metrics.
Manage in-scope projects to support the business output needs or
improve the environment.
2. FINISHING OPERATIONS:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall assume responsibility for finishing (manual and
automated, production, scheduled-ad-hoc and ad-hoc) services as they
exist as of the Cutover Date during the Term and during the Termination
Assistance Period. Supplier's responsibilities shall include:
Assist PacifiCare in providing secure environment in accordance with
Schedule 10.2. Provide assistance in the testing of UPS and building
generator(s) for power availability during power outages.
Maintain job procedures for 'PacifiCare's IDC and Disaster Recovery
locations in accordance with Disaster Recovery Managed Agreement.
[...***...].
Support, maintain, coordinate and deliver activities and Equipment
to support manual assembly and automated inserting/mailing for
production, scheduled ad-hoc and ad-hoc work.
Maintain audit logs/chain of custody recording.
For finishing Equipment (includes automated mailing/inserters,
tabletop printers, envelope labelers, folders, etc.):
Coordinate with Managed Agreement suppliers.
Identify problems with automated mailing/inserter Equipment Software
interface application to technical support.
Manage responsibility through appropriate vendors for Equipment and
associated Software repairs.
Schedule preventive maintenance on finishing Equipment based on
reviews, analysis of Equipment performance records, and original
equipment manufacturer recommendations.
Provide traceable communication method and time frames to interface
with customer to process manual or automated exceptions (custom
groups, pulls, special handling).
Quality Control input and output:
Verify print quality and completeness of information.
* CONFIDENTIAL TREATMENT REQUESTED
101.
Identify missing information, investigate and re-order print or
other.
Route output (e.g. for manual assembly, automated mailing and/or
distribution).
Provide for testing new or changed applications, stock and
procedures for compatibility with standards and technical
environment.
For manual assembly and processing:
For production output [...***...]
Coordinate, collate, insert, verify materials against reports, sort,
audit, cross-check; identify discrepancies; request required
assistance from customer and/or IDC source of input.
Create fulfillment packets.
Prepare output (e.g. tray/bucket envelopes) for distribution and
route
For automated mailing - production, scheduled ad-hoc and ad-hoc
output:
[...***...]
Manage work queues.
Perform QC of output from Equipment (e.g. address readable in
window, insert folded properly, postmark readable, sheet(s)
insertion correct etc.)
Prepare output (e.g. tray envelopes) for distribution and route.
Develop, maintain and store [...***...] following Change Management
Procedures.
Accurate and timely processing and mailing per Service Levels or
individual commitment.
Research and track " customer inquiry requests" related to
production jobs.
Proactively monitor, order, maintain/store appropriate level of
production support materials and office supplies, on the production
floor and readily accessible, needed to accomplish job duties.
Maintain time and materials for daily billing data for each job.
Identify and implement Equipment solutions to improve cost,
productivity and quality per the Change Management Procedures.
Manage output (e.g. feed paper, collate and/or distribute output)
from physically co-located, but customer owned printers; report
technical problems to customer.
* CONFIDENTIAL TREATMENT REQUESTED
102.
[...***...]
Coordinate and interface with the Disaster Recovery Managed
Agreement to support DR plan and readiness to meet recovery time
objectives.
Prepare for, and participate in, a minimum of 2 tests at Hot
Site/year.
Maintain synchronization of DR site in accordance with IDC Change
Management Procedures.
[...***...]
Proactively maintain sufficient capacity and staffing to meet
production, scheduled [ad-hoc] and [ad-hoc] business needs and
changes in business model per the Change Management Procedures.
[...***...]
Consult on related Equipment and technology investments across
PacifiCare.
Provide subject matter expertise to PacifiCare re: assembly and
automated mailing.
Provide (combined with Print Operations and Account Management)
functional subject matter expertise on business applications for
which output and finishing is provided. [...***...]
Gather, maintain and report key metrics.
Manage in-scope projects to support the business output needs or
improve the environment.
3. ACCOUNT MANAGEMENT:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall assume responsibility for account management services
as they exist as of the Cutover Date during the Term and over the
Termination Assistance Period. Supplier's responsibilities shall include:
Interface with customers regarding billing, validate cost centers
for billing.
Interface with IDC End-Users to:
Write customer agreements, and production / scheduled ad-hoc
procedures.
Gain PacifiCare approval per Schedule 13.3, Policy and Procedures
Manual of customer agreements and procedures.
Update and maintain customer agreements and procedures.
* CONFIDENTIAL TREATMENT REQUESTED
103.
Coordinate IDC in-scope business projects; manage projects to
support the business output needs or improve the environment.
Coordinate and monitor start up or changes to production activities,
including materials.
Participate in testing, implementation and post-implementation
review for new and major revisions production and schedule ad-hoc
jobs.
Coordinate in-scope projects with IDC production schedule.
Create and publish IDC production print and finishing schedule.
Perform as primary customer "front end" liaison for each
region/application.
Provide (combined with Print Operations and Finishing) key
application focus and subject matter expertise for business
applications for which output is provided. (Currently Account
Management is SME for system's ID cards and correspondence -
[...***...]
Coordinate and communicate with third party suppliers, PacifiCare
and business users regarding the design, inventory re-order points,
approvals, testing (Membership Accounting, Marketing, Member
Services, Legal/Regulatory) and purchasing of ID card inventory.
Prepare ID card cycle time reports
Perform audits of IDC procedures
4. DEMAND PRINT:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall assume responsibility for demand print (scheduled
ad-hoc and ad-hoc) services as they exist as of the Cutover Date during
the Term and over the Termination Assistance Period. Supplier's
responsibilities shall include:
[...***...].
Support, maintain, coordinate and deliver activities and Equipment
to support production, scheduled ad-hoc and ad-hoc demand print
services.
Coordinate jobs to be reproduced with PacifiCare customers.
Data correct and merge letters.
* CONFIDENTIAL TREATMENT REQUESTED
104.
Provide demand print accounting and monthly reporting for chargeback
by PacifiCare
Prepare artwork for Business Reply Mail (BRM) envelopes and
interface with U.S. Postal Service on PacifiCare's behalf for
approval..
For ad-hoc, provide customer interface and job monitoring for ad-hoc
mailing jobs from order, materials and job setup, file merges,
through delivery and QC.
Operate demand print related Equipment. [...***...]
For demand print Equipment:
Coordinate with third party suppliers, as appropriate.
Identify and correct problems with production Equipment.
Schedule preventive maintenance with appropriate third party
suppliers as required on Equipment based on reviews, analysis of
Equipment performance records, and original equipment manufacturer
recommendations.
Provide reprographics/demand printing for:
Digital, black and white, and color,
Electronic receipt of files across network,
Electronic offline storage and edit/reformat before print,
Company standard note pads,
Mylar or paper tabs for notebooks or reports.
Provide full service bindery for:
Machine folding (e.g. letters and brochures).
Labeling (e.g. envelopes and flyers).
Notebook collation, tab placement and assembly.
Comb (plastic) binding of printed documents.
Heat/cloth binding of reports and documents.
Machine collating and saddle-stitching (e.g. pamphlets, booklets,
brochures).
Drilling, cutting and shrink wrapping.
Coordinate and interface with third party suppliers to provide
offset printing.
* CONFIDENTIAL TREATMENT REQUESTED
105.
Record necessary information in time accounting work flow system for
daily billing data for each job and monthly reporting for chargeback
by PacifiCare.
For Demand Print Disaster Recovery (DR):
Coordinate and interface with third party suppliers to support DR
plan and readiness to meet recovery time objectives.
Prepare for, and participate in, a minimum of 1 test per year.
[...***...]
Proactively monitor and maintain appropriate level of production
support materials and office supplies needed to accomplish job
duties.
Consult on related Equipment and technology investments across
PacifiCare.
Provide subject matter expertise to PacifiCare re: demand print and
mailing functions.
Gather, maintain and report key metrics.
Maintain sufficient capacity and staffing to meet business needs per
the Change Management Procedures.
Manage in-scope projects to support the business output needs or
improve the environment.
5. MAIL PROCESSING
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall assume responsibility for mail processing/
distribution services [...***...] as they exist as of the Cutover
Date, during the Term and over the Termination Assistance Period.
Supplier's responsibilities shall include:
Assist PacifiCare in providing secure environment in accordance with
Schedule 10.2., Provide assistance in the testing of UPS and
building generator(s) for power availability during power outages.
Maintain job procedures for 'PacifiCare's IDC and Disaster Recovery
locations in accordance with Disaster Recovery Managed Agreements.
[...***...].
Provide mail stop coordination and administration for the
enterprise.
* CONFIDENTIAL TREATMENT REQUESTED
106.
Support, maintain, coordinate and deliver activities and Equipment
to service mail and distribution needs [...***...]
For mail processing Equipment and delivery vehicles:
Coordinate with third party maintenance suppliers and third party
suppliers.
Identify and correct problems with Equipment/vehicles
Schedule preventive maintenance on Equipment/vehicles based on
reviews, analysis of Equipment performance records, and original
Equipment manufacturer recommendations.
Operate mail/distribution Equipment and delivery vehicles,
including: manifest system, mail metering Equipment,
accountable mail system, mail management system, scale,
carrier van and step van. Maintain audit logs/chain of custody
recording.
Package for shipping and/or deliver reports.
Sort and manage special internal distributions.
Obtain mail from Post Office.
Receive courier/pouches, overnight/[...***...] mail and parcels.
Maintain accountable mail manifests (overnights, airline tickets,
certifieds, checks).
Sort mail and deliver mail per Policy and Procedures Manual.
Deliver accountable mail with tracking.
Perform mystery (mis-addressed) mail lookup and coding.
Monitor, track and report returned mail.
Process outbound pouch, [...***...]for the Campuses.
Manage postage accounts for the enterprise.
Manage postage meters for IDC functions (Finishing and Mail
Processing meters).
Validate with PacifiCare the mail screening policy on a regular
basis, at minimum annually and respond accordingly. Additional
activity relating to mail screening may be considered a New Service.
[...***...] based PO Box and Business Reply accounts per Managed
Agreements.
For Mail Processing Disaster Recovery (DR):
* CONFIDENTIAL TREATMENT REQUESTED
107.
Coordinate and interface with PacifiCare facilities to support DR
plan and readiness to meet recovery time objectives
Prepare for, and participate in, [...***...] at alternate location.
Maintain synchronization and currency of Equipment designated for DR
and supporting materials, and keep track, in accordance with IDC
Change Management Procedures and/or Change Control Procedures.
Participate with DR Plan coordinator (currently IDC Account
Management function) to maintain Mail Processing DR Plan.
Provide subject matter expertise to PacifiCare re: optimal mail and
distribution practices.
Gather, maintain and report key metrics.
Maintain sufficient capacity and staffing to meet business needs per
the Change Management Procedures.
Manage in-scope projects to support the business output needs or
improve the environment.
6. ADMIN SUPPORT SERVICES
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall assume responsibility for administrative, chargeback,
warehouse, inventory management, materials ordering ([...***...])
processes, to include:
Coordinate financial/admin tasks and processes in support of the IDC
operation, including:
Complete chargeback tasks [...***...] and reporting per schedule
fRoM PacifiCare IS Finance.
Prepare and distribute custom postage reports, contra summary report
preliminary and final, as well as preparation of business
graphs/statistics/metrics for monthly book.
[...***...]
Coordinate inventory management and warehouse tasks and processes in
support of the IDC production and ad-hoc finished goods output.
Operate systems, and warehouse Equipment with certified operators.
For warehouse Equipment and systems:
Coordinate with third party suppliers.
* CONFIDENTIAL TREATMENT REQUESTED
108.
Identify and correct problems with Equipment.
Schedule preventive maintenance per on Equipment based on reviews,
analysis of Equipment performance records, and original equipment
manufacturer recommendations.
Maintain and effectively manage inventory per Change Control
Procedures and/or Change Management Procedures as applicable.
Receive and input materials shipments into inventory management
system, perform physical inventories and cycle counts
Monitor climate controlled ([...***...]) warehouse for select
inventory to meet production needs available [...***...].
Pull, pick, deliver and/or pack orders for distribution.
Provide PacifiCare access to current inventory information.
Provide notification of low stock to customers.
Maintain sufficient IDC supplies inventory.
Coordinate and interface with third party suppliers to provide and
receive materials.
Gather, maintain and report key metrics.
7. CUSTOMER SERVICE:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall assume responsibility for customer service as they
exist as of the Cutover Date, during the Term and over the Termination
Assistance Period. Supplier's responsibilities shall include:
Answer and service incoming customer service calls for IDC.
Set up same day courier services (per request).
Provide IDC [...***...].
Gather, maintain and report key metrics.
[...***...]
8. STRATEGIC INITIATIVES AND SUPPORT:
* CONFIDENTIAL TREATMENT REQUESTED
109.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall assume responsibility for technical project
management, and technical project delivery, enhancements, integration
and support services for IDC solutions as they exist as of the Cutover
Date in the IDC, during the Term and over the Termination Assistance
Period. Supplier's responsibilities shall include:
Act as the technical resource and subject matter expert
representing the IDC for any IS Development or Methodology
projects/enhancements/ maintenance.
Provide technical support for the IDC applications (not
systems or network operating systems) production environment
in PacifiCare and at DR Hot Site.
Receive and resolve production issues related to:
Reports on fileshares.
Electronic distribution of reports
Automated change of address processing
Equipment or Software in any of the IDC functional
areas.
Schedule, communicate and perform upgrades to existing
systems.
Troubleshoot problems associated with changes or upgrades.
Document policies and procedures.
Provide input/feedback to PacifiCare management on existing
procedures.
Participate in the development of enterprise standards and
procedures for output.
Monitor Software application and production Equipment, and
notify PacifiCare of new capacity requirements.
Coordinate and interface with third party suppliers to support
Software and solutions.
Initiate, drive, manage and deliver solutions via all phases
of the development life cycle for any output related strategic
initiative projects ([...***...]) or projects to improve the
environment.
Work with PacifiCare Architecture Review Board to define
technical architecture for IDC print and finishing
environments.
Consult with IS functions and customers regarding
centralization and automation of output processes,
optimizations, and efficiency opportunities.
Provide subject matter expertise to PacifiCare re: output
architectures and standards.
Maintain IDC Change Management Procedures.
* CONFIDENTIAL TREATMENT REQUESTED
110.
Gather, maintain and report key metrics.
H. CROSS FUNCTIONAL SERVICES:
The Services described in this portion of the Statement of
Work apply to all of the Towers. Supplier shall contribute to general
IT effectiveness in addition to the specific areas listed above. Such
services include:
1. CHANGE MANAGEMENT:
SUPPLIER'S SOLUTION DESCRIPTION:
The Supplier Program Office shall control changes to the IT
environment through the Change Management Procedures, which shall
include complete PacifiCare involvement. The process to be used is
documented in Schedule 13.3 Policy and Procedures Manual, and an
overview of the process is described in Exhibit 1 hereto.
The Supplier Program Office shall coordinate all change
activities regardless of the Service delivery area or company
responsible for delivering the service.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall perform change management functions in
accordance with the agreed-upon Change Management Procedures to control
and manage changes in the operation of the Services, including any such
changes requested by PacifiCare. [...***...]. Supplier shall employ
standard procedures for change coordination, review and reporting that
are designed to minimize the business impact and risk to PacifiCare of
any change activity, as described in Exhibit 1 hereto.
The Supplier shall provide an effective Change Management
Procedure that shall facilitate effective coordination, communication
and approval across groups, Service Locations and regions. Clear
ownership for individual changes must be maintained throughout the
process, with regular and appropriate progress updates (status reports)
communicated back to those affected. Supplier's responsibilities to
provide change management shall include the following:
Control changes to Services and PacifiCare's environment,
implement changes only in accordance with the standard
agreed-upon Change Management Procedures.
Review, schedule, communicate and obtain approvals on all
proposed Services changes with PacifiCare and all related
third parties to minimize disruption of normal business
process. Supplier must provide an impact assessment, back-out
plan (with specific criteria associated to executing the
back-out plan identified), end-to-end test plan where
appropriate, and clear change acceptance criteria identified.
[...***...], conduct change management meetings with
PacifiCare or its designee's participation.
[...***...]. This data shall be summarized and reported to
PacifiCare [...***...]
* CONFIDENTIAL TREATMENT REQUESTED
111.
[...***...] Provide an audit trail of any and all changes to
the production environment made according to the Change
Management Procedures.
Test changes to the environment and resolve problems prior to
production implementation, including inter-operability
testing. The results of the testing effort must be approved by
the appropriate PacifiCare personnel.
Schedule outages for system maintenance, expansions and
modifications during hours that meet PacifiCare's operational
needs and minimize disruption.
Supplier shall, in accordance with Schedule 4.1, Transition
Plan, and to the extent enabled in the PacifiCare approved and
Supplier provided enterprise management system, [...***...]
Include representatives at Service Locations designated by
PacifiCare as part of the change review, approval, scheduling,
communication and approval process. To facilitate
communications, Supplier shall (1) submit proposed changes for
review regularly in advance to PacifiCare and the End-Users
([...***...]), and (2) provide a schedule of implementation
dates to PacifiCare for determination of any existing conflict
with business events. At a minimum, each change request shall
includE A description of the change, purpose and
justification, risk analysis, schedule, implementation
procedure, back-out procedure, and test plan.
Coordinate all changes to the Services with affected third
parties. The Change Management Procedures shall involve
applicable PacifiCare retained organizations and Application
Suppliers, and change management tools shall be made available
to them.
Define clearly the roles and responsibilities of all
individuals and areas involved in the change process, as well
as formalize the communication process between all affected
parties.
Avoid any change that (i) adversely affects the function or
performance of, or decreases to any significant degree the
resource efficiency of, the Services, (ii) increases
PacifiCare's costs or fees, or (iii) impacts the way in which
PacifiCare conducts its business or operations, without first
obtaining PacifiCare approval. Supplier may make temporary
changes required by an emergency if it has been unable to
contact PacifiCare to obtain such approval after making
reasonable attempts. Supplier shall document and promptly
report such emergency changes to PacifiCare. For the purposes
of this section, "emergency" means an event that would result
in financial impact to PacifiCare, an event that shall impact
the delivery of Critical Service Levels in real time, or any
event where PacifiCare's assets are at risk, e.g. data loss or
corruption
Implement a standard Change Management Procedure (as approved
by PacifiCare) that achieves a set of clearly defined goals,
including: efficient implementation of changes, minimize risk
and business systems.
Integrate changes across in-scope Platforms and Service
Locations.
* CONFIDENTIAL TREATMENT REQUESTED
112.
Develop a comprehensive contingency plan for each change that
presents a potentially high risk or high impact to
PacifiCare's operations or business, including: [...***...].
Perform routine maintenance during regular periods scheduled
in advance and approved by PacifiCare. At PacifiCare's request
and upon reasonable notice, Supplier shall change scheduled
maintenance windows. [...***...]. In the event that there iS a
need for emergency systems maintenance, Supplier shall provide
PacifiCare with as much notice as reasonably practicable, and
shall perform such maintenance so as to minimize interference
with the business and operational needs of PacifiCare. Systems
shall be unavailable during maintenance windows only to the
extent necessary for systems maintenance purposes.
Control system changes and activities required by moves,
upgrades, replacements, migrations, etc.
Report status of scheduled changes including maintaining a
comprehensive list of changes or activities and dates.
2. QUALITY ASSURANCE:
SUPPLIER'S SOLUTION DESCRIPTION:
SERVICE LEVEL REQUIREMENTS
Supplier provides reporting on Supplier's attainment of
Service Level requirements (refer to Schedule 8) on a regular
and scheduled basis.
ANNUAL THIRD PARTY SURVEY
- The Annual Survey shall be conducted as stated in the
Agreement.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall employ a quality assurance program designed to
promote performance of the Services at a level consistent with the
highest professional standards of care. Supplier shall write and
maintain procedures on all quality assurance activities. Supplier shall
provide an environment for PacifiCare to execute audits of quality.
Supplier shall in consultation with PacifiCare, [...***...]. Supplier
shall take steps to increase the productivity of information technology
professionals, improve the quality of deliverables produced and
increase PacifiCare's satisfaction levels, as required to meet or
exceed the Service Levels. Supplier's Quality Assurance
responsibilities shall include the following:
Maintain compliance with a published and agreed-upon Quality
Assurance Manual.
Maintain Equipment and Software in accordance with this
Agreement.
Document and implement process improvements.
* CONFIDENTIAL TREATMENT REQUESTED
113.
Identify best practices, where applicable.
3. TRAINING AND EDUCATION:
SUPPLIER'S SOLUTION DESCRIPTION:
SKILLS MANAGEMENT:
Provide training, which shall vary by individual and by job,
and shall take many forms including computer-based, multimedia,
instructor-led, and self-study courses as well as seminars and
workshops.
The primary form of in-scope education support shall be
provided through the Help Desk and level 2 support. The Web enabled
product can offer another avenue for advice and support, which shall
allow End-Users to get solutions and or assistance for computer related
problems via the Internet with customized sections for End-Users.
The level of support and skills that are required to complete
the activity for PacifiCare shall be defined through the problem
management process and tracked through the Help Desk and level 2 and 3
support.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
At no additional cost, Supplier shall provide the following
training and education:
NEW END-USER TRAINING. Supplier shall [...***...] of
instructor-led group training for new End-Users. Such training
shall, include the following:
[...***...]
END-USER TRAINING. Supplier shall investigate the needs for
training. Supplier shall provide [...***...] of instructor-led
group training per month for individual products either on a
requested basis or as a proactive step as a part of an
implementation project of a new technology /product. Such
training shall be customized so that it is specific to the
End-Users for the Services within PacifiCare's environment.
Supplier shall provide user
* CONFIDENTIAL TREATMENT REQUESTED
114.
training and associated user guide documentation for all
Services. Supplier's End-User training responsibilities shall
include the following:
[...***...]
4. PROJECT SUPPORT:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
As of the Cutover Date, Supplier shall use its standard
project methodology to provide consistent results for each
infrastructure project. Supplier's project support responsibilities are
described in Exhibit 1 hereto and shall include the following:
Manage all Supplier tasks across the Services and Service
Locations, coordinating with appropriate PacifiCare personnel.
Prepare project proposals as appropriate.
Develop functional and /or technical requirements and project
plans to include cost, ongoing maintenance and support
requirements, risks, alternatives, recommendations, with
specific references to any variances to PacifiCare standards.
Develop, build, buy or reuse technology components that shall
meet functional requirements with PacifiCare approval.
Test, and as appropriate, pilot, integrate and install
technology components to verify that the new installation does
not cause unexpected negative impact to the existing
infrastructure or environment. Also, include PacifiCare
personnel in the testing of new products, when appropriate,
and/or changes to existing systems. PacifiCare personnel shall
also be required to approve all testing results.
Facilitate standardization to comply with PacifiCare technical
requirements.
Manage all Supplier and third party supplier tasks across
service families, coordinating with appropriate PacifiCare
personnel.
* CONFIDENTIAL TREATMENT REQUESTED
115.
Use project management tools (i.e. MS Project) for all
projects, and employ a regular reporting mechanism to identify
project tasks, present current status reports (utilizing
PacifiCare's Project Summary form), and identifying potential
bottlenecks and problems.
[...***...]
Monitor the project process and report on progress.
[...***...]
5. BUSINESS METRICS:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall provide quantitative and qualitative
metrics for all functions aligned with business requirements in
accordance with Service Level Schedule 8.
6. NEW TECHNOLOGY AND AUTOMATION:
SUPPLIER'S SOLUTION DESCRIPTION:
The Supplier Program Office shall work with the appropriate
Supplier technical staff and architects to provide recommendations and
evaluation of new technology and of automation tools [...***...]
The Supplier Program Office shall work with the PacifiCare
Architectural Review Board to provide:
- A forum for cross-functional communication to develop
strategies and integrated solutions based on
PacifiCare requirements. These solutions shall be
focused on the delivery of increased value in a
cost-effective manner.
- Cross team and platform communication of technology
strategies.
- Monitoring of leading edge technology and an
evaluation of the reliability and application to
PacifiCare's environments.
- Participation in the development of proof of concepts
[...***...].
* CONFIDENTIAL TREATMENT REQUESTED
116.
- Participation in architecture governance processes
[...***...]
- Participation in updating PacifiCare architecture
documentation [...***...]
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Working with the retained PacifiCare staff, the Supplier shall
support new technology and automation, including emerging Equipment,
Software, methodologies, techniques, and various Platforms within
existing baselines being provided by [...***...]. Services shall
include investigation, evaluation, selection, training, implementation,
and consulting on new technology and automation of manual tasks.
Supplier's responsibilities for new technology and automation shall
include the following:
- Support PacifiCare in the management and
representation of technology product and service
offerings to its internal clients. Supplier shall
work with PacifiCare as required to identify new
products and services that reflect evolving
technology and /or client demands.
- Facilitate and encourage active cross-functional,
cross-group and cross-location coordination and
communication. This working practice shall be a key
element in most functions and processes, but
especially Problem Management, Change Management and
Project Management.
- Provide, on the schedule specified by PacifiCare in
support of PacifiCare's annual budget development
cycle, the input, assistance, comment and review
support for [...***...]
- Participate, from time to time, in evaluations
involving other third party suppliers.
- Make available its facilities where new third party
products are evaluated and provide, upon PacifiCare's
request, any reports, summaries, or results of such
evaluation and testing.
- Define requirements for automation.
- Automate manual monitoring functions.
- Automate alerts to system operators.
- Automate generation and routing of problem tickets to
technical support groups (irrespective of location).
- Research tools to improve Service Levels or
performance of operating environments.
7. PHYSICAL SECURITY ADMINISTRATION:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier's responsibilities to provide physical security
administration shall be in accordance with the Agreement, Section 10.2.
* CONFIDENTIAL TREATMENT REQUESTED
117.
8. LOGICAL SECURITY ADMINISTRATION:
SUPPLIER'S SOLUTION DESCRIPTION: Supplier's responsibilities
to provide logical security administration shall be in accordance with
the Agreement and as described in Safety and Security Procedures
Schedule 10.2. Supplier realizes that system security is a major
concern with PacifiCare and Supplier shall work with PacifiCare to
validate that PacifiCare's security policies and standards are being
strictly adhered to.
[...***...]. In addition, Supplier shall work with PacifiCare
to validate that the system security Software is implemented in such a
manner as to allow PacifiCare to perform PacifiCare's functions
effectively and protect PacifiCare's systems anD data.
In conjunction with PacifiCare, the Supplier Security
Compliance team shall develop and maintain an overall IT Security
architecture to address PacifiCare's requirements for a secure and
effective corporate and operational environment. [...***...].
[...***...].
PACIFICARE'S FUNCTIONAL REQUIREMENT:
In accordance with the Safety and Security Procedures,
Schedule 10.2. Supplier shall adhere and demonstrate compliance to an
information security approach [...***...]. Supplier shall manage and
administer access to [...***...]. PacifiCarE SHALL retain authority for
approval of all data and system access requirements and notify Supplier
what entities and personnel are to be granted access to the
Supplier-operated systems and the level of security access granted to
each. Supplier management shall authorize access for their employees
based on current security procedures. PacifiCare security shall retain
oversight accountability. PacifiCare business management shall retain
authority for approval of all data and system access requirements for
their employees. Supplier shall follow PacifiCare's instructions and
shall follow the procedures regarding such access as designated by
PacifiCare. [...***...]
Review all documented information security procedures with
PacifiCare pertaining to the Supplier-operated systems.
Develop, maintain, update, and implement security procedures
with PacifiCare's review and approval, including physical
access strategies and standards, and a breach of security
action plan. Implement, maintain and update PacifiCare's
security policies.
* CONFIDENTIAL TREATMENT REQUESTED
118.
Develop, implement, and maintain a set of automated and manual
processes designed to enforce PacifiCare's data access rules.
Supplier shall also provide commercially available, third
party tools designed to prevent un-deleting or recovering of
file and data deleted by certain individuals identified by
PacifiCare.
Establish procedures for resetting passwords.
Maintain security rules.
Provide security policy implementation.
Supplier shall assign and reset passwords as approved by
PacifiCare.
Follow up with End-Users to clarify ID administration
requests.
Supplier shall be responsible for the implementation (and
maintenance of an online database) of all access requests,
access rights lists, and for password management.
Supplier shall be responsible for user ID administration and
shall conduct such administration in accordance with the
Safety and Security Procedures, Schedule 10.2. Supplier's
responsibilities shall include the following:
[...***...]
Monitor users of the processing environment for authorized
access. Monitor, review and respond in a timely and
appropriate manner to access violations. Conduct periodic
reviews as appropriate to validate that individual employee
access to programs and libraries is appropriate.
Capture data regarding routine access and exceptions for audit
trail purposes, and make such data available to PacifiCare
upon request.
Establish and administer violation and access attempts report
mechanisms. Promptly provide written reports of all
information security breaches discovered or made known to
Supplier. Initiate corrective actions to minimize and prevent
further breaches to the extent within Supplier's control.
Prepare and retain documentation of breach investigations and
provide copies to PacifiCare.
* CONFIDENTIAL TREATMENT REQUESTED
119.
Provide application development security support and advice.
Where there is a security violation or unauthorized attempt to
access data, immediately bring such incident to the attention
of PacifiCare Corporate Information Security.
Provide security access control tools for data, databases,
applications, operating systems, and networks in compliance
with PacifiCare security policies, standards and procedures,
and maintain such security and access control devices in
proper working order.
Install, maintain and administer security databases.
Perform backup and recovery procedures in response to security
violations that result in lost/damaged information.
Perform security audits to verify that appropriate security
procedures are in place. [...***...]
Report logical security violations to PacifiCare's Corporate
Information Security.
At the level appropriate for Supplier's performance of
day-to-day security functions, consult with PacifiCare to
identify security risks and, subject to PacifiCare's approval,
recommend and implement procedures to minimize such risks.
Establish and maintain safeguards against the unauthorized
access, destruction, loss or alteration or PacifiCare data in
the possession of Supplier that are no less rigorous than the
most rigorous practices actually performed by PacifiCare or
Supplier as of the Effective Date in connection with the
respective PacifiCare-owned or Supplier-owned systems.
Supplier and its subcontractors shall provide PacifiCare with
evidence of a successful SAS 70 audit and an action plan and
timeline for any required remediation activities on an annual
basis.
Maintain current application security architecture,
[...***...]
Provide an environment where computing resources are
firewalled from all of the other Suppliers' customers as well
as from external threats.
Place all PacifiCare data on dedicated resources and
specifically not co-mingle PacifiCare data with the data of
other Supplier customers.
Conduct regular penetration tests and vulnerability
assessments of PacifiCare's network security and remediate
weaknesses within [...***...].
Implement all security patches within a [...***...].
* CONFIDENTIAL TREATMENT REQUESTED
120.
Define and implement processes and protocols for interfacing
with Corporate Information Security to ensure consistency in
the protection of PacifiCare information and computing assets.
9. ON-GOING BUSINESS DIVESTITURES AND ACQUISITIONS:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall support PacifiCare Included Affiliates per
Exhibit C in accordance with the Agreement. Supplier shall provide
services to additional business units in accordance with the Agreement.
10. CONSOLIDATION AND RELOCATION SERVICES:
SUPPLIER'S SOLUTION DESCRIPTION:
To minimize disruption to PacifiCare in the event of any work
consolidation or relocation, Supplier shall work with PacifiCare to
initiate a project to plan for this event. [...***...]. Supplier shall
work with PacifiCare to provide complete ANd accurate communication on
the project and to obtain PacifiCare's concurrence.
The Project Manager shall be responsible for validating that
all services (i.e. IMACs, infrastructure changes) being provided by
Supplier are addressed and planned appropriately to manage a smooth
transition. In addition, [...***...].
Supplier shall also review [...***...]. Adjustments to these
plans shall be made to verify that PacifiCare's requirements continue
to be met.
11. LICENSE MANAGEMENT AND COMPLIANCE:
SUPPLIER'S SOLUTION DESCRIPTION:
Each Party shall comply with the terms and conditions of the
Consents applicable to such Party under Section 3.4, Third Party
Consents, of the Agreement. Supplier shall deploy consistent and
uniform standards in managing and maintaining license compliance.
For Desktop and Distributed, [...***...].
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier's responsibilities shall include the following, as
applicable:
* CONFIDENTIAL TREATMENT REQUESTED
121.
Provide periodic reporting of such license information to
PacifiCare, as required.
File and track Software license agreements.
Proactively scan for pirated Software.
Report any known Software license anomalies.
12. INSTALLS, MOVES, ADDS, AND CHANGES:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Installs, moves, adds, and changes shall be executed through
the install, move, add, and change (IMAC) process described in the Fee
Schedule to the Agreement hereto.
13. CRISIS MANAGEMENT:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall provide IT services required in response to a
Corporate Crisis. Resources and requirements shall be determined at the
time of the crisis. Other specific Supplier responsibilities include:
Provide appropriate support when a crisis is declared.
Report crisis events.
Perform root cause analysis of problems.
14. COLLABORATIVE APPLICATIONS:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall support the [...***...] e-mail servers and
[...***...]. Supplier shall provide recommendations for improving the
[...***...] environment, as appropriate. The client portion of the
e-mail environment is [...***...]. [...***...] is considered part of
the PacifiCare Software that is supported by the Help Desk. The
End-Users shall be supported by either remote control from the
PacifiCare Help Desk, on-line knowledge base, or a desk-side visit from
a technician.
Supplier shall advise PacifiCare on the effective use of
[...***...]. As opportunities arise that can contribute to PacifiCare's
business environment or improve productivity, they shall be brought to
the attention of PacifiCare through THE Supplier. If PacifiCare agrees,
a New Service request shall be prepared and presented to PacifiCare for
approval.
For intranet/Internet, Supplier shall manage the [...***...].
* CONFIDENTIAL TREATMENT REQUESTED
122.
Supplier shall automatically [...***...], as directed by
PacifiCare, or advised on a regular basis. This is included in the Base
Fees.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
For all PC End-Users, Supplier shall install electronic mail
to include mail directory service, database management, Remote user
access, access to dissimilar mail system (e.g. Internet, etc.),
performance/systems tuning, and electronic mail applications services.
Supplier shall be responsible for maintaining version levels consistent
with Policy and Procedures Manual, Schedule 13.4.
Supplier shall be responsible for deploying and supporting the
collaborative applications defined in Schedule 14.2(b) within
PacifiCare. The collaborative applications environment includes such
applications and functions [...***...]
