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Exhibit 10.12
AGREEMENT AND RELEASE OF CLAIMS
Agreement and Release of Claims (hereinafter the "Agreement"),
dated as of 29 October 1996, by and among HHL FINANCIAL SERVICES, INC., a
Delaware corporation with offices at 0000 Xxxxxxxx Xxxx, Xxxxxxxx, XX 00000
("HHL"); HEALTH MANAGEMENT SYSTEMS, INC., a New York corporation with offices at
000 Xxxx Xxxxxx Xxxxx, Xxx Xxxx, XX 00000 ("HMS"); and, solely for the limited
purpose set forth herein, THE FIRST NATIONAL BANK OF CHICAGO, a national banking
association with offices at Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000
("First Chicago").
WHEREAS, HHL and HMS are parties to that certain Amendment No.
1 to Management and Data Processing Agreement dated 1 July 1993 between HHL and
HMS (the "Data Processing Agreement");
WHEREAS, HHL and HMS are desirous of memorializing certain
agreements among themselves regarding certain contracts between them and
amending certain terms and provisions of the Data Processing Agreement;
WHEREAS, various disputes have arisen between HMS and HHL, and
between HMS and First Chicago, and the parties hereto are desirous of entering
into this Agreement to release one another, subject to certain conditions and
limitations hereafter set forth, from certain liabilities regarding rights and
claims that they have against one another which arise from acts, events or
circumstances occurring before the effective date of this Agreement; and
WHEREAS, by entering into this Agreement none of the parties
hereto acknowledges or admits any liability in connection with such disputes.
NOW, THEREFORE, HHL, HMS and, solely for the limited purpose
set forth in Sections 5 through 17 hereof, First Chicago do hereby stipulate and
agree as follows:
Section 1. Continuation of Subcontract Arrangements. Subject
to the right of each of HHL and HMS, as a prime contractor to a customer, to
terminate the other as a subcontractor solely due to the failure of the
subcontractor to perform its contractual obligations or the expressed
dissatisfaction of the prime contractor's customer, all subcontracts in force
and effect between HHL and HMS as of the Effective Date (as hereinafter defined)
shall remain in full force and effect following the Effective Date. Without
limiting the generality of the foregoing:
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(a) HMS shall have the right to remain as
subcontractor to HHL on existing subcontracts so long as HHL
retains the related primary contract and/or the
renewal/extension thereof.
(b) HHL shall have the right to remain as
subcontractor to HMS on existing subcontracts so long as HMS
retains the related primary contract and/or the
renewal/extension thereof.
(c) As part of the renewal of its contract
with Xxxx County Hospital ("CCH"), HMS will use its best
efforts to cause HHL's subcontract for services to CCH to be
renewed and HHL will have the right to remain as subcontractor
to HMS so long as HMS retains the primary contract and/or the
renewal/extension thereof. HHL will pay to HMS HHL's pro rata
share of the actual fees paid by HMS to the law firm in
Chicago representing HMS in its contract negotiations with
CCH, such pro rata share to be apportioned based on HHL's and
HMS's respective revenues received pursuant to such contract
renewal. Accordingly, HHL and HMS agree that during the twelve
(12) month period following the date of such contract renewal
HMS may deduct, from revenue received on HHL's behalf from CCH
pursuant to the contract renewal and prior to the remittance
of such payments to HHL, an amount equal to seventy (70%)
percent of the monthly legal fees to be paid to such law firm
(which amount shall be equal to 70% of $8,000 or $5,600 per
month). HHL and HMS acknowledge and agree that such allocation
is based upon the historical pro rata share of the CCH
revenues received by each of HHL and HMS. Promptly following
the end of such twelve (12) month period, HHL and HMS shall
reallocate as between themselves the total aggregate legal
fees paid to such law firm based upon the pro rata share of
the CCH revenues actually received by each of HHL and HMS for
such twelve (12) month period. The aggregate actual amount for
which HHL shall be responsible following such reallocation
shall be referred to herein as the "Adjusted Amount." The
difference between the aggregate amount so deducted from HHL's
revenues and the Adjusted Amount shall be referred to herein
as the "Fee Difference." Following such reallocation, if the
aggregate amount so deducted from HHL's revenues shall exceed
the Adjusted Amount, HMS shall promptly pay to HHL an amount
equal to the Fee Difference, and if the Adjusted Amount shall
exceed the aggregate amount so deducted from HHL's revenues,
HHL shall promptly pay to HMS an amount equal to the Fee
Difference.
(d) In connection with the sale of all or a
portion of its assets, HHL may assign or sell its primary
contracts (where HMS is the subcontractor) and/or its
subcontracts (where HMS is the primary contractor) to third
parties, subject to the written consent of HMS, which consent
shall not be unreasonably withheld or delayed, provided such
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Purchaser (as hereinafter defined) agrees to the terms of any
subcontract between HHL and HMS, as modified herein.
Section 2. License of AccessLine System and Software.
(a) On the date hereof, HMS shall pay
$50,000 to HHL in exchange for the grant by HHL to HMS of a
royalty-free nonexclusive license in perpetuity for the
AccessLine system and software. Contingent upon its receipt of
such payment, and subject to the terms and conditions
hereinafter set forth, HHL hereby grants to HMS a royalty-free
nonexclusive license in perpetuity to use the AccessLine
system and software owned by HHL without limitation as to
rights (including the right to sublicense, except as set forth
below) including but not limited to possession by HMS of, but
not title to, all source code materials (defined as including
all program codes, file layouts, copybooks, file creation
utilities and job control language) and rights to all program
and user documentation and associated training material as
such items currently exist and are in the possession of HMS.
HHL shall have no future obligations to supply maintenance or
updates to the AccessLine system or software; provided,
however, that HMS shall have rights to all future AccessLine
enhancements implemented by HMS under contract with HHL, and
HMS will be free to make any changes or modifications it deems
appropriate so long as such changes or modifications do not
adversely affect the conduct by HHL or its successors or
assigns of HHL's business.
(b) During the term of the Data Processing
Agreement, HMS shall not sublicense the AccessLine system or
software to third parties in the United States, except as
expressly authorized by HHL in writing with the consent of
First Chicago. Promptly following the date hereof, HHL shall
deliver to HMS fifty (50) AccessLine terminals and four (4)
32-port controllers, provided that HHL is not required to
purchase, or make any expenditure in connection with, the
provision of such equipment. HHL makes no representations or
warranties as to (i) the condition of such equipment except
that it shall be in working condition at the time of the
transfer thereof by HHL to HMS, or (ii) the AccessLine system
and/or software, and HMS shall accept all such items AS IS.
(c) HHL may sell or otherwise transfer all
or a portion of its assets or business to one or more third
parties, and the license granted herein to HMS shall not
prevent HHL from consummating such transactions by granting
similar, nonexclusive licenses of the AccessLine system and
software to such third parties.
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Section 3. Continuation of Data Processing.
