Exhibit 10.2
I. T. SUPPORT AGREEMENT
THIS I. T. SUPPORT AGREEMENT ("Agreement") dated as of
____________________, 1999, is entered into by SHOPKO STORES, INC., a Wisconsin
corporation ("ShopKo"), and PROVANTAGE HEALTH SERVICES, INC., a Delaware
corporation ("ProVantage").
RECITALS
WHEREAS, ShopKo, through its indirect, wholly-owned subsidiary ProVantage,
provides health benefit management and health information technology products
and services to the health care industry (the "ProVantage Business"); and
WHEREAS, this Agreement is entered into in conjunction with an initial
public offering of ProVantage's Class A common stock, $.01 par value per share
(the "ProVantage IPO"); and
WHEREAS, after the ProVantage IPO, ProVantage will continue to need certain
information technology services, products and support to be provided by ShopKo
to ProVantage with respect to the operation of the ProVantage Business for a
period of time from and after the Closing Date (as hereafter defined); and
WHEREAS, the parties desire to enter into an agreement to provide for such
services.
NOW, THEREFORE, in consideration of the premises and the mutual promises of
the parties contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the indicated
meanings:
"Affiliate" means, with respect to a specified Person, any Person that,
directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, the specified Person.
"Base Fee" means the amount identified on Exhibit A attached hereto. The
Base Fee shall be paid for the Services described hereunder, exclusive of any
Service Upgrades.
"Closing Date" means the date the ProVantage IPO is consummated.
"Data" means all data used in the ProVantage Business, whether owned by
ProVantage or by a ProVantage customer, which is provided to ShopKo in
connection with the Services.
"FTE" means the equivalent of a full time employee. For purposes of this
Agreement, an FTE shall be equal to 154 work hours per month.
"Person" means any individual, partnership, joint venture, corporation,
trust, unincorporated organization, limited liability company or other business
entity.
"ProVantage Confidential Information" means Data and other confidential
data provided by ProVantage or ProVantage's customers to ShopKo in accordance
with this Agreement; and any information with respect to ProVantage's
information systems operations, including without limitation all information
with respect to the ProVantage Hardware and the ProVantage Software.
"ProVantage Hardware" means the computer equipment and telecommunications
equipment owned or leased by ProVantage from time to time during the term of
this Agreement and used by ShopKo to provide the Services to ProVantage.
"ProVantage Software" means the software owned or licensed by ProVantage
from time to time during the term of this Agreement and used by ShopKo to
provide the Services to ProVantage.
"Services" means those data processing and related information technology
services to be conducted by ShopKo on behalf of ProVantage as set forth on
Exhibit B attached hereto, and as the same may be amended and revised from time
to time.
"ShopKo Confidential Information" means any and all information with
respect to ShopKo's information systems operations, including without limitation
all information with respect to the ShopKo Hardware and the ShopKo Software.
"ShopKo Hardware" means the computer equipment and telecommunications
equipment owned or leased by ShopKo from time to time during the term of this
Agreement and used to provide the Services to ProVantage. The current ShopKo
Hardware is identified on Exhibit A attached hereto.
"ShopKo I.S. Employees" means the computer operators, operating systems
technicians, help desk staff, end user support staff, LAN administrators,
telecom analysts and other individuals who are employed or contracted by ShopKo
and who are made available to provide the Services to ProVantage. The number of
ShopKo I.S. Employees in the various areas who will provide Services hereunder
for and in consideration of the Base Fee are identified on Exhibit A attached
hereto.
"ShopKo Software" means the software owned or licensed by ShopKo from time
to time during the term of this Agreement and used to provide the Services to
ProVantage. The current ShopKo Software is identified on Exhibit A attached
hereto.
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"Transition Period" means the 180 day period following the date on which
(i) this Agreement expires or is terminated, or (ii) any of the Services are
terminated pursuant to Section 15.1(c) of this Agreement.
ARTICLE II
TERM
The initial term of this Agreement shall commence on the Closing Date and,
except as otherwise provided below, continue until January 31, 2001. This
Agreement shall be renewed automatically thereafter for successive one-year
terms unless either ProVantage or ShopKo elects not to renew this Agreement by
giving the other party written notice of its intention not to renew the
Agreement not less than one hundred eighty (180) days prior to the end of the
then current term. Either party may terminate any specified Service under the
prior notice provision in Section 15.1(c).
ARTICLE III
SERVICES
Section 3.1. Provision of Services. In consideration of the Base Fee,
ShopKo agrees to provide to ProVantage the Services during the term of this
Agreement. The entire Base Fee shall be charged regardless of whether all of the
Services have been utilized in any given period.
Section 3.2 Hardware and Software. In providing the Services to ProVantage,
ShopKo shall utilize the ProVantage Hardware, ShopKo Hardware, ProVantage
Software, and ShopKo Software to the same extent such hardware and the software
have been utilized prior to the date of this Agreement; provided, however, that
ShopKo may provide the Services with different or additional computer equipment
and/or software.