Administering and maintaining Outlook services.
Administering and maintaining electronic mail services.
Administering and maintaining Internet IDs, passwords, etc.
15. CHARGEBACK:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall provide sufficient invoice charge details to
support PacifiCare's chargeback system. This shall include invoicing
details but shall not include a chargeback application.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
[...***...]. Supplier shall provide lists of charges in both
hard and soft copy. At a minimum, Supplier shall provide to PacifiCare
invoice information by legal entity, by business unit, by site, by
[...***...]. Supplier shall also provide PacifiCare on-line access to
this information in a database that lends itself to searching and
recurring reporting.
16. EFFECTIVE USE OF THE EQUIPMENT:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall make recommendations on how Supplier believes
the technical environment could be better utilized. Supplier shall work
to consolidate systems where feasible
* CONFIDENTIAL TREATMENT REQUESTED
123.
[...***...] in support of PacifiCare. Where feasible, Supplier
[...***...].
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier, [...***...], shall identify strategies and
approaches for future information technology delivery within PacifiCare
that Supplier believes shall provide PacifiCare with competitive
advantages and identify and review with PacifiCare opportunities that
the Supplier has observed during the course of providing the Services,
that could result in increased efficiency, performance, or cost savings
([...***...]).
17. REDEPLOYMENT AND DISPOSAL:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The functions of re-deploying, cascading, and disposing of
Equipment shall be addressed by the IMAC process as described in
Schedule 17.
18. PROJECT MANAGEMENT:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier's responsibility for project management for projects
other than applications projects is described in Exhibit 1 hereto and
shall include the following:
Supplier shall implement Supplier management methodology
including the use of project management tools..
Supplier shall prepare and provide to PacifiCare periodically
[...***...] a series of performance, financial, utilization
and status reports, and those that PacifiCare reasonably
identifies or changes in the future.
Supplier shall provide PacifiCare with timely access to
information in an electronic format.
Supplier shall prepare annually and/or as requested and
provide to PacifiCare a scope of work definition.
Supplier representatives shall meet with representatives of
PacifiCare as necessary and appropriate to manage and deliver
the Services effectively. Supplier shall support and
participate in the various account management committees
called for by the Agreement and the procedures adopted by the
Parties to charter each such committee. Supplier shall
participate in related PacifiCare business and technology
planning meetings upon request to review operations and
business plans and recommend appropriate information
technology services to support plan execution.
* CONFIDENTIAL TREATMENT REQUESTED
124.
Supplier shall maintain appropriate levels of industry
knowledge in PacifiCare's business through, among other
activities, participation in industry meetings, forums and
conferences.
19. VIRUS PROTECTION:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
For all Services, Supplier shall install, update, operate and
maintain Virus protection Software on the Equipment. Supplier shall use
reasonable efforts to prevent Virus introduction into the PacifiCare
Systems, including the following:
Supplier shall monitor for, install, update, operate and
maintain Virus protection Software including protection
against worms, Trojan horses and other types of malicious
code. Updates to Virus protection Software shall be installed
on applicable servers and made available to End-Users of PCs
within five business (5) days of general release. [...***...].
Supplier shall automatically set Virus scans for desktops and
laptops on a [...***...] basis and on demand. Supplier shall
peRform Virus scans also on incoming (from external sources
including via the internet) and outgoing electronic mail.
Supplier shall actively monitor early warning alerts from
Virus vendors and their websites that broadcast
vulnerabilities and take proactive action to protect the
environment. Supplier shall utilize Software ([...***...]) to
block outbound internet access to web-based email sites.
Supplier shall utilize anti-Virus Software [...***...]on
workstations and laptops and make Software available for
in-scope home Equipment. Supplier shall utilize anti-Virus
Software [...***...] on all distributed computing servers.
Supplier shall utilize Software [...***...] on all groupware
([...***...]) servers. In the event of a Virus incident,
Supplier shall follow PacifiCare's process whereby remote
users shall be disallowed from accessinG the network until
Virus level certification is demonstrated. Supplier shall
review and update such process on a periodic basis, subject to
PacifiCare's approval. [...***...]
Upon detection of a Virus, Supplier shall take immediate
action as outlined in PacifiCare's Infrastructure Continuity
Program Charter, which will be included as part of the Policy
and Procedures Manual, and work with PacifiCare Security/CIRT
(Computer Incident Response Team) to assess the scope of
damage, and arrest the spread and progressive damage from the
Virus. CIRT operating guidelines are outlined in PacifiCare's
Infrastructure Continuity Planning Program Charter, which will
be included as part of the Policy and Procedures Manual.
Supplier shall take steps to salvage or restore as much of the
impacted file server data and Software as possible. Supplier
shall verify that the Virus
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125.
protection Software supplied by PacifiCare has the capability
to do the above referenced activities.
Supplier shall take steps to reasonably ensure that Supplier,
non-Supplier, and non-PacifiCare personnel have the required
anti-Virus protection installed on their personal
computers/laptops before being allowed to connect to the
network. Supplier shall review and update such process on a
periodic basis, subject to PacifiCare's approval.
Supplier shall install and maintain commercially available
Virus protection Software on [...***...].
If PacifiCare engages a third party risk management,
advisory/alert consulting or subscription service, Supplier
agrees to implement an agreed upon project in a timely manner,
including the recommended security Equipment, Software,
patches, fixes, version upgrades, manual and/or automated
policies, procedures, processes, to proactively prepare for
and reduce the risk of Virus incidents.
Supplier shall maintain statistics on Virus incidents that
successfully infect the environment and provide those
statistics upon request to PacifiCare.
20. PACIFICARE ONGOING PROJECTS AS OF EFFECTIVE DATE:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Change Control Procedures and/or Change Management
Procedures as applicable shall be used to address any changes in scope,
requirements, or schedules in respect of the ongoing projects.
21. REPORTING:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
In addition to report requirements described in this
PacifiCare Statement of Work, Supplier, after satisfying the PacifiCare
Service Level requirements for initial production and delivery, shall
publish and provide in an electronic format, suitable for use on a PC,
reports described in Schedule 3.9.d Reports.
22. MEETINGS BETWEEN PACIFICARE AND SUPPLIER:
PACIFICARE'S FUNCTIONAL REQUIREMENT:
In addition to meetings in the normal course of business to
address the quality and timely provision of the Services, Supplier and
PacifiCare shall meet on a regular basis to review operations controls,
Service Level results, executive reviews, etc.
23. LONG-RANGE INFORMATION SYSTEMS PLAN AND
EQUIPMENT/SOFTWARE ARCHITECTURE:
SUPPLIER'S SOLUTION DESCRIPTION:
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In support of PacifiCare's strategic planning and architecture
processes, Supplier shall assist PacifiCare in defining a strategy for
information technology architectures and standards on an ongoing basis
[...***...]. Supplier shall work wITH PacifiCare to support PacifiCare
technical architecture review board. [...***...].
Supplier shall assist PacifiCare with preparing long-term
strategic information technology plans and short-term implementation
plans on an annual basis. [...***...].
Supplier shall work with PacifiCare to integrate its specific
IT architecture strategy, Enterprise Systems Management Architecture
(ESMA), described in Exhibit 1 hereto.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
[...***...]. Supplier's responsibility for such functions
shall also include the following:
Assist PacifiCare in developing an understanding of and
confirm the business requirements.
Assist in identifying information and associated technology
needs.
Assist in identifying the projects to be performed along with
helping define schedules and high-level cost benefit analysis.
Assist in specifying the Equipment/Software architecture and
participate in continuously keeping PacifiCare's IS
Architecture current.
24. POTENTIAL VALUE ADDS:
The following potential value adds are included in the Base
Fees.
SUPPLIER'S SOLUTION DESCRIPTION:
PacifiCare has the opportunity to participate with the
Supplier team in site visits, position papers, and recommendations.
On an ongoing basis, consistent with the Agreement, [...***...].
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The e-ESM tool supports and integrates all the service areas
within the PacifiCare solution. [...***...].
Project Management Methodology: The Supplier team shall use a
consistent project management approach across all of the
Services. [...***...].
Tools The system management tools that are utilized by
Supplier in the delivery of the base solution [...***...].
After Supplier assumes the transitioned Equipment and Software
from PacifiCare, the tools shall utilized to manage the
operatioNaL environment and to facilitate event correlation
and handling. [...***...].
Technology Methodology: Supplier shall implement a suite of
delivery standards and processes that have been proven in many
customer and Supplier delivery environments. These processes
are implemented at all Supplier delivery organizations
throughout the world. Formal systems management controls
(SMC), based on Supplier's experiences and the client's
business requirements, shall be implemented consisting of:
[...***...]
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[...***...]
[...***...]
PACIFICARE'S FUNCTIONAL REQUIREMENT:
MISCELLANEOUS TOOLS AND PROCESSES
Supplier shall utilize tools and processes, [...***...],
during the performance of Services. A description of these tools and
processes is set forth in Exhibit 1 hereto.
25. DISASTER RECOVERY:
SUPPLIER'S SOLUTION DESCRIPTION:
Supplier shall manage the [...***...] PacifiCare IT Disaster
Recovery Plan. Supplier shall provide a Disaster Recovery (DR)
Coordinator for the overall Disaster Recovery Project Management of the
DR service provider. The role of the Disaster Recovery Coordinator
shall be as follows:
PRE-DISASTER RESPONSIBILITIES
Develop and maintain disaster process and documentation.
Supplier shall use the standard Supplier Service Delivery
Center Disaster Recovery Plan Template controlled document.
This document has been audited and found to be in compliance
with applicable [...***...].
Prepare for formal and informal disaster recovery reviews
(audits).
Conduct an annual DR Plan review.
Maintain a copy of the plan as a vital record.
[...***...].
POTENTIAL DISASTER RESPONSIBILITIES
Notify the Disaster Recovery Team Manager, DR service
provider, and off-site storage of Potential Disaster Alert
Status.
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Await notice from the DR service provider as to which centers are
currently available should an official disaster be declared.
Act as an interface between Supplier, PacifiCare, and the DR service
provider.
DISASTER RESPONSIBILITIES
Notify Disaster Recovery Team Leaders, the DR service provider, and
off-site storage of Declared Disaster Alert Status.
Act as an interface between Supplier, PacifiCare, and the DR service
provider.
Act as the focal point for recovery status and activity to the
Supplier Crisis Management Team.
POST-DISASTER RESPONSIBILITIES
[...***...].
Review recovery requirements and update existing PacifiCare DR
service provider agreements when applicable.
Review the recovery and update the plan.
TESTING RESPONSIBILITIES
Coordinate [...***...], or as otherwise specified by PacifiCare,
[...***...].
Develop a Disaster Recovery Test Plan. [...***...]. This document
has been audited and found to be in compliance with applicable
[...***...].
Develop Disaster Recovery Test Success Criteria.
Develop auditable Disaster Recovery Test Results. [...***...]. This
document has been audited and found to be in compliance with
applicable [...***...].
Maintain a problem log and timeline during the test.
Hold pre-test plan meetings with PacifiCare personnel and
representatives as appropriate.
Hold post-test review meetings to discuss and track problems to
closure from each test.
Verify that the Disaster Recovery Plan is updated as necessary.
THE DISASTER RECOVERY PLAN
The Disaster Recovery plan includes:
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[...***...]
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131.
[...***...]
[...***...] DISASTER RECOVERY SUPPORT
Supplier shall:
Direct development and maintenance [...***...].
Coordinate and monitor the scheduling, planning and annual testing
of [...***...].
Prepare and distribute [...***...], outlining exercise results and
action items.
Track and monitor completion of action items from [...***...]
Disaster Recovery tests.
Train all members of [...***...] Disaster Recovery Teams.
Participate in the design and implementation of [...***...]
alternate/hot-site disaster recovery strategies.
The Supplier shall manage, administer and maintain [...***...].
During the Transition Period, Supplier shall work with PacifiCare to
fully understand PacifiCare's specific requirements for disaster
recovery and the current processes, procedures, systems, and tools,
which are in place to react to and manage telecommunications
disasters that cause crisis situations. Once this is completed,
Supplier shall support disaster recovery as is currently supported.
Supplier shall manage as Managed Agreements, PacifiCare's existing
contracts relating to disaster recovery services.
PACIFICARE'S FUNCTIONAL REQUIREMENT:
The Supplier shall put plans in place and conduct periodic disaster
recovery tests. [...***...]:
Develop and maintain the Disaster Recovery Plan.
Coordinate Disaster Recovery testing.
Perform Disaster Recovery testing [...***...]. Supplier shall also
be responsible to conduct testing of those plans, and shall retest
within [...***...] if any disaster simulation(s) fail to achieve
specified results due to Supplier's failure to perform
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132.
its responsibilities. If the DRP testing encounters errors, Supplier
shall develop procedures and retest as necessary to resolve such
errors and update the DRP as necessary.
Report and review with PacifiCare Disaster Test results.
Maintain Disaster Recovery procedures manuals.
Implement the Disaster Recovery Plan upon the occurrence of a
disaster.
[...***...].
The Supplier is responsible for providing operational and technical
management support for disaster recovery telecommunications
planning, testing, and execution in crisis situations. Supplier is
responsible for training personnel in disaster recovery procedures
and providing access to these procedures in a crisis situation. The
Supplier shall also be responsible for making sure all contingency
policies and procedures comply with PacifiCare standards and are
current with no exceptions. Other Supplier responsibilities include:
Perform back up and recovery.
Perform contingency testing.
Perform battery plant management.
Identify single points of failure.
Plan and propose redundancy support across multiple Call Centers to
reduce chances of outages.
Perform disaster recovery testing as stated in the Agreement,
section 16.1 and in Schedule 8.
Implement the Disaster Recovery Plan upon the occurrence of a
disaster.
Provide Disaster Recovery (DR) program management including:
Coordination of the maintenance, planning, testing and reporting of
IDC DR plans
Coordination of IDC Change Management Procedures to DR Hot Site
vendor per Managed Agreement for maintaining Equipment
configurations, Software /forms modifications or additions and/or
procedure changes.
26. BUSINESS CONTINUITY SERVICES:
SUPPLIER'S SOLUTION DESCRIPTION: BUSINESS CONTINUITY AND RECOVERY
SERVICES METHODOLOGY
Supplier's business continuity and recovery services methodology
shall contribute to the planning and implementation of a contingency and
recovery process to meet PacifiCare's
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133.
requirements for business continuity by using a phased approach that is
based on industry best practices. [...***...]:
[...***...]
PHASE 1
[...***...]
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134.
[...***...]
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135.
[...***...]
The impacts to PacifiCare's staff, for training and support
PHASE 2
[...***...]
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136.
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
137.
[...***...]
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall be responsible to manage and maintain the Business
Continuity Plans and associated resources in place as they are actually
performed by PacifiCare as of the Cutover Date and as they pertain to
Services for which Supplier is otherwise responsible, and to extend those
capabilities to additional Equipment and applications over the Term and
during the Termination Assistance Period. Supplier shall also be
responsible to conduct testing of those plans, and shall retest
[...***...] if any disaster simulation(s) fail to achieve specified
results due to Supplier's failure to perform its responsibilities.
Supplier's responsibilities in respect of business continuity services
under this Statement of Work shall be limited to the business continuity
services in effect (in respect of the Services) on the Cutover Date or to
such enhancements to such responsibilities as Supplier and PacifiCare
shall mutually agree. Whether a Business Continuity Plan exists or not,
any recommendations made by Supplier must, at a minimum, provide
capabilities for restoration of Services within the timeframes specified
by PacifiCare.
BUSINESS CONTINUITY - SERVICES.
Supplier's responsibilities to provide Business Continuity Services
to PacifiCare shall include the following:
Plan and coordinate plans, operations, and technology requirements
with third party contingency providers.
With respect to the Application servers and LAN servers at
facilities in which Supplier personnel are located, Supplier shall
provide, and maintain on magnetic media or other media mutually
agreed to by the Parties and accessible to PacifiCare, backup,
[...***...]. Supplier shall perform such functions in accordance
with standards and procedures specified in Schedule 16.1, Disaster
Recovery Plan and which shall be no less stringent that the
standards and procedures used at well-managed operations providing
functions similar to the Services.
Supplier shall back up (and verify that such back ups have been
properly completed) the data and Software residing on the server
Systems in accordance with Business Continuity Plan.
When PacifiCare is conducting its Business Continuity test, Supplier
shall participate, as necessary, to demonstrate to PacifiCare that
the Business Continuity Plan is capable of recovering the PacifiCare
applications and data.
Perform, or with respect to the Remote sites where Supplier does not
have on-site personnel, assist PacifiCare's on-site personnel to
perform, [...***...] backup of all servers.
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Provide design and other consulting support for networking
requirements at the contingency site, including such support for
local connectivity to required servers and printers.
Support connectivity to PacifiCare's mission critical production
network and the production host systems or to the contingency
network and the recovery sites as required by the Business
Continuity Plan.
Support connectivity from the contingency site to all external
Suppliers and other organizations, as required by the Business
Continuity Plan.
In the event of a disaster, provide restoration of services as
required of the Supplier by the Business Continuity Plan. Ensure
that data is recovered to the appropriate point in time as required
by each application and as defined by the Business Continuity Plan.
Provide testing support services, which may include configuration
maintenance, server restoration, and application testing support.
Provide [...***...] training for appropriate PacifiCare Business
Continuity teams.
BUSINESS CONTINUITY PLAN.
Supplier shall, with respect to the Services existing as of the
Cutover Date, develop and maintain PacifiCare's Business Continuity
plans, which describes (i) the manner in which Supplier shall
perform backup and Business Continuity functions, and (ii)
PacifiCare's priorities for backup and Business Continuity and
methods for changing those priorities. PacifiCare's Business
Continuity Plan as of the Cutover Date, as required to be expanded
and improved by Supplier pursuant to this PacifiCare Statement of
Work, shall be the "BUSINESS CONTINUITY PLAN." Supplier shall comply
with the business continuity policies, standards and procedures in
PacifiCare's Business Continuity Plan. During the Term and the
Termination Assistance Period, Supplier shall incorporate any
reasonable comments or suggestions by PacifiCare into the Plan,
including evolving the Plan to fully cover new and evolving
architectures. Notwithstanding the foregoing, PacifiCare shall
retain the right to approve the Business Continuity Plan as Supplier
may modify it from time to time. Without limiting the generality of
the foregoing, Supplier's responsibilities with respect to the
Business Continuity Plan shall include the following:
Perform gap analysis of PacifiCare's Business Continuity Plan
existing as of the Cutover Date, and develop plans to address any
open issues as described in the Agreement.
Develop a process that shall determine and modify the list of
mission critical applications on an annual basis with PacifiCare's
input and approval.
Provide Business Continuity Plan input with respect to physical
design considerations.
Document Business Continuity standards and procedures subject to
PacifiCare's final approval.
Work with PacifiCare to incorporate security measures, as defined
for normal operations, into the Business Continuity Plan.
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Assist PacifiCare in the development of technology strategies to
meet PacifiCare business unit continuity requirements. Regularly
([...***...]) review such continuity requirements to update the
Business Continuity Plan.
Maintain and update the Business Continuity Plan to reflect addition
of New Equipment for which Supplier is responsible.
Assume responsibility for implementing, maintaining, evolving,
upgrading and testing the plans.
Assume coordination and administrative responsibility for third
party Suppliers utilized by PacifiCare in the performance of
testing.
Propose Business Continuity Plan modifications and perform problem
resolution and re-testing of all unsuccessful test components in
timely manner. At PacifiCare's request, this may include additional
tests.
For PacifiCare and Supplier, maintain a list of key personnel
contacts and notification procedures.
Train Supplier and PacifiCare personnel in Business Continuity
procedures and implement a process to obtain immediate access to
such procedures in a crisis situation.
Maintain current, without exception, all contingency policies and
procedures for the Services for which Supplier is responsible.
TESTING, DECLARATION, AND OTHER DUTIES.
In addition to the responsibilities set forth in this Section,
Supplier's responsibilities shall include the following:
Establish joint test objectives with PacifiCare designed to verify
that PacifiCare's systems for which Supplier is responsible shall be
available within established timeframes.
Subject to the availability of the PacifiCare-designated Business
Continuity test site, schedule and conduct tests of the Business
Continuity Plan at least annually in cooperation with PacifiCare and
its designees and Business Continuity provider. Supplier shall
schedule testing dates with PacifiCare's approval, which shall not
be unreasonably withheld. PacifiCare and its representatives shall
be given the opportunity to observe and participate in the tests.
Operate the Services during periodic Business Continuity tests.
Provide PacifiCare with a formal report of the test results within
thirty days of each test and report feedback from End-Users as to
the adequacy of backup for their respective areas. Such formal
report shall include a plan and a schedule for implementing such
plan to remedy any gaps revealed during testing. Supplier shall
update the Business Continuity Plan to remedy defects identified
during testing.
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For PacifiCare Service Locations, identify disasters to PacifiCare
immediately upon identification and consult with PacifiCare for
declaration. PacifiCare shall be responsible for declaration of
disasters with respect to PacifiCare Service Locations.
For all facilities for which Supplier has oversight responsibility,
declare disasters in accordance with procedures existing at the time
of declaration and notify PacifiCare of situations that may escalate
to disasters as soon as practicable.
Determine, in accordance with the Business Continuity Plan, what
business continuity resources to deploy in the event of a disaster,
and conduct, supervise, and administer the operation and
implementation of such resources.
In the event of a disaster, execute the Business Continuity Plan
including assumption of the responsibility to operate the Equipment
restoring the Software, and providing the functions in accordance
with the Business Continuity Plan.
Provide a single point of contact for Business Continuity related
communications and activities that are Supplier's responsibility.
[...***...]
Identify opportunities for improvement and efficiencies in Business
Continuity functions.
Generate a report following each and any Business Continuity test or
disaster measuring performance against the Business Continuity Plan
and identification of problem areas and plans for resolution.
Following any crisis, conduct a post-crisis meeting with PacifiCare
to understand that cause of the crisis and develop plans to
eliminate or mitigate future occurrences.
27. ASSET INVENTORY MANAGEMENT AND MAINTENANCE:
SUPPLIER'S SOLUTION DESCRIPTION:
The Supplier inventory tracking service shall address PacifiCare's
requirements for Equipment and Software asset tracking and inventory
tracking services. Tracking and making optimal use of the IT inventory is
central to the effective management of any computing environment.
[...***...].
MAINTENANCE OF DATA
The first step Supplier shall take is to [...***...] Combined with
the enterprise operating procedures and
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141.
processes that are used by the Supplier, Supplier shall [...***...].
Supplier shall use two methods to maintain the accuracy of the
inventory data: [...***...]. Supplier shall implement a manual entry
process. Whether an IMAC has takeN place or a Equipment change has
occurred as the result of a break/fix event, the changes shall be
recorded within Supplier's asset management database. This shall
assist the Help Desk agents [...***...]. The Help Desk agents shall
receive an [...***...]:
[...***...]
PACIFICARE'S FUNCTIONAL REQUIREMENT:
SUPPLIER AND/OR PACIFICARE DATA CENTER.
Supplier's responsibilities to provide asset inventory management
and maintenance for Supplier and PacifiCare Data Centers shall include the
following:
Establish and maintain proper and adequate facilities, Equipment
(excluding Equipment to be supplied by PacifiCare) and supplies at
the Supplier Data Center, and a properly trained and appropriately
sized management and support staff.
Properly manage, coordinate, oversee (and inform PacifiCare of the
results) with respect to maintenance, testing and monitoring of
facilities systems, air handlers and uninterruptible power supply
systems at the Supplier Data Centers and PacifiCare Data Centers
operated by Supplier.
Provide physical security for the Supplier Data Center as more fully
described in Section B.17 of this Statement of Work.
Create, update and maintain complete documentation (e.g., of
inventories, cabling and installed Equipment diagrams) of the
PacifiCare Equipment that is part of Supplier's responsibilities.
Use computer aided drafting (CAD) Software tools for changes to
existing documentation and newly created documentation created by
Supplier.
Provide physical access strategies and standards for the Data
Center, working with PacifiCare's Facilities department as required.
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Initiate and track requests for space, power and other Data Center
modifications in support of Equipment installations.
[...***...]
SUPPLIER EQUIPMENT AND SUPPLIER SOFTWARE.
In accordance with the Change Management Procedures, Supplier shall,
at Supplier's cost, add, replace, and upgrade Supplier Equipment and
Supplier Software that Supplier deems necessary to perform the
Services and meet the Service Levels.
Supplier shall create and maintain property removal passes for
Equipment per the Policies and Procedures Guide.
EQUIPMENT MAINTENANCE AND SUPPORT.
Supplier shall provide, or arrange for qualified third parties to
provide maintenance for Equipment for which Supplier is otherwise
responsible hereunder as necessary to keep such Equipment in good
operating condition and in accordance with manufacturer's
specifications or other agreements as applicable, so that such
Equipment shall qualify for the manufacturer's standard maintenance
plan upon sale or return to a lessor. PacifiCare shall be
responsible for additional costs and expenses, if any, to bring
PacifiCare-supplied Equipment up to such standards if such Equipment
doesn't meet such standards on the Cutover Date. Such maintenance
shall be performed in accordance with the Change Management
Procedures, so as to minimize the disruption to PacifiCare's normal
business processes. Supplier's responsibility for such functions
shall also include the following:
Supplier shall manage the third party service providers that provide
support.
Supplier shall plan, order install, test and maintain all Equipment
at Supplier-operated Data Center and work with third parties to
resolve Equipment problems. Supplier's responsibilities include
tracking configurations of Equipment and peripherals and maintaining
complete configuration documentation of the Supplier-operated Data
Center using CAD Software tools. In addition, Supplier is expected
to provide complete Supplier-operated Data Center support for all
environmental Equipment at the Supplier Data Center.
With respect to distributed Equipment for which Supplier is
otherwise responsible hereunder, Supplier shall provide break/fix,
support, advice and assistance to End-Users. Supplier shall correct
all problems associated with failure or maintenance of such
Equipment. Supplier shall install PacifiCare-supplied upgrades for
such distributed computing-related Equipment at the Service
Locations. Supplier shall maintain a level of documentation that
reflects the complexity and diversity of the environment and
facilitates the Equipment support process.
Supplier shall be responsible for coordinating rollouts and upgrades
of Equipment. Supplier shall be responsible for coordinating any
testing, scheduling, and installation integration of these products.
Supplier shall also perform full testing after installation and
provide proper back-out procedures. [...***...]
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With respect to the distributed computing environment, Supplier
shall procure (if requested by PacifiCare), install and maintain
Equipment, peripherals, file servers, gateways, and network /
communications Equipment. With respect to Equipment connected to the
network, Supplier shall maintain Equipment, peripherals, file
servers, frame relay circuits, gateways, network/communications
Equipment.
Supplier shall perform the decommissioning and removal of
distributed Equipment and shall coordinate with PacifiCare and
advise on effective technology re-use when appropriate and feasible.
Such decommissioning and removal shall be performed in an
environmentally sound manner.
Supplier shall maintain an effective inventory of all spare parts
and Equipment used to support the Equipment for which Supplier has
maintenance responsibility, and track such inventory in an inventory
management database system. This inventory shall be adequate to
allow Supplier to meet or exceed the PacifiCare Service Levels.
Supplier shall perform all operations required to support the
refresh and cascading of Equipment associated with providing the
Services throughout PacifiCare's operations. This shall include:
planning, associated change management and problem management,
de-installation, reinstallation, configuration, staging, and user
orientation as otherwise specified hereunder.
ASSET INVENTORY/CONFIGURATION MANAGEMENT.
Supplier shall conduct a wall-to-wall inventory of all Services
Equipment and Software provided or managed by Supplier and deployed
at the Service Locations as described below. Once PacifiCare
approves the inventory pursuant to provisions of the PacifiCare
Service Level Schedule, Supplier shall maintain the asset inventory
management database for all Equipment and Software provided or
managed by Supplier and deployed at the Service Locations pursuant
to provisions of the PacifiCare Service Level Schedule. Supplier
shall provide PacifiCare with online access to the asset inventory
management database, produce periodic reports as necessary, and
respond in a timely manner to queries and requests concerning the
inventory data or supporting information. Supplier shall complete
the Initial Inventory, and maintain the asset inventory database in
accordance with and within the timeframes specified in the Service
Level Schedule. This responsibility shall include the following:
[...***...]
7. Resource Category identifier
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8. Standard/Non-Standard designation
9. Mission critical designation - Provided by PacifiCare
10. Unique bar code identification number
11. Equipment manufacturer and model number
12. Peripherals
13. Upgrades
14. Operating system
15. Application Software
16. Protocol
17. Ownership and in-service date provided by PacifiCare for
existing assets
18. Lease holder and lease term. - Provided by PacifiCare
19. Maintenance provider and information
20. Physical location
21. PacifiCare customers
22. Business unit / Department Number- Provided by PacifiCare
23. Phone number - Provided by PacifiCare
24. Assigned IP address
25. Faceplate ID
26. Hub port
On a periodic basis, update inventory database by, to the extent
enabled in the PacifiCare approved enterprise management system
provided by Supplier, electronically polling devices attached to
LANs.
Ongoing inventory reconciliation via random inventory verifications,
verification of local inventories when performing Equipment
installations, etc.
Verify inventory information upon request for on-site service
28. OPERATIONS DOCUMENTATION:
SUPPLIER'S SOLUTION DESCRIPTION:
145.
Supplier's standard delivery model for operational documentation
includes maintaining and updating the existing operational documentation
for all operations procedures and services that are in-scope. In addition,
where operational documentation does not exist for in-scope services,
Supplier shall establish and then maintain documentation, with
PacifiCare's concurrence. During Transition Period, transfer of knowledge
relating to procedures and policies that are specific to PacifiCare shall
be merged with current Supplier procedures and then documented for use in
support of PacifiCare. [...***...].
PACIFICARE'S FUNCTIONAL REQUIREMENT:
OPERATIONS DOCUMENTATION. Supplier shall develop all new systems
documentation, and End-User based documentation so as to be accessible by
soft copy. Supplier shall maintain current documentation in hard and soft
copy on all operations procedures, services, Equipment and Software for
which Supplier is responsible. Supplier's responsibilities shall include:
During the Transition Period Supplier shall review and update
operational procedures with the operations and PacifiCare
staff, as appropriate.
Document operations procedures and services. All old and new
applications operations instructions shall be created or
updated.
Document application procedures that affect operations.
Document End-User procedures that affect operations.
all documentation for which Supplier is responsible, and subject to
PacifiCare's review and approval, develop and enforce documentation
standards. Supplier shall regularly audit documentation for
completeness and accuracy in order to verify that all documentation
is present, organized, readable, and updated. The resulting audit
findings shall be reported to PacifiCare on a regular basis. Where
it is determined that documentation is inaccurate (e.g., erroneous
or out of date), Supplier shall correct such documentation. To the
extent Supplier is otherwise responsible to provide support, advice
and assistance to End-Users hereunder, Supplier shall do so
consistent with current documentation. All documentation maintained
by Supplier shall be subject approval by PacifiCare and shall
conform to documentation standards agreed upon between PacifiCare
and Supplier.
29. ORDER FULFILLMENT:
SUPPLIER'S SOLUTION DESCRIPTION:
[...***...]
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[...***...].
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Supplier shall provide pre-acquisition consulting including
consulting on compatibility and infrastructure requirements. Supplier
shall forecast PacifiCare Services processing requirements, process
End-User requests, configure Equipment, and order (if requested by
PacifiCare). Supplier shall be responsible for verifying that appropriate
PacifiCare approvals have been obtained and scheduling installations, and
PacifiCare Facilities preparation. Supplier shall perform such procurement
functions in accordance with the following:
Supplier shall procure in accordance with the Change Control
Procedures PacifiCare standard (or other configurations as
PacifiCare may request) Equipment in accordance with the following:
Catalog Procedures. In order to facilitate PacifiCare's production
of orders, Supplier shall provide a catalog of the PacifiCare
Standard Equipment and Software, with current prices, in both an
electronic and hard copy format.
Delivery of Orders. PacifiCare shall send its orders for products to
Supplier in accordance with procedures agreed to by the Parties in
advance and set forth in Schedule 13.3, Policy and Procedures
Manual.. Supplier shall not accept or place any order that is not
pursuant to a PacifiCare Approved Request.
Order Content. Each order shall be numbered or uniquely identified
and shall include at least the following items whenever such item is
applicable to the product items and related Services covered by such
order: the date of the order; the delivery dates and dates of
performance of required preparatory services; a complete list of the
product items covered by the order, specifying, attaching or
referencing the quantity, model number, name or identification
number, and description; the charge for each product item; shipping
instructions; the location to which the products shall be delivered
and installed; and the scheduled installation date.
Installation Date(s). Installation dates for servers shall be as
specified in each order, or, if not specified, as mutually agreed
upon. Installation dates for PCs shall be as specified in each
order, or, if not specified, [...***...]. Supplier shall cause the
Equipment to be delivered to PacifiCare's designated location
required preparatory services on or before the dates specified.
PacifiCare shall provide a secure location for the Equipment to
reside at each designate location. Equipment and Software shall not
be considered installed until the Equipment or Software operates in
accordance with its documentation and PacifiCare guidelines.
Order Terms. Supplier shall immediately acknowledge receipt of each
order and shall be bound by such order to procure in accordance with
the Change Control Procedures or Change Management Procedures as
appropriate the product items and provide related Services provided
therein, unless Supplier notifies PacifiCare of reasonable
objections to the requirements of such order in writing within
[...***...] of the receipt of such order.
*CONFIDENTIAL TREATMENT REQUESTED
147.
Order Changes. If PacifiCare cancels or withdraws an order for any
non-Supplier product item after the time that such product is
shipped to PacifiCare, Supplier may invoice PacifiCare for Out-of
Pocket costs and reasonably related administrative expenses, as
disclosed to PacifiCare prior to the cancellation or withdrawal and
which Supplier cannot reasonably avoid or mitigate.
Order Tracking. Supplier shall track technology orders, including
verifying the technical integrity of the order, examining the order
to verify that it constitutes a properly completed PacifiCare
Approved Request, processing the order, and following through on
delivery.
[...***...]
Upon order arrival, configure install, and test in scope distributed
Equipment and Software.
Maintain master Software diskettes or CDs in a central location.
