1
EXHIBIT 10.18
KEY:
"Section" references are to provisions in the Agreement.
"Clause" references are to provisions in the Schedules.
January 4, 1996
Agreement - Execution Document
2
INFORMATION SYSTEMS MANAGEMENT AGREEMENT
This Agreement is entered into as of January 4, 1996 (the "Effective
Date"), between
1. Integrated Systems Solutions Corporation, a Delaware corporation and a
wholly owned subsidiary of International Business Machines Corporation
("ISSC")
AND
2. Central Health Management Services, Inc., a Georgia corporation
("CHMS").
The Parties agree to the terms and conditions set forth in this
Agreement including the Supplement and Schedules A through O referenced in this
Agreement.
Signed for and on behalf of Integrated Systems Solutions Corporation:
Signature: /s/ X. X. Xxxxxxx Position: V.P. Business Services
---------------------------- ------------------------------
Name: X. X. Xxxxxxx Date: January 4, 1996
--------------------------------- ----------------------------------
Signed for and on behalf of Central Health Management Services, Inc.:
Signature: /s/ Xxxx X. Xxxxxx Position: CEO
---------------------------- ------------------------------
Name: Xxxx X. Xxxxxx Date: January 4, 1996
--------------------------------- ----------------------------------
January 4, 1996
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TABLE OF CONTENTS
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PAGE
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1. PURPOSE OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. DEFINITIONS AND AGREEMENT AND RELATIONSHIP PROTOCOLS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 General Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Evolving Nature of Relationship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.3 Required Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.4 Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.5 Conflicts of Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.6 Alternate Source for Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.7 Use of Subcontractors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3. THE SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.1 Obligation to Provide Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.2 Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.3 Annual Technology Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.4 Disaster Recovery Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.5 Audits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.6 Data Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.7 Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.8 Technology Refresh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.9 Software Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.10 Software Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4. TRANSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.1 Transition Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.2 Affected Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.3 Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5. SERVICES STAFFING AND MANAGEMENT AND ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.1 Project Executives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.2 Replacement of Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.3 Retention of Experienced Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.4 Efficient Use of Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.5 CHMS Approvals and Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6. CHARGES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.1 Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.2 Annual Service Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.3 Additional Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.4 Cost of Living Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.5 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.6 New Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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6.7 Replacement Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.8 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.9 Reduction of CHMS Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.10 Benefit Sharing Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.11 Service Credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7. INVOICING AND PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.1 Annual Service Charge Invoices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.2 Cost of Living Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.3 Other Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.4 Invoice Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.5 Proration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.6 Disputed Charges/Credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.7 Other Credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8. INTELLECTUAL PROPERTY RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.1 Ownership of Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.2 Obligations Regarding Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9. CONFIDENTIALITY/DATA SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.1 Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.2 Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.3 Exclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.4 Loss of Company Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.5 Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10. TERM AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.1 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.2 Renewal and Expiration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.3 Termination By CHMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.4 Termination by ISSC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.5 Termination Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.6 Termination Proration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.7 Extension of Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.8 Services Transfer Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.9 Other Rights Upon Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11. LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.1 Liability Caps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.2 Exclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.3 Direct Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.4 Dependencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.5 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
12. WARRANTIES/COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
12.1 Work Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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12.2 Noninfringement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
12.3 Disabling Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
12.4 Authorization and Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
12.5 Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
12.6 Regulatory Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
13. INDEMNITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
13.1 Indemnity by ISSC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
13.2 Indemnity by CHMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
13.3 Employment Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
13.4 Exclusive Remedy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
13.5 Indemnification Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
13.6 Customer Contractual Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
14. INSURANCE AND RISK OF LOSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
14.1 ISSC Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
14.2 CHMS Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
14.3 Risk of Property Loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
14.4 Mutual Waiver of Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
15. ADVISORY COMMITTEES/DISPUTE RESOLUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
15.1 CHMS/ISSC Management Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
15.2 Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
15.3 Continued Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
16. GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
16.1 Control of Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
16.2 Entire Agreement, Updates, Amendments and Modifications . . . . . . . . . . . . . . . . . . . . . . 49
16.3 Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
16.4 Nonperformance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
16.5 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
16.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
16.7 Limitations Period upon Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
16.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
16.9 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
16.10 Binding Nature and Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
16.11 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
16.12 No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
16.13 Other Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
16.14 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
16.15 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
16.16 Remarketing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
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TABLE OF SCHEDULES
SCHEDULE TITLE
A CHMS Software
- Applications Software
- CHMS Systems Software
B Systems Software
- ISSC Systems Software - IBM
- Systems Software - OEM
C CHMS Provided Hardware
D ISSC Machines
E Support Services, Performance Standards and Operational Responsibilities
F Third Party Agreements
G Disaster Recovery Services
H Transition Plan
I Help Desk Services
J ISSC Charges, Measures of Utilization and Financial Responsibilities
K Security Procedures
L Market Cooperation and Operations
M Network Locations
N Services Transfer Assistance
O Affected Employees
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1. PURPOSE OF AGREEMENT
a) ISSC is provider of a broad range of information technology, information
management, data communications and related services and desires to
provide to CHMS certain information technology and perform for CHMS
certain of the information management and data communications functions,
responsibilities and tasks that are currently performed by CHMS for the
CHMS Business. CHMS desires that with the exception of the development
of applications software, Level One Support, print operations, LAN and
LAN support, the CHMS information technology and information management
and data communications services functions, responsibilities and tasks
be migrated from CHMS to ISSC, and that such technology and services be
provided to CHMS and its Affiliates by ISSC which is experienced and
skilled in the administration, management, provision and performance of
such functions and responsibilities. This Agreement documents the terms
and conditions under which CHMS and its Affiliates will obtain such
migration, technology and information management and communications
services from ISSC, and ISSC will administrate, manage, provide and
perform such functions and responsibilities for CHMS and its Affiliates.