Section 3.3 ShopKo I.S. Employees. ShopKo shall make the ShopKo I.S.
Employees available to provide the Services to ProVantage to the same extent
such employees were made available to ProVantage prior to the date of this
Agreement provided, however, that ShopKo shall only be required to provide the
number of FTEs of each of these ShopKo I.S. Employees as set forth on Exhibit A.
ShopKo and ProVantage acknowledge that the employees constituting the "ShopKo
I.S. Employees" are likely to change from time to time, and that at certain
times it is possible that staffing shortages may exist. ProVantage acknowledges
that some of the ShopKo I.S. employees may be independent contractors or
subcontractors.
Section 3.4. Access. ProVantage shall provide ShopKo and its employees and
agents access to ProVantage's facilities as necessary to provide ProVantage with
the Services. ShopKo shall provide ProVantage and its employees and agents
access to ShopKo's facilities on a basis consistent with past practices.
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Section 3.5. Modifications, Upgrades, etc. The parties acknowledge that
modifications, upgrades, and additions to the ShopKo Hardware, the ProVantage
Hardware, the ShopKo Software and the ProVantage Software and additional ShopKo
I.S. Employees may be necessary to adequately service the ProVantage Business
due to additional customers, new services, acquisitions, technological changes,
competitive pressures or otherwise (collectively, "Service Upgrades"). Charges
for Service Upgrades are not included in the Base Fee. The parties agree to
negotiate in good faith regarding any Service Upgrades. It is the intention of
the parties that to the extent practicable, ShopKo will use reasonable efforts
to provide ProVantage with any reasonable Service Upgrades requested by
ProVantage, and that the parties will negotiate reasonable fees, reimbursement
rates or other charges to adequately compensate ShopKo for the Service Upgrades.
The rates and fees listed on Exhibit A as components of the Base Fee were
derived as incremental costs to ShopKo only, and many of these rates and fees do
not reflect capitalization, or other amortization allocation of significant
initial investments made by ShopKo. Accordingly, rates and fees for Service
Upgrades could vary significantly from those set forth on Exhibit A.
Unless otherwise expressly agreed by ProVantage and ShopKo, ProVantage
shall have sole financial responsibility for any modifications, upgrades or
additions to the ProVantage Hardware and the ProVantage Software.
Section 3.6. Subsidiaries. The parties hereto agree that (i) the Services
to be provided to ProVantage under this Agreement will, at ProVantage's request,
be provided to subsidiaries of ProVantage and (ii) ShopKo may satisfy its
obligation to provide or procure the Services hereunder by causing one or more
of its subsidiaries to provide or procure such Services. With respect to
Services provided to, or procured on behalf of, any subsidiary of ProVantage,
(i) ProVantage agrees to pay on behalf of such subsidiary all amounts payable by
or in respect of such Services and (ii) references in this Agreement to
ProVantage shall be deemed to include such subsidiary.
ARTICLE IV
PERFORMANCE
Section 4.1. Standard of Performance; Remedies; Consequential Damages. In
performing its obligations under this Agreement, ShopKo represents that it will
use the same standard of care and good faith as it uses in performing services
for its own account. ShopKo agrees to exercise reasonable diligence to correct
errors or deficiencies in the Services provided by it hereunder. EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, SHOPKO MAKES NO REPRESENTATION OR
WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY
REPRESENTATION OR WARRANTY AS TO MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, ARISING OUT OF THIS AGREEMENT AND THE SERVICES TO BE PROVIDED
HEREUNDER. The sole remedy of ProVantage for any claim relating to the
performance or nonperformance of the Services shall be a refund by ShopKo to
ProVantage of any charges or fees paid for the applicable Services. In addition,
in no event shall either party be
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liable to the other for special, punitive, incidental or consequential damages
arising out of this Agreement.
Section 4.2. Annual and Interim Reviews. On or about the first anniversary
of the Closing Date and annually thereafter until termination, ShopKo and
ProVantage agree that they will review the scope and pricing of the Services
being provided as of the applicable annual review date. Interim reviews may also
be scheduled by either party upon providing 30 days advance written notice. Each
such review and any resulting amendment of the Services and the fees therefor
will be undertaken in good faith and with as much advance notification, lead
time and discussion as is reasonable under the circumstances, in the spirit of
providing appropriate services to ProVantage at a fair cost and without undue
burden to ShopKo. Accordingly, before any termination or significant alteration
of the scope of Services is made, the parties shall take into account all
elements of cost, inconvenience and other direct and indirect impact on both
parties of terminating or altering the Services. Consent to terminate or alter
the scope of the Services will not be unreasonably withheld by either party.
ARTICLE V
SUBCONTRACTING
Section 5.1. Subcontractors. ShopKo may hire or engage one or more
subcontractors to perform any or all of its obligations under this Agreement.