Maintain and upgrade in scope network Software i.e., the operating
system, mail systems, gateway and communication Software.
Plan installation of computer and environmental Equipment.
Notify users of new Software availability.
Design, configure, install and test all new file servers and
Equipment. This includes proper coordination to provide that
connectivity is ready, data center or server room space has
been coordinated, as well as physical set up of associated
Equipment and Software.
30. DATA RETENTION
PACIFICARE'S FUNCTIONAL REQUIREMENT:
Notwithstanding the standard retention requirements, for any Data
that shall be retained as required by law, by the order of a court or
similar judicial or administrative body, pursuant to a settlement
agreement, finding of a court, arbitrator, or mediator, in preparation for
or use in a matter relating to litigation or upon the request of
PacifiCare, upon notification by PacifiCare, Supplier shall retain the
applicable Data, perform the appropriate Backup of Data and ship the
relevant media to storage in compliance with the applicable retention
notice provided by PacifiCare. The process of Backup and storage will be
pursuant to the normal procedures for such Backup and shipment unless
otherwise specified by PacifiCare. In the event Supplier's compliance with
such non standard retention requirement will result in Supplier incurring
an unreasonable expense or cost, the Parties shall mutually agree on the
allocation of such expense or cost.
*CONFIDENTIAL TREATMENT REQUESTED
148.
EXHIBIT C
EXHIBIT C
PACIFICARE INCLUDED AFFILIATES
Antero Health Plans, Inc.
(an Colorado corporation)
FHP Reinsurance Limited
(a Bermuda corporation)
Health Maintenance Life, Inc.
(a Guam corporation)
PacifiCare of Arizona, Inc.
(an Arizona corporation)
PacifiCare Asia Pacific Insurance Brokers, Inc.
(a Guam corporation)
PacifiCare Behavioral Health of California, Inc.
(a Delaware corporation)
PacifiCare Behavioral Health, Inc.
(a Delaware corporation
PacifiCare of California
(a California corporation)
PacifiCare of Colorado, Inc.
(a Colorado corporation)
PacifiCare Dental of Colorado, Inc.
(a Colorado corporation)
PacifiCare Dental
(a California corporation)
PacifiCare eHoldings, Inc.
(a California corporation)
PacifiCare Health Insurance Company of Micronesia, Inc.
(a Guam corporation)
PacifiCare Health Plan Administrators, Inc.
(an Indiana corporation)
PacifiCare Health Systems Foundation
(a California nonprofit corporation)
PacifiCare Health Systems, Inc.
(a Delaware corporation)
1
PacifiCare International Limited
(an Irish Company)
PacifiCare Life Assurance Company
(a Colorado corporation)
PacifiCare Life and Health Insurance Company
(an Indiana corporation)
PacifiCare Life Insurance Company
(an Arizona corporation)
PacifiCare of Nevada, Inc.
(a Nevada corporation)
PacifiCare of Ohio, Inc.
(an Ohio corporation)
PacifiCare of Oklahoma, Inc.
(an Oklahoma corporation)
PacifiCare of Oregon, Inc.
(an Indiana corporation)
PacifiCare of Texas, Inc.
(an Oregon corporation)
PacifiCare Ventures, Inc.
(a California corporation)
PacifiCare of Washington, Inc.
(a Washington corporation)
RxConnect Acquisition Corporation
(a California corporation)
RxSolutions, Inc.
(a California corporation)
SecureHorizons USA, Inc.
(a California corporation)
SeniorCo, Inc.
(a Delaware corporation)
2
SCHEDULE 3.1(b)(i)
AFFECTED CONTRACTORS
For confidentiality purposes, the information in this schedule will only be
accessible to the PacifiCare Supplier Relationship Vice President, the IBM
Account Executive, and other personnel (e.g., Human Resources, Legal, etc.) as
deemed necessary.
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 3.1(b)(ii)
AFFECTED EMPLOYEES
For confidentiality purposes, the information in this schedule will only be
accessible to the PacifiCare Supplier Relationship Vice President, the IBM
Account Executive, and other personnel (e.g., Human Resources, Legal, etc.) as
deemed necessary.
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 3.5
TECHNICAL ARCHITECTURE AND PRODUCT STANDARDS PROCEDURES
[PACIFICARE LOGO]
ENTERPRISE-WIDE
TECHNICAL ARCHITECTURE
FOR
PACIFICARE HEALTH SYSTEMS
[PACIFICARE LOGO]
DOMAIN ARCHITECTURE DOCUMENT
GOVERNANCE DOMAIN
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
Page 1
TABLE OF CONTENTS
GOVERNANCE DOMAIN ARCHITECTURE.................................................. 3
About This Document........................................................... 3
Document History.............................................................. 3
Related Documents............................................................. 3
Governance Domain Participants................................................ 3
Governance Domain Definition.................................................. 5
Governance Domain Vision...................................................... 5
Governance Domain Executive Summary........................................... 5
Governance Principles......................................................... 7
Governance Organizations...................................................... 8
Key Architecture Entities................................................... 9
Architecture Oversight Bodies............................................... 12
Governance Processes.......................................................... 15
Management Processes........................................................ 16
Consulting Processes........................................................ 23
Communication Processes..................................................... 25
Gap Analysis.................................................................. 29
Appendices.................................................................... 32
Appendix 1. Roles and Responsibilities for Enterprise Architecture Processes 32
Appendix 2. EWTA Domain Ratification and Maintenance Process................ 32
Appendix 3. EWTA Exception Management and Compliance Process................ 32
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GOVERNANCE DOMAIN ARCHITECTURE
ABOUT THIS DOCUMENT
The Governance Domain details the principles, organizations, roles and
responsibilities, services, processes and the workflow for the PacifiCare Health
Systems (PacifiCare) Enterprise Architecture (EA).
DOCUMENT HISTORY
Version Date Team Member Reason
[...***...] [...***...] [...***...] [...***...]
RELATED DOCUMENTS
Document Title Relevance Owner How to obtain
[...***...] [...***...] [...***...] [...***...]
GOVERNANCE DOMAIN PARTICIPANTS
DOMAIN TEAM LEADER: [...***...]
DOMAIN PARTICIPANTS: [...***...]
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CORE TEAM COORDINATOR: [...***...]
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GOVERNANCE DOMAIN DEFINITION
Te Governance Architecture details the overall governance process for
PacifiCare's Enterprise Architecture (EA), including the various oversight
committees and their roles/responsibilities. Governance is the framework for
defining who is responsible for what and how decisions are made related to the
evolution of PacifiCare's Enterprise-Wide Technical Architecture (EWTA). It is
also the mechanism for ensuring compliance with the principles set forth in the
conceptual architecture and various domain architectures.
The terms EWTA and EA are utilized extensively throughout this document. EWTA
refers to the principles, standards and technology elements that make up
PacifiCare's architecture, i.e., "the What". EA refers to the governance of the
processes, touchpoints, and organizations that determine how the architecture
operates at PacifiCare, i.e., "the Who, What, Where and When."
GOVERNANCE DOMAIN VISION
PacifiCare facilitates the evolution of its technology infrastructure via
proactive and unified governance of the EWTA by all stakeholders. The conceptual
and domain design principles, which make up the EWTA, are the primary criteria
for decisions related to evolution of the EWTA and will be employed by all
stakeholders.
GOVERNANCE DOMAIN EXECUTIVE SUMMARY
EA Governance consists of four key elements: the EWTA, governance principles,
organizations and processes that must be established and maintained to insure
effective and sustainable governance and evolution of the ETWA. The following
describes each of these key EA Governance elements:
- EWTA - Consists of the Common Requirements Vision (CRV), Conceptual
Architecture principles (CA), Domain Architecture design principles,
standards, products, design patterns and technology roadmaps that guide
PacifiCare's IT investments. [...***...]
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[...***...]
- GOVERNANCE PRINCIPLES - Guiding principles for governance of the evolution
of PacifiCare's EA. The principles provide a context for consistent
architecture and program management decision-making.
- ORGANIZATION - The organizations that make up PacifiCare's EA function,
their roles and responsibilities and the services they provide.
- PROCESSES - The processes and workflow for the services that make up EA at
PacifiCare. These include strategy, EWTA maintenance, EWTA compliance,
administration, project architecture, communications, knowledge
management, and training processes.
Figure 1 graphically depicts the elements EA Governance:
FIGURE 1. EA GOVERNANCE
[GRAPHIC OF EA GOVERNANCE]
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GOVERNANCE PRINCIPLES
The following governance principles will guide the establishment and evolution
of PacifiCare's EA governance process:
1. UNIFIED. [...***...]
2. INCLUSIVE. [...***...]
3. COMPREHENSIVE. [...***...]
4. EVOLUTIONARY. [...***...]
5. COLLABORATIVE. [...***...]
6. ACCESSIBLE. [...***...]
7. EFFICIENT. [...***...]
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GOVERNANCE ORGANIZATIONS
(ARCHITECTURE ORGANIZATIONS, ROLES AND RESPONSIBILITIES)
There are a number of entities that are critical to the management of the
PacifiCare EA. In addition there is a hierarchy of architecture oversight bodies
responsible for the maintenance of and compliance to the EWTA. These are
depicted and described below:
[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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GOVERNANCE PROCESSES
(ARCHITECTURE PROCESSES AND WORKFLOW)
There are eight EA core processes. [...***...]
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MANAGEMENT PROCESSES
Management processes define, develop, evolve and manage the EA for the
enterprise.
- STRATEGY - As business direction and IT strategy of PacifiCare evolve, the
IT Executive and EA Teams work to ensure that the vision and strategic
intent of EA evolve to meet these changing business needs.
[...***...]
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- ADMINISTRATION - Administration encompasses the day-to-day EA governance
activities performed by the EA Team to ensure effective operation of the
EWTA at PacifiCare.
[...***...]
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[...***...]
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- MAINTENANCE - The ARB governs evolution of the EWTA to ensure that it is
responsive to changes in PacifiCare's business environment and the
technology market. The ARB authorizes the EA Team to update the EWTA to
continually align PacifiCare's technology standards and products with the
goals and objectives of the business and the changing technology
marketplace. Appendix 2. EWTA Domain Ratification and Maintenance Process
flowcharts the EWTA Maintenance process and responsibilities.
[...***...]
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[...***...]
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- COMPLIANCE - Compliance is crucial to the long-term success of the EA
because it details the means by which the EWTA technology standards and
products will be adhered to throughout the enterprise.
[...***...]
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[...***...]
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*CONFIDENTIAL TREATMENT REQUESTED
CONSULTING PROCESSES
Consulting processes support the application and utilization of the EWTA
standards and EA methodology throughout the enterprise.
- PROJECT ARCHITECTURE - The EA Team provides support to Project Architects
on large Technology and Application Software projects to assist them with
their architecture needs. The Project Architect position is both strategic
and tactical in nature. From the strategic perspective, the Project
Architect provides alignment with the EWTA and overall architectural
leadership and vision for the project team. From the tactical perspective,
the Project Architect must transform conceptual architectural vision into
concrete deliverables used by the project, program, development,
infrastructure, logistics, and business teams.
[...***...]
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TRAINING - The EA Team establishes an architecture training framework to align
training offerings with architectural principles and standards and promote
overall architecture education within the IT community.
[...***...]
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COMMUNICATION PROCESSES
Communication processes support the means for EA information dissemination and
sharing throughout the enterprise and promote awareness and understanding of the
EA process and guidelines.
- KNOWLEDGE MANAGEMENT - The EA Team provides a readily accessible and
useable EA knowledge base that stores, manages and makes available the
EWTA principles, standards, methodologies, templates, tools and other
resources that comprise the EA.
[...***...]
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[...***...]
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- COMMUNICATIONS - A consistent, broadly shared and readily available view
of the EA is critical to building organizational understanding and
adoption of EA processes within PacifiCare. Promoting a shared
understanding requires a focused and ongoing communications effort.
[...***...]
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[...***...]
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*CONFIDENTIAL TREATMENT REQUESTED
GAP ANALYSIS
The Gap Analysis provides a description of the gaps between current state of EA
Governance and the ideal state as outlined in this document as of September of
2001. [...***...]
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[...***...]
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[...***...]
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APPENDICES
APPENDIX 1. ROLES AND RESPONSIBILITIES FOR ENTERPRISE ARCHITECTURE PROCESSES
[...***...]
APPENDIX 2. EWTA DOMAIN RATIFICATION AND MAINTENANCE PROCESS
[...***...]
APPENDIX 3. EWTA EXCEPTION MANAGEMENT AND COMPLIANCE PROCESS
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
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APPENDIX 1
ROLES AND RESPONSIBILITIES FOR ENTERPRISE
ARCHITECTURE PROCESSES
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
APPENDIX 2
EWTA DOMAIN RATIFICATION AND MAINTENANCE PROCESS
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
APPENDIX 3
EWTA EXCEPTION MANAGEMENT AND COMPLIANCE PROCESS
[...***...]
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SCHEDULE 3.8(a)
New York, New York
December 31, 2001
PROMISSORY NOTE
The undersigned, International Business Machines Corporation,
a New York corporation having offices at Xxxxx 000, Xxxxxx, Xxx Xxxx 00000 (the
"Maker"), for value received and in consideration of the execution of a certain
Information Technology Services Agreement, dated December 31, 2001 (the
"Agreement"), between the Maker and Pacificare Health Systems, Inc., a Delaware
corporation with its principal place of business at 0000 Xxxx Xxxx Xxxxxx Xxxxx,
Xxxxx Xxxx, Xxxxxxxxxx 00000 ("PHS"), promises to provide to PHS credits for the
latter's payment for the services specifically described and delineated in the
Agreement (respectively the "Credits" for the "Services"), commencing with the
payment of the first monthly invoice under the Agreement for Base Services (as
defined in the Agreement), and continuing thereafter for a period of forty two
(42) consecutive months, subject to the conditions precedent set forth below.
The provision by the Maker of such Credits for payment for
such Services by PHS is expressly subject to, and conditioned upon the
following: (i) PHS is not in breach of its material obligations under the
Agreement at the time that any such Services are to be provided and (ii) the PHS
monthly fee payment due to Maker under the Agreement for Base Services is timely
made in accordance with Sections 17.2 and 17.7 of the Agreement . Provided that
the foregoing conditions precedent have been fulfilled, Maker will provide such
Credits provided pursuant to this Note and the Agreement in accordance with the
following schedule:
Year One (1): [...***...]
Year Two (2): [...***...]
Year Three (3): [...***...]
First Six (6) months of year Four (4): [...***...]
The Maker and PHS agree that, to the extent that the Maker and
PHS determine that the actual net book value of the assets purchased pursuant to
Section 3.8 of the Agreement (the "Assets") is less than forty-two million
dollars ($42,000,000.00), then the Credits issuable pursuant to this Note shall
be reduced proportionately by the amount of the difference between forty-two
million dollars ($42,000,000.00) and the actual net book value of the Assets, as
determined by the Maker and PHS. The Maker and PHS will cooperate with one
another and shall use all reasonable efforts to make a final determination as to
such net book value as soon as reasonably practicable following the date hereof.
This Note evidences obligations incurred under, and is subject
to, secured by and entitled to the benefits provided by the terms and conditions
of the Agreement, to which Agreement reference is hereby made for a statement of
said terms and provisions. The terms and provisions of the Agreement are
incorporated herein, to the extent applicable.
PHS agrees that it will look solely to the Credits for the
payment of this Note, and no other property or assets of the Maker or of any
person, firm or entity, disclosed or undisclosed, shall be subject to any
enforcement procedure for the satisfaction of the remedies of PHS under this
Note.
In the event that the Maker fails to provide the Services as
provided in the Agreement, or if the Maker is in default under any other
provision of the Agreement, PHS shall be entitled to those remedies specifically
afforded to it and provided by in the Agreement or at law or in equity.
Subject to the next sentence, in the event of the termination
of the Agreement, this Note will be of no further force or effect, and IBM's
obligations under this Note shall be deemed fully satisfied without any further
provision of Credits for Services or otherwise. In the event of the termination
of the Agreement by PHS pursuant to
* CONFIDENTIAL TREATMENT REQUESTED
Section 24.3 (a) of the Agreement, any outstanding Credits issuable hereunder
may, at the option of PHS, be used to reduce (i) the aggregate purchase price
for the re-purchase of the Assets from the Maker in accordance with Section 25.2
of the Agreement; and (ii) fees for Termination Assistance Services payable
pursuant to Section 26.2 of the Agreement.
Presentment, notice of dishonor, protest and notice of protest
are hereby waived.
This Note may not be changed or terminated orally and no
waiver of any provision hereof shall be valid unless in writing signed by the
Maker and PHS.
INTERNATIONAL BUSINESS MACHINES
CORPORATION
By:______________________________
Title:
SCHEDULE 3.8(b)
SCHEDULE 3.8(b)
GENERAL ASSIGNMENT AND XXXX OF SALE
THIS GENERAL ASSIGNMENT AND XXXX OF SALE, dated as of December 31, 2001, is
between PACIFICARE HEALTH SYSTEMS, INC., a Delaware corporation with its
principal place of business at 0000 X. Xxxx Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx,
00000 ("SELLER"), and INTERNATIONAL BUSINESS MACHINES CORPORATION, a New York
corporation with its principal place of business at Xxxxx 000, Xxxxxx, Xxx Xxxx
00000 ("PURCHASER").
WITNESSETH:
WHEREAS, Purchaser and Seller are entering into an agreement of even date
herewith whereby Purchaser will provide Seller with various information
technology services (the "Services Agreement"); (capitalized terms not defined
herein shall have the meanings ascribed to them in the Services Agreement);
WHEREAS, pursuant to the Services Agreement, Seller has agreed to sell, and
Purchaser has agreed to purchase, on the Effective Date, the assets described in
Exhibit 1 to this General Assignment and Xxxx of Sale (the "ASSETS"); and
WHEREAS, Seller desires to transfer and assign the Assets and Purchaser desires
to accept the transfer and assignment thereof.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Seller hereby irrevocably sells, transfers, conveys,
and assigns to Purchaser all of Seller's right, title, and interest in the
Assets, free of all liens except Permitted Liens, to have and to hold the same
unto Purchaser, its successors, and assigns, forever.
Purchaser hereby accepts the sale, transfer, conveyance, and assignment of the
Assets.
At any time or from time to time after the date hereof, at Purchaser's request
and without further consideration, Seller shall execute such other instruments
of transfer, conveyance, assignment, and confirmation, provide such materials
and information and take such other actions as Purchaser may reasonably deem
necessary or desirable in order more effectively to transfer, convey, and assign
to Purchaser, and confirm Purchaser's title to, all of the Assets, and to the
full extent permitted by law, to permit Purchaser to exercise all rights with
respect thereto. Seller represents that it owns, and has good and valid title
to, the Assets, and Seller shall indemnify and defend Purchaser from i) all
claims that the Assets infringe upon the intellectual property rights of any
third party, ii) all claims by third parties with respect to Seller's valid
title to the Assets, and iii) and all claims by third parties demanding the
satisfaction of Permitted Liens with respect to the Assets, provided that, in
each case, Purchaser complies with the indemnification procedures set forth in
Section 27.3 of the Agreement.
This General Assignment and Xxxx of Sale may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
The rights and obligations of the Parties under this General Assignment and Xxxx
of Sale shall be governed in all respects by the laws of the State of California
exclusively, as such laws apply to
1.
contracts between California residents performed entirely within California.
Supplier agrees that it shall only bring any action or proceeding arising from
or relating to this Agreement in a federal court in the Central District of
California or in state court in Los Angeles, California, and Supplier
irrevocably submits to the personal jurisdiction and venue of any such court in
any such action or proceeding or in any action or proceeding brought in such
courts by PacifiCare.
IN WITNESS WHEREOF, the undersigned have caused their duly authorized officers
to execute this General Assignment and Xxxx of Sale on the date first written
above.
PACIFICARE HEALTH SYSTEMS, INC. INTERNATIONAL BUSINESS MACHINES
CORPORATION
By: By:
-------------------------------- -------------------------------------
[NAME] [NAME]
Title: Title:
----------------------------- ----------------------------------
2.
EXHIBIT 1 TO GENERAL ASSIGNMENT AND XXXX OF SALE
The "Assets" are the information-technology-related assets used in connection
with Seller's provision of internal information technology services prior to the
Effective Date, which assets Purchaser will use to provide Services pursuant to
the Services Agreement, as such assets are contemplated by the RFP issued by
Seller in connection with the transactions contemplated by the Services
Agreement and as described in materials previously provided by Seller to
Purchaser.
3.
SCHEDULE 3.9(b)
PacifiCare / IBM Confidential
SCHEDULE 3.9(b)
REPORTS
Without limiting or altering Supplier's responsibility to provide any reports,
updates, invoices or similar documentation to PacifiCare as set forth in the
Agreement or any exhibit, schedule or attachment thereto, and without limiting
any of Supplier's other responsibilities as set forth in the Agreement or any
exhibit, schedule or attachment thereto, Supplier shall provide PacifiCare the
reports set forth in this Schedule 3.9(b) (the "REPORTS") in accordance with the
terms of this Schedule 3.9(b) and Appendix 1 hereto.
Supplier shall not change or discontinue producing any Report without the
approval of PacifiCare.
Supplier shall work with PacifiCare to determine the best means and formats by
which to provide Reports, including options such as Web access, online graphical
reports, and file transfer. For any Reports not set forth herein or otherwise
described in the Agreement or any exhibit, schedule or attachment thereto,
PacifiCare and Supplier shall mutually determine the content, format and
frequency of such Reports.
All Reports and all contents thereof shall be PacifiCare Data.
1. PRODUCTION REPORTS. Supplier shall produce all reports [...***...]
(individually and collectively, "PRODUCTION REPORTS") anD deliver such
Production Reports to [...***...].
2. OPERATIONAL REPORTS.
Supplier shall produce operational reports for PacifiCare that describe the
operations and Services performed by Supplier ("OPERATIONAL REPORTS"). The
Operational Reports shall include:
(a) SECURITY BREACH REPORT. As set forth in Section 10.4 of the
Agreement, Supplier shall deliver to PacifiCare Reports of all security breaches
and potential breaches discovered by or made known to Supplier. Supplier shall
deliver such Reports regarding security breaches and potential breaches
immediately following such breach or the discovery of such breach or potential
breach by Supplier.
(b) ANNUAL SECURITY AUDIT. As set forth in Section 10.2 of the
Agreement, Supplier shall provide PacifiCare a Report of each annual security
audit performed by Supplier promptly following the completion of such security
audit.
(c) DISASTER RECOVERY TEST SUMMARY. As set forth in Section 16.1 and
elsewhere, Supplier shall provide PacifiCare Reports of disaster recovery test
and retest results as required pursuant to Section 16.1 of the Agreement and as
otherwise conducted by Supplier, which such Reports shall be delivered promptly
following any such disaster recover test or retest ("DISASTER RECOVERY TEST
SUMMARY REPORTS").
(d) VARIABLE FEES REPORT AND RELATED REPORTS. During the Term and
Termination Assistance Period Supplier shall provide PacifiCare a monthly
Variable Fees Report as set forth in Section 17.4 of the Agreement.
(e) [...***...]
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[...***...]
(f) [...***...].
3. SERVICE LEVEL REPORTS. Supplier shall provide PacifiCare a monthly Service
Level Report (as defined in Schedule 8 to the Agreement), as set forth in
Section I.G.1 of Schedule 8 to the Agreement ("SERVICE LEVEL REPORTS").
[...***...].
4. SERVICE LEVEL MANAGEMENT REPORTS.
[...***...].
5. PROBLEM MANAGEMENT REPORTS. Supplier shall produce a monthly Report
containing number and types of problems [...***...].
6. CHANGE MANAGEMENT REPORTS. Supplier shall produce a monthly Report detailing
all changes, modifications, updates, revisions and other functions relevant to
Change Management Process (as defined in the Policy & Procedures Manual),
[...***...].
7. BILLING RESOLUTION REPORTS. As requested by PacifiCare, Supplier shall
provide to PacifiCare Reports that shall provide detailed summaries of issues
with respect to billing [...***...].
8. PROJECT MANAGEMENT REPORTS. Supplier shall provide Reports regarding the
status of all current and planned Projects as set forth in Section H.21 of
Exhibit B to the Agreement ("PROJECT STATUS REPORTS").
9. IMAC REPORTS. On a monthly basis, Supplier shall provide PacifiCare a Report
that shall detail IMAC (as defined in EXHIBIT B) activity during the preceding
month ("IMAC STATUS REPORTS"). [...***...]
* CONFIDENTIAL TREATMENT REQUESTED
Page 2 of 8
[...***...]
10. ASSET MANAGEMENT REPORTS. Beginning ninety (90) days after the Effective
Date Supplier completes the inventory pursuant to Section 3.8 of the Agreement,
Supplier shall calculate statistics and publish Reports quarterly on all
physical assets (including the Assets as set forth in Schedule 3.8 to the
Agreement) leased, managed, purchased, or otherwise used by Supplier to perform
the Services, including all Equipment and New Equipment acquired by or for
Supplier or PacifiCare pursuant to the Agreement, which such Reports shall
include a current list of all Service Locations and identify what assets are
located or used at each Service Location ("ASSET MANAGEMENT REPORTS").
11. CUSTOMER SATISFACTION REPORTS. Supplier shall provide PacifiCare a monthly
Report with respect to the customer satisfaction surveys, results and other
related functions as set forth in Exhibit B ("CUSTOMER SATISFACTION AND
INITIATIVE Reports").
12. TRANSITION REPORTS.
(a) TECHNICAL TRANSITION PLAN UPDATE. On the last day of each month
during the Transition Period, Supplier shall provide PacifiCare with an updated
hard copy Xxxxx chart detailing the current status of all technical transition
tasks ("TECHNICAL TRANSITION PLAN UPDATE").
(b) TRANSITION STATUS REPORT. On the last day of each month during the
Transition Period, Supplier shall provide PacifiCare with a written Report
detailing Supplier's status with respect to the Transition Services and
Transition Plan ("TRANSITION STATUS REPORTS"), which shall include the
following:
(i) STATUS SUMMARY - Each Transition Status Report shall
include an executive-level summary of transition progress to-date, including an
updated summary with respect to the Transition Plan and relevant accomplishments
and failures of Supplier with respect thereto.
(ii) CRITICAL MILESTONE STATUS - Each Transition Status Report
shall include a listing of all Critical Milestones as set forth in Section 4.2
of the Agreement, along with: estimated time to completion of such Critical
Milestones, days that each Critical Milestone is overdue, anticipated completion
date for each Critical Milestone and related comments.
(iii) CRITICAL ISSUES LIST - Each Transition Status Report
shall include a listing of all unresolved issues related to the Transition Plan
and Transition Services, including those for which PacifiCare has primary
responsibility, including due dates, priority lists, identification of the
responsible Party for tasks and projects related to the Transition Plan,
potential and actual business and Transition Plan execution impact assessment.
13. SYSTEM MONITORING/CAPACITY PLANNING REPORTS. The Supplier shall produce a
monthly Report that provides computer resources system monitoring information,
to facilitate the PacifiCare capacity planning and risk management process
("SYSTEM MONITORING/CAPACITY PLANNING REPORTS"), which such Reports shall
include the following Reports in support of the purposes set forth below:
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
Page 3 of 8
[...***...]
14. CAPACITY AND PERFORMANCE REPORT. In conjunction with Xxxxx, Supplier shall
publish a monthly capacity and performance report[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
Page 4 of 8
[...***...]
15. AD HOC REPORTS. Supplier shall produce other reports requested by PacifiCare
("AD HOC REPORTS") as set forth in Exhibit B to the Agreement.
16. SECURITY REPORTS. Supplier shall produce monthly reports for PacifiCare that
describe various functions that impact on security ("SECURITY REPORTS").
[...***...]
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
Page 5 of 8
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
Page 6 of 8
APPENDIX 1 TO SCHEDULE 3.9(b)
The following is a summary of the Reports described in Schedule 3.9(b), the
frequency and timing of such Reports and the date Supplier shall begin to
deliver such Reports to PacifiCare. Unless otherwise indicated, (1) any Report
that is described as "Monthly" shall be due within five (5) days of the
beginning of each month of the Term and shall address the appropriate
information for the immediately preceding month, (2) any Report that is
described as [...***...] (3) any Report that is described as "Weekly" shaLl be
due on the Monday immediately following the week for which such Report is
provided.
------------------------------------------------------------------------------------------------------------
NO. REPORT TITLE FREQUENCY AND TIMING COMMENCEMENT DATE FOR REPORTING
------------------------------------------------------------------------------------------------------------
1. Production Reports [...***...] Effective Date
------------------------------------------------------------------------------------------------------------
2. Operational Reports [...***...] As noted below or as otherwise
agreed by the Parties
------------------------------------------------------------------------------------------------------------
2(a) Security Breach Report [...***...] Cutover Date
------------------------------------------------------------------------------------------------------------
2(b) Annual Security Audit [...***...] Cutover Date
------------------------------------------------------------------------------------------------------------
2(c) Disaster Recovery Test Summary [...***...] Cutover Date
Reports
------------------------------------------------------------------------------------------------------------
2(d) Variable Fees Report and [...***...] Cutover Date
Related Reports
------------------------------------------------------------------------------------------------------------
2(e) [...***...] [...***...] [...***...]
------------------------------------------------------------------------------------------------------------
2(f) [...***...] [...***...] [...***...]
------------------------------------------------------------------------------------------------------------
3. Service Level Reports [...***...] As provided Schedule 8
------------------------------------------------------------------------------------------------------------
4. Service Level Management Reports [...***...] As noted below
------------------------------------------------------------------------------------------------------------
4(a) Annual Earnback Report [...***...] Cutover Date
------------------------------------------------------------------------------------------------------------
* CONFIDENTIAL TREATMENT REQUESTED
------------------------------------------------------------------------------------------------------------
4(b) Annual Automatic Adjustment [...***...] Cutover Date
Report
------------------------------------------------------------------------------------------------------------
5. Problem Management Reports [...***...] Cutover Date
------------------------------------------------------------------------------------------------------------
6. Change Management Reports [...***...] Cutover Date
------------------------------------------------------------------------------------------------------------
7. Billing Resolution Report [...***...] Effective Date
------------------------------------------------------------------------------------------------------------
8. Project Management Reports [...***...] Cutover Date
------------------------------------------------------------------------------------------------------------
9. IMAC Reports [...***...] Cutover Date
------------------------------------------------------------------------------------------------------------
10. Asset Management Reports [...***...] Cutover Date
------------------------------------------------------------------------------------------------------------
11. Customer Satisfaction and [...***...] Cutover Date
Initiative Reports
------------------------------------------------------------------------------------------------------------
12. Transition Reports [...***...] Effective Date
------------------------------------------------------------------------------------------------------------
12(a) Technical Transition Plan Update [...***...] Effective Date
------------------------------------------------------------------------------------------------------------
12(b) Transition Status Report [...***...] Effective Date
------------------------------------------------------------------------------------------------------------
13. System Monitoring/ Capacity [...***...] Cutover Date
Planning Reports
------------------------------------------------------------------------------------------------------------
14. Capacity and Performance Report [...***...] Cutover Date
------------------------------------------------------------------------------------------------------------
15. Ad Hoc Reports [...***...] Effective Date
------------------------------------------------------------------------------------------------------------
16. Security Reports [...***...] Effective Date
------------------------------------------------------------------------------------------------------------
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 4.1
PACIFICARE
DRAFT TRANSITION SCHEDULE
---------------------------------------------------------------------------------------------------------------------------------
ID WBS Task Name Owner Assisting Duration Start Finish Predecessors
---------------------------------------------------------------------------------------------------------------------------------
1 1 PacifiCare Integrated IBM/Xxxxx PHS [...***...] [...***...] [...***...] [...***...]
Transition Schedule
---------------------------------------------------------------------------------------------------------------------------------
[...***...] [...***...] [...***...] [...***...][...***...] [...***...] [...***...] [...***...]
---------------------------------------------------------------------------------------------------------------------------------
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 4.2
CRITICAL TRANSITION MILESTONES
Solely for the purposes of Section 4.2 of the Agreement, the following
milestones constitute the Critical Transition Milestones and the specific
allowable cure period associated with each such milestone:
------------------------------------------------------------------------------------------------
NO. CRITICAL MILESTONE COMPLETION DATE -- CURE PERIOD COMPLETION CRITERIA
NO LATER THAN THE
IDENTIFIED DATE*
---------------------------------------------------------------------------------------------
1. Hire All Affected [...***...] [...***...] [...***...]
Employees
---------------------------------------------------------------------------------------------
2. Migration of NOC to an [...***...] [...***...] [...***...]
IBM facility
---------------------------------------------------------------------------------------------
3. Migration of Help Desk [...***...] [...***...] [...***...]
to an IBM facility
---------------------------------------------------------------------------------------------
4. Migration of the Data [...***...] [...***...] [...***...]
Center to an IBM
facility
---------------------------------------------------------------------------------------------
*Completion dates are subject to any changes in the detailed Transition Plan
which are mutually agreed by the Parties.
Limitations. [...***...]
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 6.3(a)
SCHEDULE 6.3(a)
FACILITIES SPACE REQUIREMENTS AND RULES & REGULATIONS
A. INTRODUCTION
This Schedule defines the use of PacifiCare Service Locations by Supplier in
order to provide Services as well as the Rules and Regulations that must be
followed for use of the facilities.
B. FACILITIES PLAN
Initial space requirements will include space that is currently being used by
the "in-scope" personnel as of the Effective Date. Within [...***...] of
Transition start, Steady State facilities plans and space requirements will be
documented.
-----------------------------------------------------------------------------------------------------------------------------------
ITEM # PACIFICARE SUPPLIER SPACE REQUIREMENTS SERVICE(S) DATES REQUIRED
BUILDING AND PERSONNEL PROVIDED
ADDRESS OFFICES CUBICLES WAR ROOM/
CONFERENCE
ROOM
-----------------------------------------------------------------------------------------------------------------------------------
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
-----------------------------------------------------------------------------------------------------------------------------------
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
-----------------------------------------------------------------------------------------------------------------------------------
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
-----------------------------------------------------------------------------------------------------------------------------------
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
-----------------------------------------------------------------------------------------------------------------------------------
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
-----------------------------------------------------------------------------------------------------------------------------------
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
-----------------------------------------------------------------------------------------------------------------------------------
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
-----------------------------------------------------------------------------------------------------------------------------------
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
-----------------------------------------------------------------------------------------------------------------------------------
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
-----------------------------------------------------------------------------------------------------------------------------------
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
-----------------------------------------------------------------------------------------------------------------------------------
* CONFIDENTIAL TREATMENT REQUESTED
C. RULES, REGULATIONS AND RESTRICTIONS AT PACIFICARE SERVICE LOCATIONS
Supplier agrees to comply with all of the rules, regulations and
restrictions set forth below, and with any reasonable amendments or additions
thereto as PacifiCare or its landlord may deem necessary from time to time in
accordance with Section 6.4 of the Agreement.