(a) HMS shall continue to provide data
processing services to HHL under the terms of the Data
Processing Agreement consistent with current service levels
and staffing in accordance with Attachment 1 attached hereto
and incorporated herein by reference (including (x) the
reduction of dedicated programming staff by two (2)
programmers, one programmer reduction to occur six (6) months
after the Effective Date and the second programmer reduction
three (3) months thereafter and (y) the reduction of dedicated
programming staff to not less than two (2) programmers, in the
event the Monthly Aggregate Data Processing Fees (as
hereinafter defined) shall be reduced to less than $200,000
per month, provided that HMS shall satisfy its performance
requirements hereunder) subject to the following amended terms
and conditions:
(b) All minimum monthly data processing fees
shall be paid by HHL to HMS monthly in advance by the 25th day
of the prior month and HMS shall receive $200,000 from HHL as
advance payment for the last month of the Data Processing
Agreement, such advance payment to be made as provided in
Section 5 herein.
(c) (i) The monthly minimum data processing
fees shall be the greater of (x) five (5%) percent of HHL's
monthly revenues (excluding the revenues of HLS Financial
Group, Inc.) and (y) the following minimum amounts:
Monthly Minimum Data
Quarter Ended Processing Fee
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31 Jan 1997 $300,000
30 Apr 1997 $250,000
31 Jul 1997 $250,000
31 Oct 1997 $240,000
31 Jan 1998 $220,000
30 Apr 1998 $200,000
(ii) HHL's monthly minimum data
processing fee obligations may be reduced from time to time,
subject to the provisions of Section 3(d)(iii) hereof and the
following conditions or any combination thereof:
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(A) If HHL sells all or a
portion of its assets or business to any
purchaser (a "Purchaser"), and such
Purchaser enters into a data processing
services agreement with HMS as set forth in
subsection (f) below (but not if the
Purchaser is subject to the provisions of
Section 3(f)(ii) below), then with respect
to each Purchaser to which HMS grants
approval, which approval shall not be
unreasonably withheld or delayed, HMS shall
assume the responsibility for the collection
of its data processing fees from such
Purchaser and shall reduce HHL's minimum
monthly data processing fee and Disaster
Recovery cost obligations (as set forth in
Section 3(e) below) by an amount equal to
the minimum monthly data processing fees and
Disaster Recovery cost obligations of each
such Purchaser; and/or
(B) If HHL reduces its
requirement for AccessLine services from HMS
(including but not limited to a reduction in
its operations, closure of offices or
termination of clients), then HHL's monthly
minimum data processing fee and Disaster
Recovery cost obligations shall be reduced
by an amount obtained by multiplying: (i)
each of the monthly minimum data processing
fees (or Disaster Recovery costs, as
appropriate) applicable after the date of
such service requirement reduction, as
reduced by any prior reduction(s) effected
pursuant to paragraph (A) above or this
Paragraph (B), by (ii) the quotient obtained
by dividing (y) HHL's Fiscal Year 1996
revenue from such discontinued operations or
its business no longer supported by
AccessLine, by (z) HHL's total Fiscal Year
1996 revenue (excluding the revenue of HLS
Financial Group, Inc.). HHL shall provide 30
days' advance written notice to HMS of such
reduction, together with adequate supporting
documentation related thereto.
(iii) To the extent that HHL's final
minimum monthly data processing fee obligation is reduced from
time to time, pursuant to the foregoing provisions, to an
amount which in the aggregate with the minimum monthly data
processing fee obligations of all Purchaser(s) totals less
than $200,000, HMS shall refund promptly to HHL (x) the amount
by which the $200,000 advance payment specified in Section
3(b) hereof exceeds the reduced monthly minimum data
processing fee obligation plus (y) the amount, if any, paid to
HMS by the Purchaser(s) as advance payment(s) for the last
month of each such Purchaser's data processing agreement with
HMS.
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(iv) Any excess of (x) the monthly
fee calculated with reference to five (5%) percent of HHL's
monthly revenues (excluding the revenues of HLS Financial
Group, Inc.) over (y) the monthly minimum data processing fees
of HHL that were paid in the previous month, shall be payable
within 10 days after invoicing. If data processing services
are limited solely to the use of the Xxxx/Financial System,
the monthly minimum data processing fee will be reduced to
$20,000. HHL shall inform HMS of its prior month's revenues by
the 15th day of each month.
(v) The term "Effective Date" as
used herein shall mean 8 October 1996.
(d) (i) The term of the Data Processing
Agreement is hereby amended so that the remaining term thereof
shall be a term of eighteen (18) months commencing 1 November
1996. The Data Processing Agreement shall not automatically
renew.
(ii) Notwithstanding any other
provision hereof, during the term of the Data Processing
Agreement as so amended, HHL may terminate the Data Processing
Agreement prior to the end of such eighteen (18) month period
upon 30 days' advance written notice to HMS.
(iii) During the term of the Data
Processing Agreement as so amended or the term(s) of any data
processing agreements(s) between HMS and one or more
Purchaser(s) which have been entered into pursuant to the
provisions of Section 3(f) hereof (the "Purchaser Data
Processing Agreement(s)"), HMS may elect to terminate such
Purchaser Data Processing Agreement(s) with such Purchaser(s)
and/or the Data Processing Agreement in the event that at any
time HHL's and any successor's monthly minimum data processing
fee obligations to HMS together with the monthly minimum data
processing fee obligations of all Purchaser(s) to HMS
(collectively, the "Monthly Aggregate Data Processing Fees")
shall be reduced to less than $100,000 per month in the
aggregate. HMS shall make such election by giving 60 days'
advance written notice to HHL and the Purchaser(s) of HMS's
election to terminate the Data Processing Agreement and/or the
Purchaser Data Processing Agreement(s). Notwithstanding the
foregoing, HHL and the Purchaser(s) shall have the right on
one occasion only to suspend HMS's notice(s) of termination
(the "HMS Termination Notice(s)") by giving HMS written notice
(the "Reply Notice") of their intention to pay to HMS, on a
month to month basis, the full amount of the difference
between (a) $100,000 and (b) the Monthly Aggregate Data
Processing Fees as so reduced (the "Aggregate Shortfall
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Amount"). The Reply Notice shall be given within 30 days of
the receipt by HHL and the Purchaser(s) of the HMS Termination
Notice(s) and shall be accompanied by the payment of the
Aggregate Shortfall Amount with respect to the first month in
which the Monthly Aggregate Data Processing Fees were reduced
to less than $100,000. Upon delivery of the Reply Notice and
the initial monthly Aggregate Shortfall Amount, the term of
the Data Processing Agreement and the term(s) of the Purchaser
Data Processing Agreement(s) shall continue uninterrupted in
accordance with the terms hereof and thereof. Thereafter, HHL
and the Purchaser(s) shall pay to HMS the monthly Aggregate
Shortfall Amount on the 25th day of the following month. In
the event an Aggregate Excess Amount (as hereinafter defined)
shall be paid to HMS by HHL and/or one or more Purchaser(s)
with respect to any month for which HHL and/or the
Purchaser(s) shall have paid an Aggregate Shortfall Amount,
HMS shall, upon receipt of such Aggregate Excess Amount,
refund the Individual Shortfall Amount (as hereinafter
defined) for that month to each respective payor thereof (in
each case, up to the amount of such payor's Individual Excess
Amount (as hereinafter defined)) or to such parties as shall
be otherwise directed by HHL and/or the Purchaser(s) in
writing. As used herein, the term "Aggregate Excess Amount"
shall mean any excess of (x) the aggregate of (A) the monthly
fee of HHL calculated with reference to five (5%) percent of
HHL's monthly revenues (excluding the revenues of HLS
Financial Group, Inc.) plus (B) the monthly fee of one or more
Purchaser(s) calculated with reference to five (5%) percent of
such Purchaser(s) monthly revenues over (y) the sum of the
Monthly Aggregate Data Processing Fees and the Aggregate
Shortfall Amount (if any). As utilized herein, the term
"Individual Excess Amount" shall mean the respective amount
paid by HHL and each of the Purchaser(s) as a portion of the
Aggregate Excess Amount. As utilized herein, the term
"Individual Shortfall Amount" shall mean the respective amount
paid by HHL and each of the Purchaser(s) as a portion of the
Aggregate Shortfall Amount. At any time during the period that
HHL and the Purchaser(s) shall be paying monthly Aggregate
Shortfall Amounts to HMS, HHL and the Purchaser(s) may elect
to discontinue the payment of the monthly Aggregate Shortfall
Amounts and to terminate the Data Processing Agreement and the
Purchaser Data Processing Agreement(s) by giving 30 days
advance written notice (the "HHL/Purchaser(s) Termination
Notice") to HMS of their election to terminate such
agreement(s). Such termination shall be effective 30 days
following the delivery to HMS of the HHL/Purchaser(s)
Termination Notice, and HHL and the Purchaser(s) shall have no
obligation to pay any such monthly Aggregate Shortfall Amounts
for such 30 day period. HMS shall have no obligation to
provide data processing services under the Data Processing
Agreement and the Purchaser Data Processing
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Agreement(s) for more than 60 days following the last day of
the month with respect to which the last Aggregate Shortfall
Amount has been paid.