b) In entering into this Agreement, the Parties have identified specific
objectives and goals intended to be satisfied through performance of
this Agreement. These objectives and goals include, but are not limited
to the following: (1) reducing the on-going monthly operating costs of
CHMS; (2) securing favorable rates for additional resource consumption;
(3) taking advantage of new technology to improve performance and the
cost to performance ratios experienced by CHMS; (4) improving the
current level of service; (5) minimizing any potential risk to CHMS's
customer base; (6) insuring the integrity and security of existing and
future hardware and software systems; (7) increasing flexibility
regarding resource commitments and availability and evolving
technologies to meet the dynamic requirements of the CHMS Business; (8)
implementing joint marketing arrangements to expand the CHMS Business
and the ISSC business as described on Schedule L; and (9) providing an
opportunity to transition the Services back to CHMS or to another
service provider from ISSC with minimal disruption.
c) ISSC recognizes that CHMS expects to be treated as a valued customer and
agrees that the definition of customer satisfaction goes beyond ISSC's
performance against established Performance Standards and Minimum
Service Levels and requires that ISSC exhibit customer service attitude
focused on assisting CHMS in reducing operating costs and improving
service to CHMS, its Affiliates and the CHMS customers.
d) The provisions of this Section 1 are intended to be statement of the
purpose of this Agreement and are not intended to alter the plain
meaning of the terms and conditions of this Agreement. To the extent
that the terms and conditions of this Agreement are unclear or
ambiguous, such terms and conditions are to be interpreted and construed
consistent with the purposes set forth in this Section 1.
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2. DEFINITIONS AND AGREEMENT AND RELATIONSHIP PROTOCOLS
2.1 GENERAL DEFINITIONS
In this Agreement including the Supplement and Schedules A through O, the
following terms will have the following meanings:
Additional Resource has the meaning given in Schedule J.
Charge or RC
Affiliates means, with respect to Party, any entity at any time
Controlling, Controlled by or under common Control
with such Party.
Affected Employees has the meaning set forth in Section 4.2.
Agreement means this Information Systems Management Agreement,
the Supplement, and Schedules A through O referenced
herein.
Annual Service Charge has the meaning given in Schedule J.
Application(s) Software means those programs and programming, including all
supporting documentation and media, that perform
specific user related data processing and
telecommunications tasks, including updates,
enhancements, modifications, releases and Derivative
Works thereof. Applications Software as of the
Effective Date is listed in Schedule A, which
schedule shall be updated pursuant to Section 2.2 to
reflect the then-current Applications Software.
Authorized User(s) "Authorized Users" means any person or entity
authorized to use the Services to be provided by
ISSC under this Agreement, which shall include
without limitation (1) CHMS, (2) CHMS's
Affiliates, (3) third parties who use CHMS or its
Affiliates services including their customers, or
(4) any other person or entity rendering services to
CHMS, its Affiliates or customers.
Authorized User Data means information provided by Authorized Users for
use in connection with the System.
Baseline has the meaning given in Schedule J.
Change Management has the meaning given in Schedule E.
Procedures
Change of Control means the transfer of the Control of a Party from the
persons or persons who hold such control on the
Effective Date to another person or persons.
CHMS Business means the business engaged in by CHMS and its
Affiliates of providing information technology and
information management, data processing, system
integration, system development, telecommunications
and related consulting services to the healthcare
industry.