ShopKo shall promptly notify ProVantage of its intent to enter into any
subcontract. ShopKo is responsible for monitoring and managing the performance
of all subcontractors. ShopKo shall require such subcontractors, as a condition
to their engagement, to agree to be bound by the provisions substantially
identical to those included in this Agreement. Subject to Section 4.1 hereof,
ShopKo shall in all cases remain primarily responsible for all obligations
undertaken by it in this Agreement with respect to the scope, quality and nature
of the Services provided to ProVantage. If, as the result of ShopKo's
subcontracting any Service, the performance of that Service falls below the
level of ShopKo's previous actual, typical performance, then ShopKo shall work
with the subcontractor to restore the performance of that Service to such
previous actual, typical performance level. Even if an inadequacy in a
subcontractor's performance does not amount to a breach of this Agreement or
inadequate performance, if ProVantage is dissatisfied with the performance of
any subcontractor, ProVantage shall promptly notify ShopKo and ShopKo and
ProVantage shall discuss means to resolve ProVantage's dissatisfaction.
ARTICLE VI
FEES
Section 6.1. Payment. ProVantage agrees that in consideration of the
Services described in this Agreement, ProVantage shall pay ShopKo the Base Fee
as amended and revised from time to time by mutual agreement. ProVantage shall
also pay ShopKo for all Service Upgrades in accordance with agreed upon rates
and fees. In addition, ProVantage shall reimburse ShopKo for all direct and
identifiable costs and third-party disbursements incurred by ShopKo in
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performing the Services, provided ProVantage has approved any such costs and
disbursements in advance. In the event that any Services are terminated during a
fiscal year, payments shall be made for such Services through the effective date
of cancellation, said payments to be a pro rata portion of the charges for such
Services. ProVantage shall also pay ShopKo for any pre-approved costs or
disbursements, plus costs associated with ShopKo Hardware or ShopKo Software
purchases or other long-term commitments or investments made by ShopKo in
reliance upon this Agreement, provided ProVantage has approved any such costs,
commitments or investments in advance. The parties acknowledge that no such
costs, commitments or investments exist as of the date of this Agreement.
Section 6.2. Payments For Third Party Software Upon Disaffiliation. If
ProVantage and ShopKo cease to be Affiliates, ProVantage shall pay such license
fees, and any applicable or related taxes, for the Software as are required by
the third party to enable ShopKo to continue to provide the Services.
ARTICLE VII
INVOICES AND PAYMENT
Section 7.1. Billing and Payment. ProVantage shall pay the Base Fee for
Services rendered within each month during the term of this Agreement within
thirty (30) calendar days after the end of each such month. No invoices for the
Base Fee shall be sent, and no backup documentation shall be required for the
Services included in the Base Fee.
The fees for Service Upgrades shall be invoiced monthly by the thirtieth
(30th) calendar day of the calendar month next following the calendar month in
which the Service Upgrades were performed. Such invoices shall specify the value
of Service Upgrades determined in accordance with the agreed upon arrangements,
and shall be accompanied by supporting detail, and shall be due and payable
thirty (30) days from receipt thereof.
ARTICLE VIII
TRANSFER AND PROPERTY TAXES
Section 8.1. Allocation Of Responsibility For Certain Taxes. ProVantage
will reimburse ShopKo for all sales, use or excise taxes levied on amounts
payable by ProVantage to ShopKo pursuant to this Agreement, provided that
ProVantage shall not be responsible for remittance of such taxes to applicable
tax authorities. ProVantage shall not be responsible for any ad valorem, income,
franchise, privilege, value added or occupational taxes of ShopKo. ShopKo shall
cooperate with ProVantage's efforts to identify taxable and nontaxable portions
of amounts payable pursuant to this Agreement (including segregation of such
portions on invoices) and to obtain refunds of taxes paid, where appropriate.
ProVantage may furnish ShopKo with certificates or other evidence supporting
applicable exemptions from sales, use or excise taxation.
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ARTICLE IX
OWNERSHIP OF DATA
Section 9.1. Ownership Of Data. The Data is the exclusive property of
ProVantage or its customers. Any data about which there is an ambiguity as to
ownership shall be treated as Data and subject to the provisions of this
Agreement until its ownership is resolved. This Agreement does not purport to
address the ownership of any data other than Data.
Section 9.2. Use of Data. ShopKo shall use the Data only in providing
Services pursuant to this Agreement. Except as otherwise expressly agreed in
writing, ShopKo shall not and shall not attempt to sell, license, provide,
disclose, use, pledge, hypothecate, and/or in any other way transfer the Data.
All such attempts shall be void and without legal effect. ShopKo may use the
Data for such other purposes as ProVantage and ShopKo may agree in writing.
Section 9.3. Risk of Data Loss. When Data is in ShopKo's possession or
under ShopKo's control and an event occurs that prevents or hinders the access
to or reliable use of such data, ShopKo shall use reasonable efforts to cure and
re-create or restore such data as promptly as practicable.