(iv) The Data Processing Agreement
and HMS's obligation to provide data processing services
thereunder shall terminate automatically if any fee due from
HHL under the Data Processing Agreement is overdue for more
than 15 days or if there is any other material default by HHL
under the Data Processing Agreement which is not cured within
15 days after written notice thereof from HMS; provided,
however, that the Data Processing Agreement shall not
terminate from a material non-payment default if it is not
reasonably practicable for HHL to cure such material default
within such 15 day period and HHL shall have within such 15
day period (x) commenced good faith efforts to cure such
default and be continuing to diligently pursue such efforts,
and (y) given HMS written notice of the reasons for HHL's
inability to promptly cure such default, as well as HHL's good
faith estimate as to the completion date for such cure;
provided, however, that notwithstanding the foregoing, if such
material non-payment default has not been cured by HHL within
90 days after written notice thereof from HMS, the Data
Processing Agreement shall terminate.
(v) Upon termination of the Data
Processing Agreement for whatever reason, HHL's obligations
for processing fees (including monthly minimum data processing
fees) and Disaster Recovery costs will cease to accrue. Any
amounts paid in advance by HHL to HMS shall be applied to any
HHL data processing fees and Disaster Recovery costs which
accrue for the month prior to such termination. To the extent
that payments made in advance by HHL to HMS exceed any
obligations of HHL to HMS at the termination of the Data
Processing Agreement, HMS shall refund such amount to HHL
promptly; to the extent that payments made in advance by HHL
to HMS are less than any obligations of HHL at the termination
of the Data Processing Agreement, HHL shall pay such amount to
HMS promptly.
(e) HHL shall pay to HMS $12,000 per month
in advance for Disaster Recovery, as reduced from time to time
pursuant to Section 3(c)(ii) hereof. Disaster Recovery and the
cost therefor shall be cancelable by HHL on 30 days' advance
written notice to HMS.
(f) HMS shall enter into separate
agreement(s) with any Purchaser(s) (other than HMS) of all or
a portion of the assets or business of HHL, if any, pursuant
to which HMS will commit to provide
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the same data processing services as are to be provided to HHL
pursuant to the Data Processing Agreement, as modified by the
terms specified herein for HHL and subject to the following
additional provisions:
(i) Minimum monthly data processing
fees and Disaster Recovery costs shall be prorated among HHL
and all Purchaser(s) based approximately on revenue as
provided above in Section 3(c) hereof.
(ii) Each additional entity
receiving data processing services shall be required to pay to
HMS $10,000 per month in addition to the fees provided for in
Section 3(c) hereof; provided, however, that any additional
entity which: (1) agrees to receive data processing for 6
months or less; (2) will be converting to another provider of
data processing services (whether pursuant to a license for
AccessLine or another software system); and (3) can be
supported within the current AccessLine framework (e.g., via a
new office/letter code without the need for a separate MVS
partition) shall be exempt from the $10,000 per month payment
and shall be able to terminate services on 30 days written
notice.
(iii) All such agreement(s) with
Purchaser(s) shall terminate eighteen (18) months after 1
November 1996 except as otherwise provided herein.
(iv) If HHL licenses the AccessLine
system and software to one or more Purchaser(s), HMS shall
provide each such Purchaser with a copy of the AccessLine
system and software, as defined in Section 2(a) above,
provided that HMS shall be reimbursed for its reasonable costs
in connection therewith.
(v) HMS shall cooperate in and
provide support for the conversion by any or all Purchaser(s)
from HMS's data processing services to another data processing
system (including processing of AccessLine on another hardware
platform), including but not limited to provision of such
Purchaser's data and documentation, provided that HMS shall be
reimbursed by each Purchaser for its reasonable costs in
connection therewith.
(g) HMS and HHL shall develop, by 31 October
1996 or as soon thereafter as practicable, the form of a
standard agreement for data processing services between HMS
and each such Purchaser, including but not limited to the
terms of subsection (f) above.
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(h) The Data Processing Agreement shall be
deemed to be amended in part as of the Effective Date in
accordance with the terms hereof. Without limiting the
generality of the foregoing, the following specific amendments
and deletions to the Data Processing Agreement shall be deemed
to be effective as of the Effective Date:
(i) Schedules A, B, C and D to the
Data Processing Agreement shall be deleted therefrom in their
entirety and the new Schedules A, B, C and D attached hereto
shall be substituted therefor in their place.
(ii) Items 1 and 2 of Schedule H and
all of Schedule I to the Data Processing Agreement shall be
deleted therefrom in their entirety.
(iii) The following Articles and
Sections shall be deleted in their entirety from the Data
Processing Agreement: Article I, Section 2.3(e), Section
2.4(d), Section 4.1, Section 4.2, Section 6.2, Section 6.3,
Section 9.4(e)(i) and Section 9.5(e)(i).
(iv) Section 2.3(c) and Section
4.3(b) of the Data Processing Agreement are hereby amended so
that the phrase "16 full-time programming support personnel"
shall read "six (6) full time programming support personnel".
Section 4.3(b) of the Data Processing Agreement is hereby
amended so that the phrase "not less than 12 full-time
equivalent support personnel nor more than" shall be deleted
from therefrom. Section 2.3(c) and Section 4.3(b) shall also
be deemed to be further modified pursuant to the terms of
Section 3(a) hereof.
(v) Section 4.7 of the Data
Processing Agreement is amended to conform to the terms of
Section 3(c), (d) and (e) hereof.
(vi) Section 5.1 of the Data
Processing Agreement is amended to conform to the terms of
Sections 3(b) and 3(e) hereof.
(vii) Section 6.1 of the Data
Processing Agreement is amended to conform to the terms of
Section 3(d) hereof.
(viii) Section 10.4 of the Data
Processing Agreement is amended to conform to the terms of
Section 2 hereof.
(ix) Section 11.1 and Section 11.9
of the Data Processing Agreement shall be deemed to be amended
to delete all references therein to the Oversight Committee
and its function.