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CHMS Code means Code Developed by ISSC and/or its
subcontractors independently or jointly with CHMS, at
CHMS's expense, as part of the Services, or that is
specifically related to the core business of CHMS.
CHMS Data Center means the data center owned and operated by CHMS
located at 0000 Xxxxxx Xxxxx Xxxx, Xxxxxxx, Xxxxxxx,
as of the Commencement Date.
CHMS Derivative Code means Developed Code which constitutes Derivative
Work of software for which the copyright is owned by
CHMS, its affiliates or their subcontractors.
CHMS/ISSC has the meaning given in Section 15.2.
Management Committee
CHMS Provided Hardware means the computer equipment peripheral devices,
storage media, cabling, connectors and other
equipment (however described) provided from time to
time by CHMS for use by ISSC to perform and deliver
the Services and fulfill its obligations under this
Agreement. The CHMS Provided Hardware as of the
Effective Date is listed on Schedule C, which
schedule shall be updated pursuant to Section 2.2
during the Term to reflect the then-current CHMS
Provided Hardware.
CHMS Sale means a sale of all or substantially all of the
assets of CHMS or the transfer by sale or merger of
seventy-five percent (75%) of the voting power of
CHMS in one transaction from one shareholder or group
of shareholders to another person or persons;
provided, however, a CHMS Sale shall not include the
"spin-off" of CHMS from Central Health Holding
Company, Inc., the initial public offering of the
voting securities of CHMS, any secondary offering of
the voting securities of CHMS or the acquisition by
CHMS or any subsidiary of CHMS of the Xxxxxxx &
Xxxxxxx or its assets.
CHMS Software means Applications Software and CHMS Systems
Software.
CHMS Systems Software means the systems and applications development tools
software listed in Schedule A provided or to be
provided by CHMS.
CHMS Works means literary works of authorship (other than Code)
Developed by ISSC and/or its subcontractors
independently or jointly with CHMS, at CHMS's
expense, as part of the Services, or that is
specifically related to the CHMS Business, including
without limitation user manuals, charts, graphs and
other written documentation, and machine-readable
text and files.
Code has the meaning given in Section 8.
Computer Hardware means the ISSC Machines and CHMS Provided Hardware.
Commencement Date means January 1, 1996.
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Confidential Information has the meaning given in Section 9.1.
Contract Year means the first twelve (12) months following the
Commencement Date and each twelve (12) month period
thereafter beginning on the first anniversary of the
Commencement Date.
Control, Controlling, means possessing, directly or indirectly, the power
or Controlled to direct or cause the direction of the management
and policies of an entity, whether through ownership
of voting securities, by contract or otherwise.
Cost of Living has the meaning given in Schedule J.
Adjustment ("COLA")
Data Center means the ISSC data center at a site to be mutually
agreed by February 1, 1996, and/or other such
location authorized under this Agreement.
Derivative Work means a work based on one or more pre-existing works,
including without limitation, a condensation,
transformation, expansion or adaptation, which would
constitute a copyright infringement if prepared
without authorization of the owner of the copyright
of such pre-existing work.
Develop has the meaning given in Section 8.
Direct Damages Cap has the meaning given in Section 11.2(a).
Disaster Recovery means the location designated by such name or its
Center equivalent in the Disaster Recovery plan.
Disaster Recovery means the Disaster Recovery services described in
Services Schedule G.
Effective Date means the date set forth on the initial page of this
Agreement.
End-User has the meaning given in Schedule J.
Existing Network has the meaning given in Schedule M.
Force Majeure Event has the meaning given in Section 16.3.
Help Desk means the ISSC help desk located at an ISSC facility
which is staffed by ISSC to provide support to CHMS
as described in Schedules E and I.
Indemnified Party has the meaning given in Section 13.5(a).
Indemnifying Party has the meaning given in Section 13.5(a).
Indemnities has the meaning given in Section 13.1.
ISSC Code means Code Developed by ISSC personnel at ISSC's
expense, and used to provide the Services, which does
not constitute a Derivative Work of any software
owned by CHMS, ISSC, IBM or their Affiliates or
subcontractors.
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ISSC Derivative Code means Code Developed under this Agreement, which
constitutes Derivative Works of software for which
the copyright is owned by ISSC, IBM, their Affiliates
or their subcontractors.
ISSC Indemnitees has the meaning given in Section 13.2.
ISSC Interfaces means Code and/or literary works of authorship
created at ISSC's expense and used to interface
between the CHMS Software and ISSC Software which
does not constitute a Derivative Work of any software
or literary works of authorship owned by CHMS, ISSC,
IBM or their Affiliates or subcontractors, including
without limitation, user manuals, charts, graphs and
other written documentation, and machine-readable
text and files.