Section 9.4. Data Security. ShopKo shall maintain safeguards for protecting
against the loss and disclosure of the Data no less rigorous than such
safeguards as are in effect on the Closing Date. ShopKo acknowledges that as a
holder or recipient of health care claims information, ProVantage is and shall
continue to be subject to special restrictions regarding the treatment and
handling of the data. ShopKo agrees to comply with all reasonable requests made
by ProVantage in this regard, provided that any incremental costs incurred by
ShopKo associated with such requests shall be billed to ProVantage as costs of
Service Upgrades.
Section 9.5. Media Containing Data. As between ProVantage and ShopKo,
ProVantage is the exclusive owner of all Data recorded on any media irrespective
of which party owns the media.
ARTICLE X
SOFTWARE PROTECTION
Section 10.1. Protection of Software Rights Against Third Parties. If
either party to this Agreement shall become aware of any infringement or
misappropriation by any third party of the intellectual property rights of the
other party, it shall promptly give notice to the other party of such
infringement or misappropriation. The owner of such intellectual property may,
at its expense, institute suit against such third party, and the other party
shall fully cooperate with the owner to enjoin such infringement or
misappropriation and if reasonably necessary, shall, if requested, join with the
owner as a party to any action brought by the owner for such purpose. The owner
shall bear all expenses connected with such suit, provided, however, that if the
other party desires to retain its own counsel, it shall do so at its own cost
and expense. Each party hereby agrees to defend, indemnify and hold harmless the
other party for any costs, losses, or
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expenses related to any claim of infringement or misappropriation of the
indemnifying party's intellectual property.
ARTICLE XI
SOFTWARE OWNERSHIP
Section 11.1. Software Ownership. ShopKo acknowledges that is has no
ownership interest in the ProVantage Software. ProVantage acknowledges that it
has no ownership interest in the ShopKo Software. If during the term of this
Agreement ShopKo or ProVantage develops, purchases or licenses software which is
utilized by ShopKo to provide the Services to ProVantage, such software shall be
the property of ShopKo or ProVantage, respectively and shall be considered
"ShopKo Software" or "ProVantage Software", respectively for purposes of this
Agreement unless ShopKo and ProVantage agree otherwise in writing.
ARTICLE XII
CONFIDENTIAL INFORMATION
Section 12.1. Confidential Information. Except as otherwise provided in
this Agreement, the ProVantage Confidential Information and the ShopKo
Confidential Information (collectively, the "Confidential Information") is
proprietary to ProVantage and ShopKo, respectively, and may not be used by the
other party hereto except to carry out the parties' respective obligations under
this Agreement.
Section 12.2. Excluded Information. Information is not considered
Confidential Information to the extent that such information:
(a) is or becomes publicly available other than as a result of any
breach of this Agreement;
(b) is or becomes available to a party from a source that, to that
party's knowledge, is lawfully in possession of that information and is not
subject to a duty of confidentiality, which is violated by that disclosure;
or
(c) is independently developed without reference to the Confidential
Information.
Section 12.3. Standard Of Care. Except as otherwise set herein, each party
shall use at least the same degree of care in maintaining the confidentiality of
the other party's Confidential Information as is normally used with respect to
its own proprietary or confidential information.
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Section 12.4. Permitted Disclosures. Either party may disclose Confidential
Information to its respective employees or agents, on a need-to-know basis, in
order to fulfill its obligations under this Agreement.
Section 12.5. Required Disclosures. Either party may disclose Confidential
Information in response to a request for disclosure by a court or another
governmental authority, including a subpoena, court order, or audit-related
request by a taxing authority. Either party may also make disclosures of
Confidential Information as may be required under applicable securities laws or
the rules and regulations of each party's respective stock exchange. Prior to
any disclosure of Confidential Information pursuant to this Section, however,
the disclosing party shall make a good faith attempt to notify the other party
in advance to allow the non-disclosing party the opportunity to seek a
protective order or other injunctive relief.
Section 12.6. Confidentiality And Third Parties. If ShopKo engages a
subcontractor to perform any of its obligations under this Agreement and such
subcontractor has access to ProVantage Confidential Information, ShopKo shall
advise such subcontractor of the confidentiality requirements of this Agreement.
Section 12.7. Irreparable Harm. The parties acknowledge that any disclosure
or misappropriation of Confidential Information in violation of this Agreement
could cause irreparable harm, the amount of which may be extremely difficult to
estimate, thus making any remedy at law or in damages inadequate. Each party
therefore agrees that the other party shall have the right to apply to any court
of competent jurisdiction for a temporary or provisional order restraining any
breach or impending breach of this Article XII. This right shall be in addition
to any other remedy available under this Agreement.
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ARTICLE XIII
KEY EMPLOYEES
Section 13.1 Employees. During the term of this Agreement and for a period
of two years thereafter:
(a) neither ProVantage nor any of its direct or indirect subsidiaries
(whether now owned or hereafter acquired) shall solicit for hire any
employees of ShopKo or any of ShopKo's direct or indirect subsidiaries
(other than ProVantage and its subsidiaries), and
(b) neither ShopKo nor any of its direct or indirect subsidiaries
(other than ProVantage and its subsidiaries) shall solicit for hire any
employees of ProVantage or any of its direct or indirect subsidiaries.