(1) Except in emergency situations, supplier shall refrain from
contacting any landlord of PacifiCare for any reason or purpose whatsoever.
Whenever any matter provided for herein requires that any such landlord be
contacted for approval, consent, or otherwise, Supplier shall so advise
PacifiCare and PacifiCare will contact the landlord.
(2) Except in emergency situations, supplier shall refrain from going
onto the roof of any building or building complex in which a PacifiCare Service
Location is situated for any purpose without first having obtained the prior
written consent of PacifiCare and its landlord.
(3) General office hours and the business hours of operation in
relation to truck dock activity shall be limited to 7:00 a.m. to 9:00 p.m.
daily.
(4) Each of the Supplier's employees and other personnel shall at all
times while at any PacifiCare Service Location wear and display a standard
identification badge issued to them in a manner that allows easy identification
of the employee or personnel. PacifiCare may deny an employee or other Supplier
personnel access to any PacifiCare Service Location if current and proper
identification is not presented and worn while entering and working at any
PacifiCare Service Location.
(5) Any and all loading and unloading of goods shall be done only at
such times, in the areas and through the entrances designated for such purpose
by PacifiCare or its landlord.
(6) Supplier shall not, without first having obtained PacifiCare's and
its landlord's prior written consent, make any structural or non-structural
interior or exterior alterations, additions, improvements or utility
installations (including without limitation, alterations to the plumbing,
electrical and other building systems, the boring, cutting or stringing of
wires, the laying of linoleum or other floor coverings, the attachment to or
suspension from floors, walls or ceilings of curtains, blinds, shades,
sunscreens, planters, television sets, telephones, call boxes and other office
equipment,) in, on or about any PacifiCare Service Location.
(7) Supplier shall (a) promptly pay for all costs of alterations or
other work done or permitted to be done by it or caused by it to be done on or
about any PacifiCare Service Location unless otherwise agreed; (b) keep each
PacifiCare Service Location free and clear of any liens arising out of any such
alterations or work; and (c) in the event any lien is filed against any
PacifiCare Service Location in connection with any alterations or other work
done, permitted or caused to be done by Supplier, Supplier shall, at its sole
cost and expense, obtain a release bond in the statutorily required amount and
issued by a surety approved by PacifiCare and its landlord, immediately after
written request to do so from PacifiCare.
(8) Any and all garbage, trash and refuse shall be kept in the type of
container specified by PacifiCare's landlord, and shall be placed in the
designated trash enclosures for collection. Supplier shall not burn any trash or
garbage of any kind in or about the building or building complex housing any
PacifiCare Service Location.
(9) No satellite dish, antenna or other telecommunications equipment
shall be erected in or outside of any PacifiCare Service Location, without in
each instance the written consent of PacifiCare and
its landlord. Any such equipment so installed without such written consent shall
be subject to removal without notice at any time by PacifiCare or its landlord,
at the sole cost of Supplier. In the event any such equipment, installed by or
at the request of Supplier within any PacifiCare Service Location or elsewhere
within the building which houses a PacifiCare Service Location causes
interference with or to equipment used by PacifiCare or another tenant within
said building, Supplier shall assume and pay or discharge all liability arising
from or related to such interference and shall take all necessary actions to
eliminate such interference.
(10) Supplier shall not make or permit to be made any unseemly or
disturbing noises, sounds or vibrations or disturb or interfere with occupants
of the building housing any PacifiCare Service Location or any building complex
which includes such building (collectively, the "Development") by the use of any
musical instrument, radio, phonograph, unusual noise, or in any other way. No
loudspeakers, televisions, phonographs, radios or other devices shall be used in
a manner so as to be heard or seen outside of the PacifiCare Service Location
without the prior written consent of PacifiCare and its landlord. Supplier shall
conduct its business in a quiet and orderly manner so as not to create
unreasonable or unrelated noise.
(11) Supplier shall not solicit business within the Development by
circulars or otherwise, or take any action which would interfere with the rights
of other persons to use such facilities without the written consent of Landlord,
and shall cooperate with PacifiCare and its landlord to prevent same.
(12) Supplier shall not place or permit any obstruction in the common
areas immediately adjoining any building housing a PacifiCare Service Location
without the written consent of PacifiCare and its landlord. Supplier shall not
display or sell merchandise, or allow carts, portable signs, signed vehicles,
devices or other objects to be stored or to remain outside of any building
housing a PacifiCare Service Location without the written consent of PacifiCare
and its landlord.
(13) Supplier and its employees shall be required to park their
vehicles in an area designated by PacifiCare and its landlord for such parking.
Supplier shall not permit any parking by its employees, agents, subtenants,
customers, invitees, concessionaires or visitors on the streets surrounding such
building in violation of any ordinances or postings of any public authorities
having jurisdiction.
(14) Supplier shall not cause or permit the existence of any obnoxious
or foul odors that disturb the public or other tenants. Should such odors be
evident, Supplier shall be required to take immediate steps to remedy same at
Supplier's expense.
(15) Supplier shall not obstruct the sidewalks, entrances, passages,
corridors or halls, nor use same for any purpose other than ingress and egress.
The halls, passages, entrances and roof are not for the use of the general
public, and PacifiCare and its landlord shall in all cases retain the right to
control and prevent access thereto by all persons whose presence in the judgment
of PacifiCare or its landlord shall be prejudicial to the safety, character,
reputation or interests of the Development and its tenants, provided that
nothing contained herein shall be construed to prevent such access by persons
with whom the Supplier normally deals in the ordinary course of its business
unless such persons are engaged in illegal activities.
(16) PacifiCare and its landlord shall have the right to determine and
prescribe the weight and proper position of any unusually heavy equipment,
including, but not limited to, equipment, libraries, safes, large files, and the
like that are to be placed in a PacifiCare Service Location, and only those
which in the opinion of PacifiCare or its landlord will not do damage to the
floors, structure and/or elevators may be moved into a PacifiCare Service
Location. Any damage occasioned in connection with the moving or installing of
such aforementioned articles in a PacifiCare Service Location or the existence
of same therein shall be paid for by Supplier.
(17) Any telephone mainline and all cabling and gas lines shall be run
only with the prior written approval of PacifiCare and its landlord, and only in
accordance with detailed plans which have been submitted to and approved by
PacifiCare and its landlord.
(18) The plumbing facilities installed in any PacifiCare Service
Location shall be used only for the purpose for which they were constructed. No
foreign substance shall be deposited in any toilet or sink, and the cost of
repair from any breakage, stoppage or damage resulting therefrom shall be borne
by Supplier.
(19) Supplier shall not overload the electrical circuit breaker panels.
(20) When cleaning the glass windows and/or aluminum framing, Supplier
must use only mild soap and water and apply with a sponge. No abrasive materials
shall be used. If the window frames are aluminum, ammonia must not be used to
clean the windows.
(21) No signs, advertisements or notices shall be exhibited, painted or
affixed by Supplier to any PacifiCare Service Center so as to be seen from the
outside of such location without the prior written consent of PacifiCare and its
landlord. In the event Supplier violates the foregoing, PacifiCare and its
landlord may remove same without any liability and may charge Supplier for the
cost of such removal.
(22) Supplier shall not xxxx, paint, drill into, or in any way deface
any part of any PacifiCare Service Location or the rest of the Development.
(23) The PacifiCare Service Locations shall not be used for
manufacturing or for storage of merchandise except as such storage may be
incidental to the use of such locations for those uses contemplated by the
Agreement. Supplier shall not occupy or permit any portion of any PacifiCare
Service Location to be occupied for the manufacture of any illegal substance.
The PacifiCare Service Locations shall not be used for any illegal purposes.
(24) PacifiCare and its landlord shall have the right to prohibit any
advertising by Supplier which, in PacifiCare or its landlord's opinion, tends to
impair the reputation of any Development, and upon written notice from
PacifiCare or its landlord, Supplier shall refrain from or discontinue such
advertising.
(25) Canvassing, soliciting and peddling in any Development are
prohibited and Supplier shall cooperate to prevent same.
(26) All parking ramps and areas, pedestrian walkways, plazas and other
public areas forming a part of any Development shall be under the sole and
absolute control of PacifiCare's Landlord, who has the exclusive right to
regulate and control these areas.
(27) Suppler shall not place anything or allow anything to be placed
near the glass of any window, door, partition or wall which may appear unsightly
from outside the PacifiCare Service Locations, nor shall Supplier sunscreen any
window without the prior written consent of PacifiCare and its landlord.
(28) Suppler shall not alter any lock or install any new or additional
locks or bolts on any doors or windows of the PacifiCare Service Locations
without the written consent of PacifiCare and its landlord; provided that in the
event such consent is given, Supplier shall provide PacifiCare with keys to such
locks or bolts.
(29) Supplier shall see that the windows and doors of the PacifiCare
Service Locations are closed and securely locked, that all water faucets and
other apparatus are entirely shut off, and that, when feasible, all lights and
electrical equipment are entirely shut off before leaving, so as to prevent
waste or damage.
(30) Supplier shall exercise due care to protect the PacifiCare Service
Locations from theft, robbery or pilferage.
(31) Supplier shall not place any live load exceeding fifty (50) pounds
per square foot on the floor of any PacifiCare Service Location.
(32) No animals (except for service animals for persons with
disabilities) or birds may be brought or kept in or about any PacifiCare Service
Location or any building housing a PacifiCare Service Location.
(33) Supplier shall not use or keep in any PacifiCare Service Location
or any building housing a PacifiCare Service Location any kerosene, gasoline or
other flammable or combustible fluid or material, or use any method of heating
or air conditioning other than that supplied by PacifiCare or its landlord,
except in such quantities and in such containers as are commonly found in
offices and are in compliance with all applicable governmental laws, statutes,
rules, regulations, ordinances and life, safety and fire codes.
(34) No commercial cooking for sale to the public shall be done or
permitted in any PacifiCare Service Location; nor shall any PacifiCare Service
Location be used for the storage of merchandise, for washing clothes or for
lodging.
(35) PacifiCare and its landlord shall have the right to exclude or
expel from any PacifiCare Service Location and the building housing any
PacifiCare Service Location any person who, in the judgment of PacifiCare or its
landlord, is intoxicated or under the influence of liquor or drugs, or who shall
in any manner do any act in violation of any of the rules or regulations of the
building housing a PacifiCare Service Location.
(36) No vending machine or machines of a similar type shall be
installed, maintained or operated at any PacifiCare Service Location without the
prior written consent of PacifiCare and its landlord, provided that any such
consent may be conditioned on Supplier's written undertaking and agreement to
indemnify, defend and hold PacifiCare and its landlord harmless from and against
any and all liability arising out of or resulting from the acts or omissions of
persons supplying goods or services in connection therewith.
(37) PacifiCare or its landlord shall have the right to control and
operate the public portions of the building housing any PacifiCare Service
Location, any the public facilities, and heating and air conditioning, as well
as any facilities furnished for the common use of all tenants, in such manner as
it deems best for the benefit of such tenants.
(38) All entrance doors in a PacifiCare Service Location shall be left
locked when such PacifiCare Service Location is not in use, and all doors
opening to public corridors shall be kept closed except for normal ingress and
egress thereto and therefrom.
(39) Supplier shall, upon termination of its possession of any
PacifiCare Service Location, surrender all keys thereto to PacifiCare and shall
make known to PacifiCare the combination of all combination locks and safes,
cabinets and vaults in such PacifiCare Service Location.
(40) Supplier shall not employ any person for the purpose of cleaning
or taking care of such location without the written consent of PacifiCare and
its landlord. The janitor of the building housing the PacifiCare Service
Location may at all times keep a pass key, and such janitor or other agents of
PacifiCare and its landlord shall at all times be allowed admittance to said
location.
(41) Bicycles and other vehicles shall not be permitted in the offices,
halls, corridors and elevators in the building housing any PacifiCare Service
Location, nor shall any obstruction of sidewalks or entrances of such building
by such vehicles be permitted.
(42) All right, title and interest in and to any alternations made by
Supplier to any PacifiCare Service Location shall belong to PacifiCare or its
landlord, free and clear of any claim or interest of Supplier.
(43) Supplier shall not continue to occupy or conduct business in any
PacifiCare Service Location beyond the expiration or termination of the lease
under which PacifiCare holds such PacifiCare Service Location.
(44) Supplier shall not use any PacifiCare Service Location for any
purpose or activity which has not been specifically provided for or authorized
under the Agreement or these Rules and Regulations.
(45) Supplier shall not cause or permit any hazardous materials to be
brought upon, kept or used in or about any PacifiCare Service Location.
(46) To prevent the generation, growth, or deposit of any mold, mildew,
bacillus, virus, pollen or other micro-organisms (collectively, "Biologicals")
and the deposit, release or circulation of any indoor contaminants, including
emissions from paint, carpet and drapery treatments, cleaning, maintenance and
construction materials and supplies, pesticides, pressed wood products,
insulation, and other materials and products (collectively with Biologicals,
"Contaminants"), that could adversely affect the health, safety or welfare of
any tenant, employee or other occupant of the Building or their invitees,
Supplier shall, at Supplier's sole cost and expense, at all times (i) operate
the Premises in a manner consistent with preventing or minimizing the
generation, growth, circulation, release or deposit of any Contaminants, and
(ii) maintain, operate and repair each PacifiCare Service Location in such a
manner to prevent or minimize the accumulation of stagnant water and moisture in
planters, kitchen appliances and vessels, carpeting, insulation, water coolers
and any other locations where stagnant water and moisture could accumulate, and
(iii) otherwise maintain, operate and repair the Premises to prevent the
generation, growth, deposit, release or circulation of any Contaminants.
(47) Supplier shall permit PacifiCare or its landlord to enter any
PacifiCare Service Location at reasonable times upon prior notice (except that
in the case of emergencies no prior notice shall be required) to examine such
location, and to show the same to prospective purchasers, lenders or tenants, to
make such repairs, alterations, additions or improvements as may be required in
connection with the development or maintenance of said location, without the
same constituting an eviction of Supplier or a trespass.
SCHEDULE 7.1
ASSIGNED AGREEMENTS
IBM
--------------------------------------------------------------------------------
NO. SUPPLIER: DESCRIPTION:
--------------------------------------------------------------------------------
[...***...] [...***...] [...***...]
--------------------------------------------------------------------------------
* CONFIDENTIAL TREATMENT REQUESTED
2.
SCHEDULE 7.2
MANAGED AGREEMENTS
--------------------------------------------------------------------------------
NO. SUPPLIER: DESCRIPTION:
--------------------------------------------------------------------------------
[...***...] [...***...] [...***...]
--------------------------------------------------------------------------------
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 8
SERVICE LEVEL AGREEMENT
SCHEDULE 8
--------------------------------------------------------------------------------
SERVICE LEVEL SCHEDULE
IBM
--------------------------------------------------------------------------------
[PACIFICARE LOGO]
Confidential Page 1 of 51 3/15/02
Confidential
TABLE OF CONTENTS
I. GENERAL PROVISIONS:......................................................4
A. General:..............................................................4
B. Attachments:..........................................................4
C. Reporting:............................................................5
D. Definitions:..........................................................5
E. Notice Requirements for Additions, Deletions and Modifications:.......7
F. Service Level Credits:................................................8
G. Earn back:............................................................9
H. Additions and Deletions of Performance Categories:...................10
I. Additions and Deletions of Service Levels:...........................10
J. Modifications of Service Level Credit Allocation Percentages for
Critical Service Levels:.............................................12
K. Critical Deliverables:...............................................12
L. Commencement of Obligations:.........................................12
M. Cooperation:.........................................................12
N. [...***...] - Critical Service Levels:...............................13
O. Root-Cause Analysis:.................................................13
P. Measuring & Monitoring Tools:........................................14
Q. Exceptions:..........................................................14
R. Exclusions:..........................................................14
II. CRITICAL SERVICE LEVELS:................................................16
A. Performance Category - Critical Application Availability:...........16
B. Performance Category - Application Availability:....................16
C. Performance Category Critical Application Response Time..............16
D. Performance Category - Application Response Time:...................16
E. Performance Category Critical Processes:............................16
F. Performance Category - Infrastructure Services Levels:...............16
G. Other Service Levels.................................................17
III. CRITICAL DELIVERABLES:...............................................18
A. Policy and Procedure Manual Draft:...................................18
B. Report Format Draft:.................................................18
C. Annual Plan..........................................................18
Page 2 of 51 [PACIFICARE LOGO]
*CONFIDENTIAL TREATMENT REQUESTED
D. PacifiCare IS Customer Satisfaction Survey Draft Questions...........18
E. PacifiCare IS Customer Satisfaction Survey Key Measurements Plan.....18
F. Completion of Physical Inventory:....................................18
G. Creation of New Development Lab:.....................................18
IV. KEY MEASUREMENTS:....................................................19
A. Performance Category - Application Availability:....................19
B. Performance Category Application Response Time:......................19
C. Performance Category - Application Performance Degradation:........19
D. Performance Category Critical Processes:.............................19
E. Other Service Levels.................................................19
F. Performance Category - Applications Performance:.....................20
G. Performance Category - Desktop:......................................20
H. Performance Category - Infrastructure Availability..................23
I. Performance Category - Voice Services...............................24
J. Performance Category - Video Conferencing Services..................25
K. Performance Category - Help Desk:...................................26
L. Performance Category - Account Administration:.......................28
M. Performance Category - Supplier Staffing.............................30
N. Performance Category - Change Management:...........................31
O. Performance Category - Project Management and Delivery:..............31
P. Performance Category - Disaster Recovery:............................33
Q. Performance Category - IDC Critical Outputs..........................35
V. DEFINITION OF TERMS USED IN SERVICE LEVELS..............................41
Page 3 of 51 [PACIFICARE LOGO]
SERVICE LEVEL SCHEDULE
I. GENERAL PROVISIONS:
A. GENERAL:
1. This Service Level Schedule, including any attachments hereto,
(the "Schedule") is a schedule to that certain Information
Technology Services Agreement entered into and made to be
effective as of ____________, 2001 by and between PacifiCare and
Supplier (the "Agreement").
2. In the event of any conflict, confusion or ambiguity between this
Schedule and the Agreement, the Agreement shall control.
3. This Schedule sets forth certain quantitative Critical Service
Levels, Key Measurements and Critical Deliverables against which
Supplier's performance shall be measured and does not replace any
requirements or obligations on Supplier to provide the Service or
any subset thereof. Supplier shall perform the Services at or
above the levels of performance indicated in this Schedule.
Critical Service Levels are identified in Section II below.
Critical Deliverables are identified in Section III below. Key
Measurements are described in Section IV below.
4. As of the Cutover Date, Supplier shall perform the Services
consistent with the documented levels of performance, measured for
[...***...] consecutive months from [...***...] of 2001 that have
been achieved by PacifiCare. In the event that PacifiCare does not
have documented levels of performance, Supplier shall perform the
measurements in accordance with Section I.I.1. During such
measurement period, Service Level Credits shall not apply.
5. In the case of Services that do not have corresponding Service
Levels specified in this Schedule as of the Cutover Date, Supplier
shall provide such Services to PacifiCare Entities at least at the
same level of performance (including the degree of accuracy,
quality, completeness, responsiveness, etc.) as such Service was
provided by or for PacifiCare prior to the Cutover Date or at the
appropriate Service Level as shall be determined in accordance
with the process set forth herein.
6. New Performance Categories, Critical Service Levels and Key
Measurements may be added or substituted by PacifiCare as
specified in this Schedule during the Term and during the
Termination Assistance Period in order to achieve a fair, accurate
and consistent measurement of Supplier's performance of the
Services. For example, such additions or substitutions may occur
in conjunction with changes to the environment and the
introduction of New Equipment or means of service delivery; the
Parties agree that in the event such New Equipment or such means
of service delivery is a replacement or upgrade of existing
technology, there shall be a presumption of equivalent or improved
performance.
B. ATTACHMENTS:
The following Service Level Attachments are attached hereto and are
hereby incorporated by reference:
SLA-1 Service Level Matrix;
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SLA-2 Service Level Outcome Examples;
SLA-3 Pre-approved Measuring Tools and Methodologies for Critical
Service Level Measurements;
SLA-4 Application Summaries;
SLA-5 PacifiCare Disaster Recovery Program Charter.
C. REPORTING:
Unless otherwise specified in this Service Level Schedule, Supplier
shall measure and report Supplier's performance with respect to each
Critical Service Level and Key Measurement on a monthly basis. On or
before the fifteenth (15th) of each month of the Term and the
Termination Assistance Period, Supplier shall provide to PacifiCare a
Service Level Report of Supplier's performance with respect to the
applicable Service Levels for the preceding month, including Supplier's
actual performance, any Service Level Defaults that occurred and
Service Level Credits that accrued during the month. Supplier shall
provide the Service Level Reports in hard copy and soft-copy formats;
formats can include Microsoft Office Word, Excel and any other format
as reasonably requested by PacifiCare. Supplier shall include in the
Service Level Reports sufficient details of Supplier's performance of
the Services to allow verification of Supplier's performance and
compliance with the Critical Service Levels, Key Measurements and
Critical Deliverables, which such information shall be in
machine-readable form, as specified by PacifiCare, suitable for use on
a personal computer. All information supplied as part of and in
connection with the Service Level Reports shall be Confidential
Information of PacifiCare. Each Service Level Report shall include
total invoice costs (including Base Fees and Variable Fees), for the
month to which the Service Level Report applies, which may be in
summary form. For example, the Service Level Report for Supplier's
performance in August shall include a summary of the invoice for the
Base Fees and Variable Fees applicable to August. Each Service Level
Performance Report shall contain a summary page that indicates the
total amount of Service Level Credits incurred during the previous
month and a running total of all Service Level Credits and Deliverable
Credits accrued or incurred during the then-current Contract Year.
D. DEFINITIONS:
Terms used herein with initial capital letters shall have the
respective meanings set forth in the Agreement, or, for those terms
that are not defined in the Agreement, the meanings set forth in this
Schedule in Section V and as follows:
a. ALLOCATION OF POOL PERCENTAGE shall have the meaning set
forth in Section I.F.1 of this Service Level Schedule. The
total of all Allocation of Pool Percentages shall not
exceed the Pool Percentage Available for Allocation.
b. APPLICATION means PacifiCare Software, or any particular
component thereof, as applicable.
c. AT RISK AMOUNT shall mean, for any month during the Term
and Termination Assistance Period, [...***...] percent
([...***...]%) of the monthly Fees, which is the amount
that Supplier shall have At risk for Service Level Credits
as set forth in Service Level Attachment SLA-1.
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d. CHANGE MANAGEMENT PROCEDURES shall mean those procedures
that govern the process by which Supplier will manage
changes, modifications, additions, deletions and other
alterations of the configurational and operational aspects
of the Systems, as set forth in the Policy and Procedures
Manual.
e. CONTRACT YEAR shall mean each year from the anniversary of
the Effective Date.
f. CRITICAL DELIVERABLES shall mean those deliverables
performed on a one-time basis, for which a Deliverable
Credit shall be payable in accordance with Section I.K of
this Service Level Schedule and described in Section III of
the Service Level Schedule if Supplier fails to deliver
such deliverables. Critical Deliverables are identified in
Service Level Attachment SLA-1. Critical Deliverables are
not Critical Service Levels.
g. CRITICAL SERVICE LEVELS shall mean those Service Levels
established under this Service Level Schedule for which a
Service Level Credit shall accrue as set forth in Section
I.F, subject to earnback provisions of Section I.G.
Critical Service Levels are identified in Service Level
Attachment SLA-1 and are described in Section II of this
Service Level Schedule. Each Critical Service Level has an
Expected Service Level and a Minimum Service Level
associated with it unless otherwise specified.
h. DELIVERABLE CREDITS shall have the meaning set forth in
Section I.K of this Service Level Schedule.
i. EXPECTED SERVICE LEVEL shall mean the desired level of
performance for a Critical Service Level or a Key
Measurement, as set forth in Service Level Attachment
SLA-1.
j. EXPECTED SERVICE LEVEL DEFAULT shall mean Supplier's level
of performance for a particular Critical Service Level
fails to meet the applicable Expected Service Level (but
does not fail to meet the applicable Minimum Service Level)
as specified in this Service Level Schedule, and has failed
to meet such Expected Service Level [...***...]
k. KEY MEASUREMENTS shall mean those Service Levels for which
no Service Level Credit is payable, but which are
meaningful to PacifiCare Entities' business operations, and
are described in Section IV of this Service Level Schedule.
Each Key Measurement has an Expected Service Level and a
Minimum Service Level associated with it unless otherwise
specified. It is the intent of the Parties that all Key
Measurement shall be quantifiable, measurable and
objective.
l. MEASUREMENT WINDOW shall mean the time during which
performance of a Service Level, Application, or other
element of the Services shall be measured, which such time
shall exclude approved Scheduled Downtime.
m. MINIMUM SERVICE LEVEL shall mean the minimum level of
performance set forth in Service Level Attachment SLA-1
with respect to each Critical Service Level or Key
Measurement.
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n. MINIMUM SERVICE LEVEL DEFAULT shall mean Supplier's level
of performance for a particular Critical Service Level
fails to meet the applicable Minimum Service Level at any
time.
o. MONTHLY FEES shall mean the Base Fees and Variable Fees for
a calendar month.
p. OTHER SUPPLIER(S) shall mean and other third parties,
excluding Xxxxx, contracted by PacifiCare.
q. PERFORMANCE CATEGORY shall mean a grouping of Critical
Service Levels as set forth on Service Level Attachment
SLA-1. Critical Deliverables do not constitute a
Performance Category.
r. POOL PERCENTAGE AVAILABLE FOR ALLOCATION shall mean
[...***...] percent ([...***...]%) of the At Risk Amount.
s. SERVICE LEVEL CREDIT shall have the meaning set forth in
Section I.F.1 of this Schedule.
t. SERVICE LEVEL CREDIT ALLOCATION PERCENTAGE shall have the
meaning set forth in Section I.F.1 of this Service Level
Schedule. The sum of the Service Level Credits Allocation
Percentages shall not exceed one hundred percent (100%) for
each Performance Category.
u. SERVICE LEVEL DEFAULT shall mean a Minimum Service Level
Default or an Expected Service Level Default.
v. SERVICE LEVEL REPORT shall mean the monthly report of
Supplier's performance with respect to the Service Levels
set forth in this Service Level Schedule and any Service
Level Defaults and Service Level Credits attributable to
Supplier's performance during the preceding month, as set
forth in Section I.C. of this Service Level Schedule.
w. SIX-MONTH MEASUREMENT PERIOD shall mean, if Section I.I.1
of this Schedule is used to establish the Expected Service
Level and Minimum Service Level commitments, the six (6)
consecutive months of measurements immediately preceding
the month in which PacifiCare provided notice to Supplier.
x. UNRELIEVED SERVICE LEVEL CREDITS shall have the meaning set
forth in Section I.G.4 of this Service Level Schedule.
y. YEARLY PERFORMANCE AVERAGE shall have the meaning set forth
in Section I.G.1.b of this Service Level Schedule.
E. NOTICE REQUIREMENTS FOR ADDITIONS, DELETIONS AND MODIFICATIONS:
PacifiCare shall send notice to Supplier at least ninety (90) days
prior to the date that additions or deletions to Performance
Categories, or additions or deletions to Service Levels (which include
Critical Service Levels and Key Measurements), or modifications to
Service Level Credit Allocation Percentages for any Critical Service
Levels are to be effective, provided that
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PacifiCare may send only one (1) such notice (which notice may contain
multiple changes) each calendar quarter.
F. SERVICE LEVEL CREDITS:
In the event of a Service Level Default, Supplier shall provide
PacifiCare credits as calculated below.
1. Service Level Attachment SLA-1 sets forth the information required
to calculate the credits that shall accrue to PacifiCare (and that
Supplier shall credit to PacifiCare as set forth in Section I.G.4)
in the event of a Service Level Default ("SERVICE LEVEL CREDIT").
For each Service Level Default, subject to Section I.G below, a
Service Level Credit that shall accrue to PacifiCare and shall be
computed in accordance with the following formula:
SERVICE LEVEL CREDIT = A x B x C
Where:
A = The Allocation of the Pool Percentage specified for the
Performance Category in which the Service Level Default occurred
as shown in Service Level Attachment SLA-1 (the "ALLOCATION OF
POOL PERCENTAGE").
B = The percentage of the Allocation of Pool Percentage allocated
to the Critical Service Level in which the Service Level Default
occurred as shown in Service Level Attachment SLA-1 (the "SERVICE
LEVEL CREDIT ALLOCATION PERCENTAGE")
C = At Risk Amount
For example, assume that Supplier fails to meet the Minimum
Service Level for a Critical Service Level, and that the
Supplier's total Monthly Fees for the month in which the Service
Level Default occurred were $100,000.
Additionally, assume that the Allocation of Pool Percentage for
the Performance Category of such Critical Service Level is
[...***...]% and that its Service Level Credit Allocation
Percentage is [...***...]%. The Service Level Credit due to
PacifiCare for such Service Level Default would be computed as
follows:
A = [...***...]% (the Allocation of Pool Percentage),
Multiplied by
B = [...***...]% (the Service Level Credit Allocation Percentage),
Multiplied by
C = [...***...] percent [...***...] of $100,000, Supplier's Fees
for the month during which the Service Level Default occurred).
= [...***...] (the amount of the Service Level Credit)
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2. If one (1) or more than one (1) Service Level Default has occurred
in a single month where the Supplier has failed to meet more than
one (1) Minimum Service Level, the sum of the corresponding
Service Level Credit(s) shall accrue to PacifiCare.
3. In no event shall the amount of Service Level Credits that accrue
to PacifiCare with respect to all Service Level Defaults occurring
in a single month exceed, in total, the At Risk Amount.
4. Supplier shall notify PacifiCare if PacifiCare accrues a Service
Level Credit, which notice shall be included in the Service Level
Reports described in Section I.C. The Service Level Reports shall
also describe any failure to meet Key Measurements for the month.
G. EARN BACK:
Supplier shall have earn back opportunities with respect to Service
Level Credits as follows:
1. Within fifteen (15) days after the last day of each Contract Year,
Supplier shall provide a report to PacifiCare that shall include,
with respect to each Critical Service Level for which there was a
Service Level Default during the preceding Contract Year, the
following:
a. Statistics on Supplier's monthly performance during the
preceding Contract Year;
b. The average of Supplier's monthly performances in that
Critical Service Level during the preceding Contract Year
("YEARLY PERFORMANCE AVERAGE"); and
c. The total amount of Service Level Credits accrued to
PacifiCare for Service Level Defaults.
2. If during the preceding Contract Year Supplier achieved a Yearly
Performance Average in a Critical Service Level that was greater
than or equal to the Expected Service Level in effect for such
Critical Service Level during the preceding year, then Supplier
shall be relieved from paying any Service Level Credits that
accrued during the preceding Contract Year for such Critical
Service Level.
3. If during the preceding Contract Year PacifiCare deletes a
Critical Service Level, then Supplier shall be relieved from
paying Service Level Credits assessed during the preceding
Contract Year for Service Level Defaults in that Critical Service
Level only for the time period for which the deletion was
effective.
4. Supplier shall pay to PacifiCare the amounts of any Service Level
Credits accrued to PacifiCare for which Supplier is not relieved
pursuant to Section I.G.2 or I.G.3 above for each Contract Year
("UNRELIEVED SERVICE LEVEL CREDITS") as a credit to PacifiCare on
the monthly invoice reflecting charges to PacifiCare for the first
month of the Contract Year immediately following the Contract Year
in which such Service Level Credits accrued. In the case where
there shall be no further invoices, Supplier shall pay the accrued
amount of the Unrelieved Service Level Credits to PacifiCare
within fifteen (15) days after the end of the last month of the
Term.
5. If the Agreement is terminated prior to the end of the Initial
Term, any Extension Period or any Renewal Term, the foregoing
process shall be undertaken with respect to the portion of the
Contract Year during which the Agreement was in effect.
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H. ADDITIONS AND DELETIONS OF PERFORMANCE CATEGORIES:
PacifiCare may add or delete Performance Categories by sending notice
as described in Section I.E above. In no event may: (1) the sum of the
Allocations of Pool Percentage for all the Performance Categories
exceed the Pool Percentage Available for Allocation, or (2) the sum of
the Service Level Credit Allocation Percentages for all Critical
Service Levels within a Performance Category exceed one hundred percent
(100%).
I. ADDITIONS AND DELETIONS OF SERVICE LEVELS:
PacifiCare may add or delete Service Levels pursuant to the following
provisions. PacifiCare may require the addition of Services Levels,
including Service Levels required to address Supplier's performance
with respect to New Services, Services for which a Service Level does
not exist but for which PacifiCare requires a Service Level and for any
changes in Supplier's performance that can reasonably be expected due
to the addition or utilization of new, updated, upgraded or modified
Equipment, Systems, Applications or other technology.
1. ADDITIONS:
PacifiCare may add Service Levels in accordance with this
Section I.I.1 and by providing notice in accordance with Section
I.E. Expected Service Levels and Minimum Service Level
commitments associated with added Service Levels shall be
computed as follows:
a. Where measurements exist for at least [...***...] for a
particular Service that is being provided by Supplier, the
Parties agree that the Expected Service Level shall be
defined as the average performance indicated by such
measurements for [...***...] Measurement Period and that
the Minimum Service Level shall be defined as the
lowest(1) measurements achieved during [...***...]
Measurement Period, or
b. Where less than [...***...] of measurements (or no
measurements) exist for a particular Service that is being
provided by Supplier, the Parties shall attempt in good
faith to agree on an Expected Service Level and a Minimum
Service Level commitment using industry standard measures
or third party advisory services [...***...], or
c. Where less than [...***...] of measurements (or no
measurements) exist for a particular Service that is being
provided by Supplier, and the Parties fail to agree on an
Expected Service Level and a Minimum Service Level
commitment using Section I.I.1.b above, the Parties shall
do the following:
1) Supplier shall begin providing monthly measurements
within [...***...]