ISSC Machines means the computer equipment, peripheral devices,
storage media, cabling, connectors, extenders and
other equipment (however described) including without
limitation, modems, routers and termination boxes for
the Network located in the Data Center and at the
Network Locations (including the CHMS headquarters
and offices) used from time to time by ISSC to
perform and deliver the Services and fulfill its
obligations under this Agreement. The ISSC Machines
as of the Effective Date are listed on Schedule D,
which schedule shall be updated pursuant to Section
2.2 during the Term to reflect the then-current ISSC
Machines.
ISSC Software means the ISSC Systems Software-IBM and Systems
Software-OEM.
ISSC Systems Software- means Systems Software listed on Schedule B
IBM under the heading "ISSC Systems Software-IBM",
provided or to be provided by ISSC.
ISSC Works means literary works of authorship (other than Code)
Developed at ISSC's expense, by ISSC personnel and/or
its contractors and used to provide the Services,
including without limitation user manuals, charts,
graphs and other written documentation and
machine-readable text and files.
Level One Support has the meaning given in Schedule E.
Level Three Support has the meaning given in Schedule E.
Level Two Support has the meaning given in Schedule E.
Losses means all losses, liabilities, damages, penalties and
claims (including taxes), and all related costs,
expenses and other charges (including any and all
reasonable attorneys' fees and reasonable costs of
investigation, litigation, settlement, judgment,
interest and penalties).
Machines means the ISSC Machines and CHMS Provided Hardware.
Maintenance Release means those Software fixes and updates provided by
the Software vendor as part of normal maintenance
service for the Software.
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Materials means the CHMS Code, the CHMS Derivative Code, the
CHMS Works, the ISSC Derivative Code, the ISSC Code,
the ISSC Works and the ISSC Interfaces.
Minimum Service Levels has the meaning given in Schedule E. N-1 has the
meaning given in Section 3.8.
Network has the meaning given in Schedule M.
New Services has the meaning given in Section 6.6.
Out-of-Pocket Expenses means all actual, direct, verified payments made by
ISSC for equipment, materials, supplies and services,
other than New or Replacement Services, (i) outside
or beyond the scope of the Services, or (ii) payments
in addition to those made to otherwise fulfill its
obligations under this Agreement, which payments in
both instances are incremental or in addition to
those payments that ISSC would otherwise make to
provide the Services or to fulfill its obligations
under this Agreement. All such payments and the
purposes for such payments must be approved in
writing by CHMS in advance. Such payments may include
the reasonable costs of ISSC personnel that would not
otherwise have been used in connection with the
provision of the Services or to fulfill ISSC's
obligations under this Agreement, including a
reasonable allocation of overhead expenses allocable
to such personnel while providing services
constituting the subject of Out-of-Pocket Expenses.
In no event will Out-of-Pocket Expenses include any
element of profit for ISSC or any subsidiary of ISSC.
Parties means ISSC and CHMS as detailed on the initial page
of this Agreement.
Party means ISSC or CHMS as detailed on the initial page
of this Agreement.
Performance Standards means the service levels and performance
responsibilities under which the Services will be
provided. The Performance Standards are described in
Schedule E.
Operational has the meaning given in Schedule E.
Documentation
Replacement Services has the meaning given in Section 6.7.
Required Consents means any consents or approvals required to be
obtained (a) to allow ISSC to assume financial,
support, operational, management and administrative
responsibility for the CHMS Software and CHMS
Provided Hardware in connection with the Services;
(b) for the licensing, transfer or grant of the right
to CHMS to use the ISSC Software and ISSC Machines as
contemplated by this Agreement; and (c) for CHMS and
ISSC to have access to and use of the space,
equipment, software and/or third party services
provided under the Third Party Agreements in
connection with the Services as contemplated by this
Agreement.
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Resource Unit ("RU") has the meaning given in Schedule J.
Revised Improvement has the meaning given in Section 6.10.
Service Credits has the meaning set forth in Section 6.11.
Service Employees has the meaning given in Section 10.9(g).
Services means the administration, management, provision and
performance of the information technology and
information management and communications services
functions and responsibilities of CHMS and the
migration and transition of such services from CHMS
to ISSC, as described and defined in this Agreement,
the Supplement and Schedules A through O.
Services Transfer has the meaning given in Section 10.8.
Assistance
Similarly Situated means ISSC customers with substantially the same
Customers mix of on-line and batch processing applications
and systems resources utilization at similar or
lesser volumes.
Software means ISSC Software and CHMS Software.
Software Maintenance means Software defect identification and fixes and
the installation of Maintenance Releases.