This covenant may be waived only with the prior written consent of the other
party.
Nothing in this Article XIII shall be deemed or construed to prevent
solicitation, recruitment or hiring of any employee of the other party who first
initiates contact with the soliciting, recruiting or hiring party, provided that
neither party shall engage in any activity intended to encourage the other
party's employees to initiate such contact. General advertisements shall not be
deemed violative of this restriction.
ARTICLE XIV
FORCE MAJEURE AND DISASTER RECOVERY
Section 14.1. Force Majeure. Each party shall be excused for failure to
perform any part of this Agreement due to events beyond its control, including
but not limited to fire, storm, flood, earthquake, explosion, accident, riots
and other civil disturbances, sabotage, strikes or other labor disturbances,
injunctions, transportation embargoes or delays, failure of performance of third
parties necessary for the parties' performance under this Agreement (other than
third parties engaged by ShopKo pursuant to Article V), or the laws or
regulations of the federal, state or local government or breach or agency
thereof; provided, however, no force majeure event shall excuse the obligation
of the party claiming the benefit of a force majeure event from paying the
applicable fees for any services provided by the other party.
ARTICLE XV
TERMINATION
Section 15.1. Termination. This Agreement and the scope of the Services may
be reduced, suspended, or terminated as follows:
(a) Either party hereto may terminate this Agreement immediately upon
written notice to the other party (i) in the event of the other party's
voluntary bankruptcy or
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insolvency, (ii) in the event that the other party shall make an assignment
for the benefit of creditors, or (iii) in the event that a petition shall
have been filed against the other party under a bankruptcy law, a corporate
reorganization law or any other law for relief of debtors (or other law
similar in purpose or effect).
(b) If either party hereto (the "Defaulting Party") shall fail
adequately to perform in any material respect any of its material
obligations under this Agreement, whether voluntarily or involuntarily or
as a result of any law or regulation or otherwise, the other party hereto
shall have the option to terminate this Agreement upon sixty (60) days'
written notice (which shall be reduced to thirty (30) days' written notice
in the event of a failure to make payment in accordance with the terms
hereof) to the Defaulting Party specifying the respects in which the
Defaulting Party has so failed to perform its obligations under this
Agreement, unless during such period the Defaulting Party shall have
substantially remedied the default therein specified.
(c) Either party may, at any time prior to the expiration of this
Agreement or any extension thereof, terminate any of the Services upon one
hundred twenty (120) days' prior written notice from the party desiring
such termination. For purposes of this Section 15.1(c), Services may only
be terminated to the extent such Services can reasonably be discontinued
without additional cost to ShopKo. If this Agreement is terminated by
ProVantage pursuant to this Section 15.1(c), ProVantage shall reimburse
ShopKo for any costs associated with ShopKo Hardware or ShopKo Software
purchases or other long-term commitments made by ShopKo in reliance upon
the existence of this Agreement. Additionally, ProVantage shall be
responsible for all costs related to any commitments made by ShopKo with
respect to all previously agreed upon Service Upgrades.
ARTICLE XVI
TRANSITION ASSISTANCE; SURVIVAL
Section 16.1. Transition Assistance By ShopKo. Upon expiration or
termination of this Agreement for any reason whatsoever, or upon termination of
any of the Services pursuant to Section 15.1(c) above, ProVantage and ShopKo
agree that ShopKo shall provide assistance to ProVantage to obtain services to
replace the affected Services in accordance with this Section 16.1.
A. During the Transition Period, ShopKo shall provide to ProVantage
all assistance reasonably requested by ProVantage to allow the Services to
continue without interruption or adverse effect and to facilitate the
orderly transfer of responsibility for the Services. Services provided
during the Transition Period will be provided by ShopKo at the rates then
in effect pursuant to this Agreement.
B. ShopKo may provide transition assistance after the Transition
Period at market rates. ShopKo shall endeavor to utilize any existing
ShopKo resources and personnel to provide this assistance and the services
in Subsection C below, to the extent reasonably
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possible. If the assistance requires resources in addition to those
regularly used in the daily performance of Services, ProVantage will pay
ShopKo for such assistance on a time and materials basis.
C. Upon expiration or termination of this Agreement or with respect
to any particular Data, on such earlier date that the same shall be no
longer required by ShopKo in order for it to render the Services hereunder,
such Data shall be, at ProVantage's election and expense, (i) erased from
the data files maintained by ShopKo, or (ii) returned to ProVantage by
ShopKo in a form reasonably requested by ProVantage.
Section 16.2. Survival. Articles IX, X, XI, XII and XVI of this Agreement
shall survive the termination or expiration of this Agreement.