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(x) In all other respects, following
the Effective Data the Data Processing Agreement shall
continue in full force and effect in accordance with its
terms, as amended hereby. In the event of any inconsistency
between this Agreement and the Data Processing Agreement, this
Agreement shall govern.
(i) Capitalized terms utilized herein and
not defined herein shall have the respective meanings ascribed
to them in the Data Processing Agreement.
Section 4. Intercompany Payments between HMS and HHL. Each of
HMS and HHL:
(a) Shall continue to use its best efforts
to collect all accounts receivable from customers on behalf of
the other which arise in connection with the subcontracts
referred to in Section 1 hereof. For all payments received by
HMS or HHL on behalf of the other after the Effective Date,
each shall promptly remit such payments to the other.
(b) Obtain and/or provide to the other
certain goods and services on a mutually agreeable basis
(including but not limited to voice and data
telecommunications services, laser printing, subleased space,
and support services). Each of HHL and HMS shall promptly pay,
upon receipt of an invoice from the other, for such services
or goods obtained or provided after October 1, 1996.
Section 5. HMS Payables. HMS shall on the date hereof pay
$1,070,000 to HHL and shall waive all future rights of set off, counterclaim,
and recoupment with respect to the accounts payable due and owing from HMS to
HHL. Upon the effectiveness of this Agreement, such amount plus the license fee
for the AccessLine software and system (as per Section 2 hereof) minus the
$200,000 to be retained by HMS pursuant to Section 3(b) hereof shall be wired to
HHL's operating account at First Chicago pursuant to HHL's direction given
hereby, and First Chicago shall debit such account in the amount of $870,000 to
be applied against its HHL loans.
Section 6. Releases.
(a) Background. HMS believes it holds valid
contractual claims of approximately $6 million against HHL.
HHL and First Chicago on the one hand, and HMS on the other
hand, dispute whether the amounts HHL is contractually
obligated to pay HMS for data processing represent above
market amounts. HMS and First Chicago have disputed whether
First Chicago's security interest in HHL's assets is prior to
rights asserted by HMS of recoupment and set off. HMS
represents that it has
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recouped and set off approximately $1,889,000 with respect to
(y) expenses invoiced to HMS which were incurred by HHL on
HMS's behalf and (z) accounts receivable of HHL collected by
HMS prior to the Effective Date.
(b) Release of HHL and First Chicago by HMS.
HMS on behalf of itself, its affiliates, successors and
assigns, in consideration of the mutual covenants and
agreements contained herein, hereby waives, releases and
forever discharges each of HHL and First Chicago, their
respective stockholders, subsidiaries, affiliates, legal
counsel and their successors and assigns (collectively,
"Representatives"), and their respective officers, directors,
employees and agents (collectively, the "Officials") (but only
with respect to actions taken in their respective capacities
as officers, directors, employees and/or agents of HHL or
First Chicago, respectively) from any and all liability
regarding each and every right and claim of any nature
whatsoever related to HHL, in law or in equity, whether known
or unknown and existing as of the Effective Date, against (i)
HHL, its Representatives and Officials, or (ii) First Chicago,
its Representatives and Officials solely in connection with
First Chicago's loans to HHL, in either case including without
limitation, all claims made, relating to or arising, directly
or indirectly, out of rights or actions based upon theories of
contract, tort, set off or recoupment including, without
limitation, any and all claims against HHL arising under the
Data Processing Agreement which accrued on or prior to the
Effective Date (the "HMS Released Claims"); provided, however,
that (x) except as set forth above, HMS shall not be deemed to
have released any of its rights to enforce this Agreement, the
Data Processing Agreement, as amended hereby, and/or any other
rights or obligations under any subcontract agreements
referenced in Section 1 hereof that survive the Effective
Date, and (y) the HMS Released Claims Against HHL shall not be
released to the extent, if any, that HHL becomes a debtor
under Title 11 of the United States Code (a "Debtor") and the
HHL Released Claims or any claims of the estate of HHL arising
solely upon the commencement of a Title 11 case by HHL and
solely as a result of its status as a Debtor ("Estate Claims")
are asserted against HMS.
(c) Release of HMS by HHL and First Chicago.
Each of HHL and First Chicago on behalf of themselves, their
respective affiliates, successors and assigns, in
consideration of the mutual covenants and agreements contained
herein, hereby waives, releases and forever discharges HMS,
its Representatives and its Officials (but only with respect
to actions taken in their respective capacities as Officials
of HMS) from any and all liability regarding each and every
right and claim of any nature whatsoever related to HHL, in
law or in equity, whether known or unknown and existing as of
the Effective Date, against
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HMS, its Representatives and its Officials (but in the case of
First Chicago and its Representatives and Officials, solely in
connection with its loans to HHL), including without
limitation, all claims made, relating to or arising directly
or indirectly, out of rights or actions based upon theories of
contract, tort, set off or recoupment including, without
limitation, any and all claims against HMS arising under the
Data Processing Agreement which accrued on or prior to the
Effective Date (respectively, the "HHL Released Claims Against
HMS" and the "First Chicago Released Claims Against HMS");
provided, however, except as set forth above, that neither HHL
nor First Chicago shall be deemed to have released any of
their respective rights to enforce this Agreement, the Data
Processing Agreement, as amended hereby, any other rights or
obligations under any subcontract agreements referenced in
Section 1 hereof that survive the Effective Date, and/or the
liens and security interests of First Chicago granted by HMS
or its Representatives or Officials, and all documents,
instruments or agreements evidencing or governing the same.
(d) Release of First Chicago by HHL. HHL on
behalf of itself, its affiliates, successors and assigns, in
consideration of the mutual covenants and agreements contained
herein, hereby waives, releases and forever discharges First
Chicago, its Representatives and its Officials (but only with
respect to actions taken in their respective capacities as
Officials of First Chicago and relating to the relationship of
HHL and HMS) from any and all liability regarding each and
every right and claim of any nature whatsoever, in law or in
equity, whether known or unknown and existing as of the
Effective Date, against First Chicago, its Representatives and
Officials and relating to the relationship of HHL and HMS,
including without limitation, all claims made, relating to or
arising, directly or indirectly, out of rights or actions
based upon theories of contract, tort, set off or recoupment
and relating to the relationship of HHL and HMS (the "HHL
Released Claims Against First Chicago", and collectively with
the HHL Released Claims against HMS, the "HHL Released
Claims"); provided, however, that HHL shall not be deemed to
have released any of its rights to enforce this Agreement, the
Data Processing Agreement, as amended hereby, and/or any other
rights or obligations under any subcontract agreements
referenced in Section 1 hereof that survive the Effective
Date.