Strategic Steering has the meaning given in Section 15.1.
Committee
Supplement means the Supplement to this Agreement
containing the charges and certain other necessary
information.
System means the Machines and Software provided
under this Agreement and the operating
environment therefor.
Systems Software means those programs and programming, including all
supporting documentation and media, that perform
tasks related to the functioning of the data
processing and telecommunication equipment which is
used to operate the Applications Software or
otherwise to support the provision of the Services by
ISSC under this Agreement, whether or not licensed to
ISSC. Systems Software includes, but is not limited
to, operating systems, software utilities, data
security software, data network software,
communications monitors and data base managers.
Systems Software as of the Effective Date is listed
in Schedule B, which schedule shall be updated
pursuant to Section 2.2 to reflect the then current
Systems Software.
Systems Software-OEM means Systems Software listed in Schedule B under the
heading "Systems Software-OEM", provided or to be
provided by ISSC.
Technology Plan has the meaning given in Section 3.3.
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Term has the meaning given in Section 10.1 and any
extension and renewal term described in this
Agreement.
Termination Charge means the amount that will reimburse ISSC for the
expenses incurred and investments made by ISSC to
provide the ISSC Machines and ISSC Software and
perform the functions, responsibilities and tasks
that collectively comprise the Services, together
with an ISSC profit based on such expenses and
investments, that ISSC has not recovered as of a
termination date occurring prior to the expiration of
the Term, but such charge does not include any
element of profit allocable to periods after the
termination date or any charge for lost opportunity
or expectancy, however described or denominated,
before or after such date.
Third Party Agreements means those contractual, leasing and licensing
arrangements for which ISSC has undertaken financial,
management and/or administrative responsibility and
CHMS receives third party products, software and/or
services in connection with the provision of the
Services. Third Party Agreements to which CHMS is a
party are listed on Schedule F, which schedule shall
be updated pursuant to Section 2.2 to reflect the
then-current Third Party Agreements.
Third Party Provider means a business or entity other than CHMS or ISSC
that performs tasks by providing products, software
and/or service under a Third Party Agreement, in
support of the provision of the Services by ISSC.
Transition Plan has the meaning given in Section 4.1(a).
Transition Period has the meaning given in Section 4.1(a).
Transition Personnel has the meaning given in Section 4.1(b).
Version means those Software updates that generally add
function to the existing Software and may be provided
by the Software vendor at a fee over and above the
standard software maintenance costs.
Virus or Viruses has the meaning given in Schedule E.
Visit has the meaning given in Schedule E.
Wind-Down Expenses means the amount that will reimburse ISSC for the
actual costs that ISSC incurs in the disposition
and/or reallocation of ISSC Machines, ISSC Software
and the portion of the Data Center dedicated to the
performance of the Services, the placement of ISSC
personnel allocated to the delivery of the Services,
and the termination, if appropriate, of the Third
Party Agreements, in the event of a termination
occurring prior to the expiration of the Term;
provided, however, CHMS shall have the right to
mitigate such costs by purchase of, or assumption of
the leases for, the ISSC Machines, assumption of the
licenses and maintenance agreements for the ISSC
Software, hiring the ISSC personnel delivering the
Services, assuming Third Party Agreements and taking
similar actions.
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2.2 EVOLVING NATURE OF RELATIONSHIP
a) The Supplement and Schedules A through O to this Agreement will be
updated by the Parties as necessary or appropriate during the Term to
accurately reflect the evolution of the Services and components and
elements of the Services as described therein.
b) Following the Effective Date, ISSC and CHMS reserve the right to
inventory, validate and update any information that is reflected in or
omitted from the Agreement and attached Supplement and/or Schedules. If
discrepancies are detected, the Agreement, Supplement and/or Schedules
shall be promptly changed, modified, updated and adjusted to correct
such discrepancies upon mutual agreement, so that the Agreement,
Supplement and/or Schedules will be correct and accurately reflect the
Services and charges provided by ISSC to CHMS. If either Party disputes
the existence of a discrepancy identified by the other Party, the
Parties will submit the matter to the CHMS/ISSC Management Committee
and/or the Strategic Steering Committee for dispute resolution as
specified in Section 15.
c) Both CHMS and ISSC agree that the Services provided may require
adjustments to reflect the evolving business and operations of CHMS and
ISSC, that the relationship memorialized by this Agreement is dynamic in
nature and will change as the operating and business environment of CHMS
changes and evolves, and that it is impossible to define with
specificity the scope of the Services that will be provided by ISSC
during the Term. Therefore, the CHMS/ISSC Management Committee and the
Strategic Steering Committee will periodically evaluate the business and
operating strategies of each Party and recommend modifications to, and
evolution of, the Services (including the Performance Standards and
Minimum Service Levels) to optimize such strategies.
d) While the Parties will endeavor to update, modify and amend this
Agreement, the Supplement and the Schedules as necessary or appropriate
from time to time to reflect the parameters and changing nature of the
Services and the requirements of the CHMS Business, the Parties
acknowledge that such activities may not always be documented with
specificity. Therefore, the Parties agree to deal with each other in
good faith to resolve all issues presented and any disputes that may
arise.