ARTICLE XVII
AUDITING RIGHTS
Section 17.1. Operational Audit. ProVantage and its representatives, at
ProVantage's expense and upon reasonable notice to ShopKo, shall have the right
to conduct an audit of ShopKo's operations used in providing the Services (i) on
an annual basis and (ii) more frequently as reasonably requested by ProVantage
to the extent that such audit will not unreasonably disrupt the operations of
ShopKo, in order to verify that ShopKo is exercising reasonable operational
procedures in accordance with the customary standards of the health benefit
management and healthcare information technology industries in its performance
of the Services. ShopKo will provide ProVantage and its representatives access
to the ShopKo facilities at which ShopKo is performing the Services, to ShopKo's
personnel engaged in performing the Services, to existing Data and work product
located at ShopKo facilities and to reasonably related documentation. ShopKo
will provide to ProVantage and its representatives any assistance that they
reasonably require in connection therewith at no additional charge to
ProVantage, provided, however, that ProVantage shall pay ShopKo, at rates then
in effect pursuant to this Agreement, for any technical resources and
application development time used by ShopKo and any other reasonable additional
costs of ShopKo necessary for the audit and not otherwise provided to ProVantage
hereunder.
Section 17.2. Record-Keeping Audits of Charges. ShopKo shall maintain
complete and accurate books, records and accounts to support and document all
charges to ProVantage for Service Upgrades. ShopKo shall retain such records for
three (3) years after creation, or for such longer period as required to comply
with government requirements, as directed in writing by ProVantage. ShopKo shall
permit ProVantage or its representatives access to ShopKo's facilities to
perform an audit of ShopKo's records to the extent necessary to verify ShopKo's
charges billed to ProVantage (i) on an annual basis and (ii) more frequently as
reasonably requested by ProVantage if and to the extent that such audit will not
unreasonably disrupt the operations of ShopKo.
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ARTICLE XVIII
NOTICES AND OTHER COMMUNICATIONS
Section 18.1. Notice. Any notice, request, designation, direction, demand,
election, acceptance or other communication shall be in writing and shall be
effective and deemed to have been given when it is (i) mailed postage prepaid,
by certified first class mail, return receipt requested, addressed to a party
and received by such party; (ii) hand or courier delivered; or (iii) sent by
telecopy with receipt confirmed, as follows:
If to ShopKo,
ShopKo Stores, Inc.
000 Xxxxxxx Xxx
Xxxxx Xxx, XX 00000
Telecopy: (000) 000-0000
Attention: Chief Information Officer
cc: General Counsel
If to ProVantage,
ProVantage Health Services, Inc.
00000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Chief Information Officer
cc: Legal Department
Any party may from time to time designate another address to which notice
or other communication shall be addressed or delivered to such party and such
new designation shall be effective on the later of (i) the date specified in the
notice or (ii) receipt of such notice by the intended recipient.
ARTICLE XIX
MISCELLANEOUS PROVISIONS
Section 19.1. Independent Parties. ShopKo shall perform the Services
hereunder as an independent contractor. Nothing in this Agreement shall
constitute or be deemed to constitute a partnership or joint venture between the
parties hereto, constitute or be deemed to constitute any party as the agent or
employee of the other party for any purpose whatsoever and neither party shall
have authority or power to bind the other or to contract in the name of, or
create a liability against, the other in any way or for any purpose. Each party
shall be responsible for any injury or death to its own employees, including all
workers' compensation claims or liabilities resulting
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therefrom, and each such party shall remain responsible for reporting its income
and paying its own taxes.
Section 19.2. Assignment. Except as otherwise provided in this Section
19.2, neither party may assign any of its rights or delegate any of its duties
or obligations under this Agreement without the other party's consent.
ProVantage may assign its rights and delegate its duties and obligations under
this Agreement as a whole or as part of the sale or transfer of all or
substantially all of its assets and business, including by merger or
consolidation, to a Person (i) that assumes and has the ability to perform
ProVantage's duties and obligations under this Agreement; and (ii) the core or a
principal part of the business of which is not competitive with the core or a
principal part of the business of ShopKo. ShopKo may assign its rights and
delegate its duties and obligations under this Agreement as a whole or as part
of the sale or transfer of all or substantially all of its assets and business
involved in any manner in providing Services, including by merger or
consolidation, to a Person (a) that assumes and has the ability to perform
ShopKo's duties and obligations under this Agreement; and (b) the core or a
principal part of the business of which is not competitive with the core or a
principal part of the business of ProVantage. Any attempted assignment or
delegation of any rights, duties, or obligations in violation of this Section
19.2 shall be void and without effect. Nothing in this Section 19.2, however,
precludes ShopKo from subcontracting the performance of any of the Services as
permitted by this Agreement or precludes ProVantage from extending the right to
receive the Services to its Affiliates.
Section 19.3. Amendment And Waiver. This Agreement may be amended,
modified, superseded, canceled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by the
parties, or in the case of a waiver, by the party waiving compliance. Any waiver
by either party hereto of any condition, or of the breach of any provision or
term in any one or more instances shall not be deemed to be nor construed as a
further or continuing waiver of any such condition, or of the breach of any
other provision or term of this Agreement.
Section 19.4. Integration. This Agreement supersedes any and all prior or
contemporaneous oral agreements or understandings between the parties regarding
the subject matter of this Agreement.