(e) Release of HHL by First Chicago. First
Chicago on behalf of itself, its affiliates, successors and
assigns, in consideration of the mutual covenants and
agreements contained herein, hereby waives, releases and
forever discharges HHL, its Representatives and Officials (but
only with respect to actions taken in their respective
capacities as Officials of HHL) to the extent relating to the
relationship of HMS and
13
14
HHL from any and all liability regarding each and every right
and claim of any nature whatsoever, in law or in equity,
whether known or unknown and existing as of the Effective
Date, against HHL, its Representatives and Officials and to
the extent relating to the relationship of HHL and HMS,
including without limitation, all claims made, relating to or
arising directly or indirectly, out of rights or actions based
upon theories of contract, tort, set off or recoupment and to
the extent relating to the relationship of HHL and HMS (the
"First Chicago Released Claims Against HHL" and collectively
with the First Chicago Released Claims Against HMS, the "First
Chicago Released Claims"); provided, however, that First
Chicago shall not be deemed to have released (i) any other
rights or remedies against HHL, or any Representatives or
Officials of HHL or of any of its affiliates or subsidiaries,
including, without limitation, its rights or remedies under or
in connection with its amended and restated Term and Revolving
Credit Loan Agreement with HHL or any other agreement,
document or instrument related thereto or delivered in
connection therewith, any indebtedness, liability or
obligation of HHL, its subsidiaries or affiliates thereunder
or related thereto, or any lien, security interest (including
without limitation any security interest in any obligations
owing from HMS to HHL which survive the Effective Date),
encumbrance or right of set off or recoupment arising
thereunder or related thereto, including, without limitation,
the liens and security interests of First Chicago granted by
any Representatives or Officials of HHL or of any of its
affiliates or subsidiaries (excluding therefrom the First
Chicago Released Claims Against HHL), or (ii) any of its
rights to enforce this Agreement, the Data Processing
Agreement, as amended hereby, and/or any subcontract
agreements referenced in Section 1 hereof that survive the
Effective Date.
(f) Use of the HMS Released Claims. In the
event that HHL becomes a Debtor and either HHL or its estate's
representative shall raise any claims against HMS on account
of the HHL Released Claims or the Estate Claims, HMS shall
only use the HMS Released Claims as defenses, set offs, and
recoupments against the HHL Released Claims and the Estate
Claims. In no event shall HMS use the HMS Released Claims to
obtain an affirmative recovery against HHL.
(g) The term "affiliates" when used herein
with respect to HHL shall not include HMS, and the term
"affiliates" when used herein with respect to HMS shall not
include HHL.
Section 7. Waiver of Future Rights. HMS waives all rights of
set off, counterclaim, and recoupment with respect to its payables to HHL, the
exercise of which would be adverse to HHL or First Chicago, including, but not
limited to, the payables to HHL described in Section 4 hereof; provided,
however, that the foregoing
14
15
shall not prevent HMS from asserting any and all of the HMS Released Claims as
counterclaims and/or rights of set off and recoupment against the HHL Released
Claims or any Estate Claims, if such claims are brought by the estate of HHL
against HMS. HMS shall not challenge the allowability of First Chicago's claim
in any case involving HHL under Title 11 of the United States Code and shall not
challenge such claim's priorities, seniority, and secured status.
Section 8. Assignments by First Chicago and HMS. If HHL
becomes a Debtor and (a) the HHL Released Claims or any Estate Claims are
asserted against HMS and (b) HMS pays any amounts to the estate of HHL in
respect of such claims ("HMS Payments"), First Chicago shall transfer to HMS,
promptly after receipt thereof, the amount First Chicago receives from the HHL
estate resulting from the HMS Payments, other than amounts received by First
Chicago as reimbursement of cash collateral used to prosecute the litigation
giving rise to such HMS Payments ("First Chicago HMS Receipts"); provided,
however, that if any portion of the cash collateral used to prosecute the
litigation has not been reimbursed to First Chicago at the time of such receipt
("Unreimbursed Cash Collateral"), First Chicago may deduct from the First
Chicago HMS Receipts to be transferred to HMS an amount equal to the product of
(i) the Unreimbursed Cash Collateral, multiplied by (ii) the quotient obtained
by dividing (A) the First Chicago HMS Receipts by (B) the HMS Payments. First
Chicago shall not consent to any use of its cash collateral to xxx HMS or its
related parties; First Chicago shall not be deemed to have given such consent if
a bankruptcy court has ordered the use of its cash collateral following First
Chicago's objection to such use. If HHL becomes a Debtor and HMS obtains a
distribution from the HHL estate on behalf of any of the HMS Released Claims
notwithstanding Section 7 above, HMS shall transfer to First Chicago, promptly
after receipt thereof, the amount HMS receives on account of those claims,
without set off, counterclaim, recoupment or other defense of any kind. HMS
shall not assign its rights to such distribution without the prior written
consent of First Chicago. To the extent First Chicago and HMS do not agree on
how to enforce this Section 8, they shall each submit the dispute to binding
arbitration in the Borough of Manhattan of New York City under the auspices of,
and in accordance with the rules of, the American Arbitration Association.
Section 9. Power and Authority. Each party signing below
represents and warrants that such party has full power and authority to execute
this Agreement and to perform all covenants and agreements to be performed
hereunder, and that such party has not previously assigned or transferred all or
any part of any claim or right covered by this Agreement. Each party signing
below represents and warrants that all corporate action necessary to execute,
deliver and perform this Agreement and the obligations contained herein has been
duly taken.
Section 10. Benefit of Counsel. Each party hereto represents
and warrants that it has read and reviewed this Agreement in its entirety and
has sought and obtained the benefit of full, complete and competent legal advice
in connection with this Agreement.
15
16
Section 11. Binding Agreement. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns.
Section 12. Entire Understanding; Integration. This Agreement,
together with the Data Processing Agreement as amended herein, contains the
entire understanding among the parties hereto concerning the subject matter
hereof and supersedes and replaces all prior negotiations, proposed agreements
and agreements entered into by any of the parties hereto with respect to the
subject matter hereof and thereof, including, without limitation, the Agreement
In Principle dated 8 October 1996. This Agreement shall be deemed to be an
integrated agreement. Each provision hereof is in consideration of all other
provisions hereof. No provision hereof shall be deemed to be severable.
Section 13. Amendments. This Agreement may be amended,
modified or supplemented only by a writing signed by all the parties hereto.
This Agreement may not be modified orally and any purported oral modification
shall not be effective.
Section 14. Counterparts. This Agreement may be executed in
multiple counterparts and, as long as each party has executed one counterpart,
this Agreement is enforceable.
Section 15. Disclosure. Subject to all rules, regulations and
statutes providing for public or judicial disclosure, and except as disclosure
of this Agreement shall be deemed necessary to attorneys and accounting firms,
representatives, financial advisors, lenders, investment bankers, purchasers or
potential purchasers of all or a portion of the business of any party hereto
that execute an appropriate confidentiality agreement to maintain this Agreement
in strictest confidence, the parties hereto shall keep this Agreement
confidential for the benefit of HHL and its creditors.
Section 16. Headings. All headings contained in this Agreement
are for reference purposes only and shall not be used to interpret this
Agreement.
Section 17. Applicable Law. This Agreement shall be governed
by and construed under the laws of the State of New York with respect to
contracts to be entered into and performed entirely within such state, without
regard to principles of conflicts of law. Each of the parties hereto hereby
irrevocably consents to the service of process in any action or proceeding by
the mailing thereof by United States registered or certified mail postage
prepaid at its address set forth herein.
16
17
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the date first set forth above.
[CORPORATE SEAL] HHL FINANCIAL SERVICES, INC.
By: /s/ Xxxxxx Holster
---------------------------
HEALTH MANAGEMENT SYSTEMS, INC.