2.3 REQUIRED CONSENTS
a) CHMS shall remain the contracting party of record for the Third Party
Agreements to which CHMS is a party on the Commencement Date. ISSC will
provide CHMS with advice and counsel regarding ISSC's experience and
agreements with the vendors under the Third Party Agreements to which
CHMS is a party on the Commencement Date and the benefit of any
relationship of ISSC with each such vendor to the extent permitted under
the ISSC-vendor arrangement to obtain any Required Consent. ISSC and
CHMS will share management and administrative responsibilities for
obtaining all Required Consents under the Third Party Agreements
existing on the Commencement Date. CHMS shall have the responsibility
for timely obtaining all Required Consents under the Third Party
Agreements entered into after the Commencement Date and for which CHMS
bears financial responsibility and pays the vendors directly thereunder,
except Third Party Agreements to which any Affiliate of ISSC is a party.
ISSC shall have the responsibility for timely obtaining all Required
Consents under Third Party Agreements entered into after the
Commencement Date
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(i) with affiliates of ISSC, and (ii) for which ISSC bears financial
responsibility and pays the vendors directly or indirectly through a
third party, thereunder.
b) CHMS shall bear the costs, if any, of obtaining all Required Consents,
including without limitation, all charges and fees related to obtaining
the Required Consents (i) for the Third Party Agreements existing as of
the Commencement Date, except Third Party Agreements to which any
Affiliate of ISSC is a party, and (ii) for the Third Party Agreements
entered into after the Commencement Date for which CHMS bears financial
responsibility and pays the vendor directly thereunder, except Third
Party Agreements to which any Affiliate of ISSC is a party. ISSC shall
bear such costs of obtaining all Required Consents (A) for the Third
Party Agreements to which an ISSC Affiliate is a party as of the
Commencement Date or during the Term, and (B) for all Third Party
Agreements entered into after the Commencement Date for which ISSC bears
financial responsibility and pays the vendor directly or indirectly
through a third party, thereunder. All Required Consents with regard to
Third Party Agreements existing on the Commencement Date shall be
obtained within ninety (90) days after the Effective Date unless
otherwise agreed by the Parties in writing. In addition, CHMS shall bear
the costs, if any, associated with the cancellation and re-licensing of
any Software licensed by CHMS prior to the Commencement Date if required
for ISSC to provide the Services after the Commencement Date, except
Software licensed from ISSC or any Affiliate of ISSC. ISSC shall bear
the cost, if any, associated with the cancellation and re-licensing of
any Software licensed by CHMS prior to the Commencement Date licensed
from ISSC or any Affiliate of ISSC, if required for ISSC to provide the
Services after the Commencement Date.
c) ISSC will publish a list each month setting forth the status of each
Required Consent until all Required Consents are obtained. If any
Required Consent is not obtained with respect to any of the Third Party
Agreements existing as of the Commencement Date, the Parties shall
cooperate with each other in achieving a reasonable alternative
arrangement for CHMS to continue to process its work with minimum
interference to its business operations unless and until such Required
Consents are obtained. The cost of achieving such reasonable alternative
arrangement shall be borne by ISSC if caused by Required Consents needed
from ISSC or Affiliates of ISSC or from the licensors of the ISSC
Software, and in all other instances, such cost shall be borne by CHMS.
2.4 AGENCY
a) CHMS appoints ISSC as its agent for the limited purposes of
administering, managing and paying under the Third Party Agreements to
which CHMS is a party. Under this Agreement CHMS does not appoint ISSC
as its agent for the purposes of entering into oral or written
agreements with any individual or business entity for or in the name of
CHMS or its Affiliates, without the prior express written approval of
CHMS. CHMS agrees to promptly notify all Third Party Providers under the
Third Party Agreements to which CHMS is a party of such appointment.