------------------------------
(1) [...***...]
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[...***...]
2) After [...***...] measurements have been taken (or
should have been taken per Section I.I.1.c(1) above
and if not so measured; constructed as described in
Section I.I.1.c(2)(a) below), PacifiCare may at any
time in writing request that Section I.I.1.a above be
used to establish the Expected Service Level and
Minimum Service Level commitments.
(a) If Supplier is responsible for measuring
actual service levels for [...***...] and
fails to provide one (1) or more
measurements during the [...***...]
Measurement Period such that [...***...]
consecutive measurements are NOt available,
the missing measurement(s) shall be
constructed according to the following;
[...***...].
(b) [...***...]
2. DELETIONS:
PacifiCare may delete Service Levels by sending notice to
Supplier in accordance with Section I.E.
3. IMPACT OF ADDITIONS AND DELETIONS OF CRITICAL SERVICE LEVELS ON
SERVICE LEVEL CREDIT ALLOCATION PERCENTAGES:
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When adding or deleting a Critical Service Level,
PacifiCare shall modify the Service Level Credit
Allocation Percentages for the Critical Service Levels
within the Performance Category such that the total
Service Level Credit Allocation Percentages for all
Critical Service Levels within the Performance Category
equals one hundred percent (100%). If PacifiCare adds a
Critical Service Level in accordance with Section I.I.1
above, but does not modify the Service Level Credit
Allocation Percentages for the Critical Service Levels
within the applicable Performance Category under this
Section I.I.3, then, until such time as PacifiCare so
modifies such Service Level Credit Allocation Percentages,
the Service Level Credit Allocation Percentage for such
added Critical Service Level shall be zero (0).
J. MODIFICATIONS OF SERVICE LEVEL CREDIT ALLOCATION PERCENTAGES FOR
CRITICAL SERVICE LEVELS:
PacifiCare may modify the Service Level Credit Allocation Percentages
for any Critical Service Levels within the Performance Category by
sending notice in accordance with Section I.E. PacifiCare shall modify
the Service Level Credit Allocation Percentages for two (2) or more of
the Critical Service Levels within the Performance Category such that
the sum of the Service Level Credit Allocation Percentages for all
Critical Service Levels within the Performance Category equals one
hundred percent (100%).
K. CRITICAL DELIVERABLES:
Service Level Attachment SLA-1 sets forth the credits that shall be
payable by Supplier to PacifiCare in the event Supplier fails to
deliver any of the Critical Deliverable by the time specified for the
delivery of such Critical Deliverable in Service Level Attachment SLA-1
("DELIVERABLE CREDITS"). [...***...]. The total amount of Deliverable
Credits that Supplier incurs each month shall be reflected On the first
monthly invoice after the month during which the Deliverable Credits
accrued (e.g., the amount of Deliverable Credits payable for failure to
deliver any Critical Deliverable(s) in August shall be credited against
the September invoice for Base Fees). Unlike Service Level Credits,
Deliverable Credits shall be shown in each monthly invoice as an actual
credit to the charges [...***...].
L. COMMENCEMENT OF OBLIGATIONS:
The obligations set forth in this Service Level Schedule shall commence
on the Effective Date or as otherwise specified in Service Level
Attachment SLA-1 referencing the column "cutover + mos**". The number
used in the column "cutover +mos**" are in the format X where "X"
represents the number of months after Cutover Date that the Supplier
shall be responsible to provide measurement data in support of the
Critical Service Level and Supplier shall be responsible for Service
Level Credits for any failures to attain the Critical Service Level. In
the event any Service Levels are added pursuant to Section I.I.1 above,
Supplier's obligations shall commence at the time that the Expected
Service Level or Minimum Service Level, as applicable, has been defined
for the added Service Level.
M. COOPERATION:
Without limiting or altering any of Supplier's obligations as set forth
in Section 13.2. of the Agreement, Supplier shall provide a single
point of contact for the prompt resolution of all
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Service Level Defaults and all failures to provide high quality
Services to PacifiCare, regardless of whether the reason for such
Service Level Defaults, or failure to provide high quality outsourcing
Services to PacifiCare, was caused by Supplier or Other Suppliers.
N. AUTOMATIC ADJUSTMENT - CRITICAL SERVICE LEVELS:
The Parties agree to the concept of [...***...]. Critical Service
Levels shall be [...***...] each [...***...] period following the
commencement of obligations dates specific to each Critical Service
Level as described in Section I.L and below:
1. [...***...]
2. [...***...]
3. In any event, in the case of very high Service Levels, the
cost-benefit of applying these [...***...] rules may not
be present. In these cases the parties agree to discuss and reset
the Expected Service Levels and Minimum Service Levels by mutual
agreement.
4. [...***...]
5. In no event will any adjustment of any Critical Service Level
result in any Expected Service Level or Minimum Service Level
being reset below the level of the applicable Expected Service
Level or Minimum Service Level prior to the adjustment.
O. ROOT-CAUSE ANALYSIS:
If a problem is defined as Severity Level 0 or 1 for any Service Level,
then Supplier shall perform root-cause analysis for such failure as
described in Section 8.4 of the Agreement.
Without limiting or altering any of the Supplier's obligations pursuant
to Section 8 of the Agreement, Supplier's root-cause analysis for each
Service Level Default shall determine a single root-cause for each such
Service Level Default. If a single root-cause incident results in more
than one (1) Service Level Default, then PacifiCare shall select one
(1) Service Level Default for which PacifiCare shall be entitled to
receive a Service Level Credit. PacifiCare shall not be entitled to a
Service Level Credit for each such Service Level Default attributable
to each root-cause incident. [...***...].
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[...***...].
With regards to root cause analysis and Service Level Defaults, the
term ILIAD refers to a group of applications consisting of ILIAD
Claims, ILIAD Member Services and ILIAD Provider Services. The term
NICE refers to a group of applications consisting of NICE Claims, NICE
Membership - Commercial, NICE Membership - Secure and NICE Provider
Contracts.
PacifiCare reserves the right to add, delete or change the Applications
within each grouping providing that the Application being substituted
is part of the existing suite and currently exists in Key Measurements.
P. MEASURING & MONITORING TOOLS:
As of the Cutover Date, the measuring tools and methodologies set forth
in Service Level Attachment SLA-3 to this Service Level Agreement
represent acceptable tools and methodologies for measuring the Critical
Service Levels. If there are any Critical Service Levels for which the
measuring tools and methodologies have not been agreed upon by
PacifiCare and Supplier and included in Attachment SLA-3 and Supplier
fails to propose a measuring tool or methodology for such Critical
Service Level that is acceptable to PacifiCare prior to the date upon
which Supplier shall be responsible for measuring such Service Level
performance and Service Level Credits due for applicable Service Level
Defaults, then such failure to provide an acceptable measuring tool and
methodology shall be deemed a Minimum Service Level Default for the
applicable Critical Service Level until Supplier proposes and
implements an acceptable measuring tool.
Tools for new Critical Service Levels shall be implemented according to
the Change Management Procedures. If after the Cutover Date or the
implementation of measuring tools methodologies for new Critical
Service Levels Supplier desires to use different measuring and tools or
methodologies for a Critical Service Level, then Supplier shall provide
notice to PacifiCare, in which event the Parties shall reasonably
adjust the measurements as necessary to account for any increased or
decreased sensitivity in such new tools or methodologies. If the
Parties cannot agree on the required adjustment, Supplier shall
continue to use the measuring tools and methodologies that had been
initially agreed to by the Parties.
Q. EXCEPTIONS:
Supplier shall not be responsible for a failure to meet any Service
Level solely to the extent that such failure is directly attributable
to any of the following:
1. PacifiCare's breach of this Agreement, or the failure of a
PacifiCare Agent to perform according to the terms of such
PacifiCare Agent's agreement with PacifiCare, or the acts of
PacifiCare or of a PacifiCare Agent that directly cause
Supplier's failure to perform, provided that, in each case,
Supplier used all reasonable efforts to meet the Service Levels
as specified.
2. Service or resource reductions requested or approved by
PacifiCare and agreed to by the Parties through the Change
Control Procedures; provided that Supplier has previously
notified PacifiCare in writing prior to the execution of such
Change Control Procedures that the implementation of such
request would result in such failure to meet the Service Level.
R. EXCLUSIONS:
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For purposes of calculating Availability, Scheduled Uptime and
Unscheduled Downtime shall not include any period of Scheduled Downtime
that is the result of scheduled time required to perform system
maintenance (e.g., Preventive Maintenance (as defined in Exhibit B,
Statement of Work), system upgrades, data center relocation, etc.),
provided that such time has been mutually agreed between the Parties.
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II. CRITICAL SERVICE LEVELS:
This section sets forth descriptions of the Critical Service Levels.
The Minimum Service Levels and the Expected Service Levels associated
with the following Critical Service Levels are set forth in Service
Level Attachment SLA-1.
A. PERFORMANCE CATEGORY - CRITICAL APPLICATION AVAILABILITY:
Supplier shall measure and report the Availability of each Critical
Application identified in Service Level Attachment SLA-1 ("CRITICAL
APPLICATION AVAILABILITY"), which such Critical Application
Availability shall constitute a Critical Service Level.
B. PERFORMANCE CATEGORY - APPLICATION AVAILABILITY:
Supplier shall measure and report the Availability of each Application
identified in Service Level Attachment SLA-1 ("APPLICATION
AVAILABILITY"), which such Application Availability shall constitute a
Critical Service Level.
C. PERFORMANCE CATEGORY CRITICAL APPLICATION RESPONSE TIME
Supplier shall measure and report the Response Time of each Critical
Application identified in Service Level Attachment SLA-1 ("CRITICAL
APPLICATION RESPONSE TIMe"), which such Critical Application Response
Time shall constitute a Critical Service Level.
D. PERFORMANCE CATEGORY - APPLICATION RESPONSE TIME:
Supplier shall measure and report the Response Time of each Application
identified in Service Level Attachment SLA-1 ("APPLICATION RESPONSE
TIMe"), which such Application Response Time shall constitute a
Critical Service Level.
E. PERFORMANCE CATEGORY CRITICAL PROCESSES:
The Batch Schedule Completion On-Time Rate calculation includes
production of updated files and appropriate reports, produced in a
calendar month.
For avoidance of doubt, the list of all Critical Batch Jobs to be
tracked in this performance category can be found on the Service Level
Attachment SLA-1 1 under the title Critical Batch Jobs and shall herein
be known as Scheduled Batch Jobs.
[...***...].
With respect to ongoing Scheduled Batch Job schedule requirements,
Supplier shall be responsible to make updates to the job schedules as
required and review such updates with PacifiCare no less frequently
than [...***...].
F. PERFORMANCE CATEGORY - INFRASTRUCTURE SERVICES LEVELS:
1. LAN AVAILABILITY:
"AVAILABLE FOR USE" shall mean, with respect to each LAN Segment, that
each End-User
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connected to that LAN Segment is able to use the LAN Segment and all
functionality that the LAN is intended to provide. If there is LAN
Downtime with respect to a LAN Segment, which is then brought back up,
except for the restoration of data that may have been lost, it is
understood that such data restoration shall not prevent the LAN Segment
from being deemed "Available for Use".
[...***...].
2. ASPECT AUTOMATIC CALL DISTRIBUTION ("ACD") EQUIPMENT AVAILABILITY:
[...***...].
G. OTHER SERVICE LEVELS
1. NICE CLAIMS AVERAGE DAILY VOLUME
[...***...]
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III. CRITICAL DELIVERABLES:
If Supplier fails to deliver to PacifiCare any Critical Deliverables as
described below, in format and content acceptable to PacifiCare by the
date identified for such Critical Deliverable, Supplier shall provide
PacifiCare, each month, a credit as set forth in Service Level
Attachment SLA-1 until such Critical Deliverable is provided to
PacifiCare.
A. POLICY AND PROCEDURE MANUAL DRAFT:
Supplier shall deliver to PacifiCare the draft of the Policy and
Procedures Manual in conformance with the requirements described in
Section 13.3 of the Agreement.
B. REPORT FORMAT DRAFT:
Supplier shall deliver to PacifiCare the draft of the portion of the
Policy and Procedures Manual that pertains to the Services and other
functions and aspects of Supplier's performance, in conformance with
the requirements described in Section 13.3 of the Agreement.
C. ANNUAL PLAN.
Supplier shall deliver the Annual Plan as set forth in Section 3. (b)
of the Agreement.
D. PACIFICARE IS CUSTOMER SATISFACTION SURVEY DRAFT QUESTIONS.
Supplier will provide a draft of customer satisfaction survey questions
with regards to the service the Supplier provides. This draft is due
[...***...] following the Effective Date. The draft will be revieweD by
PacifiCare and blended into the annual IS Customer Satisfaction Survey
conducted by an independent third party.
E. PACIFICARE IS CUSTOMER SATISFACTION SURVEY KEY MEASUREMENTS PLAN
[...***...] after the results of the first annual IS Customer
Satisfaction Survey are available the SupplIeR shall provide a Key
Measurements plan to measure the applicable improvement of Supplier
provided service identified in the IS Customer Satisfaction Survey as
requiring improvement. Identified Key Measurements shall be approved by
PacifiCare and reported on a monthly basis. Annually, these Key
Measurements will be adjusted based on the latest IS Customer
Satisfaction Survey results.
F. COMPLETION OF PHYSICAL INVENTORY:
Supplier shall provide to PacifiCare a physical inventory of all
Equipment (except Desktop PC) and Software that is used in the
performance of the Services provided by Supplier in support of
PacifiCare as set forth in Section 3.8 of the Agreement.
G. CREATION OF NEW DEVELOPMENT LAB:
Supplier shall provide for PacifiCare's use the development lab as set
forth in Exhibit B (Statement of Work) within [...***...] of the
Effective Date, [...***...].
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IV. KEY MEASUREMENTS:
This section Sets forth qualitative descriptions of the Key
Measurements. The Minimum Service Level and Expected Service Level
targets associated with such Key Measurements are set forth in Service
Level Attachment SLA-1. The column "Track and Report by Region" on the
Key Measurement tab of Service Level Attachment SLA-1 indicates the
region(s) in which these Key Measurements apply. As indicated, the
monthly performance reports should contain the results for these Key
Measurements by region.
A. PERFORMANCE CATEGORY - APPLICATION AVAILABILITY:
Supplier shall measure and report the Availability of each Application
identified in Service Level Attachment SLA-1 ("APPLICATION
AVAILABILITY"), which such Application Availability shall constitute a
Key Measurement.
B. PERFORMANCE CATEGORY APPLICATION RESPONSE TIME:
Supplier shall measure and report the Response Time of each Application
identified in Service Level Attachment SLA-1 ("APPLICATION RESPONSE
TIMe"), which such Application Response Time shall constitute a Key
Measurement.
C. PERFORMANCE CATEGORY - APPLICATION PERFORMANCE DEGRADATION:
Supplier shall measure and report Application performance degradation
(slow response) using information as reported by the End-Users via the
problem management process ("APPLICATION PERFORMANCE DEGRADATION").
[...***...].
D. PERFORMANCE CATEGORY CRITICAL PROCESSES:
The Batch Schedule Completion On-Time Rate calculation includes
production of updated files and appropriate reports, produced in a
calendar month.
For avoidance of doubt, the list of all Critical Batch Jobs to be
tracked in this performance category can be found on the Service Level
Attachment SLA-1 under the title Critical Batch Jobs and shall herein
be known as Scheduled Batch Jobs.
[...***...].
With respect to ongoing Scheduled Batch Job schedule requirements,
Supplier shall be responsible to make updates to the job schedules as
required and review such updates with PacifiCare no less frequently
than [...***...].
E. OTHER SERVICE LEVELS
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1. NICE CLAIMS AVERAGE DAILY VOLUME
[...***...].
2. COMPUTER INCIDENT RESPONSE:
[...***...].
F. PERFORMANCE CATEGORY - APPLICATIONS PERFORMANCE:
GENERAL. Supplier shall manage applications performance as to meet or
be better than the Service Levels set forth in Service Level Attachment
SLA-1.
1. [...***...].
2. [...***...].
G. PERFORMANCE CATEGORY - DESKTOP:
1. RCSC DESKTOP, LAPTOP & WINDOWS TERMINAL BREAK FIX - RESPOND
WITHIN 1 HOUR:
[...***...]
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[...***...].
2. RCSC DESKTOP, LAPTOP & WINDOWS TERMINAL BREAK FIX - RESOLVE
WITHIN 2 BUSINESS HOURS:
[...***...].
3. CAMPUS DESKTOP, LAPTOP AND WINDOWS TERMINAL BREAK FIX - RESPOND
WITHIN 1 HOUR:
[...***...].
4. CAMPUS DESKTOP, LAPTOP AND WINDOWS TERMINAL BREAK FIX - RESOLVE
WITHIN 8 BUSINESS HOURS:
[...***...].
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[...***...].
5. REMOTE DESKTOP, LAPTOP PC AND WINDOWS TERMINAL BREAK FIX - RESPOND
WITHIN 1 HOUR:
[...***...].
6. REMOTE DESKTOP, LAPTOP PC AND WINDOWS TERMINAL BREAK FIX - RESOLVE
BY THE NEXT BUSINESS DAY:
[...***...].
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[...***...].
7. ACQUISITIONS - STANDARD QUOTE:
A standard quote is a quote for a PC configuration, software or
peripheral that has been selected, tested and approved for use in
the enterprise in order to meet a business requirement.
[...***...].
H. PERFORMANCE CATEGORY - INFRASTRUCTURE AVAILABILITY
1. WAN AVAILABILITY:
WAN AVAILABILITY shall mean the PacifiCare Wide Area Network,
router to router, is operating properly and available to end users
in the ordinary course of business on a 7x24 basis, excluding
Scheduled Downtime.
[...***...].
2. WAN VENDOR AVAILABILITY
WAN VENDOR AVAILABILITY shall mean that the Wide Area Network,
Network Circuits (i.e. ATM, Frame Relay, Point to Point) provided
by Telecommunication Carriers, are operating properly and
available to end users in the ordinary course of business on a
7x24 basis. [...***...].
3. SQL SERVER AVAILABILITY (DATA BASE)
AVAILABLE FOR USE shall mean that the Server, including the
processor and associated storage devices, cabling, peripherals and
other equipment, is running properly so as to enable database
support from a workstation.
[...***...].
4. EXCHANGE SERVER AVAILABILITY (MAIL)
AVAILABLE FOR USE shall mean that the Server, including the
processor and associated storage devices, cabling, peripherals and
other equipment, is running properly so as to enable mail support
from a workstation.
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[...***...].
5. INFRASTRUCTURE SERVER AVAILABILITY (FILE/PRINT):
AVAILABLE FOR USE shall mean that the server, including the
processor and associated storage devices, cabling, peripherals and
other equipment, is running properly so as to enable proper
printer support and transfer of files to and from a Workstation.
[...***...].
6. LAN AVAILABILITY:
"AVAILABLE FOR USE" shall mean, with respect to each LAN Segment,
that each End-User connected to that LAN Segment is able to use
the LAN Segment and all functionality that the LAN is intended to
provide. If there is LAN Downtime with respect to a LAN Segment,
which is then brought back up, except for the restoration of data
that may have been lost, it is understood that such data
restoration shall not prevent the LAN Segment from being deemed
"Available for Use".
[...***...].
7. ASPECT AUTOMATIC CALL DISTRIBUTION ("ACD") EQUIPMENT AVAILABILITY:
[...***...].
I. PERFORMANCE CATEGORY - VOICE SERVICES
1. PREMISE VOICE AVAILABILITY:
[...***...].
2. VOICE MAIL AVAILABILITY:
[...***...].
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J. PERFORMANCE CATEGORY - VIDEO CONFERENCING SERVICES
[...***...].
1. VIDEO CONFERENCING RESERVATION SYSTEM AVAILABILITY:
The availability of the Supplier Video Conferencing Reservation System
is essential to PacifiCare Entities' ability to obtain the advantages
of using Video Conferencing. Supplier shall ensure the availability and
complete functioning of the Video Conferencing Reservation System
including access to necessary data. [...***...].
2. COMPLETE SUPPORT PROVIDED:
[...***...].
3. SUCCESSFUL VIDEO CONFERENCE START-UPS:
[...***...].
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[...***...].
K. PERFORMANCE CATEGORY - HELP DESK:
1. HELP DESK SPEED OF ANSWER AFTER AUTOMATED MENU SELECTION:
[...***...].
2. HELP DESK ABANDON RATE:
[...***...].
3. HELP DESK FIRST CALL PROBLEM RESOLUTION (RESOLVABLE CALLS):
[...***...].
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[...***...].
4. HELP DESK PERCENTAGE OF PROBLEMS RESOLVED WITHIN THREE (3) DAYS:
[...***...].
5. HELP DESK TIME FOR FINAL RESOLUTION OF CRITICAL SEVERITY HELP DESK
CALLS:
[...***...].
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[...***...].
6. INITIAL NOTIFICATION TO IMPACTED END-USERS ON CRITICAL SEVERITY
HELP DESK CALLS
[...***...].
7. CSD HELP DESK - SATISFACTION RATE:
[...***...].
L. PERFORMANCE CATEGORY - ACCOUNT ADMINISTRATION:
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1. REMOTE ACCESS ACCOUNT CREATIONS (DAYS TO CLOSE):
[...***...].
2. SYSTEM AND APPLICATION LOGONS ID CREATIONS:
[...***...].
3. EXCHANGE ACCOUNT CREATION (DAYS TO CLOSE)
[...***...].
4. IMAC COMPLETION -- INCLUDING REMOVALS, COMPLETE WITHIN 5 BUSINESS
DAYS OF APPROVED REQUEST:
[...***...].
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[...***...].
5. PASSWORD RESET DURING HELP DESK CALL
[...***...].
M. PERFORMANCE CATEGORY - SUPPLIER STAFFING
1. RETENTION RATE - DEDICATED STAFF:
[...***...].
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[...***...].
N. PERFORMANCE CATEGORY - CHANGE MANAGEMENT:
GENERAL. The intent of the Critical Service Levels under this Section
is to address PacifiCare's concern that Supplier's responsiveness to
End-Users during outages is essential to the satisfactory provision of
Services. Subject to the requirements of this Section, Supplier's
performance shall be better than, or at least equal to, the Critical
Service Levels set forth in PacifiCare Service Level Attachment SLA-1.
[...***...].
O. PERFORMANCE CATEGORY - PROJECT MANAGEMENT AND DELIVERY:
General. The Critical Service Levels under this Section are important
to address PacifiCare's concern that implementation of Projects are
managed to ensure they conform to approved schedule and budgets as well
as the quality standards agreed by PacifiCare and Supplier. Supplier
shall manage all Projects with respect to Project Deliverables so as to
meet or be better than the Service Levels set forth in Service Level
Attachment SLA-1.
1. PERCENT OF MEASURED PROJECT SCHEDULE OVERRUNS
[...***...].
2. MILESTONES DELIVERED TO SCHEDULE (WITHIN [...***...]%)
[...***...].
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[...***...].
3. PROJECTS DELIVERED TO BUDGET WITHOUT VARIANCE
[...***...].
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[...***...].
P. PERFORMANCE CATEGORY - DISASTER RECOVERY:
GENERAL. The intent of this measurement is to address PacifiCare's
concern that the ability to develop, document, and test Disaster
Recovery capability for Critical Systems and, if needed, use the
Disaster Recovery Plans to rapidly recover from catastrophic failures
is critical to PacifiCare Entities' ability to conduct its business
processes in the event of a loss of Supplier's ability to provide the
Services. Additionally, the ability to Backup Data to rapidly recover
from Equipment failures that generate the need to restore files
(applications or user data) is critical to PacifiCare Entities'
business requirements.
Subject to the requirements of this Section, Supplier shall provide
this service as described below so as to meet or exceed the Service
Levels set forth in Service Level Attachment SLA-1 and in accordance
with the PacifiCare Disaster Recovery Plan.
1. MAINTAIN DISASTER RECOVERY PLANS AND DOCUMENTATION:
[...***...].
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[...***...].
2. BACK-UPS FOR MEASURED SYSTEMS -- FULL AND INCREMENTAL / CRITICAL
AND NON-CRITICAL:
For all Measured Systems, Supplier shall, during the Scheduled Backup
Windows, perform Measured Backups as described in Service Level
Attachment. Supplier shall advise PacifiCare of changes required to
Service Level Attachment [SLA-1] as PacifiCare Entities' system files
are added or modified, and, as such changes are approved by PacifiCare,
update Service Level Attachment SLA-1 and review such updates with
PacifiCare no less frequently than monthly.
[...***...].
3. CONDUCT SUCCESSFUL DISASTER RECOVERY TEST -- APPLICATIONS,
DATABASES AND NETWORK.
Supplier shall, on an annual basis, test the Disaster Recovery Plan
designed to achieve all Disaster Recovery Milestones identified in the
Disaster Recovery Plan as critical to PacifiCare Entities' ability to
conduct its business processes in the event of a loss of Supplier's
ability to provide the Services.
[...***...].
4. DISASTER RECOVERY RE-TEST -- WITHIN [...***...] OF FAILURE.
Should Supplier fail to achieve any Disaster Recovery Milestone(s)
required to demonstrate recoverability as defined in the Conduct
Successful Disaster Recovery Test Key Measurement, Supplier shall be
obligated to re-test the failed Disaster Recovery Milestone(s)
("Retest") within [...***...] of ThE failure(s) until successfully
achieved.
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[...***...].
5. FILE RESTORATION RECOVERY - FROM ON-SITE STORAGE < 3 HOURS:
The ability to rapidly recover from Equipment failures that generate
the need to restore files (applications or user data) is critical to
PacifiCare Entities' business requirements. This service level applies
to loss of Data resulting from an Equipment failure or other
catastrophic event, and not to loss of Data resulting from an error
resulting in deletion of Data by a user.
[...***...].
6. FILE RESTORATION RECOVERY - FROM OFF-SITE STORAGE < 8 HOURS:
The ability to rapidly recover from Equipment failures that generate
the need to restore files (applications or user data) is critical to
PacifiCare Entities' business requirements. This service level applies
to loss of Data resulting from an Equipment failure or other
catastrophic event, and not to loss of data resulting from an error
resulting in deletion of Data by a user.
[...***...].
Q. PERFORMANCE CATEGORY - IDC CRITICAL OUTPUTS
1. CHECKS
CHECKS created by the various Applications must be mailed on time
per the detailed outline below.
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The Service Level per tracked PacifiCare Service Location is
calculated as follows:
[...***...].
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[...***...].
2. ELIGIBILITY REPORTS
ELIGIBILITY REPORTS for NICE, and RIMS are required to be mailed
twenty-four (24) hours after they are created. The Service Level
per tracked PacifiCare Service Location is calculated as
follows:
[...***...].
3. BILLING:
BILLING OUTPUTS created by the various Applications must be mailed
on time per the detailed outline in SLA-1. The Service Level per
tracked PacifiCare Service Location is calculated as follows:
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[...***...].
4. ID CARDS:
ID CARDS created by the various Applications must be mailed on
time
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ID CARDS created by the various Applications must be mailed on
time per the detailed outline in SLA-1. The Service Level per
tracked PacifiCare Service Location is calculated as follows:
[...***...].
5. NIGHTLY REPORTS AVAILABLE IN FILESHARES (OR ERD):
NIGHTLY REPORTS AVAILABLE IN FILESHARES (OR ERD) need to be
processed and made available by 8:00 a.m. local regional time in
the USA.
6. INBOUND MEDIA
a. Paper
1) [...***...].
b. Electronic
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1) [...***...].
7. [...***...] MAIL PROCESSING:
a. Mail Processing - Incoming / Outgoing mail must be
delivered or sent on the same day as received in the
mail-processing center via couriers from or to the
Campuses located in [...***...].
b. [...***...].
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V. DEFINITION OF TERMS USED IN SERVICE LEVELS
The following terms when used in the Service Level Schedule (including any
exhibits thereto) with initial capital letters shall have the respective
meanings set forth herein. Terms used with initial capital letters that are not
defined herein shall have the meaning set forth in the Agreement.
[...***...].
d ACTUAL SCHEDULED UPTIME of a particular System, Application, Software,
Equipment, Network or any other part of the Services shall mean the
Scheduled Uptime that a particular System, Application, Software,
Equipment, Network or any other part of the Services is actually available
during the Measurement Window, as specified in the Attachment SLA-1, for
normal business use.
[...***...].
g BACKUP shall mean to copy a file or files and place them in an appropriate
alternate location so that a safe, usable copy remains if the original is
destroyed.
[...***...].
i BILLING OUTPUTS shall mean invoices sent to vary constituents specifying
payments due.
j BILLING OUTPUTS shall mean invoices sent to varied constituents specifying
payments due
k BROKER CHECKS shall mean checks issued to Brokers in payment of Commissions
l BROKER CHECKS shall mean checks issued to Brokers in payment of
commissions.
m BUSINESS CONTINUITY PLAN shall mean Disaster Recovery Plan.
n BUSINESS DAY shall mean Monday through Friday excluding national holidays
and official PacifiCare holidays unless otherwise specified by PacifiCare
Supplier Relationship Manager (or his / her designee).
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o CALL shall mean a call to a Help Desk from an End-User requesting
assistance that is related to the Services.
p [...***...].
q CAPITATION CHECKS shall mean checks covering monthly payment to Provider.
r CAPITATION REPORTS shall mean reports supporting the monthly payment to
Providers.
s CERTIFIED BUSINESS CONTINUITY PLANNER is defined in Section IV.I.
t CLAIM CHECKS are checks issued to providers or members for reimbursement of
covered medical expenses.
u [...***...].
v COMPONENT shall mean any constituent part of a Product or Services, whether
provided by Supplier or any other source.
w CRITICAL APPLICATIONS are those applications that support critical business
objectives within a specific reporting entity (region) and are tracked and
measured using Online Hour Measurement Windows under the Critical Service
Level Section of SLA-1.
x CUSTOMER SUPPORT shall mean any effort required prior to establishing a
development project or work on minor data changes, reports user questions,
or training requests. Customer Support includes: Help Desk tickets not
related to resolving production issues or bugs; minor user training;
answering and addressing direct calls from business partners; business
management requests for pre-project consultation (research, analysis,
brainstorming, estimating); regular business partner/status meetings - not
project related; business requested support for application demonstrations
to customers; business requested support for generating presentation
materials, not project related; meetings with employer groups/providers as
requested by business partners; updates to production data or tables done
outside of the normal application functionality.
y DATA shall mean numbers, characters, images, or other PacifiCare Entities'
information recorded in a form that can be input into a CPU, stored and
processed there, or transmitted on some digital channel.
z DEDICATED STAFF is defined in Section IV.E.1.
aa DESKTOP PC shall mean an End-User PC configuration, including Standard
Equipment (e.g., keyboard, monitor, CPU, mouse, peripherals, printers,
plotters, video adapters, etc.), core system and user Software (i.e.,
Operating System Software, memory manager, device drivers, configuration
scripts, e-mail, productivity tools, etc.) A Desktop PC may have Standard
or Non-Standard Equipment or Software.
bb [...***...]
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[...***...].
cc DISASTER RECOVERY PLAN shall mean a PacifiCare or Supplier-developed and
PacifiCare-approved plan (developed and maintained with appropriate
PacifiCare-provided input) to perform Disaster Recovery. [NOTE: TO BE
CONFORMED TO THE AGREEMENT AND SCHEDULE 16.1.]
dd DISASTER RECOVERY shall mean the ability to recover those services
designated as Critical Services by PacifiCare within PacifiCare specified
time frames and sequences specified by PacifiCare (when changes to existing
plans are required such changes shall be processed through the Change
Management Procedure) via the use of an off-Campus recovery capability
provided by Supplier or other facility provided by PacifiCare.
ee DOCUMENTATION shall mean the user manuals and any other completed (as
opposed to works in progress) materials in any form or medium related to
the Services provided by Supplier to PacifiCare Entities as required by the
Agreement or, provided by PacifiCare to Supplier (to the extent such
materials exist, PacifiCare is aware of the existence, PacifiCare has
reasonable access to the materials and PacifiCare has legal authority to
access and provide such materials to an outsourcing company of the related
Services).
ff DOWNTIME shall mean the time that a particular System, Application,
Product, Software, Equipment or any other part of the Services is not
available during the Measurement Window as specified in this Schedule, for
normal business use by the End-User.
gg ENHANCEMENT - Any approved effort required to meet standards for
Application availability, to provide adequate performance of the PacifiCare
Software, and to enhance PacifiCare Software as required and necessary to
accommodate the evolution of PacifiCare Entities' environments and
`business requirements, Supplier shall develop, test and introduce changes
to the PacifiCare Software that modify or add functionality to existing
Applications.
hh EQUIPMENT REPAIR CALL shall mean a call by an End-User notifying the Help
Desk of degradation in functionality or performance for Equipment.