[CORPORATE SEAL]
By: /s/ Xxxxxxx Xxxxxx
---------------------------
AS TO SECTIONS 5 THROUGH 17 HEREOF
ONLY
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Xxxxxxxxxx Xxxxxxx
---------------------------
17
18
STATE OF NEW YORK )
) SS.:
COUNTY OF NASSAU )
On Nov. 4, 1996 before me Xxxxx Xxxxx personally came Xxxxxx
X. Holster to me known, who, by me duly sworn, did depose and say that deponent
resides at 0000 Xxxxxxxx Xx., Xxxxxxxx, X.X. that deponent is the President of
HHL Financial Services, Inc., the corporation described in, and which executed
the foregoing Agreement and Release of Claims, that deponent knows the seal of
the corporation, that the seal affixed to the Agreement and Release of Claims is
the corporate seal, that it was affixed by order of the board of the
corporation; and that the deponent signed deponent's name by like order.
/s/ Xxxxx Xxxxx
_______________________________________
Notary Public
[SEAL]
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On October 30, 1996 before me Xxxxxxx X. Xxxxxxxx
personally came Xxxxxxx Xxxxxx to me known, who, by me duly sworn, did
depose and say that deponent resides at 00 Xxxxxxxx Xx., Xxxxxxxx, XX that
deponent is the Chief Financial Officer of Health Management Systems, Inc., the
corporation described in, and which executed the foregoing Agreement and Release
of Claims, that deponent knows the seal of the corporation, that the seal
affixed to the Agreement and Release of Claims is the corporate seal, that it
was affixed by order of the board of the corporation; and that the deponent
signed deponent's name by like order.
/s/ Xxxxxxx X. Xxxxxxxx
________________________________________
Notary Public
[SEAL]
00
XXXXX XX XXXXXXXX )
) SS.:
COUNTY OF XXXX )
On October 31, 1996 before me Xxxxxxxx Xxxxxxx personally came
Xxxxxxxxxx X. Xxxxxxx to me known, who, by me duly sworn, did depose and say
that deponent is the Vice President of The First National Bank of Chicago, the
national bank association described in, and which executed the foregoing
Agreement and Release of Claims.
/s/ Xxxxxxxx Xxxxxxx
________________________________________
Notary Public
[SEAL]
20
SCHEDULE A
PHYSICAL ENVIRONMENT
HARDWARE
HMS will supply Client with a hardware configuration, to satisfy Client
processing requirements of AccessLine and its supplementary reporting system
based on the use of SAS and Tablebase consisting of up to the following as
required to meet service level commitments:
CPU - MIPS 40
MEGABYTES 128
CHANNELS 36
DASD GIGABYTES 172
TAPE 34XX 8
or equivalent equipment
HMS will supply Client with a hardware configuration, to satisfy client
financial requirements of the Xxxx Renaissance Series System, consisting of the
following:
CPU - VAX 4000-3000 - MEGABYTES 32
DASD - R400X Storage - GIGABYTES 4
TAPE - TS207 Tape Drive 1
or equivalent equipment
HMS will supply Client with a communication gateway configuration, to satisfy
handling of all Client related data lines, consisting of the following:
37XX Communications Controller 2
3728 Matrix Switch 1
Communications Channels 4
or equivalent equipment
21
SCHEDULE B
HHL FINANCIAL SERVICES, INC.
SOFTWARE ENVIRONMENT SYSTEMS SOFTWARE (OR EQUIVALENTS)
PRODUCT/FEATURE VENDOR PURPOSE
-------------------------------------------------------------------------------------------------
5665 - XA3 MVS/DFP IBM MVS/ESA
0000 - 000 XXX/XXXX XXX Telecomm
5665 - 327 DFDSS IBM Backup/Restore
5665 - ACF/SSP V3 IBM Telecomm
5665 - 362 netview MVS/XA IBM Telecomm
5665 - 370 MVS/Ditto IBM File Utility
5665 - 402 ISPF/PDFV3 IBM Program Main.
5665 - 488 SDSF IBM Spool Utility
5668 - 854 ACF/NCP for
3725 IBM Telecomm
5668 - 949 SMP/E IBM MVS/ESA
5668 - 958 VS COBAL II IBM Programming
5668 - 962 Assembler
HV2R1 IBM Programming
5685 - 025 TSO/E V2 IBM MVS/ESA
5685 - 029 RMF V4 IBM MVS/ESA
5685 - 054 ISPF V3 IBM Program Main.
5685 - 083 CICS/ESA V3 IBM Telecomm
5695 - 047 JES2 MVS/SP
V4 IBM MVS/ESA
5740 - SM1 OS/VS
Sort/Merge IBM Sort
5740 - XXH RACF IBM Security
DASD Design Strategy DASD Reports
XXXXX/MVS Goal Systems VSAM Bkup/Rstr
VSAM Capacity Plus Softworks VSAM Compress
22
HHL FINANCIAL SERVICES, INC.
SOFTWARE ENVIRONMENT SYSTEMS SOFTWARE
PRODUCT/FEATURE VENDOR PURPOSE
-------------------------------------------------------------------------------------------------
TMON/CICS ESA 1.0 Landmark CICS Perf Mon
XPEDITER/CICS/TSO Compuware CICS Debug
Tubes/VTAM Macro-4 Multi-Sess
SAS (Base.ETS.FSP) SAS Institute 4-GL
STOPX-37.BudgetDASD Empact DASD Mang
PanValet, PanApt Computer Associates Program Maint
JESLOG Ricomm JCL Capture
TABLEBASE Data Kinetics Application Development
VIEW/DELIVER CA Report Management
JOBTRAC CA Job Scheduling
MEDIA CA Tape Management
GROUP 1 SOFTWARE Group 1 Mailing Application
23
SCHEDULE C
PERFORMANCE STANDARDS
I. BASELINE
A) Transaction Volume
Client agrees and understands that the
physical hardware and communications
environments specified in Schedule A have
been configured to provide online services
with the capacity to process up to 1 million
transactions per day under the AccessLine
application.
Client acknowledges that any new product or
service offerings by Client, newly acquired
Applications Software or new acquisitions by
Client may require a re-evaluation of the
current Data Center performance standards.
B) Online Usage
Client agrees and understands that online
availability is based on the current batch
windows agreed upon in Section D below. If
Client requests an extension of the online
window, the system may not come up on time
the following morning.
C) Data Input
Client agrees to submit all data in
accordance with existing standards for input
at the times of batch processing
availability set forth below in Paragraph I
(D) Systems Availability.
D) Systems Availability
1) Holidays Observed
Holidays observed as of the Effective
Date of this Amendment are as follows:
New Year's Day Labor Day
Memorial Day Thanksgiving Day
Independence Day Christmas Day
24
2) On-Line Operating Hours (Client's Local
Office Times)
HMS scheduled hours of on-line operation
as of the Effective Date are as follows:
8:00 AM - 7:30 PM (Local Time) Monday -
Friday
8:00 AM - 12:00 PM (Local Time) Saturday
3) Batch Operating Hours
7:30 PM - 7:30 AM (ET) Monday - Friday
3:00 PM - 8:00 AM (ET) Saturday through
Sunday 8:00 AM - 7:30 AM (ET) Sunday
through Monday
NOTE: If HHL utilizes two CICS Regions
(Production and Branch) Monday -
Friday, end times will be 9:00 PM
Local Time
II. DATA CENTER
A) Online Availability
AccessLine Online Systems shall be available
98% of the time scheduled to be available on
a monthly basis.