Subject to its obligation to pay applicable penalties, damages,
termination or other charges under Section 13.1, ISSC may cancel,
substitute, change or add to the Third Party Providers under such Third
Party Agreements as it chooses so long as ISSC continues to perform the
Services in the manner required by this Agreement; provided however,
ISSC must submit written notification to CHMS and obtain CHMS' written
agreement prior to the termination, modification or addition of any
Third Party Agreement to which CHMS is a party. If such termination will
have an impact on the operations
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of CHMS' other Authorized Users or other users that are outside the
scope of the Services, ISSC will provide or cause to be provided the
services that are the subject of such Third Party Agreements to CHMS'
other Authorized Users or other users on terms no less favorable than
the terms of the applicable Third Party Agreement.
b) As agent for CHMS, ISSC will perform all obligations and
responsibilities of CHMS under all Third Party Agreements to which CHMS
is a party, subject to the provisions of Section 2.3, this Section 2.4,
Section 6.1 and Section 9. Upon CHMS's request, ISSC will provide to
CHMS all information and documentation related to its activities as
CHMS's agent with regard to such Third Party Agreements. CHMS may in its
sole discretion terminate or provide additional restrictions on ISSC's
agency appointment with respect to any Third Party Agreement to which
CHMS is a party if ISSC (i) fails to pay any amount due in a timely
manner; (ii) fails to act in CHMS's best interests; (iii) permits a
claimed or actual default to occur; or (iv) ISSC does not diligently
pursue the service and financial benefits available to CHMS under such
Third Party Agreement. If CHMS terminates or provides additional
restrictions on ISSC's agency appointment with respect to any Third
Party Agreement to which CHMS is a party solely for the reason set forth
in Section 2.4(b)(ii) or (iv), then CHMS shall relieve ISSC of the
service level impact and/or reimburse ISSC for the additional costs
directly attributable to such termination or additional restrictions to
the extent CHMS's action affects ISSC's ability to provide the Services
and/or increases ISSC's costs of providing the Services.
c) Beginning on the earlier of the Commencement Date or the Effective Date
and for the Term, CHMS will not enter into any new or amend any existing
Third Party Agreement to which CHMS is a party that adversely impacts
ISSC's ability to provide the Services or increases ISSC's cost of
providing such Service without the prior written consent of ISSC.
2.5 CONFLICTS OF INTERESTS
a) Each Party recognizes that ISSC personnel providing Services to CHMS
under this Agreement may perform similar services for others and this
Agreement shall not prevent ISSC from performing similar services for
others subject to the restrictions set forth in Section 9; provided,
however, ISSC shall not use any of the Machines or Software to perform
such similar services for others.
b) Neither Party shall knowingly solicit or hire away any employee of the
other Party during the Term of the Agreement unless otherwise agreed in
writing by the Parties and except as provided in Section 10.9(g). CHMS
or ISSC employee's responses to or employment resulting from general
solicitations will be exempted from this provision.
2.6 ALTERNATE SOURCE FOR WORK
a) During the Term, CHMS shall have the right to retain third party
suppliers to perform any service, function, responsibility or task that
is within the scope of the Services or would constitute a New Service
pursuant to Section 6.6 or a Replacement Service pursuant to Section
6.7, or to perform any such services, functions, responsibilities or
tasks (whether all or a part of the Services or the New Services or the
Replacement Services) internally. ISSC shall cooperate with any such
third party supplier and CHMS. Such cooperation shall include, without
limitation, (1) providing
January 4, 1996
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reasonable physical and electronic access to the Data Center; (2) use of
any Machines used by ISSC to perform services provided that such use of
any Machines shall be for the purpose of providing services to CHMS and
its Affiliates for the CHMS Business but may not be for the purpose of
providing services directly to customers and potential customers of CHMS
and its Affiliates; (3) use of any of the Software (other than any
Software where the underlying license agreement does not authorize such
access and a Required Consent permitting such access has not been
obtained); (4) providing such information regarding the operating
environment, System constraints, and other operating parameters as is
reasonably necessary for the work product of the third party supplier or
CHMS to be compatible with the Services or New Services; and (5) such
other reasonable cooperation as mutually agreed by the Parties.
b) ISSC's obligations hereunder shall be subject to the third party
suppliers' compliance with reasonable Data Center data and physical
security and other applicable standards and procedures, execution of
appropriate confidentiality agreements, and reasonable scheduling of
computer time and access to other resources to be furnished by ISSC
pursuant to this Agreement.