Equipment Repair Calls shall not include calls relating to degradation in
performance resulting from problems other than the Equipment or Software
(such as Network problems), provided that if Supplier mistakenly diagnoses
a problem as something other than Equipment or Software, and such diagnosis
is wrong, and the problem is actually Equipment-related or
Software-related, such call shall be counted as a Equipment Repair Call at
the time such call was originally made.
ii EXCHANGE ACCOUNT shall mean shall mean a Microsoft Outlook email account
created or maintained by the Supplier for an End User.
jj EXISTING SYSTEM - Any PacifiCare Proprietary Systems as listed in Schedule
14.2. (a) or Schedule 14.2(b) of the Agreement.
kk FILE RESTORATION RECOVERY is defined in Section IV.I.5.
ll FILE/PRINT SERVER shall mean a server [...***...] that is limited in
function to storing end user data, acting as a repository for applications
to be executed on the Workstation, and support
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of attached printers.
mm FINAL RESOLUTION is defined as the application meets the business
requirements in place prior to the error that resulted in the call to the
Help Desk, and the End-User that reported the problem has been contacted by
the Help Desk representative and agrees that it has been resolved.
nn FULL TIME PERSON OR ("FTP") [...***...].
oo HELP DESK shall mean a Supplier-managed help desk function that provides
reactive and proactive problem determination, resolution and /or tracking,
as applicable, under the Agreement. The Help Desk functions with respect to
Software or Equipment within Supplier's scope of responsibility.
pp HELP DESK - SUPPLIER APPLICATIONS SUPPORT personnel shall mean those
personnel and facilities through which Supplier shall Respond to all calls
and contacts concerning ongoing production Applications Maintenance
problems. Calls and contacts from End-Users shall come through the Help
Desk.
qq HELP DESK SPEED OF ANSWER AFTER AUTOMATED MENU SELECTION shall mean the
time between the caller's selection of the option on the Help Desk voice
response unit's menu that leads to a live person and the time that a live
person answers ready to start working on the Call.
rr HIGH OR CRITICAL-RISK VIRUS shall mean a Virus reported often or very often
in the field that has a payload that can cause serious damage which can
spread rapidly on common operating systems using a common platform. If the
Virus causes very serious damage, high risk might be assigned even with a
lower level of prevalence.
ss ID CARDS are cards issued to members identifying key member data.
tt IMAC is defined in Schedule 17 to the Agreement, the Fee Schedule.
uu IS CUSTOMER SATISFACTION SUMMARY shall mean of survey of End-Users opinions
regarding the services provided.
vv IT shall mean Information Technology.
ww LAN SEGMENT AVAILABILITY is defined in Section II.G.
xx LAN SEGMENT shall mean a separate PacifiCare infrastructure that connects
desktop and workstation computers to server resources within a building or
Campus environment including the management of switches, hubs, DNS servers,
DHCP servers, IMAC requests, and connectivity up to the LAN port of the
Wide Area Network (Wan) access router, but excludes PCs, the installation
or repair of the building and Campus wiring plan, and any international
locations.
yy LAPTOP PC shall mean an End-User Laptop PC configuration, including
Standard Equipment (e.g.,
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docking station, monitor, PCMCIA modem, keyboard, CPU, mouse, peripherals,
printers, plotters, video adapters, etc.), core system and user Software
(e.g., Operating System Software, memory manager, device drivers,
configuration scripts, e-mail, productivity tools, etc.). A Laptop PC may
have Standard or Non-Standard Equipment or Software.
zz LOCAL AREA NETWORK (LAN) shall mean a data network (typically within a
building or Campus), which utilizes one of several data protocols and to
which Equipment, such as PCs and printers, is attached such that
End-Users can access or share Equipment and other resources.
aaa LOOPING / RUNAWAY PROCESS is a process that has lost communication with
it's control mechanism. Without a control mechanism, the process
continues to execute.
bbb MAIL, for IDC Critical Output purposes, is defined as the completion of a
post-print processing function. Post-print processing may be automated or
manual, may include collation, insertion, verification, and/or Quality
Control. Stated time commitments for mail exclude weekends and holidays.
ccc MEASURED BACKUP shall mean a Backup of applicable Data files and Software
for a Measured System during the Scheduled Backup Window that includes
the completion of the following:
- For applications, jobs that Backup application Data files,
Software and databases according to the Application Disaster
Recovery Plan or other agreed upon Documentation for the
Application.
- For infrastructure Components used in connection with an
Application, jobs that Backup operating systems, Software and
user data (where appropriate).
- For cases in which technology solutions or methodologies
selected do not execute a full Backup (e.g., ADSM),
incremental or revisional Backups.
- For the avoidance of doubt, in no event shall the Measured
Backups occur less frequently than current practice (as of the
Cutover Date) between PacifiCare and Supplier or as required
in any existing Agreement(s).
ddd MEASURED IMAC REQUEST shall mean a completed and approved request for an
IMAC that is submitted to Supplier through the Supplier Service Request
Management System and is related to the Services. [...***...].
eee MEASURED PROJECT shall mean any project which PacifiCare requires to be
measured by Supplier.
fff MODULE shall mean a separately defined Software Component of a Sub-system
where similar functions generally are contained within the same unit of
programming code and separate functions generally are developed as
separate units of code.
ggg NETWORK shall mean the telecommunications circuits, and the LAN/WAN
equipment supporting these circuits, between the End-User's Desktop PC,
Laptop PC, Windows Terminal, the
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*CONFIDENTIAL TREATMENT REQUESTED
PacifiCare Site Equipment, and the Supplier Data Center Equipment.
hhh NEW SERVICES are defined in Section 5.1 of the Agreement
iii NON-STANDARD shall mean that Equipment or Software that has not been
approved by PacifiCare as Standard.
jjj ONLINE HOURS shall means all hours within a daily 24-hour period minus
the Batch Window and Schedule Downtime. Online hours shall mean that
period of time (days of the week and hours per day) during which a
particular System, Application, Software, Equipment or any other part of
the Services is expected to be available to PacifiCare Entities for
normal business use.
kkk OPERATING SYSTEM SOFTWARE shall mean the Software control program in a
CPU that provides the interface to the CPU and its associated Equipment,
and the usage and allocation of memory resources, processor resources,
input/output resources, and security resources.
lll PACIFICARE APPROVED REQUEST shall mean a PacifiCare request that is
formatted properly in accordance with the then current format that has
been approved by the PacifiCare Contract PC shall mean an End-User
personal computer or Workstation forming a part of the Hardware including
all PacifiCare specified Software installed thereon, and all PacifiCare
specified Hardware attached or connected thereto (including display
monitors, keyboards, mice and printers, but excluding non-office Hardware
e.g., robotics, environmental control devices, etc.), and all PacifiCare
funded network attachments, provided, however, any PacifiCare specified
Hardware item connected with more than one personal computer or
Workstation shall be deemed to be a part of only one personal computer as
selected by PacifiCare in its discretion. A PC may have Standard or
Non-Standard Hardware or Software.
mmm PACIFICARE SERVICE LOCATIONS shall mean any PacifiCare service location
set forth in Schedule 10.1 and any other service location owned or leased
by PacifiCare from which Supplier has been authorized by PacifiCare to
provide the Services.
nnn PASSWORD RESET shall mean using appropriate Software commands to restore
a Password to usable status.
ooo PASSWORD shall mean a code identified with an End-User to enable access
to PacifiCare Entities' Systems.
ppp PC AND LAPTOP SYSTEMS REPAIR CALL shall mean a call by an End-User
notifying the Help Desk of degradation in functionality or performance
for a PC or Laptop. This includes End-Users working from a Home Office
reporting degradation in functionality or performance for a Home PC.
[...***...].
qqq PC shall mean an End-User personal computer or Workstation forming a part
of the Equipment including all PacifiCare specified Software installed
thereon, and all PacifiCare specified Equipment attached or connected
thereto (including display monitors, keyboards, mice and
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*CONFIDENTIAL TREATMENT REQUESTED
printers, but excluding non-office Equipment e.g., robotics,
environmental control devices, etc.), and all PacifiCare funded Network
attachments, provided, however, any PacifiCare specified Equipment item
connected with more than one personal computer or Workstation shall be
deemed to be a part of only one personal computer as selected by
PacifiCare in its discretion. A PC may have Standard or Non-Standard
Equipment or Software.
rrr PLAN COMPLIANCE CRITERIA is defined in Section IV.I.1.
sss PRESCRIPTION SOLUTIONS CLAIMS REPORTS AKA - RX CLAIMS REPORTS - Are
reports created from PacifiCare's Prescription Solutions specialty
product company and printed on their behalf.
ttt PRODUCT shall mean any Equipment, Software or supply item provided by
Supplier or PacifiCare pursuant to the Agreement.
uuu REGIONAL CUSTOMER SERVICES CENTERS (RCSCS) - which include the following
business functions: Customer Services; Claims; Membership Accounting;
Medical/Clinical Management; Regional Information Services; Provider
Network Management; and Selected PacifiCare Executives and Executive
Associates.
vvv REMOTE ACCESS ACCOUNT shall mean those accounts requiring access from
remote location via remote access technology such as RAS or VPN.
www REMOTE shall mean an End-User not on a Campus location.
xxx REPAIR CALL shall mean a call by an End-User notifying the Help Desk of
degradation in functionality or performance in Equipment or System.
[...***...].
yyy RESPOND shall mean notification may be via telephone or in person to the
End User when the End-User reports a problem to Help Desk.
zzz RESPONSE TIME shall be the value at the [...***...] percentile of a
series of end-to-end measurements using the agreed-to tools, which are
used to assess the processing speed of an Application's operation within
the environment.
aaaa SCHEDULED BACKUP WINDOW shall mean the scheduled time to complete Backups
of Applications and infrastructure Components according to the agreed
upon Documentation for the Application or infrastructure Components.
bbbb SCHEDULED BATCH JOB shall mean a sequence of computer programs that are
assigned/sent to a
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*CONFIDENTIAL TREATMENT REQUESTED
computer to run without further user interaction and are scheduled, in
connection with the Services, by an End-User or Supplier to run
automatically at a certain time.
cccc SCHEDULED DOWNTIME of a particular System, Application, element of
hardware, network or any other part of the Services shall mean the amount
of time that a particular System, Application, element of hardware,
network or any other part of the Services is not available for normal
business use by the End-User that has been agreed to in advance by
PacifiCare (e.g. planned schedule maintenance activities). The Parties
intend to schedule such time so as to minimize the impact to PacifiCare
Entities' business operations. Supplier shall maintain Availability
during such periods to the extent reasonably practicable.
dddd SERVICE MEASUREMENT a measurement of service based on the report
frequency established in SLA-1 of the Schedule 8.
eeee SERVICE REQUEST shall mean a PacifiCare Approved Request that Supplier is
responsible for logging and tracking, including via a service management
tool (including Tivoli Service Desk and Help Now!).
ffff SEVERITY LEVEL assigned to a particular problem shall mean the value 0,
1, 2, 3 or 4 determined by the Infrastructure Supplier Help Desk
technician when a problem occurs by referring to the following table:
LEVEL DESCRIPTION STATUS UPDATE/ TARGET RESPONSIBLE GROUP
RESOLUTION STATUS REPORTING
-----------------------------------------------------------------------------------------------------
Severity 0 COMPANY AND OR ENTERPRISE - [...***...]. [...***...].
[...***...] WIDE
STATUS UPDATE
[...***...].
[...***...].
TARGET RESOLUTION
[...***...].
-----------------------------------------------------------------------------------------------------
Severity 1 MAJOR OPERATIONAL IMPACT [...***...]. [...***...].
WITH NO WORKAROUND
AVAILABLE
STATUS UPDATE
[...***...].
[...***...].
-----------------------------------------------------------------------------------------------------
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*CONFIDENTIAL TREATMENT REQUESTED
LEVEL DESCRIPTION STATUS UPDATE/ TARGET RESPONSIBLE GROUP
RESOLUTION STATUS REPORTING
-----------------------------------------------------------------------------------------------------
[...***...]. [...***...]. [...***...].
TARGET RESOLUTION
[...***...].
-----------------------------------------------------------------------------------------------------
Severity 2 MAJOR OPERATIONAL IMPACT- TARGET STATUS [...***...].
PRE-EXISTING WORKAROUND
IN PLACE.
[...***...].
[...***...].
TARGET RESOLUTION
EXAMPLE: [...***...].
[...***...].
-----------------------------------------------------------------------------------------------------
Severity 3 - Individual is Down and TARGET STATUS [...***...].
there is no work around
[...***...].
- One individual customer
is unable to work within
an application.
-----------------------------------------------------------------------------------------------------
Page 49 of 51 [PACIFICARE LOGO]
*CONFIDENTIAL TREATMENT REQUESTED
LEVEL DESCRIPTION STATUS UPDATE/ TARGET RESPONSIBLE GROUP
RESOLUTION STATUS REPORTING
-----------------------------------------------------------------------------------------------------
EXAMPLES: TARGET RESOLUTION
[...***...]. [...***...].
-----------------------------------------------------------------------------------------------------
Severity 4 - Individual is TARGET STATUS [...***...].
experiencing a
problem and a
workaround does exist [...***...].
- Individual has a TARGET RESOLUTION:
non-urgent question
regarding application,
report or other IS [...***...].
related assistance.
EXAMPLES:
[...***...].
-----------------------------------------------------------------------------------------------------
gggg SHIP, for IDC Critical Output purposes, is defined as print and bundle
for distribution with no post-print processing function.
hhhh STANDARD shall mean (collectively and individually) that hardware and
Software that has been approved by the PacifiCare and certified by the
SUPPLIER.
iiii SUB-SYSTEM shall mean any collection or aggregation of one (1) or more
Applications that are designed to perform, are performing, or capable of
PERFORMING, in accordance with the applicable functional specifications
(development only) and Statement of Work.
jjjj SUPPLIER RE-TEST shall mean a re-test of the RECOVERABILITY of Critical
Services required because of failed Disaster Recovery Milestones.
kkkk SYSTEM AND APPLICATION LOGON ID shall mean a user id and password
granting an End User access to any of PacifiCare's systems, applications
or networks, as created and maintained by the Supplier.
llll SYSTEM CRITICAL SCHEDULED UPTIME shall mean the AMOUNT of minutes within
the applicable Measurement Window for the System as set forth in Service
Level Attachment SLA-1.
mmmm SYSTEM DOWNTIME shall mean the total time per calendar month out of the
System Critical Scheduled Uptime, as measured in minutes, that the System
for which Availability is being computed is not Available for Use.
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*CONFIDENTIAL TREATMENT REQUESTED
nnnn SYSTEM shall mean any collection or aggregation of two (2) or more
Products that are designed to perform, or are represented by Supplier as
performing or being capable of performing, as a functional entity.
oooo SYSTEM SOFTWARE shall mean those programs, including Documentation and
materials, that perform tasks basic to the functioning of the Equipment
and which are required to operate the Application or otherwise support
the provision of Services by Supplier. Systems Software includes
Operating Systems Software and systems utilities.
pppp TIME TO RESOLVE shall mean the elapsed time between registration of the
problem to Supplier's Help Desk and the successful resolution (i.e.,
repair or bypass, not escalation) of the problem as accepted by the
End-User.
qqqq TURNOVER shall mean each case in which a Supplier employee leaves the
employ of Supplier in a voluntary / involuntary manner or otherwise
ceases to provide support to PacifiCare Entities, except (i) in the case
of death, disability, retirement or extended leave of the employee or,
(ii) in the case that the employee ceases to provide support as a result
of a planned reduction in force or, (iii) because the employee's position
is eliminated due to the conclusion of a PacifiCare-specific work effort
(e.g., at the conclusion of a project) or, (iv) the Services provided by
the employee are determined not to be needed to provide the Services
according to the Agreement and PacifiCare accepts Supplier's proposal to
reduce the Supplier personnel.
rrrr UNSCHEDULED DOWNTIME shall mean the time that a particular System,
Application, element of hardware or any other part of the Services is not
available for normal business use during the Batch Window or Online
Hours. If the duration of unavailability for Scheduled Downtime event
exceeds the agreed-to time interval for the event and extends into the
Online Hours, the time unavailable which extends into the Online Hours
shall be considered Unscheduled Downtime in the Application Availability
calculation.
ssss VIDEO CONFERENCE (VIDEO CONFERENCE SESSION) shall mean any scheduled
meeting that involves at least two locations connected by
telecommunications and involving video service provided from a full time,
part time, or temporarily set up or rented room that has audio and video
transmission capabilities.
tttt VIDEO CONFERENCE ROOMS shall mean any room set up for and used regularly
for Video Conference sessions even if the room may be used for other
purposes when not in use for Video Conferences.
uuuu VIDEO CONFERENCING RESERVATION SYSTEM shall mean the system used by
End-Users to schedule Video Conference Sessions and Video Conference
Rooms.
vvvv WIDE AREA NETWORK (WAN) shall mean a collection of computers connected
(or networked) to each other over a geographic area.
wwww WINDOWS TERMINAL shall mean a windows desktop with limited or no local
processing capability accessing the operating system and Applications via
a link to a server running terminal server operating software.
xxxx WORKSTATION shall mean a setup composed of a computer and peripheral
devices that enable someone to do work.
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*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 8
SERVICE LEVEL AGREEMENT ATTACHMENT 1
SERVICE LEVEL MATRIX
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 8
SERVICE LEVEL AGREEMENT ATTACHMENT 2
SERVICE LEVEL OUTCOME EXAMPLES
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 8
SERVICE LEVEL AGREEMENT ATTACHMENT 3
PRE-APPROVED MEASURING TOOLS AND METHODOLOGIES FOR CRITICAL
SERVICE LEVEL MEASUREMENTS
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 8
SERVICE LEVEL AGREEMENT ATTACHMENT 4
APPLICATION SUMMARIES
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 8
SERVICE LEVEL AGREEMENT ATTACHMENT 5
DISASTER RECOVERY PROGRAM CHARTER
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 8.7
AGREEMENT
BETWEEN
PACIFICARE AND SUPPLIER
SCHEDULE 8.7
SERVICE LEVELS APPLICABLE TO TERMINATION
INTRODUCTION
Failures to meet the Service Levels set forth below may result in termination of
the Agreement by PacifiCare as provided in Section 8.7 of the Agreement.
SLA SUBJECT TO SECTION 8.7 MINIMUM SLA
-------------------------- -----------
1. [...***...] [...***...]
2. [...***...] [...***...]
3. [...***...] [...***...]
4. [...***...] [...***...]
5. [...***...] [...***...]
6. [...***...] [...***...]
7. [...***...] [...***...]
8. [...***...] [...***...]
9. [...***...] [...***...]
10. [...***...] [...***...]
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 9.2 (a)
APPROVED BENCHMARK PROVIDERS
1. [...***...]
2. [...***...]
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 10.1
Service Locations
BUSINESS
STATE UNIT ADDRESS PEOPLE BREAKROOMS AKA
---------------------------------------------------------------------------------------------------------------------------------
AZ
PCAZ 000 X. 00xx Xxxxxx Xxxxxxx, XX 00000 [...***...] [...***...] [...***...]
PCAZ 0000 X. Xxxxxx Xxxxxx Xxxxxxx, XX 00000 [...***...] [...***...] [...***...]
PCAZ 0000 X. Xxxxxxxx Xxxxxx, XX 00000 [...***...] [...***...] [...***...]
CA
PCCA 00000 Xxxxxxx Xx. #000 Xxxxxx Xxxxx, XX 00000- [...***...] [...***...]
PCDV 0000 X. Xxxxx Xxxxxxx Xxxxxxx, XX 00000- [...***...] [...***...]
PCDV 0000 X. Xxxxx Xxxxxxx Xxxxxxx, XX 00000 [...***...] [...***...]
PCDV 0000 X. Xxxxxx #X (Xxxxxxx) Xxxxxxx, XX 00000 [...***...]
RXSL 0000 Xxxxx Xxxx Xxxxxxxx, XX 00000- [...***...] [...***...] [...***...]
PCCA 0000 Xxxxxxx Xxxx Xxxxxxx, XX 00000 [...***...] [...***...]
RXSL 0000 Xxxxxx Xxxx. Xxxxx Xxxx, XX [...***...] [...***...]
PHPA 0000 Xxxxxx Xxxx. Xxxxx Xxxx, XX 00000 [...***...] [...***...] [...***...]
RXCN 0000 Xxxxxx Xxxx. Xxxxx Xxxx, XX 00000- [...***...] [...***...]
PCCA 00000 Xxxxxx Xxxx Xxxxxxx, XX 00000 [...***...] [...***...] [...***...]
PIS 00000 Xxxx Xxxxxx Xxxxxxx, XX 00000 [...***...] [...***...] [...***...]
PCCA 00000 Xxxxxx Xxxx Xxxxxxx, XX 00000 [...***...] [...***...] [...***...]
PCCA 0000 Xxxxxxx Xxxxxx Xxxxxxx, XX 00000 [...***...] [...***...] [...***...]
PCCA 0000 Xxxxx Xxxxx (Xxxxxxx) Xxxxxxx, XX 00000 [...***...]
PCCA 0000 Xxxxx Xxxxx Xxxxxxx, XX 00000 [...***...] [...***...] [...***...]
PIS 0000 Xxxxxxx Xxxxxxx, XX 00000 [...***...] [...***...] [...***...]
PIS 0000 Xxxxxxx Xxxxxxx, XX [...***...] [...***...] [...***...]
PHPA 0000 Xxxxxxx Xxxxx, Xxxx X Xxxxxxx, XX 00000 [...***...] [...***...] [...***...]
PIS 0000 Xxxxxxx Xxxxx, Xxxx X Xxxxxxx, XX 00000 [...***...] [...***...] [...***...]
PCCA 000 Xxxx Xxxxxx Xxx Xxxxxx, XX 00000 [...***...] [...***...]
PHPA 00000 Xxxxx Xxx - Xxxxx 0 & 00 Xxxxxx Xxxxx, XX 00000- [...***...] [...***...] [...***...]
PCCA 00000 Xxxxx Xxx - Xxxxx 0 & 00 Xxxxxx Xxxxx, XX 00000- [...***...] [...***...] [...***...]
ACD 00000 Xxxxxxx Xxxxxx, Xxx 000 Xxxxxx, XX 00000- [...***...] [...***...] [...***...]
PBHI 00000 Xxxxxxx xx xx Xxxxxxx Xxxxxx Xxxxx, XX 00000 [...***...] [...***...]
PBHI 00000 Xxxxxxx xx xx Xxxxxxx #000 Xxxxxx Xxxxx, XX
PCCA 0000 Xxxxxxx Xxxxxx (Xxxxxxx) Xxx Xxxxxxxx, XX 00000- [...***...] [...***...] [...***...]
PCCA 0000 X. Xxxxxxxx Xxxx Xxxxxxxx, XX 00000 [...***...] [...***...]
PCCA 0000 Xxxxxxx Xxxxxx Xxxxxxxxx, XX 00000 [...***...] [...***...]
PCCA 0000 Xxxxxxx Xxxxxx Xxxxxxxxxx, XX 00000 [...***...] [...***...]
PCCA 0000 Xxxxxxxxx Xxxxx Xxx Xxxxx, XX 00000 [...***...] [...***...]
RXSL 0000 Xxxxxx Xxxxxx, Xxxxx 000 Xxx Xxxxx, XX 00000 [...***...] [...***...]
PCCA 0000 Xxxxxxx Xxxxx Xxx Xxxx, XX 00000 [...***...] [...***...]
* CONFIDENTIAL TREATMENT REQUESTED
LIFE 0000 Xxxx Xxxxxx Xxxxx Xxxxx Xxx, XX 00000- [...***...] [...***...]
PHPA 3100,3110,3120 Xxxx Xxxxxx Xx Xxxxx Xxx, XX 00000 [...***...] [...***...]
PBHI 0000 Xxxxxxxxx Xxxx Xxx Xxxx, XX 00000 [...***...] [...***...]
West Los Angeles, CA
PCCA 0000 X. Xxxxxxxxx Xxxx, Xxx 000 00000 [...***...] [...***...]
CO
Colorado Springs, CO
PCCO 0000 Xxxx Xxxxxxx Xxxx 00000 [...***...] [...***...] [...***...]
PBHI 0000 X. Xxxxxxxx Xxxxxxxxx, XX [...***...] [...***...]
PCCO 0000 X. Xxxxxxxx Xxxxxxxxx, XX 00000 [...***...] [...***...] [...***...]
PCCO 0000 X. Xxxxxxxx, Xxxxx 000 Xxxxxxxxx, XX 00000- [...***...] [...***...]
PCCO 0000 Xxxxx Xxxxxxx, Xxx 000 Xxxx Xxxxxxx, XX 00000 [...***...] [...***...]
GU
GUAM 000 Xxxxx 000 Xxxxxx Xxxxx (XxxXxx Admn) Dededo, GU 96911- [...***...]
GUAM Blessco Warehouse Dededo, GU [...***...] [...***...]
GUAM Hafa Adai Theatre Parking Dededo, GU [...***...] [...***...] [...***...]
GUAM 000 Xxxxxxxx Xxxxxx Xxxxxxxx, XX 00000- [...***...] [...***...]
GUAM 000 Xxxxx Xxxxxx Xxxxx (Med. Center) Tamuning, GU 96911- [...***...]
GUAM 000 Xxxxx Xxxxxx Xxxxx (Parking) Tamuning, GU [...***...]
GUAM 000 Xxxxx Xxxxxx Xxxxx (Annex) Tamuning, GU [...***...]
GUAM EMI Warehouse #3, Unit D Tamuning, GU [...***...] [...***...] [...***...]
XXXX Xxx 0, Xxx 0, X X Xxxxx Memorial Pkway Tamuning, GU [...***...] [...***...] [...***...]
IR
PLIC Letterkenney Bus. Park, Lisenan Letterkenney, IR [...***...] [...***...]
NV
PCNV 0000 X. Xxxxxx (Xxxxxxx) Xxx Xxxxx, XX 00000 [...***...]
PCNV 000 Xxxx Xxxxxxx Xxxx Xxx Xxxxx, XX 00000 [...***...] [...***...]
OK
PCOK 000 Xxxxxxx Xxxx Xxxxx Xxxxxxxx Xxxx, XX 00000 [...***...] [...***...]
PCOK 0000 X. 00xx Xxxxxx, Xxxxx 000 Xxxxx, XX 00000 [...***...] [...***...]
OR
PCOR 00000 X.X. Xxxxxxxxx Xxxx Xxxxxxxxx, XX 00000 [...***...] [...***...] [...***...]
PBHI 00000 X.X. Xxxxxxxxx Xxxx Xxxxxxxxx, XX 00000- [...***...]
PCOR Xxxx Xxxxxxxxxxxx Xxxxx Xxxx Xxxxxx, XX 00000 [...***...] [...***...] [...***...]
SP
GUAM 000 Xxxxx Xxxxxxxx Xxx Xxx Xxxx, XX 00000- [...***...] [...***...]
TX
PCTX 000 Xxxx Xxxxx Xxxxx Xxxxxxxxx, XX 00000- [...***...] [...***...] [...***...]
COV 00000 Xxxxxxxx Xxxx., Xxxx 0, #000 Xxxxxx, XX 00000- [...***...] [...***...] [...***...]
PCTX 00000 Xxxxxx Xxxx, Xxxxx 000 Xxxxxx, XX 00000- [...***...] [...***...]
PCTX 0000 XXX Xxxxxxx,Xxx 000, 000, 000 Xxxxxx, XX 00000 [...***...] [...***...]
PBHI 0000 XXX Xxxxxxx,Xxxxxx 000 & 000 Xxxxxx, XX [...***...] [...***...]
* CONFIDENTIAL TREATMENT REQUESTED
PCTX 0000 Xxxx Xxxx Xxxxx, Xxx 000 Xxxxxxx, XX 00000 [...***...] [...***...]
San Antonio, TX
PCTX 0000 Xxxxxxxxx Xxxxxxx 78249-3348 [...***...] [...***...] [...***...]
PCTX 0000 XX 00 Xxxx, Xxx 0000 Xxx Xxxxxxx, XX 00000 [...***...] [...***...] [...***...]
WA
PCWA 0000 Xxxxx Xxx. Xxxxxxx, XX 00000 [...***...] [...***...]
PCWA 0000 0XX Xxxxxx X. X. Xxxxx, XX 00000- [...***...] [...***...] [...***...]
PCWA 0000 X.X. 00xx Xxxxxx Xxxxxx, XX 00000 [...***...] [...***...]
Group State City Address
--------------------------------------------------------------------------------
[...***...]
CO Englewood 000 X. Xxxxxxxxx
XX San Antonio 0000 XxXxxxxxxx Xxx
XX Xxx Xxxxxxx 00000 Xxxxxxxxxxx
XX San Antonio 0000 X.X. Xxxxxxxx
XX Xxx Xxxxxxx 000 Xxxxx Xxx Xxxx
[...***...]
CA Cypress 0000 Xxxxx Xxxxx
XX Letterkenny
[...***...]
CA Santa Xxxxxxx 351 Paseo Nuevo
CO Englewood 0000 Xxxxxxxxx, Xxxxx 000
XX Xxxxxxxxx 0000 Xxxxxxxxx, Xxxxx 000
SP Saipan Chalan Kiya Circle Apt A-1
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 10.2
SAFETY AND SECURITY PROCEDURES
The PacifiCare Safety and Security Procedures can be found via pull-down menus
at the following URL on PacifiCare's intranet:
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 11
HUMAN RESOURCES
For purposes of this Schedule 11 (this "Schedule"), all capitalized
terms not otherwise defined herein shall have the meanings ascribed to them in
the Agreement
1. Employment Offers. Supplier shall extend offers of employment according
to the terms of this Schedule and in accordance with the procedures
described in this Schedule to those PacifiCare employees set forth in
Exhibit A hereto (collectively, the "Affected Employees"; each, an
"Affected Employee"). [...***...]
2. Hiring Requirements. Supplier shall hire those Affected Employees who:
(1) are listed in Exhibit A hereto;
(2) [...***...]
(3) [...***...]
[...***...].
3. Terms of Employment. Supplier's offer of employment to each Affected
Employee shall include the following:
(1) Base Salary. [...***...].
(2) Positions. [...***...]
1. * CONFIDENTIAL TREATMENT REQUESTED
[...***...].
(3) Work Hours. [...***...].
(4) Health Care Benefits and Employee Benefit Plans.
[...***...].
(5) Vacation. [...***...].
(6) Savings Plans. [...***...].
(7) Length of Service Credit. [...***...].
(8) Adjustments Related to Benefit Plans. [...***...]
2. * CONFIDENTIAL TREATMENT REQUESTED
[...***...].
(9) Tuition Aid. [...***...].
(10) Location. [...***...].
(11) Bonuses/Compensation Programs.
(a) [...***...].
(b) [...***...].
(12) [...***...].
4. Severance Benefits.
(1) [...***...]
3. * CONFIDENTIAL TREATMENT REQUESTED
[...***...].
(2) [...***...].
5. Financial and Administrative Responsibilities After Effective Date
and Prior to Cutover Date.
(1) [...***...].
(2) [...***...].
(3) [...***...].
(4) [...***...].
6. Human Resources Representative. [...***...].
4. * CONFIDENTIAL TREATMENT REQUESTED
7. Conditions for Working on PacifiCare Accounts.
(1) Supplier agrees to [...***...].
(2) Supplier shall be responsible for [...***...].
(3) Supplier will implement an employee training program
that will complement, further develop and maintain
the requisite skills and technical knowledge of
Supplier personnel assigned to the PacifiCare account
in anticipation of PacifiCare's needs for the
products and services in its business units.
[...***...]:
a. [...***...].
b. [...***...].
c. [...***...].
d. [...***...].
8. Conditions for Rehire. [...***...].
5. * CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT A
AFFECTED EMPLOYEES
NAME
POSITION
BASE SALARY
SHIFT
AMOUNT OF SIGN ON BONUS
AUTOMOBILE ALLOWANCE
FLEX PLAN ALLOWANCE
RELOCATION PACKAGE
EXHIBIT B
RELEASE AND WAIVER OF CLAIMS
[TO BE EXECUTED UPON TERMINATION OF EMPLOYMENT WITH SUPPLIER]
I understand that my last day of employment with International Business
Machines Corp. ("Supplier") will be ______________. In exchange for and in
consideration of the promises and covenants stated in this Release and Waiver
("Release and Waiver") , [...***...].
[...***...].
1. * CONFIDENTIAL TREATMENT REQUESTED
[...***...].
This Release and Waiver constitute the complete, final and exclusive
embodiment of the entire agreement between PacifiCare and me and the Supplier
and me with regard to the subject matter hereof. I am not relying on any promise
or representation by PacifiCare or the Supplier that is not expressly stated
herein. This Release and Waiver may only be modified by a writing signed by both
me and a duly authorized officer of PacifiCare and the Supplier.
Date: __________________ By:_________________________________
[EMPLOYEE]
2. * CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT B-1
DISCLOSURE UNDER TITLE 29 U.S. CODE SECTION 626(F)(1)(H)
CONFIDENTIALITY PROVISION: The information contained in this document
is private and confidential. You may not
disclose this information to anyone except your
professional advisors.
1. The following departments have been selected for the severance package
program:
a.
----------------------------
b.
----------------------------
[ADD MORE IF NECESSARY]
2. In the [two] departments listed above, employees whose job positions
will be eliminated on [DATE OF TERMINATION] are eligible to participate
in the severance package program.
3. An eligible employee will have up to forty-five (45) days to review the
terms and conditions of the severance package.
EMPLOYEES ELIGIBLE FOR THE SEVERANCE PACKAGE PROGRAM
JOB TITLE AGE
1.
EMPLOYEES NOT ELIGIBLE FOR THE SEVERANCE PACKAGE PROGRAM
JOB CLASSIFICATION/ORGANIZATION UNIT AGE
2.
SCHEDULE 12.2
KEY PERSONNEL
For confidentiality purposes, the information in this schedule will only be
accessible to the PacifiCare Supplier Relationship Vice President, the IBM
Account Executive, and other personnel (e.g., Human Resources, Legal, etc.) as
deemed necessary.
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 12.4
APPROVED SUBCONTRACTORS
INTRODUCTION
This Schedule defines the Supplier Subcontractors that are approved by
PacifiCare for use in performing the Services. Approved Subcontractors shall
also include those subcontractors performing work for PacifiCare as of the
Effective Date including the Assigned Agreement subcontractors.
APPROVED SUBCONTRACTORS
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 13.2
Oversight and Management Process
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 13.3
INITIAL DRAFT
IBM GLOBAL SERVICES
AGREEMENT
BETWEEN
PACIFICARE AND IBM
SCHEDULE 13.3
POLICY AND PROCEDURES MANUAL TABLE OF CONTENTS
INTRODUCTION
This Schedule defines the table of contents that will evolve into the Policy and
Procedures Manual to be developed during Transition.
POLICY AND PROCEDURES MANUAL TABLE OF CONTENTS
*Document Control (How to execute changes to policies and procedures guide)
*Document Overview (High level overview of manual 's content)
*Services Overview (High level contract overview)
Process Specifications
*Change Management
*Control Backup and Recovery
Control Batch Operations
Control Capacity
Control Inventory
*Control IT Security
*Control Service Levels
Control Tape Operations
Coordinate IMACs
*Application Delivery
Application Management and Support Operations
AM Support Services
*Handle Customer Satisfaction
Handle Entitlement Failure
Handle Inventory Logistics
Handle Procurement
*Handle User Requests
1.