Actual online performance will be calculated
monthly by computing the number of hours
that the Central Processing Unit was
actually operational on an online basis as a
percentage of the number of hours it was
scheduled to be operational on an online
basis, exclusive of preventative, but not
scheduled, maintenance. Preventative
maintenance by HMS and the resultant lack of
online systems availability during the above
scheduled hours of operation are that which
are required due to Client's actions.
Downtime caused by Operations error, Systems
error, hardware malfunction, telephone line
failure or Data Center environmental
failures will be included in the calculation
of the online availability statistics.
Downtime caused by client errors,
environmental conditions external to the
client site such as loss of power, air
conditioning and/or acts of God will not be
included in the calculation of the online
availability statistics.
25
B) Response Time
AccessLine response time shall not exceed,
on average, more than three (3.0) seconds
per response, except that the Phoenix office
shall be excluded from this standard.
Response time shall be defined as the time
taken for the Central Processor to receive a
transaction from the 3174 Communications
Controller (or equivalent), process the
transaction, and transmit the resulting
response back to the Controller located at
the client site.
C) Reports
AccessLine critical reports shall be
available for remote printing on time
without significant errors each month.
Actual performance will be calculated
monthly by computing the total number of
critical reports which were available on
time and without significant error to the
number of critical reports which were
scheduled to be available on time and
without significant error. On time is
defined as meeting the standard
corresponding to each critical report as set
forth below not less than 95% of the time.
Critical reports shall include:
ON TIME STANDARD -
REPORT WITHIN:
----------------------------------------------------------------------------
1. Client Remittances 72 hours of client's customary
billing cycle close
2. Accounts Receivable
Statements " " " "
3. Invoices " " " "
4. Status Reports 10 days of client's month end
5. Placement Analysis " " " "
6. Closed " " " "
7. Acknowledgment 48 hours of each loading to
AccessLine of Client's customers'
accounts
26
D) Performance Reports
HMS will report to Client on a daily basis
regarding the matters delineated in
Paragraphs II (A) and (B) above with respect
to its adherence to, or deviation from, the
performance standards set forth in this
Schedule C during both the preceding day and
the current month through such preceding
day. HMS will report to Client on a monthly
basis regarding the matters delineated in
Paragraph II (C) above with respect to its
adherence to, or deviation from, the
performance standards set forth in this
Schedule C during the preceding month.
27
SCHEDULE D
APPLICATIONS SOFTWARE
HMS will utilize AccessLine custom software to provide Client with
functionality needed to perform collection and follow-up services for
Client-related product lines. Software consists of a series of online and batch
programs written in COBOL II utilizing CICS functionality and providing Client
with the ability to inquire and update online and to receive on demand or at
scheduled intervals of time various batch reports that will be used internally
by Client or be distributed by Client to its customers. In addition, certain
applications residing outside the CICS environment (e.g. ARCL) will be
maintained. SAS will be available for use only against AccessLine master files.
HMS will utilize a third party software package from Xxxx called the Renaissance
Series for financial support and associated DEC Software to support the system.
On an ongoing basis, enhancement requests made by Client for purposes of
enhancing software will be recorded weekly by HMS on the HHL Programming Log for
purposes of prioritizing, changing, and implementing such changes. An index of
all AccessLine and related SAS programs and a software tape will be generated to
serve as the baseline of programs available at time of execution of this
Amendment. Thereafter, the index and tape backup will be done not less than on a
quarterly basis to serve as a record of the then-current version of the
software.
28
ATTACHMENT 1
August 1996
ACCESSLINE SERVICE LEVEL COMMITMENTS
This document defines HMS's service level commitments to HHL. Services are
grouped into five tables according to the functional categories listed below.
Within the appropriate category, an entry for each service specifies the unit
of the Data Center responsible for its execution and the commitment according
to which the service will be performed. Please see the HHL Data Center Contact
Matrix for information on who to contact for AccessLine problems and questions.
Revised 24 October 1996
TABLE OF CONTENTS
Routine Operations ...................................... 1
Output Processing ....................................... 4
Telecommunications ...................................... 5
Programming ............................................. 6
AccessLine Administration ............................... 8
29
1. ROUTINE OPERATIONS
Description of Services: Provide and maintain AccessLine, including
online, batch, and referral processing.
(ALL TIMES LISTED ARE EASTERN TIME)
ROUTINE OPERATIONS (1)
Service Responsible Unit Commitment
1. Online Availability Computer Ops AccessLine Dates Start Time End Time
Region(3) Available
Available 98% of time scheduled on monthly basis.
Production Monday-Friday 0800 1930
Saturday 0800 1200
last day of 0800 2100
month
first day of 1100 1930
month
East (Branch) Monday-Friday 0800 1930
Saturday 0800 1200
last day of 0800 2100
month
first day of 1100 1930
month
West Monday-Friday 1100 2230
Saturday 1100 1500
last day of 1100 2400
month
first day of 1400 2230
month
2. Response Time Computer Ops 90% of all transactions completed within 3 seconds.
3. Batch Processing(2) Computer Ops Complete batch processing by 0800 local time, unless on
month end schedule.
4. CIS Download Computer Ops Complete successful download by 0800 local standard time.
(mainframe to field)
-------------------------------------------------------------------------------
AccessLine Service Level Commitments--October 1996 Revised Page 1
30
ROUTINE OPERATIONS(1)
Service Responsible Unit Commitment
5. CIS Data Upload Computer Ops Cutoff for field to upload data to the mainframe: 2100 local standard
(field to mainframe) time.
6. OCM Download Computer Ops Complete successful downloaded by 0800 local standard time.
(mainframe to field)
7. Account loads Computer Ops Type of Referral Accounts loaded within...
(referrals)
under 20K records with no 24 hours
itemized bills and no UB info
under 10K records with 24 hours
itemized bills and UB info
11K-20K records with itemized 48 hours
bills and UB info
over 20K records, pend 7 calendar days
referral and special cleanup
projects
8. ARCL Processing Support existing ARCL loads according to above standards; convert
ARCL to Ad Hoc as programming resource permits.
9. DFU Processing Convert to mainframe operation as soon as possible.
10. DAS Transmission Information available within 3 business days after referral load
(directory assistance)
11. SAS Processing Availability to go directly against VSAM master files during normal run
time. (All direct access against VSAM master files should be coordinated
with Xxxxxx Xxxxxx)
12. Reload client referrals Completed within 72 hours
13. Machine Downtime Problems and abends that affect AccessLine uptime are handled as a
high (12-24 hour) priority. Information will be communicated to users
as soon as it is received by Computer Ops.
-----------------------------------------------------------------------------------------------------------------------------
AccessLine Service Level Commitments-October 1996 Revised Page 2
31
PLEASE NOTE:
1. The Data Center is closed and AccessLine is unavailable on the
following days: New Years Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, Christmas Day.
2. Nightly batch processing may be delayed at month-end due to the need for
additional online time required to post payments. If necessary, the Data
Center reserves the right to cancel lower priority batch jobs to maintain
daytime online availability.
3. When East and West regions are consolidated into Branch region, Monday-
Friday end times will be 2100 hours local time.
-------------------------------------------------------------------------------
AccessLine Service Level Commitments -- October 1996 Revised Page 3
32
II. OUTPUT PROCESSING
Description of Services: Produce and distribute AccessLine output, including
letters, statements and reports.
OUTPUT PROCESSING
Service Responsible Unit Commitment
1. Letter Processing HMS Computer Ops Letters at U.S.P.S. the next business day after requested (on an
exception basis, may require additional days during times of
increased online time and corresponding batch delays but not later
than third business day after requested.)