Section 19.5. Severability. If any term or condition of this Agreement
shall be held invalid in any respect, such invalidity shall not affect the
validity of any other term or condition hereof.
Section 19.6. Successors. This Agreement binds and inures to the benefit of
the parties and their respective legal representatives, successors, and
permitted assigns.
Section 19.7. Applicable Law. This Agreement shall be construed under the
laws of the State of Wisconsin and the rights and obligations of the parties
shall be determined under the substantive law of Wisconsin, without giving
effect to Wisconsin's conflict of law rules or principles.
14
Section 19.8. Reasonableness. As concerns every provision of this
Agreement, ShopKo and ProVantage agree to act reasonably and in good faith
unless a provision expressly states that ProVantage or ShopKo may act in its
sole discretion.
Section 19.9. Counterparts. This Agreement may be executed in two
counterparts, each of which shall constitute an original, and both of which,
when taken together, shall constitute one and the same instrument.
Section 19.10. Further Assurances. Each party shall take such actions, upon
request of the other party and in addition to the actions specified in this
Agreement, as may be necessary or reasonably appropriate to implement or give
effect to this Agreement.
Section 19.11. No Third Party Beneficiaries. Each of the provisions of this
Agreement is for the sole and exclusive benefit of the parties hereto
respectively, as their interests may appear, and shall not be deemed for the
benefit of any other person or entity or group of persons or entities.
Section 19.12. Construction. Descriptive headings to sections and
paragraphs are for convenience only and shall not control or affect the meaning
or construction of any provisions in this Agreement.
Section 19.13. Look-Back. The parties acknowledge that the intent of this
Agreement is to accurately capture the scope and nature of the information
technology services being performed as of the date hereof, so that such services
may continue uninterrupted for the term of this Agreement. Both parties have
made a good faith attempt to identify all of the information technology services
provided to ProVantage by ShopKo. If, however, it is later determined that the
parties unintentionally omitted a description of services or charges therefor,
both parties shall negotiate in good faith to amend this Agreement to include
such services and charges, and charges and credits for such additional services
shall be retroactive back to the commencement date of this Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the parties as of the date first written above.
15
SHOPKO STORES, INC.
By:
-----------------------
Xxxxxxx X. Xxxxxx
President and Chief
Executive Officer
Attest:
-------------------
Xxxxxxx X. Xxxxxx,
Xx. Vice President,
General Counsel/Secretary
PROVANTAGE HEALTH SERVICES, INC.
By:
-----------------------
Xxxxxxx X. Xxxxx
Executive Vice
President and Chief
Operating Officer
Attest:
-------------------
Xxxxxxx X. Xxxxxx,
Secretary
16
Exhibit A
Base Fee
--------------------------------------------------------------------------------------------------------------
Monthly Annual
Fee in $'s Fee in $'s
-------------------------------------------------------------------------------------------------------------
ShopKo IS Employees
Job Category FTE
--------------------------------------------------------------------------------------------------------
Telecommunications 0.50 2,684 32,213
Technical Services - MVS 0.15 930 11,165
Technical Services - RS/6000 SP 1.00 6,906 78,082
Technical Services - AS/400 2.00 9,375 112,503
Technical Services - Internet/Intranet 0.50 3,253 39,041
Technical Services - Security 0.30 1,287 15,439
Production Control & Operations 0.75 2,198 26,372
Help Desk 0.25 698 8,372
End User Service Analyst 0.50 2,453 29,436
--------------------------------------------------------------------------------------------------------
Total ShopKo IS Employees $29,784 $352,623
------------------------
ShopKo Hardware Description
-------------------------------------------------------------------------------------------------------------
IBM RS/6000 43P External Firewall 4 44
IBM RS/6000 E20 Primary public webserver 4 44
IBM RS/6000 360 Internal Firewall 4 44
IBM RS/6000 360 Internal ACEServer 56 678
Nortel Option 81C GO/ProVantage-North telephone system 56 667
Centigram Series 6 Model 640 GO/ProVantage-North voice mail system 35 417
MultiLink System 70 Audio conference bridge 69 833
Cisco 7000 Client router 1,333 16,000
Cisco 2501 GO Internet router 1 10
Cisco 7513 Core router 192 2,300
IBM 0000-X00 Xxxxxxxxx 156 1,878
Proliant 1600 Netware file server 42 500
---------------------------------------------------------------------------------------------------------
Total ShopKo Hardware $ 1,951 $ 23,415
-------------------------
ShopKo Software
---------------------------------------------------------------------------------------------------------
Computer Associates
- CA-Prevail/XP-Jobtrac remote AIX - SP2 9 102
- CA-Prevail/XP-Jobtrac remote AIX - 370 0 6
- CA-View VTAM interface 1 17
- CA-View - ERO option 3 40
- CA-Deliver MVS 11 134
- CA-Deliver VTAM interface 1 17
- CA-View MVS 7 87
VPS
- VPS base 5 58
- VPS VMCF/VTAM 1 14
- VPS Report Browse 2 19
- VPS PC 0 6
- VPS/TCPIP 3 33
Oracle
- Oracle DB 3,750 45,000