Network Services
*Perform Escalation
Perform User Administration
*Perform Asset Inventory
*Problem Management
*Provide Request Status
*Reassign Request
*Situation Management
Support Desktop
Support Hardware Facilities
*Support Performance
*Support Software
*Track Inventory
*Update Configuration Information
*Acronyms
INDEX
Note:
- This table of contents is representative of the topics that need to be
included in the Policies and Procedures Manual. PacifiCare and IBM/Xxxxx
will agree on the final version of the document. These Policies and
Procedures will address where the client and supplier need to interface.
- This Policy and Procedures Manual will be a comprehensive document and
refer to other relevant policies and procedures by name or location of the
living document as they are updated over time.
- It is not necessary to modify this Schedule via a contract amendment if the
Table of Contents change in the draft or final document.
- The sections where Xxxxx will provide information are indicated with an
"*". The Application Delivery Section is provided solely by Xxxxx while the
remaining sections are IBM's responsibility with Xxxxx contributing to
reviewing content. This will be true for the version of Schedule 13.3 that
will be attached to the Xxxxx and PacifiCare Agreement.
2.
SCHEDULE 14.2(a)
PACIFICARE PROPRIETARY SOFTWARE
INTRODUCTION
This Schedule lists the PacifiCare Proprietary Software as defined in Exhibit A
of the Agreement.
PACIFICARE PROPRIETARY SOFTWARE
PROPRIETARY SOFTWARE NAME
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 14.2(b)
PACIFICARE THIRD PARTY SOFTWARE
SUPPLIER DESCRIPTION
--------------------------------- --------------------------------------
[...***...] [...***...]
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 14.3
SUPPLIER SOFTWARE
INTRODUCTION
This Schedule lists the Software.
SUPPLIER SOFTWARE
Item # Vendor Application Name and Description Financial Responsibility Operational Responsibility
-----------------------------------------------------------------------------------------------------------------
1 [...***...] [...***...] Supplier Supplier
2 [...***...] [...***...] Supplier Supplier
3 [...***...] [...***...] Supplier Supplier
4 [...***...] [...***...] Supplier Supplier
5 [...***...] [...***...] Supplier Supplier
6 [...***...] [...***...] Supplier Supplier
7 [...***...] [...***...] Supplier Supplier
8 [...***...] [...***...] Supplier Supplier
9 [...***...] [...***...] Supplier Supplier
10 [...***...] [...***...] Supplier Supplier
11 [...***...] [...***...] Supplier Supplier
12 [...***...] [...***...] Supplier Supplier
13 [...***...] [...***...] Supplier Supplier
14 [...***...] [...***...] Supplier Supplier
15 [...***...] [...***...] Supplier Supplier
16 [...***...] [...***...] Supplier Supplier
17 [...***...] [...***...] Supplier Supplier
18 [...***...] [...***...] Supplier Supplier
19 [...***...] [...***...] Supplier Supplier
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 16.1
CRITICAL SERVICES
APPLICATION: RECOVERY
-----------
TIME-FRAME
-----------------------------
[...***...] [...***...]
CUSTOMER SUPPORT SYSTEMS: APPLICATION RUNNING IN REGION
------------------------ -------------------------------
[...***...] [...***...] [...***...]
LIMITATIONS. [...***...]
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 17
INFORMATION TECHNOLOGY SERVICES AGREEMENT
BETWEEN
PACIFICARE HEALTH SYSTEMS AND IBM
FEE SCHEDULE
SCHEDULE 17
1.
This schedule describes the methodology for calculating the Fees. In the event
of any conflict, confusion or ambiguity between this Schedule and the Agreement,
the Agreement shall control.
ATTACHMENTS
The following Attachments are attached hereto and are hereby incorporated by
reference:
Attachment 17.1 Fees
Attachment 17.2 Resource Unit Rates
Attachment 17.3 Resource Unit Descriptions
Attachment 17.4 Resource Unit Baselines
Attachment 17.5 Early Termination Fees
Attachment 17.6 Retained Contractors
Attachment 17.7 Funds Transfer Information
Attachment 17.8 Rates for Application Project Services
Attachment 17.9 Wire Instructions for Asset Charges
1. DEFINITIONS
Terms used herein with initial capital letters shall have the
respective meanings set forth in the Agreement, or, for those terms that are not
defined in the Agreement, the meanings set forth in this Schedule.
1.1 "ACTUAL RESOURCE UNITS" has the meaning set forth in Section 4.3(a)
(Calculation of ARCs for Resource Units) of this Schedule.
1.2 "ADD" has the meaning set forth in Section 5.2(a)(iii) (Install,
Move, Add, and Change Services) of Attachment 17.3 to this Schedule.
1.3 "ARC(S)" or "ADDITIONAL RESOURCE CHARGE(S)" is defined in the
Agreement.
1.4 "ARC DEADBAND" means the percentage above the Baseline within which
ARCs will not apply but, when exceeded, ARCs will apply. Each Resource Unit has
an ARC Deadband associated with it, as set forth in Section 4.3(a)(i) below.
1.5 "ARC DEADBAND BASELINE" has the meaning set forth in Section 4.3(a)
(Calculation of ARCs for Resource Units) of this Schedule.
1.6 "ARC RATE" means the per Resource Unit rate at which PacifiCare is
charged for use of additional resources.
2.
1.7 "BASELINE" means the quantity of a particular Resource Unit that
constitutes the volume of that Resource Unit included in the Base Fees. The
parties have established the initial Baselines for each Resource Unit as of the
Effective Date, which are described in Attachment 17.3 to this Schedule and
enumerated in Attachment 17.4 to this Schedule. Baselines may be adjusted during
the Term pursuant to the processes established in the Agreement.
1.8 "CALLS" has the meaning set forth in Section 6.2(e) below of
Attachment 17.3 to this Schedule.
1.9 "CHANGE SERVICE" has the meaning set forth in Section 5.2(a)(4)
(Install, Move, Add, and Change Services) of Attachment 17.3 to this Schedule.
1.10 "CONSUMABLES" mean items used in the normal course of business
(including the IDC Tower) at the PacifiCare Service Locations, through the
utilization of information technology resources, including, for example, paper,
toner, printer cartridges, diskettes, compact disks, tapes, batteries, and other
such consumable items that comply with original equipment manufacturer
specifications. Other than as stated above, Consumables do not include office
supplies, hard disks or other capital equipment.
1.11 "CPI-U" has the meaning set forth in Section 11.1(b) below.
1.12 "ECA FACTOR" has the meaning set forth in Section 11.1(a) below.
1.13 "ECONOMIC CHANGE ADJUSTMENT" or "ECA" has the meaning set forth in
Section 11.1(a) below.
1.14 "FTP" is defined in Schedule 8 to the Agreement (Service Level
Schedule).
1.15 "INSTALL, MOVE, ADD, CHANGE SERVICE" and "IMAC" means Install,
Move, Add, Change Service events as set forth in Section 5.2 (Install, Move,
Add, and Change Services) of Attachment 17.3 to this Schedule.
1.16 "INSTALL" has the meaning set forth in Section 5.2(a)(i) (Install,
Move, Add, and Change Services) of Attachment 17.3 to this Schedule.
1.17 "MOVE" has the meaning set forth in Section 5.2(a)(ii) (Install,
Move, Add, and Change Services) of Attachment 17.3 to this Schedule.
1.18 "PERIPHERALS" is defined in the Statement of Work.
1.19 "PROJECT" means projects performed by Supplier at PacifiCare's
request, which projects are included in the Base Services to the extent that 1)
the Supplier can perform such projects using the skills of the Project Staff,
including skills related to the examples set forth below, and 2) the aggregate
amount of resources (measured in FTPs) required to perform such projects
underway at any given time does not exceed the aggregate amount of resources
(measured in FTPs) allotted for Projects as described in Attachment 17.3 to this
Schedule and enumerated in Attachment 17.4 to this Schedule. To the extent any
Project requires skills different from the skills referenced above in this
paragraph, or to the extent any Project requires
3.
more resources (measured in FTPs) than are allotted for Projects at that time,
the Parties will agree on the fees applicable to the provision of such different
skills and/or additional resources prior to commencing work on such Project. The
scope of work for each Project and the fees described in the immediately
preceding sentence, if any, for each Project will be set forth in a project plan
in a form to be mutually agreed to by the parties. The terms and conditions of
the Agreement will apply to all Projects, except to the extent expressly amended
by the applicable project plan. The following list includes examples of
Projects:
- PacifiCare-requested upgrades impacting schedules set
forth in the Statement of Work, the Agreement or as
approved by PacifiCare;
- Extension of network to a new building or location
not currently occupied by PacifiCare;
- PacifiCare-requested support that is outside the
scope of the Statement of Work and not inherent to
the Base Services;
- Any new pilot and proof-of-concept activity;
- Any work by the IDC "programming group" that exceeds
eight (8) FTPs
1.20 "PROJECT PLAN" means the project plan to be agreed by the parties
as described in the definition of "Project" above.
1.21 "REGION" means delineated business units within PacifiCare
including Corporate, Central, Desert, Northwest, Southwest and Western. The
Regions may be revised by PacifiCare from time to time during the Term.
1.22 "RESOURCE UNIT" means the applicable unit of measurement for usage
of the specified resource.
1.23 "RRC(S)" or "Reduced Resource Charge(s)" means the resource
charges for the use of Services below the resource Baselines enumerated on
Attachment 17.4 hereto.
1.24 "RRC DEADBAND" means the percentage below the Baseline within
which RRCs will not apply but, when exceeded, RRCs will apply. Each Resource
Unit has a RRC Deadband associated with it, as set forth in Section 4.3(b)(i)
below.
1.25 "RRC DEADBAND BASELINE" has the meaning set forth in Section
4.3(b) (Calculation of RRCs for Resource Units) of this Schedule.
1.26 "RRC RATE" means the rate at which PacifiCare is credited for its
reduced use of resources.
1.27 "START UP FEES" mean all one-time costs associated with the
transition of Services from PacifiCare to Supplier.
1.28 "STATEMENT OF WORK" or "SOW" means the Statement of Work attached
as Exhibit B to the Agreement.
4.
1.29 "SUPPORTED DESKTOP RESOURCE" means a Desktop PC, Laptop PC or
Printer that is subject to support and service under the Agreement, and that is
operational, as described in Section 5.1(c) of Attachment 17.3 to this Schedule.
1.30 "SUPPORTED SERVER" means a server that is subject to support and
service under the Agreement, and that is operational as described in Section
7.1(c) of Attachment 17.3 to this Schedule.
1.31 "TOWER" is defined in the Statement of Work.
2. GENERAL
2.1 All pricing is based on the Supplier's responsibilities as set
forth in the Agreement including, in particular the Statement of Work. For
clarity, this pricing does not include expenses associated with responsibilities
of PacifiCare under the Agreement.
2.2 All periodic charges will be computed on a calendar-month basis and
will be prorated for any partial month, unless this Agreement expressly states
otherwise.
2.3 INVOICES. All Fees will be invoiced to PacifiCare. Supplier
acknowledges that PacifiCare desires certain levels of detail in such invoices
in order to facilitate tracking and payment. The invoices will set forth the
details (i.e., as line-item entries) as agreed to by the parties within thirty
(30) days after the Effective Date. In accordance with Section 17.15 of the
Agreement (Funds Transfer), PacifiCare will pay amounts to Supplier to the
account specified on Attachment 17.7 hereto.
3. NON-VARIABLE FEES
3.1 BASE FEES. Base Fees are the Operational Fees set forth in
Attachment 17.1 to this Schedule. PacifiCare shall pay the Base Fees in
accordance with Section 17.2 of the Agreement.
(a) OPERATIONAL FEES. Operational fees include the management
service fees, equipment and software costs, and other fees and costs that are
listed for each Tower on Attachment 17.1 to this Schedule.
3.2 START UP FEES include transition costs for each Tower (Data Center,
Network, Desktop, Help Desk, Distributed Computing and IDC), as well as costs
for Key Hiring Bonus, Sign on Bonus, Enhanced Severance and HR Compensation and
Benefits true-up, all as enumerated on Attachment 17.1 to this Schedule.
3.3 ASSET CHARGES. Supplier will purchase the Assets as set forth in
Section 3.8 of the Agreement. The instructions applicable to the wire transfer
discussed in Section 3.8 of the Agreement are set forth on Attachment 17.9
hereto.
3.4 BILLING. [...***...]
* CONFIDENTIAL TREATMENT REQUESTED
5.
3.5 SPECIAL NOTE. Start Up Fees and Asset Charges are included on the
Fees matrix as set forth as Attachment 17.1 hereto, and will be invoiced along
with and as part of the Base Fees in accordance with Section 17 of the
Agreement.
4. VARIABLE FEES
4.1 GENERAL. As of the Effective Date and each month thereafter,
Supplier will measure, track and report on PacifiCare's usage of Resource Units
(as described on Attachment 17.3 hereto) as compared with the applicable
Resource Unit Baseline set forth in Attachment 17.4 to this Schedule. To the
extent that Resource Unit descriptions are not reflected in this Schedule or the
Attachment, the parties agree to determine the measurement methodology within
thirty (30) days of the Effective Date. Rates for Resource Units on a per-unit
basis are set forth on Attachment 17.2 hereto. In the event the that PacifiCare
exceeds or underutilizes a Resource Unit, or if PacifiCare requests a New
Service that is an additional incremental service to a current service (i.e., an
increase in a service that is currently provided by Supplier for PacifiCare at
the time the New Service is requested), Supplier will, in accordance with
Section 17.3 of the Agreement (Variable Fees and Baseline Adjustments),
calculate Supplier's prospective fee for such additional incremental service
using the methodology set forth in this Section 4 and the charges set forth for
the applicable Resource Units in Attachment 17.2 to this Schedule. Any requests
for New Services are subject to the terms of the Agreement, including the terms
of Section 3.10 (Right to Use Third Parties).
4.2 BASELINES. The quantity of Resource Units for each category of
resources provided to PacifiCare under the Agreement for the applicable
measurement period as of the Effective Date will be specified in Attachment 17.4
to this Schedule as a Baseline. Supplier may, with PacifiCare's prior approval,
and at Supplier's expense, implement technological advancements relative to
providing the Services, provided Supplier performs the Services according to the
Service Levels. If such technological advancements will have an effect on a
Baseline, Supplier will normalize such affected Baseline, and the ARC Rate
and/or RRC Rate so that PacifiCare receives the same or improved level of
performance and the same or improved price performance as PacifiCare received
under the methodology applicable to such Baseline, ARC Rate or RRC Rate.
Supplier will review with PacifiCare the conversion methodology (for example,
historical data) that Supplier used to support such adjustments.
4.3 METHODOLOGY. PacifiCare's increased or decreased resource usage
within a Resource Unit Baseline may result in either an ARC or RRC. After the
completion of each month during the Term, following the first month after the
Effective Date, Supplier will calculate ARCs and RRCs as set forth in this
Section 4 (Variable Fees), and provide the reports described in Section 4.4
below.
(a) CALCULATION OF ARCS FOR RESOURCE UNITS. For each Resource
Unit, Supplier will compare the quantity of Resource Units used during the
applicable measurement period ("ACTUAL RESOURCE UNITS") with the product of the
Baseline for that Resource Unit, multiplied by the sum of 1.00 plus the ARC
Deadband (the "ARC DEADBAND BASELINE") for that Resource Unit. The ARC Deadbands
are set forth in the ARC Summary Chart below. There will be no increase of the
charges otherwise payable to Supplier for such period if the Actual Resource
Units do not exceed the applicable ARC Deadband Baseline for such period. If the
6.
Actual Resource Units exceed the applicable ARC Deadband Baseline for such
period, PacifiCare will pay Supplier an ARC with the current or future charges
(or, if no future charges will be due, make payment to Supplier) equal to the
product of the ARC Rate for the applicable Resource Unit, as set forth in
Attachment 17.2 to this Schedule, multiplied by the difference between the
Actual Resource Units for that Resource Unit and the applicable ARC Deadband
Baseline.
(i) ARC SUMMARY CHART.
REF. NUMBER++ RESOURCE UNIT ARC DEADBAND
[...***...] [...***...] [...***...]
[...***...] [...***...] [...***...]
[...***...] [...***...] [...***...]
[...***...] [...***...] [...***...]
[...***...] [...***...] [...***...]
[...***...] [...***...] [...***...]
[...***...] [...***...] [...***...]
[...***...] [...***...] [...***...]
[...***...] [...***...] [...***...]
[...***...] [...***...] [...***...]
-------------
++From Attachment 17.4 to this Schedule.
(ii) EXAMPLE. Assuming the following variables, the ARC
calculation would be as follows below:
(1) [...***...]
(2) [...***...]
(3) [...***...]
(4) [...***...].
ARC CALCULATION
ARC = [...***...]
ARC = [...***...]
ARC = [...***...]
ARC = [...***...]
ARC = [...***...]
* CONFIDENTIAL TREATMENT REQUESTED
7.
ARC = [...***...]
In this example, the ARCs for IMACs for the month would be [...***...].
(b) CALCULATION OF RRCS FOR RESOURCE UNITS. For each Resource
Unit, Supplier will compare the quantity of Actual Resource Units used during
the applicable measurement period with the product of the Baseline for that
Resource Unit multiplied by the sum of 1.00 minus the RRC Deadband (the "RRC
DEADBAND BASELINE") for that Resource Unit. The RRC Deadbands are set forth in
the RRC Summary Chart below. There will be no decrease of the charges otherwise
payable to Supplier for such period if the Actual Resource Units do not fall
below the applicable RRC Deadband Baseline for such period. If the Actual
Resource Units fall below the applicable RRC Deadband Baseline for such period,
PacifiCare will be credited an RRC with the current or future charges (or, if no
future charges will be due, Supplier will make payment to PacifiCare) equal to
the product of the RRC Rate for the applicable Resource Unit, as set forth in
Attachment 17.2 to this Schedule, multiplied by the difference between the
applicable RRC Deadband Baseline and the Actual Resource Units. [...***...].
(i) RRC SUMMARY CHART.
REF. NUMBER++ RESOURCE UNIT RRC DEADBAND
[...***...] [...***...] [...***...]
[...***...] [...***...] [...***...]
[...***...] [...***...] [...***...]
[...***...] [...***...] [...***...]
[...***...] [...***...] [...***...]
[...***...] [...***...] [...***...]
[...***...] [...***...] [...***...]
[...***...] [...***...] [...***...]
[...***...] [...***...] [...***...]
[...***...] [...***...] [...***...]
-----------
++From Attachment 17.4 to this Schedule.
(ii) EXAMPLE. Assuming the following variables, the RRC
calculation would be as follows below:
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
8.
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
9.
RRC CALCULATION
RRC = [...***...]
RRC = [...***...]
RRC = [...***...]
RRC = [...***...]
RRC = [...***...]
RRC = [...***...]
RRC = [...***...]
In this example, the RRCs for IMACs for the month would be [...***...].
4.4 REPORTING. Each month after the Effective Date, Supplier will
provide PacifiCare with a report detailing the calculations made by Supplier
pursuant to Section 4.3 above for each Resource Unit. Based upon these monthly
reports, the parties will reconcile payments and/or credits with other amounts
paid or payable every month, [...***...], which wIlL be reported monthly but
reconciled and invoiced (if necessary) quarterly.
4.5 ASSETS. Supplier shall be responsible for securing the assets
associated with committed scheduled refreshes, as specified in the Statement of
Work. [...***...].
4.6 PERIPHERALS. Supplier will acquire, receive, install and support
PacifiCare with Peripherals as defined and set forth in the Statement of Work.
Within thirty (30) days of the Effective Date, the parties will agree on the
procedures necessary to implement a structured procurement plan for Peripherals,
which will include an approval process for all non-standard configuration
equipment. The parties agree to discuss the possibility of creating a catalog of
pre-approved materials. Peripherals subject to refresh are included in the Base
Fees and will be provided at the time of the scheduled refresh. The cost of
other Peripherals that are not subject to refresh and of upgrades to assets out
of the refresh cycle will be permitted to be charged to PacifiCare. The
procurement plan will not permit Supplier to xxxx-up the cost of any Peripherals
or refresh materials, although IMACs will apply and there may be a separate
charge for procurement, receiving, and asset management.
* CONFIDENTIAL TREATMENT REQUESTED
10.
5. FINANCIAL ASSUMPTIONS.
5.1 If Supplier arrives at a Facility to perform a scheduled or agreed
onsite Service after appropriate notice to PacifiCare, but is unable to perform
the Service because of PacifiCare's action or inaction, the visit will be
counted and/or charged in accordance with this Schedule.
5.2 PacifiCare will be financially responsible for all Consumables used
in the performance of all services.
5.3 No inflation protection has been included in Supplier's price.
5.4 HR Compensation and Benefits true-ups will occur as described
Schedule 11 to the Agreement (Human Resources Provisions).
5.5 The operating software and tools capitalized as PacifiCare assets
will be provided to Supplier for its use at no additional cost to Supplier.
5.6 PacifiCare will permit the Supplier the use of PacifiCare Service
Location and support services (fax, telephone, mail, etc.) by Supplier support
personnel for the purposes of performing the Services under this Agreement at no
cost to Supplier. This does not include individual office supplies, including
writing implements, paper, notepads, binders, and personal communication
devices, including pagers, PDAs, cell phones and Blackberrys. Supplier will
terminate use of, and manage the transfer of, the assets listed in the preceding
sentence from Affected Employees and Affected Contractors beginning on the
Effective Date, and continuing through no later than six (6) months after the
Effective Date.
5.7 As of the Effective Date, Affected Employee and Affected
Contractors may be using an item of capital equipment (including the Desktop and
Distributed Computing Towers) that is subject to a lease from a third-party
vendor. [...***...].
5.8 [...***...].
5.9 Supplier will be PacifiCare's authorized agent to manage and
maintain the Managed Agreements. No fees will be charged for PacifiCare
Proprietary Software used in performance of the data center mission.
5.10 [...***...].
* CONFIDENTIAL TREATMENT REQUESTED
11.
[...***...]
5.11 In addition to Service Levels described in the Agreement for Data
Center transition, downtime for all applications, including [...***...].
5.12 Replacement Services for the [...***...] agreement will be deemed
New Services pursuant to and in accordance with the Agreement, including Section
3.10 (Right to Use Third Parties).
5.13 Within five (5) days of the Effective Date, PacifiCare will
include as Attachment 17.6 a list of up to fifteen (15) contractors whose
services PacifiCare believes it is required to retain under its existing
agreements. For so long as Supplier retains the services of these contractors,
PacifiCare will be responsible for compensation to them under the existing
agreements. Supplier will credit against invoiced amounts the actual costs of
PacifiCare associated with compensating these contractors. When completed,
Attachment 17.6 will be integrated with and become a part of this Schedule.
6. ADDITIONAL SERVICE FEES
If Supplier provides Services to additional PacifiCare Included
Affiliates in accordance with Section 3.1 of the Agreement, then PacifiCare will
pay and fees or expenses related to the provision of such Services as negotiated
by the parties in accordance with that section.
7. NEW SERVICES
In the event that PacifiCare requests that Supplier perform a New
Service as described in Section 5.1 of the Agreement, Supplier shall calculate
Supplier's prospective fees for such New Service as follows:
7.1 NEW SERVICE. In the event a New Service is not currently being
provided by Supplier for PacifiCare at the time the New Service is requested,
but is a service for which Supplier has a standard fee, Supplier shall calculate
Supplier's prospective fee for such New Service using Supplier's standard fee,
as described in Section 5.1 of the Agreement (New Services), and subject to
Section 17.14 of the Agreement [...***...]. In the event the New Service is not
currently being provided by Supplier for PacifiCare at the time the New Service
is requested, and is not a service for which Supplier has a standard fee,
Supplier shall calculate Supplier's prospective fee for such New Service using
its best available data, as described in Section 5.1 of the Agreement (New
Services) and subject to Section 17.14 of the Agreement [...***...].
7.2 PROJECTS AND PROJECT PLANS. If PacifiCare requests that Supplier
undertake a Project, then, if required as described in the definition of Project
set forth above, the parties will mutually agree on a Project Plan prior to the
commencement of work. The Project Plan will include provisions for any
additional fees and/or expenses that may be agreed upon in connection with the
Project. Such fees may be calculated on a basis to be agreed by the parties, and
may, for
* CONFIDENTIAL TREATMENT REQUESTED
12.
example, include hourly service fees, a fixed fee, an increase to the Base Fees,
or as otherwise agreed, subject in all cases to the terms of the Agreement
(including Section 5.1 of the Agreement (New Services) and Section 17.14
[...***...].
8. APPLICATION PROJECT SERVICES
If PacifiCare requests Supplier to perform application development or
maintenance services which are not part of the Agreement as of the Effective
Date, then such application development or maintenance services will be
considered to be New Services. The parties have agreed on the applicable rates
for such services, which are set forth on Attachment 17.8 to this Schedule.
9. TERMINATION FEES
9.1 EARLY TERMINATION FEE. In the event PacifiCare terminates the
Agreement pursuant to Section 24.1 of the Agreement and triggers payment of the
Early Termination Fee as set forth in Section 25.1 of the Agreement, PacifiCare
shall pay the applicable Early Termination Fee as set forth in Attachment 17.5
to this Schedule pursuant to the payment terms set forth in Section 25.1 of the
Agreement.
9.2 TERMINATION ASSISTANCE SERVICES FEE. In the event any Termination
Assistance Services provided by Supplier cannot be provided through resources
included in the Fees, PacifiCare shall pay the Termination Assistance Services
Fee as provided in Section 26.2 of the Agreement.
10. WIND-DOWN COSTS.
PacifiCare will pay Wind Down Costs, if any, in accordance with the
terms of the Agreement.
11. COST OF LIVING ADJUSTMENT
11.1 ECONOMIC CHANGE ADJUSTMENT
(a) Supplier will calculate and apply an adjustment to all Fees other
than Asset Charges (i.e., Operational Fees and Start Up Fees) based upon
economic changes (an "ECONOMIC CHANGE ADJUSTMENT" or "ECA") as described below
beginning in January 2003. The ECA will be payable on a prospective basis (for
example, the actual inflation for December 2002 will determine the ECA for the
year 2003) on the Fees (other than Asset Charges) and ARCs payable by
PacifiCare, minus the RRCs creditable to PacifiCare. The ECA will be determined
as soon as practicable after the end of each calendar year using the formula
below (the "ECA FACTOR").
(b) Supplier will invoice PacifiCare for the ECA, if any, beginning in
January 2003 and monthly thereafter. PacifiCare and Supplier agree to use the
December unadjusted Consumer Price Index (national average), as published in the
Summary Data from the Consumer Price Index News Release by the Bureau of Labor
Statistics, US. Department of Labor, For All Urban Consumers ("CPI-U"), for
purposes of determining actual inflation. In the event the
* CONFIDENTIAL TREATMENT REQUESTED
13.
Bureau of Labor Statistics stops publishing the CPI-U or substantially changes
its content and format, PacifiCare and Supplier will substitute another
comparable index published at least annually by a mutually agreeable source. If
the Bureau of Labor Statistics merely redefines the base year for the CPI-U from
1982-84 to another year, PacifiCare and Supplier will continue to use the CPI-U,
but will convert the Base Year Index to the new base year by using an
appropriate conversion formula.
11.2 ACTUAL INFLATION. Supplier will calculate the ECA by comparing the
change in the year-to-year CPI-U with the CPI-U for December before the
Effective Date (the "BASE YEAR INDEX"). For each calendar year of the Term, the
actual CPI-U for December before the year for which the ECA is being calculated
("ACTUAL INFLATION") will be compared to the Base Year Index in Exhibit C-1 (for
example, the December 2002 CPI-U will be used to determine the ECA for the year
2003). If Actual Inflation is equal to or less than the Base Year Index, then no
ECA is due. If, however, Actual Inflation is greater than the Base Year Index,
then Supplier will apply the ECA to the Fees (other than Asset Charges) and ARCs
less RRCs due Supplier for the year for which Supplier is calculating the ECA.
11.3 INFLATION SENSITIVITY. A percentage has been established that
reflects the inflationary impact on Supplier's delivery of the Services
(Inflation Sensitivity). The Inflation Sensitivity will apply to all Fees other
than the Asset Charges. The Inflation Sensitivity agreed by the parties is equal
to [...***...]%.
11.4 ECA FACTOR. The ECA is equal to the ECA Factor times the sum of
the Base Fees plus ARCs due Supplier, less RRCs creditable to PacifiCare, for
each month of the calendar year succeeding the calendar year during which Actual
Inflation is greater than the Base Year Index.
(a) ECA FACTOR. The ECA Factor is calculated as follows:
ECA Factor = [...***...];
Actual Inflation = [...***...];
Base Year Index = [...***...];
Inflation Sensitivity = [...***...].
(b) ECA CALCULATION. The example below calculates the ECA
based on the following assumptions:
- an Effective Date in 2001;
- a Base Year Index of the CPI-U for December 2000;
- ECA calculation begins in January 2002;
- Inflation Sensitivity of [...***...] percent; and
- the following Actual Inflation examples:
Base Year Index 2000 = [...***...]
* CONFIDENTIAL TREATMENT REQUESTED
14.
Year 2001 2002 2003 2004 2005
Actual Inflation [...***...] [...***...] [...***...] [...***...] [...***...]
In this example, there will be an ECA for calendar years 2002 through 2005
because the Actual Inflation for the year preceding each year is greater than
the Base Year Index.
In this example, to determine the ECA amounts due in addition to the other
charges for February 2003, further assume:
- the monthly prorated portion of the Fees (other than Asset
Charges) for February is $[...***...],
- there are VMS ARCs of $[...***...] due for that month; and
- there are Database Instances RRCs of $[...***...] due
PacifiCare for that same month.
Then, the calculation is as follows:
ECA Calculation Example
ECA = [...***...]
ECA = [...***...]
ECA = [...***...]
ECA = [...***...]
ECA = [...***...]
ECA = [...***...]
The ECA for each month of each year in which the ECA is due is
calculated as above (substituting the appropriate monthly amounts and the ECA
Factor based upon the actual information).
12. ADJUSTMENTS RELATED TO SCHEDULES 7.1 (ASSIGNED AGREEMENTS) AND 7.2
(MANAGED AGREEMENTS).
12.1 BACKGROUND. As described in Section 7 of the Agreement (Third
Party Agreements), Supplier will be responsible for payments pursuant to the
Assigned Agreements, and PacifiCare will remain responsible for payments
pursuant to the Managed Agreements. [...***...]:
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
15.
[...***...]
[...***...]
12.2 ADJUSTMENT TO SCHEDULES 7.1 AND 7.2. The parties agree that on a
mutually agreeable date [...***...] (the "ADJUSTMENT DATE"), the parties will
revise Schedules 7.1 and 7.2 to:
[...***...]
12.3 ADJUSTMENTS TO PRICING. Concurrent with the adjustment to
Schedules 7.1 and 7.2 described above, and in accordance with those procedures:
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
16.
[...***...].
[...***...].
12.4 PROVISIONS RELATED TO CERTAIN AGREEMENTS BETWEEN PACIFICARE AND
[...***...].
(a) During the period between the Effective Date and the
Adjustment Date, the parties will review documentation related to four (4)
[...***...] agreements [...***...]:
[...***...]
12.5 CUMULATIVE CHANGES. [...***...].
12.6 SUPPLIER MONITORING. Supplier will monitor and manage agreements
in order to identify potential cost-efficiencies or agreements that could be
terminated without negative effects on the provision of Services. As Supplier
identifies such potentially beneficial circumstances, Supplier will present
recommendations to PacifiCare. Any changes to be made to
* CONFIDENTIAL TREATMENT REQUESTED
17.
Schedules 7.1 or 7.2 after the Adjustment Date, including as the result of
PacifiCare accepting such recommendations, will be made, if at all, pursuant to
the Change Control Procedures in the Agreement.
* CONFIDENTIAL TREATMENT REQUESTED
18.
ATTACHMENT 17.1
BASE FEES
19.
ATTACHMENT 17.1
BASE FEES
Category of Services Year 1 * Year 2 Year 3 Year 4
-----------------------------------------------------------------------------------------------------------------------------------
OPERATIONAL FEES (K$) [...***...] [...***...] [...***...] [...***...]
DATA CENTER
[...***...]
DATA CENTER TOTAL
NETWORK
[...***...]
NETWORK TOTAL
DISTRIBUTED COMPUTING
[...***...]
DISTRIBUTING COMPUTING TOTAL
DESKTOP
[...***...]
DESKTOP TOTAL
HELP DESK TOTAL
PROJECT FTPs TOTAL
INFORMATION DISTRIBUTION CENTER
[...***...]
INFORMATION DISTRIBUTION CENTER TOTAL
TOTAL OPERATIONAL FEES
START-UP FEES
TRANSITION COSTS (itemize):
DATA CENTER TRANSITION
NETWORK TRANSITION
DESKTOP, HELP DESK AND DISTRIBUTED TRANSITION
IDC TRANSITION
PROJECT OFFICE TRANSITION
ASSET PURCHASE FMV
ASSET PURCHASE NBV
[...***...]
[...***...]
[...***...]
TOTAL START-UP FEES
GRAND TOTAL FEES
Category of Services Year 5 Year 6 Year 7 Year 8
----------------------------------------------------------------------------------------------------------------------------------
OPERATIONAL FEES (K$) [...***...] [...***...] [...***...] [...***...]
DATA CENTER
[...***...]
DATA CENTER TOTAL
NETWORK
[...***...]
NETWORK TOTAL
DISTRIBUTED COMPUTING
[...***...]
DISTRIBUTING COMPUTING TOTAL
DESKTOP
[...***...]
DESKTOP TOTAL
HELP DESK TOTAL
PROJECT FTPs TOTAL
INFORMATION DISTRIBUTION CENTER
[...***...]
INFORMATION DISTRIBUTION CENTER TOTAL
TOTAL OPERATIONAL FEES
START-UP FEES
TRANSITION COSTS (itemize):
DATA CENTER TRANSITION
NETWORK TRANSITION
DESKTOP, HELP DESK AND DISTRIBUTED TRANSITION
IDC TRANSITION
PROJECT OFFICE TRANSITION
ASSET PURCHASE FMV
ASSET PURCHASE NBV
[...***...]
[...***...]
[...***...]
TOTAL START-UP FEES
GRAND TOTAL FEES
Category of Services Year 9 Year 10 Total
------------------------------------------------------------------------------------------------------------------
OPERATIONAL FEES (K$) [...***...] [...***...] [...***...]
DATA CENTER
[...***...]
DATA CENTER TOTAL
NETWORK
[...***...]