2. Acknowledgement Reports Sent to HHL office within 1 day from date of account load
3. Month-end Processing
Client Remittances, Reports printed for all remittances within 3 calendar days
Invoices and following weekend or month-end date
Statements
Statistics Completed by the first business day following month-end
A/R Trial Balances Completed by the second business day following weekend or
month-end
All remaining month-end I/O Control Delivered/transmitted to field locations and/or HHL clients
processing, report within 10 calendar days after month-end
printing and distribution
One copy of all reports will be printed at the data center. Additional copies
will be remoted to office for printing.
AccessLine Service Level Commitments-October 1996 Revised Page 4
33
III. TELECOMMUNICATIONS
Description of Services: Respond to requests for installations and changes in
both voice (telephone, predictive dialer) and data (terminal to mainframe
connections). Maintain network infrastructure.
TELECOMMUNICATIONS
Service Responsible Unit Commitment
------ ----------------- ----------
1. New dedicated lines Communications Services Within 30 business days after approval.
(installations or office moves, Unit Dependent on phone company installation.
T-1s or 800 numbers)
2. New dial-up terminal 30 business days after approval, provided client AHA number
("Beehive")** is supplied. Dependent on phone company installation.
3. Discontinue Service** Hub sites (Woodbury, Eatontown, Miami, Atlanta, Lincolnwood,
Phoenix, and North Hollywood): 90 business days after
approval. All other sites: 10 business days notice
4. Strategic Infrastructure To be determined on a case-by-case basis according to size
Projects and scope of project. Requires prior HHL management
approval.
5. Implementation of PC file Refer to "Programming and Data Exchange Protocol."
transfers
6. Maintenance and testing of Regions will be notified 30 days prior to scheduled test
communication component of procedures.
disaster recovery plan
------------------------------
** Request forms and existing protocols for these services can be found in
the "Accessline Data Network TSU Binder." However, some service levels
in the existing protocol may have been altered. Current service level
commitments are reflected in this table.
--------------------------------------------------------------------------------
AccessLine Service Level Commitments--October 1996 Revised Page 5
34
IV. PROGRAMMING
-----------------------------------------------------------------------------------------------------------------------------
PROGRAMMING
-----------------------------------------------------------------------------------------------------------------------------
SERVICE RESPONSIBLE UNIT COMMITMENT
-----------------------------------------------------------------------------------------------------------------------------
1. Add task to Programming Log/ HMS/HHL Within 10 business days
Assign priority management,
AccessLine Support
----------------------------------------------------------------------------------------------------------------------------
2. Programming(1) Programming Effort Elapsed Time(2)
-------------------------------------------- -------------------------------------------------
Critical Production Problems (Walk-ins) Dependent on task As soon as possible.
-------------------------------------------- -------------------------------------------------
New Business Standard HHL 800 Referrals 8-20 hours 14 calendar days
(no reformatting necessary) Depending on
resources
-------------------------------------------- -------------------------------------------------
Simple reformats (convert 40-60 hours To be determined
into standard 800 format) depending on
resources.
-------------------------------------------- -------------------------------------------------
Custom Reformats (medium 60-100 hours To be determined
complexity, multi-file/ depending on
multi-record structure) resources.
-------------------------------------------- -------------------------------------------------
Complex referrals (complex over 100 hours To be determined
file structures; may require depending on
enhancements to resources.
AccessLine functionality)
-------------------------------------------- -------------------------------------------------
Corporate Development Detailed project estimate/plan based on the
formula below
--------------------------------------------
Enhancements Elapsed business days = Total effort (hours)
-------------------------------------------- -------------------
Maintenance/Production Problems 7 x % programmer's time allocated to task
-----------------------------------------------------------------------------------------------------------------------------
----------------------------
(1) Programming includes systems analysis and specification writing, coding, and
initial testing. Service levels assume that measurement begins once a task
has been prioritized as high or medium and assigned to an available
programming resource.
(2) For all referral, additional time may be required for user/client
interaction.
-------------------------------------------------------------------------------
AccessLine Service Level Commitments -- October 1996 Revised Page 6
35
PROGRAMMING
-------------------------------------------------------------------------------------------------------------------
SERVICE RESPONSIBLE UNIT COMMITMENT
-------------------------------------------------------------------------------------------------------------------
3. PROGRAMMING STAFF PROGRAMMING SIX PROGRAMMERS/ANALYSTS UNTIL 8 APRIL 1997.
FIVE UNTIL 8 JULY 1997. FOUR THEREAFTER
-------------------------------------------------------------------------------------------------------------------
4. TEST ENHANCEMENT HHL/USERS DEPENDENT UPON COMPLEXITY OF THE TASK AND
USER AVAILABILITY
-------------------------------------------------------------------------------------------------------------------
5. IMPLEMENT ENHANCEMENT/ HHL/COMPUTER NEXT VERSION CONTROL DATE AFTER TASK IS
COMMUNICATE CHANGES TO USERS OPS COMPLETED (VERSION CONTROL OCCURS TWICE
PER MONTH)
-------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------
ACCESSLINE SERVICE LEVEL COMMITMENTS -- OCTOBER 1996 REVISED PAGE 7
36
V. ACCESSLINE ADMINISTRATION
Description of Services: Provide support to AccessLine users and clients in
their use of AccessLine System.
ACCESSLINE ADMINISTRATION
Service Responsible Commitment
Unit
1. Client Profile Updates HHL Ops
AHA Code/Temporary Complete within 24 hours.
AHA Code Assignment
Branch Address Update as needed, in conjunction with Letter projects.
Report Setup Complete within 24 hours.
2. Carrier Directory Updates Complete within 5 days.
For critical changes, call Xxxx XxXxxxxxxx at
(000) 000-0000. These will be completed within 24 hours.
3. Reports (lost, special requests) Computer Ops Urgent reports: within 48 hours.
User should fax completed Report Request Form
(attached) to (000) 000-0000.
Non-urgent reports: within 5 working days. May be
dependent on Programming and/or Operations.
Information communicated to user as soon as it is
received.
4. AccessLine System Table Updates HHL Ops Complete within 48 hours.
(Status Messages, Close
Reasons, Variant, Profit
Center, Report Tables,
closing schedule, Special
Dates Tables, Associate
Attorney additions and
modifications)
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AccessLine Service Level Commitments -- October 1996 Revised Page 8
37
ACCESSLINE ADMINISTRATION
Service Responsible Commitment
Unit
5. Maintenance of AccessLine Security HHL Ops Account Representative IDs: completed within 48 hours.
(RACF User security. Controls
functions and AccessLine IDs with "PM" level and above: requests reviewed by
assignment of security levels, Xxxxxx Xxxxxx as needed.
including password assignment)
6. Letter Enhancements HHL Ops Monitor and coordinate letter request with Compliance personnel
(Letter text, RE Criteria, (when text changes are requested) and User.
or Pointer Files)
Complete within 48-72 hours of receiving compliance approval,
if no programming intervention needed.
Complete within one week if programming intervention is required.
7. Communications HHL Ops
Programming Log Maintenance Distribute every 2 weeks.
Request Received Log
AccessLine Enhancement Screen Complete before or when enhancement goes live.
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AccessLine Service Level Commitments -- October 1996 Revised Page 9