- Oracle 7.1 development 4 45
Others
- Security Dynamics - Secur-id 47 563
- Xxxxxx 280 3,360
- Integral 33 394
- Ab initio 41 495
- SQL Backtrac 482 5,781
- MicroStrategy DSS Agent/Server/Web 2,667 32,000
- IBM Operating System Software 353 4,230
- Groupwise 2,479 29,750
- Netware 4,083 49,000
---------------------------------------------------------------------------------------------------------
Total ShopKo Software $14,263 $171,151
-------------------------
Other Services
---------------------------------------------------------------------------------------------------------
Tape Vaulting 210 2,520
1.S Disaster Recovery Services 5,100 61,200
AIX Support line 3,333 40,000
---------------------------------------------------------------------------------------------------------
Total Other Services $ 8,643 $103,720
-------------------------
--------------------------------------------------------------------------------------------------------------
Base Fee XXX XXX
--------------------------------------------------------------------------------------------------------------
EXHIBIT B
Operating, Monitoring, And Communicating The Status Of Systems
. Monitor claims processing
. 1st shift daily sign on to AS/400 and AMS to verify communication
. Ping ProVantage benefits, 1st shift each day
. Verify ProVantage mail order programs are running
. Track disk usage
. Track system up time
. Verify on-line systems are up
. Execute production schedule for ProVmed, ProVRx and other HIT systems
. Operate Data Center hardware
. Operate BBS for ProVantage
Administering Information, Systems, And Services
. Maintain shrink wrapped/turnkey applications
. Maintain AS/400 & OS/400
. Maintain DOS with VPS-PC
. Maintain Openview
. Work with vendors to apply fixes to OS and turnkey software
. Maintain long distance dialing plan and access codes
. Loaner PC checkout/administration
. Loaner pager checkout/administration
. Loaner cell phone checkout/administration
. Administer operations inventory IS equipment
. Order, distribute, and maintain calling cards
B-1
. Crystal information administration
. Provide call detail reporting on request
. Track and verify accuracy of Telecom xxxxxxxx
. Track software licenses
. Report/audit calling card usage
. Voice system administration
. Maintain NOS Novell
. Maintain OS/390
. Maintain Windows NT-NOS
. Maintain AIX Unix
. Maintain BBS for ProVantage
. Maintain SNA software, VTAM, NCP, and SNA/server
Securing Information Assets
. Backup file servers
. Tape library administration
. Restore files
. Manage firewalls
. Security setup
. Audit security access to data and systems
. Protect data access control
. User ID administration
. Performance of Y2K Activities substantially as outlined and detailed in
ShopKo's and ProVantage's respective Year 2000 Charters
. Maintain disaster recovery capability in accordance with past practices, but
in no event less reliable than those disaster recovery capabilities in place
to protect ShopKo's own systems.
Tracking, Escalating, And Resolving IT Problems
. 2nd level support for ProVantage Support Desk
. Trouble shoot remote client access
. Support ProVantage mail services IVR
. Troubleshoot communications problems
. Support ProVantage vision IVR
. Respond to on-call pages and calls
. Identify production problems, escalate or fix
. Support all IS hardware in all locations. Assume responsibility until
problems are resolved. (All equipment whether in-house supported or
contracted)
. Trouble shoot hardware/software problems
B-2
Managing IS Fixed Assets
. Dispose of obsolete equipment
. Manage UPS and dual power feed
. Dispose of hardware
Installing And Maintaining Equipment
. Install data communication facilities
. Install voice communication facilities
. Install data communication equipment
. Install voice communication equipment
. Install Routers
. Install file servers
. Install Data Center equipment
. Install firewall
. Install Internet/Intranet
. Install shrink-wrapped turnkey applications
. Install AS/400, AIX Unix, OS/390, and other OS utilities or software packages
as needed
. Order printers, file servers, workstations, software, data center supplies,
paging service and equipment, and cellular service and equipment
. Order data communication equipment
. Order data communication facilities
. Order voice communication facilities
. Order voice communication equipment
. VPS administration setup printers
. Define terminals, printers to system software
. Manage technical hardware/software for optimal use
. Maintain paging service and equipment
. Maintain cellular service and equipment
. Maintain wiring
. Maintain voice equipment
. Maintain data communications equipment
. File server maintenance
. Maintain data center environmental equipment
. Maintain firewall
Planning For System Capacity Growth And Technological Change
. Capacity planning for voice network
. Capacity planning for data network
B-3
. Recommend capacity or configurations of hardware/software to applications and
business
Defining And Engineering Information Technology Platforms
. Consult with applications development on design and implementation of
software
. Provide solutions to business
. Specify voice communication facilities
. Specify voice communication equipment
. Design technical architectures
. Design Intranet/Internet
. Specify data communications equipment
. Specify data communications facilities
B-4