NETWORK TOTAL
DISTRIBUTED COMPUTING
[...***...]
DISTRIBUTING COMPUTING TOTAL
DESKTOP
[...***...]
DESKTOP TOTAL
HELP DESK TOTAL
PROJECT FTPs TOTAL
INFORMATION DISTRIBUTION CENTER
[...***...]
INFORMATION DISTRIBUTION CENTER TOTAL
TOTAL OPERATIONAL FEES
START-UP FEES
TRANSITION COSTS (itemize):
DATA CENTER TRANSITION
NETWORK TRANSITION
DESKTOP, HELP DESK AND DISTRIBUTED TRANSITION
IDC TRANSITION
PROJECT OFFICE TRANSITION
ASSET PURCHASE FMV
ASSET PURCHASE NBV
[...***...]
[...***...]
[...***...]
TOTAL START-UP FEES
GRAND TOTAL FEES
-------------------
*
[...***...]
**
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT 17.2
RESOURCE UNIT RATES
20.
ATTACHMENT 17.2
UNIT RATES - INFRASTRUCTURE
UNIT RATES YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
----------------------------------------------------------------------------------------------------------------------------
Project FTPs
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
DATA CENTER
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
NETWORK
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
CUSTOMER SUPPORT DESK (CSD)
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
DESKTOP SUPPORT
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
UNIT RATES YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10
--------------------------------------------------------------------------------------------------------------------------
Project FTPs
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
DATA CENTER
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
NETWORK
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
CUSTOMER SUPPORT DESK (CSD)
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
DESKTOP SUPPORT
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
(continued on next page)
* CONFIDENTIAL TREATMENT REQUESTED
Attachment 17.2 (continued from previous page)
Unit Rates - INFRASTRUCTURE
UNIT RATES Year 1 Year 2 Year 3 Year 4 Year 5
---------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTED COMPUTING
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
INFORMATION DISTRIBUTION CENTER - MONTHLY
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
UNIT RATES Year 6 Year 7 Year 8 Year 9 Year 10
----------------------------------------------------------------------------------------------------------------------------
DISTRIBUTED COMPUTING
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
INFORMATION DISTRIBUTION CENTER - MONTHLY
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
[...***...]
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT 17.3
RESOURCE UNIT DESCRIPTIONS
1. GENERAL.
1.1 PROFILE ADJUSTMENTS. Certain pricing assumptions contained in this
Attachment contain profiles (e.g., average call time will be [...***...]
minutes). To the extent that an assumption contains a profile, and the actual
numbers or amounts deviate from the numbers or amounts specified in that profile
by more than [...***...] percent ([...***...]%) over any [...***...]month period
during the Term, then the parties agree to discuss adjustments to the profile or
any other provision (including price), as appropriate. No adjustments will be
made except by mutual agreement of the parties.
1.2 MEASUREMENT. As noted in Section 4.1 of Schedule 17 (to which this
Attachment is attached), to the extent that Resource Unit descriptions are not
reflected in this Attachment, the parties agree to determine the measurement
methodology within thirty (30) days of the Effective Date.
2. PROJECT SERVICES BASELINE RESOURCE UNITS.
2.1 RESOURCE UNITS. The Resource Unit for a Project is a Project FTP,
which consists of a monthly charge for an experienced technician (exclusive of
travel). A technician has skills in hardware, software, problem management or
physical database management and administration, as required to perform the
applicable Project services, and may be responsible for activities including
evaluating, installing, configuring, troubleshooting and supporting equipment
and software products.
2.2 MANAGEMENT OF PROJECT FTPs. The Project FTPs will be tasked by
PacifiCare through a Project authorization process that will be developed by
Supplier and approved by PacifiCare during the first 60 days after the Effective
Date. [...***...].
2.3 MEASUREMENT AND RECONCILIATION. Use of Project FTPs will be
measured, tracked and reported to PacifiCare by Supplier on a monthly basis, and
will be reconciled and invoiced (if applicable) on a quarterly basis.
2.4 SPECIAL CONSIDERATIONS FOR PROJECT FTPs. With respect to the
utilization of Project FTPs:
(a) notwithstanding Section 3.10 of the Agreement (Right to
Use Third Parties), PacifiCare [...***...].
(b) notwithstanding Section 4.3(b) of Schedule 17 (to which
this Attachment is attached), there will be RRCs for resource usage of Project
FTPs below [...***...] percent ([...***...]%) of the Baselines as of the
Effective Date.
* CONFIDENTIAL TREATMENT REQUESTED
21.
3. DATA CENTER SERVICES BASELINE RESOURCE UNITS
3.1 SERVER RESOURCE UNITS. Supplier will categorize each of the servers
based on the server size (small, medium and large) for UNIX. VMS servers are not
categorized based on server size. Each category of server, including categories
based on the server size, will have a separate baseline associated with the
server category. [...***...]. As the standards are updated or as new
requirements that deviate from the standards are established, the standard
configuration will provide the Baseline for measuring change. The installed
Baselines and charges will not be subject to adjustment when a standard is
updated, however, when such Resource Unit Baseline is refreshed, then it will be
refreshed with the then current standard.
3.2 DATABASE RESOURCE UNITS. A database Resource Unit is any
[...***...] database, supported by Supplier personnel, residing on PacifiCare
production and development systems.
3.3 STORAGE RESOURCE UNITS. A storage Resource Unit equals [...***...]
of storage.
3.4 ASSUMPTIONS. Supplier's charges for Resource Units are based on the
following assumptions:
(a) Hours of operations support (as described in the Statement
of Work, in particular Sections B(2) and B(4)) are 24x7.
(b) System hardware moves for the production and ILIAD
clusters must be accomplished within a 24 hour window. The remaining system
hardware moves can be performed during weekends and three (3) day holidays with
reduced impact to PacifiCare processing requirements and with PacifiCare's prior
approval, in accordance with Schedule 16.1 to the Agreement (Critical Services).
(c) Consolidation, relocation, and migration from the
PacifiCare data center to the IBM data center in St. Louis, MO. will occur as
identified in Schedule 4.1 of the Agreement (Transition Plan).
4. NETWORK SERVICES BASELINE RESOURCE UNITS
4.1 DATA NETWORK SERVICES RESOURCE UNITS. Resource Units for this
category means the number of devices used (as categorized by routers, switches,
hubs, and CSUs) to connect the Data Center to the Data NETWORK locations in
Schedule 6.3(a) to the Agreement (Facilities Space Requirements and Rules &
Regulations). This Schedule 6.3(a) lists the data communications lines with
their capacities and addresses of the from and to locations. The Base Fee
includes the frame relay based connection charges for these locations. "DATA
NETWORK" means the machines, associated attachments, features and accessories,
Software, lines and cabling used to connect, transmit and receive data between
the Data Center(s) and PacifiCare locations listed in Schedule
* CONFIDENTIAL TREATMENT REQUESTED
22.
10.1 to the Agreement (Service Locations), including routers, network
switches, circuits and DSUs/CSUs, but excluding Desktop PCs and Laptop PCs.
(a) ROUTERS. A router Resource Unit is measured by number of
physical machines.
(b) NETWORK SWITCHES. A Network Switch Resource Unit is
measured by number of physical machines.
(c) CIRCUITS. A Circuit Resource Unit is measured by number of
billed circuits.
(d) Digital Service UNITS (DSUs)/CHANNEL SERVICE UNITS (CSUs).
Resource Units for DSUs/CSUs are measured by number of physical machines.
4.2 VOICE NETWORK SERVICES RESOURCE UNITS.
(a) PBX MAINTENANCE. Resource Units for the maintenance of
PacifiCare's Avaya and Siemens PBX telephone systems are based on the specified
number of each type, model, version and software release of PBXs, and the total
number of ports for each type of system. Maintenance charges are based on
coverage from 8 AM to 5 PM (local time) from Monday through Friday. Maintenance
charges do not cover telephone stations and specified adjunct equipment. These
costs do not include the costs of the telephone lines for connectivity to these
systems which will be paid for by PacifiCare.
(b) ASPECT ASD MAINTENANCE. Resource Units for the maintenance
of PacifiCare's Aspect ASD systems are based on the number of ASD licenses
currently in force on these systems. These costs do not include the costs of the
telephone lines for connectivity to these systems which will be paid for by
PacifiCare.
(c) VOICE MAIL MAINTENANCE. Resource Units for the maintenance
of PacifiCare's [...***...] voice mail systems are based on the specified number
of each type, model, version and software release of voice mail systems.
Maintenance charges are based on coverage from 8 AM to 5 PM (local time) from
Monday through Friday. Maintenance charges for [...***...] voice mail systems
are for base voice mail units only, and do not cover connectivity and peripheral
equipment costs.
(d) VIDEO CONFERENCING MAINTENANCE. Resource Units for video
conferencing systems are based on the specified number of each type, model,
version and software release of video conferencing systems. Maintenance charges
are based on coverage from 8 AM to 5 PM (local time) from Monday through Friday.
Maintenance charges are for base voice mail units only, and do not cover
connectivity and peripheral equipment.
(e) VOICE MAIL INSTALLS, MOVES, ADDS AND CHANGE SERVICE
ACTIVITY ("IMAC") charges. [...***...]
* CONFIDENTIAL TREATMENT REQUESTED
23.
4.3 ASSUMPTIONS. Supplier's charges for Resource Units are based on the
following assumptions:
[...***...]
24. *CONFIDENTIAL TREATMENT REQUESTED
[...***...].
5. DESKTOP SERVICES BASELINE RESOURCE UNITS
5.1 SUPPORTED DESKTOP PCS, LAPTOP PCS, AND PRINTERS
(d) Resource Units for this category will be measured as the number
of supported Desktop Resources (on a Desktop PC, Laptop PC, or Printer basis)
operational at the Facilities based on information provided by PacifiCare during
the Transition Period. One supported Desktop PC equals one Resource Unit, one
Laptop PC equals one Resource Unit and one printer equals one Resource Unit.
(e) There are 3 classifications of supported Desktop Resources:
Desktop PCs, Laptop PCs and Printers (as enumerated in Attachment 17.4 to this
Schedule, Reference Numbers 501 through 503), each having a separate Baseline
and an associated ARC Rate and RRC Rate. Such classifications reflect the
differences in the allocation of shared or required infrastructure, equipment
and software, maintenance and support costs, infrastructure design or Service
Level commitments.
(f) A Supported Desktop Resource will be considered operational:
(i) when Supplier or PacifiCare install it according to the
criteria for a completed installation, set forth in the Policy and Procedures
Manual (Schedule 13.3 to the Agreement) or as Supplier discovers or is otherwise
notified by PacifiCare;
(ii) until Supplier deinstalls it as an IMAC event or as
Supplier is otherwise notified that it is a deinstalled unit; or
(iii) until it is classified as unserviceable in accordance
with the Policy and Procedures Manual, which is set forth as Schedule 13.3 to
the Agreement.
5.2 INSTALL, MOVE, ADD, AND CHANGE SERVICES. IMAC services encompass the
coordination and performance of Installation, Move, Add, Change Services and
Remove activities.
(a) RESOURCE UNITS. Resource Units for this category will be
measured as the aggregate number of Install, Move, Add, and Change Service
events Supplier performs during the applicable measurement period. IMAC events
are defined as follows:
(i) INSTALL means the setup and connection of standard
equipment. The source of the equipment can be either through the procurement
process or from a storage location containing unused equipment. An Install
includes unpacking, connecting the system unit and associated Peripherals,
adding an asset tag and testing to verify that the system is functional with
network connectivity, as applicable. Supplier will migrate End User data from
the existing system onto the new standard system, if applicable.
25. * CONFIDENTIAL TREATMENT REQUESTED
(ii) MOVE means relocating a system unit and associated
peripherals from its current location and relocating it to a new location
requiring no modification to the system software other than minor configuration
changes to operate in a new location (e.g. new IP address). A Move includes
disconnecting the system unit and peripherals, packing, unpacking, reconnecting
the system unit and associated peripherals, and testing to verify that the
system is functional with network connectivity, as applicable. Transportation is
not included as part of the Move activity. "Move" also includes system units
that are disconnected from a current location and relocated to a storage or
staging area for future development.
(iii) ADD means the installation of new hardware or Software
to an existing device. A hardware add includes the installation of an external
device and the appropriate device driver. A Software add includes an
installation of up to five applications using a server-based distribution
process or via media.
(iv) CHANGE SERVICE means a modification to an existing
system/unit. It may consist of a hardware upgrade or downgrade (remove
functionality), a Software application upgrade, a Software system upgrade, or a
end user requested configuration change.
Software upgrades or changes that represent significant functional enhancements
and require changes to data structure (for example, Windows 3.1 to Windows 95)
may be handled, at PacifiCare's option, as:
a. an IMAC (i.e., as a Change Service to the software)
per end-user upgrade;
b. charged as hourly services; or
c. as a Project.
(v) CASCADE means the combination of a Refresh event and a
Move event. The device being replaced by the Refresh unit is moved to another
location and that replaced device is the unit that is disposed. No more than one
(1) Cascade will be scheduled in conjunction with a single Refresh installation.
All Cascade events will be billed in accordance with the IMAC process.
(vi) REDEPLOY means the installation of previously used
equipment that has been in storage. This is the equivalent of and charged as an
Install event. To be eligible for Redeploy, the equipment must meet the minimum
hardware standards as defined for the PacifiCare environment.
(vii) DISPOSE means removal of equipment at the end of its
life. Supplier will validate data is removed from the hard drive, if applicable.
Equipment that is owned by Supplier will be disposed of in accordance with the
Policy and Procedures Manual. The cost for disposing of PacifiCare-owned
equipment is not covered in the Base Fees.
(viii) IMAC PROJECT means requests for IMAC services which
contain [...***...] or more IMAC events on a single request. All IMAC Projects
shall have mutually
26. * CONFIDENTIAL TREATMENT REQUESTED
agreed to implementation schedules outside the normal SLA requirements. There
are no additional costs for IMAC Projects outside the normal IMAC event costs.
(ix) EXPEDITED IMAC SERVICE means:
(1) requests for IMAC service that must be completed in
less time than the stated SLA requirement; or
(2) PacifiCare requested cancellations of service
[...***...];
(3) [...***...].
Based on the total IMAC event counts for a given calendar month, the first
three percent (3%) of Expedited IMAC Service events in the same calendar month
will not have any additional costs. All Expedited IMAC Service events above
[...***...] will count as one (1) additional IMAC event.
(b) VIRUS INCIDENTS. In the event of a Virus incident:
(i) activities necessary to redress the Virus incident,
including those resulting from virus definition installs or upgrades (to desktop
or to server), will not be counted as IMAC events and will not be coordinated
through the IMAC process; and
(ii) activities related to the redress of the Virus incident
(including installs or upgrades) will proceed as required under the Agreement;
and
(iii) the parties will discuss and agree to (A) any
adjustments to the Service Level commitments during the period in which the
redress activities take place and (B) supplementary costs or expenses, or both,
that may be occasioned by
the undertaking of activities that are necessary to redress a Virus incident.
(c) MEASUREMENT. Each IMAC event described above will be counted in
accordance with the following IMAC events chart. The IMAC Baseline set forth in
Attachment 17.4 reflects the agreed quantity of IMAC events included in the Base
Fees.
As described above in Sections 4.3(a) and (b), respectively, ARCs apply to
IMAC event resources above [...***...] percent ([...***...]%) of the IMAC
Baseline, and RRCs apply to IMAC event resources below [...***...] percent
([...***...]%) of the IMAC Baseline.
IMAC EVENTS
IMAC NUMBER OF IMAC EVENTS
Install [...***...]
27. * CONFIDENTIAL TREATMENT REQUESTED
IMAC EVENTS
Move
- within a Facility [...***...]
- between Facilities [...***...]
Add
- hardware [...***...]
- Software [...***...]
Change Service
- hardware [...***...]
- software [...***...]
Dispose [...***...]
(d) EXAMPLES. IMAC Charging examples:
(i) New device ordered to replace existing device that is
disposed of: (1 Install and 1 Dispose).
(ii) End user requests new hard drive, memory upgrade, and new
network card. (1 Change Service as long as all new equipment is installed on a
single trip. If end user requests that multiple trips be done, each trip will
count as 1 Change Service event).
(iii) Move PC along with person's telephone number to new
office. (1 Move and 1 Voice).
(iv) Application is electronically pushed/pulled to end user
outside the scope of the Statement of Work (Not an IMAC event resulting in an
adjustment to the baselines. This would be a Project subject to the procedures
set forth in the Statement of Work.).
(v) Install a new printer (1 Install).
(vi) Install external CD-RW device to existing PC (1 Change
Service).
(vii) Take memory out of one PC and install it into another PC
(2 Change Services).
(viii) A new PC is ordered. The PC that is being replaced is
to be moved to another user who does not have a PC. (1 Install and 1 Move).
(ix) An end user leaves the business and his/her PC is put
into storage until needed. (1 Move to put in storage, 1 Redeploy when needed).
(x) Area is recarpeted over weekend and entire department (50
users) needs to be removed and re-installed afterwards (worked as IMAC Project
and would count as
28. * CONFIDENTIAL TREATMENT REQUESTED
50 Moves. Because the event is continuous, there is no additional fee for the
temporary storage of equipment).
(xi) New device is ordered and existing device is moved to
another user and his/her device is to be disposed of. (1 Install, 1 Move, and 1
Dispose).
(xii) End user wants to add a new printer to printer folder
(If done via Help Desk call, no IMAC. If end user requests that someone come to
his/her work area, 1 Change Service).
(xiii) PacifiCare requests that all desktops be upgraded to
Window XP (This would be treated as a Project).
(xiv) Move a local attached printer from one desktop to
another (1 Move).
(xv) Install scanner to PC and add an application that comes
with scanner (1 Add, there is no additional cost for the application install as
long as it is done at the same time as the scanner install).
5.3 ASSUMPTIONS. Supplier's charges for Resource Units for Desktop and
Distributed Computing Management are based on the following assumptions
[...***...].
29. * CONFIDENTIAL TREATMENT REQUESTED
[...***...].
6. CUSTOMER SUPPORT DESK (CSD) SERVICES BASELINE RESOURCE UNITS
6.1 RESOURCE UNIT. After the Transition Period, Resource Units for this
category will be measured as described below.
(a) END USERS. The Baseline for this category will be measured as
the total number of end users. One end user will equal one Resource Unit.
30. * CONFIDENTIAL TREATMENT REQUESTED
(b) EXCHANGE ACCOUNT SERVICES. Resource usage for this category will
be measured as the number of Exchange Accounts created per year. One Exchange
Account will equal one Resource Unit.
(c) REMOTE ACCESS SERVICES. The Baseline for this category will be
measured as the number of initial remote administration creations per year. One
initial remote administration creation will equal one Resource Unit.
(d) SECURITY ACCOUNT SERVICES. The Baseline for this category will
be measured as the number of security accounts created per year (logon
requests). One security account creation will equal one Resource Unit.
6.2 ASSUMPTIONS. Supplier's charges for Resource Units are based on the
following assumptions:
[...***...].
7. DISTRIBUTED COMPUTING SERVICES BASELINE RESOURCE UNITS
7.1 SUPPORTED DISTRIBUTED SERVERS.
(a) RESOURCE UNITS. Resource Units for this category will be
measured as the number of Supported Servers operational in distributed
environment. One Supported Server equals one Resource Unit.
31. * CONFIDENTIAL TREATMENT REQUESTED
(b) There are four (4) classifications of Supported Servers: small,
medium, large and NT Storage, each having a separate Baseline and associated ARC
Rate and RRC Rate.
(c) A Supported Server will be considered operational:
(i) when Supplier or PacifiCare install it according to the
criteria for a completed installation, set forth in the Policy and Procedures
Manual or as Supplier discovers or is otherwise notified by PacifiCare;
(ii) until Supplier or PacifiCare deinstall it, or Supplier is
otherwise notified that it is a deinstalled unit; or
(iii) until it is classified as unserviceable in accordance
with the Policy and Procedures Manual, which is set forth as Schedule 13.3 to
the Agreement.
8. INFORMATION DISTRIBUTION SERVICES RESOURCES
8.1 BASELINES. The Baselines for this resource category will be based upon
PacifiCare's estimates provided in the Attachments to this Schedule as of the
Effective Date.
(a) Each single image or one-sided page will equal one (1) print
hardcopy Resource Unit.
(b) Online print image or screen of online printed output will be
measured in gigabytes. A Resource Unit will be one (1) gigabyte.
(c) Each page of output automatically inserted into an envelope will
equal one (1) auto insert flat Resource Unit.
(d) Each hour of time spent performing automated insertion of pages
into an envelope will equal one (1) Resource Unit.
(e) The average monthly number of inserts included per item of
output (standard size) will equal one (1) Resource Unit.
(f) Each hour of time spent performing manual output assembly will
equal one (1) manual assembly Resource Unit.
(g) Each image or one-sided page of color print will equal one (1)
demand print color Resource Unit.
(h) Each image or one-sided page of black and white print will equal
one (1) demand print black/white Resource Unit.
(i) Each hour of time spent creating any other print processing
and/or output will equal one (1) demand print special processing Resource Unit.
(j) Each mail stop located within the Cypress and Lake Center
facilities will equal one (1) mail stop Resource Unit.
32.
(k) The total of all pieces of inbound and output US mail and
interoffice mail processed from the Cypress and Lake Center facilities in one
month will equal one (1) mail Resource Unit.
(l) The total of all pieces of inbound/output accountable
(certified, registered, etc.) mail processed from the Cypress and Lake Center
facilities in one month will equal one (1) accountable mail Resource Unit.
(m) Each item stocked in the IDC warehouse will equal one (1)
warehouse Resource Unit.
(n) Each item ordered for the IDC warehouse will equal one (1)
warehouse order item Resource Unit.
(o) Each service call physically handled by the IDC personnel will
equal one (1) customer support call Resource Unit.
(p) As described above in Sections 4.3(a) and (b), respectively,
ARCs apply to Information Distribution Center resources above [...***...]
percent ([...***...]%) of the Baselines, and RRCs apply to Information
Distribution Center resources below [...***...] percent ([...***...]%) of the
Baselines.
(q) NON-PRINT MEDIA PROCESSING FTP. The Resource Unit for an FTP for
Non-Print Media Processing (see Attachment 17.4, Reference Number 707) is a
Non-Print Media Processing FTP, which consists of a monthly charge for an
onsite, experienced technician (exclusive of travel). The technician has skills
in non-print media processing, as required.
(r) INFORMATION DISTRIBUTION CENTER ACCOUNT MANAGER FTP. The
Resource Unit for an Information Distribution Center Account Manager (see
Attachment 17.4, Reference Number 708) is an Information Distribution Center
Account Manager FTP, which consists of a monthly charge for an onsite,
experienced project manager (exclusive of travel). An account manager has skills
in either account management, records management, or print output management, as
required.
(s) INFORMATION DISTRIBUTION CENTER TECHNICAL FTP. The Resource Unit
for an Information Distribution Center Technician (see Attachment 17.4,
Reference Number 709) is an Information Distribution Center Technical FTP, which
consists of a monthly charge for an onsite, experienced technician (exclusive of
travel). A technician has skills in print, mail, or document management and
administration, as required.
33. * CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT 17.4
RESOURCE UNIT BASELINES
[SEE REDACTED ATTACHMENT 17.4]
ATTACHMENT 17.4
RESOURCE UNIT BASELINES - INFRASTRUCTURE
RESOURCE UNITS BASE YEAR YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Ref Project FTPs
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
DATA CENTER
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
NETWORK
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
CUSTOMER SUPPORT DESK (CSD)
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
DESKTOP SUPPORT
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
DISTRIBUTED COMPUTING
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
INFORMATION DISTRIBUTION CENTER - MONTHLY
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
RESOURCE UNITS YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10
Ref Project FTPs
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
DATA CENTER
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
NETWORK
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
CUSTOMER SUPPORT DESK (CSD)
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
DESKTOP SUPPORT
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
DISTRIBUTED COMPUTING
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
INFORMATION DISTRIBUTION CENTER - MONTHLY
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
* CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT 17.5
TERMINATION FEE SCHEDULE
CATEGORY OF SERVICES YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7
TERMINATION FOR CAUSE
[...***...]
TOTAL TERMINATION FEES
TERMINATION FOR CHANGE OF CONTROL
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
TOTAL TERMINATION FEES
TERMINATION FOR CONVENIENCE
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
TOTAL TERMINATION FEES
CATEGORY OF SERVICES YEAR 8 YEAR 9 YEAR 10
TERMINATION FOR CAUSE
[...***...]
TOTAL TERMINATION FEES
TERMINATION FOR CHANGE OF CONTROL
[...***...] [...***...] [...***...] [...***...]
TOTAL TERMINATION FEES
TERMINATION FOR CONVENIENCE
[...***...] [...***...] [...***...] [...***...]
TOTAL TERMINATION FEES
ALGORITHM FOR CALCULATING FEES ON ANY DATE OTHER THAN THE ANNIVERSARY OF THE
EFFECTIVE DATE
TERMINATION FOR CAUSE
TERMINATION FOR CHANGE OF CONTROL [...***...]
TERMINATION FOR CONVENIENCE [...***...]
* CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT 17.6
RETAINED CONTRACTORS
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT 17.7
FUNDS TRANSFER INFORMATION
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT 17.8
RATES FOR APPLICATION PROJECT SERVICES
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT 17.9
WIRE INSTRUCTIONS FOR ASSET CHARGES
[...***...]
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 24.4
FAILURE TO PROVIDE CRITICAL SERVICES
Solely for the purposes of Section 24.4 of the Agreement, the following sets
forth the Critical Services and the specific allowable cure periods:
CRITICAL SERVICE CURE PERIOD
[...***...] [...***...]
[...***...] [...***...]
[...***...] [...***...]
[...***...] [...***...]
[...***...] [...***...]
[...***...] [...***...]
[...***...] [...***...]
Limitations. [...***...].
* CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 26.1
SCHEDULE 26.1
TERMINATION ASSISTANCE SERVICES
1. INTRODUCTION AND OBJECTIVES
During the Termination Assistance Period, in addition to its obligations
under Section 26 of the Agreement, Supplier shall provide PacifiCare or
its Designee the Termination Assistance described in this Schedule 26.1.
Any capitalized terms used herein, and not otherwise defined, shall have
the meanings ascribed to such terms in the Agreement.
Supplier shall, by the end of the Termination Assistance Period, provide
existing applicable documentation and facilitate a knowledge transfer
regarding the Services to PacifiCare or, at PacifiCare's option, its
Designee.
2. DURING THE TERMINATION ASSISTANCE PERIOD:
(a) If PacifiCare is to assume primary responsibility for the Services
after the end of the Termination Assistance Period, Supplier shall,
upon PacifiCare's request, provide assistance with the development
of a plan for the transition of Services from Supplier to PacifiCare
(the "PLAN"), which shall be no less detailed than the Transition
Plan, and shall address each process, schedule, and milestone listed
therein. A "skeleton" transition plan describing, in general, the
components to be included in the Plan shall be delivered to
PacifiCare within thirty (30) days after the "Termination Assistance
Start Date." Termination Assistance Start Date shall mean the
earlier of (1) upon the delivery of notice of termination, or (2)
the day after either Party notifies the other Party of its intent
not to extend the term pursuant to Section 2.2 of the Agreement.
The Plan shall specify:
i. The resources necessary to provide transition assistance;
ii. The details regarding Supplier responsibilities and PacifiCare
responsibilities that are necessary to permit execution of the
transition; and
iii. A timetable and process for executing Supplier's and
PacifiCare's responsibilities for the transition. Such
timetable and process must deal with each of the issues set
out in this Schedule 26.1.
(b) If PacifiCare's Designee is to assume primary responsibility for the
Services, Supplier shall assist PacifiCare and its Designee with the
preparation and implementation of a transition plan by providing, in
a timely manner upon PacifiCare's request, the Designee with
sufficient information regarding the Services, that may be required
in connection with the plan. Supplier shall assist in preparing the
portion of the
transition plan detailing Supplier's responsibilities, including
schedules and resource commitments.
(c) Subject to Section 20 of the Agreement, Supplier shall provide
reasonable cooperation and information to PacifiCare, or its
Designee, upon PacifiCare's request, to assist PacifiCare, or its
Designee, in assuming responsibility for, the Services in an orderly
manner.
(d) Subject to Section 20 of the Agreement, Supplier shall, upon
PacifiCare's request, provide procedures, processes, and information
to PacifiCare and/or its Designee and such other reasonable
cooperation and assistance, to assist in the execution of the
transition. To the extent that such procedures, processes and
information are Supplier Confidential Information, PacifiCare shall
have a right to use such procedures, processes and information as
set forth in the Agreement.
3. TERMINATION ASSISTANCE PERIOD SERVICES
During the Termination Assistance Period, Supplier shall:
(a) Provide and coordinate the assistance to PacifiCare in notifying
relevant third parties of the procedures to be followed prior to,
during, and after the Termination Assistance Period.
(b) Provide a current listing of the full time dedicated personnel
(third-party contractors and employees) used to provide the Services
to determine their applicability to the transition process and
ongoing operation and support of PacifiCare systems.
(c) Provide access as requested by PacifiCare to current Supplier
personnel (employees and third-party contractors) performing the
Services.
(d) Review and explain the Policies and Procedures Manual to
PacifiCare's, or Designee's, operations staff as requested.
(e) Provide a copy of the security guidelines and procedures used in
providing the Services.
(f) Provide applicable Service logs, reporting back twelve (12) months
prior to the Expiration Date or Termination Date.
(g) Provide a copy of documentation and diagrams as maintained by
Supplier in support of the PacifiCare Entities IT environment to the
extent required to assist in the execution of the transition.
(h) Provide for the transfer of ongoing projects (including a listing of
current and planned projects and current status, as well as all
Supplier Equipment and Software ordered or in process).
(i) Cooperate with PacifiCare's transition plans and procedures.
(j) Upon PacifiCare's request, provide PacifiCare or Designee access to
Equipment and Software, third parties, and other resources that
Supplier uses to provide Services, provided that, i) any such access
does not materially interfere with Supplier's ability to provide the
Services, including the Termination Assistance Services; and ii) the
Designee complies with Supplier's security and confidentiality
requirements, including execution of a confidentiality agreement
reasonably acceptable to Supplier.
4. OPERATIONAL TRANSFER
Supplier shall provide the following assistance to execute a transition of
operational responsibility for the Services to PacifiCare or the Designee:
a) Identifying work volumes, current staffing levels (if transition is
back to PacifiCare), service levels, and information on historical
performance for the Equipment and Software over the preceding twelve
(12) months or the longest available time such information has been
reported to the extent that the Services were not being delivered
for twelve months or twelve months of information is not available
to report.
b) Identifying work and Projects expected to be in progress as of the
end of the Term. With respect to such work, Supplier shall document
current status, stabilize for continuity during transition, and
provide a transfer of knowledge to achieve effective transfer of
responsibilities.
c) Providing reasonably requested assistance to PacifiCare, or the
Designee, in the execution of parallel monitoring, servicing, and
testing.
5. RETURN OF PROPERTY
Without limiting Supplier's obligations pursuant to Section 15.4 of the
Agreement, upon the expiration or termination of the Agreement, Supplier
shall return to PacifiCare any property of PacifiCare in Supplier's
possession or under Supplier's control.
6. TRANSITION OF EQUIPMENT, SOFTWARE AND THIRD PARTY SERVICE CONTRACTS
Supplier shall provide PacifiCare or Designee with:
a) A list of all, the Software and Equipment, third party service
contracts, and related supplier personnel contacts used by Supplier
solely to perform the Services;
b) In relation to the Software and Equipment, a brief description of
its functionality, the applicable supplier, and estimate of the cost
to PacifiCare of continuing to use: i) the Software and Equipment,
and ii) related third party service contracts.
c) Any other relevant information related to the Services as reasonably
requested by PacifiCare.
7. DISASTER RECOVERY TRANSFER
Supplier shall, to the extent that disaster recovery coverage is
contracted under the Agreement:
(a) Supply documentation used by Supplier to provide disaster recovery
services for PacifiCare based on the PacifiCare Disaster Recovery
Plan, including the most current version of disaster recovery plans,
passwords, access codes, testing procedures and frequencies,
redundancy programs and plans.
8. PAYMENT
Payment for all services in this Schedule 26.1 shall be as set forth
within the following framework:
(a) With respect to any Supplier Equipment that is owned or leased by
Supplier and which on the date of expiration or termination Supplier
is using on a dedicated basis to perform the Services, Supplier
shall, or shall permit PacifiCare to (as applicable), do the
following: (i) with respect to Supplier Equipment that is owned by
Supplier, PacifiCare shall have the option to purchase such
dedicated Equipment from Supplier, and if PacifiCare elects to
purchase the Supplier-owned Equipment, PacifiCare shall pay Supplier
the fair market value for such Equipment, as determined by an
appraisal conducted by a mutually agreed-upon appraiser.; and (ii)
with respect to leased Supplier Equipment, PacifiCare may, at its
option, assume the leases associated with certain leased Supplier
Equipment (including the financial and administrative responsibility
associated with such leases) to the extent allowed by such leases,
and Supplier shall use reasonable efforts to assist Supplier in
assuming such leases.
(b) Without limiting Supplier's obligations pursuant to Section 26.3(e),
upon PacifiCare's request, with respect to any generally available
one-time charge Software which on the date of expiration or
termination of this Agreement Supplier is using solely to provide
the Services to PacifiCare, Supplier shall assign to PacifiCare
Supplier's license to the Software subject to the recovery of any
un-amortized costs (in accordance with GAAP) of the one-time
license. Upon PacifiCare's request with respect to any generally
available Software Supplier is using to provide Services to
PacifiCare and other customers in a shared environment on the date
of expiration or termination of this Agreement, Supplier shall
provide reasonable assistance to PacifiCare in obtaining licenses
for such Software.
(c) Upon PacifiCare's request, and without limitation of any other
Supplier obligations under this Agreement, Supplier shall provide to
PacifiCare copies of software licenses and maintenance agreements
entered into by Supplier with respect to Software which Supplier
acquired during the Term and is used in the delivery of the
Services.
(d) The appraisals described in this Section shall be paid for by
PacifiCare; provided, however, if the Termination Assistance
Services are being performed as a result of a termination by
PacifiCare for cause as described in Section 24.3(a) of this
Agreement, the appraisal shall be paid for by Supplier.