c) If ISSC's cooperation with CHMS or any third party supplier performing
work as described in Section 2.6(a), causes ISSC to expend additional
resources that ISSC would not otherwise have expended but which fall
within the scope of activities comprising the Services, such additional
resources will be charged to CHMS under the established charging
mechanism and/or Resource Baseline therefor. The Parties agree that any
other additional resources utilized by ISSC in support of such
cooperative work will be charged as an Out-of-Pocket Expense and not as
a New Service, except as otherwise provided in Section 10.8(b). The
Parties further agree that if in ISSC's reasonable, good faith
determination, a third party supplier's activities affect ISSC's ability
to meet the Performance Standards or otherwise provide the Services in
accordance with this Agreement, ISSC will provide written notice to CHMS
of such determination. The Parties will cooperate to determine and
verify whether such affect is caused by a third party supplier, the
extent of such affect, and how to ameliorate any such affect. ISSC
shall be excused for any inability to meet the Performance Standards,
Minimum Service Levels or otherwise provide any of the Services to the
extent any such third party supplier's activities directly affect and
impact ISSC's ability to meet any Performance Standard or Minimum
Service Level or otherwise provide any of the Services in accordance
with this Agreement.
2.7 USE OF SUBCONTRACTORS
a) ISSC shall notify CHMS in writing of a decision to delegate or
subcontract any function, responsibility or task, or change
subcontractors for any function, responsibility or task, that could have
a material impact on the Services or on the operations of CHMS or on the
security of the Authorized User Data, or on the CHMS Business, at least
thirty (30) days prior to the proposed date of commencement of such
subcontractor's activity with respect hereto. Upon CHMS's request, ISSC
shall promptly provide to CHMS information regarding the proposed new or
replacement subcontractors, the scope of the Services to be delegated
thereto, experience and financial position of the proposed
subcontractor, and ISSC's selection criteria therefor and conclusions
regarding its selection in order to permit CHMS to determine whether to
grant its consent to such delegation or subcontract. Subject to ISSC's
timely provision of the foregoing information to CHMS, CHMS shall be
deemed to have accepted such delegation or subcontract or
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change that is the subject of the notification by ISSC to CHMS, if CHMS
has not notified ISSC in writing of its good faith objections to such
delegation or subcontract on or before the thirtieth (30th) day after
receipt of such notice from ISSC. ISSC shall not delegate or subcontract
or change subcontractors unless and until ISSC and CHMS shall have
resolved any objection timely made by CHMS to such proposed action by
ISSC. In addition, ISSC shall not disclose any Confidential Information
of CHMS to any subcontractor unless and until such subcontractor has
agreed in writing to protect the confidentiality of such Confidential
Information in a manner equivalent to that required of ISSC by Section
9.
b) ISSC shall remain primarily liable and obligated to CHMS for the timely
and proper performance of all of its obligations hereunder even if such
obligations are delegated to third party subcontractors, and the proper
and timely performance and actions of any person or entity to which it
delegates or subcontracts any such obligation.
3. THE SERVICES
3.1 OBLIGATION TO PROVIDE SERVICES
Starting on the Effective Date and continuing during the Term, ISSC shall
provide and perform the Services to and for CHMS, as the Services may evolve
and be supplemented and enhanced during the Term as provided in this Agreement,
including the following:
a) The Services as described and defined in this Agreement (including the
Supplement and Schedules referenced in this Agreement); and
b) Subject to Section 2.2, if any services, functions, responsibilities or
tasks not specifically described in this Agreement are required for the
proper performance and provision of the Services and are an inherent
part of, or a necessary sub-part included within, the Services described
above in this Section 3, such services, functions, responsibilities and
tasks shall be deemed to be implied by and included within the scope of
the Services to the same extent and in the same manner as if
specifically described in this Agreement. Except as otherwise expressly
provided in this Agreement, ISSC shall be responsible for providing all
facilities, personnel and other resources as necessary to provide the
Services.
3.2 PERFORMANCE
a) ISSC agrees that its performance of the Services will meet or exceed
each of the applicable Performance Standards and Minimum Service Levels
set forth in Schedule E, except as specifically provided otherwise in
this Agreement. During the Term, ISSC shall upgrade the ISSC Machines
and associated Disaster Recovery Services as necessary to insure that
the Performance Standards, Minimum Service Levels and ISSC's other
obligations and responsibilities hereunder are satisfied, subject to
rate adjustments caused by changes, if any, to the "Customer Visit",
"Overhead" and "Utilization" profiles set forth in Schedule J.
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b) ISSC also agrees to use commercially reasonable efforts to perform the
Services in a manner that will result in a rating of acceptable or
higher on the customer surveys to be conducted in accordance with
Schedule E.
c) Concurrent with the annual Technology Plan review process described in
Section 3.3, CHMS and ISSC will review and agree to commercially
reasonable modifications of, additions to and replacements of the
Performance Standards, the Minimum Service Levels and the Service
Credits for the purposes of better reflecting and supporting the
continuing development of, and evolving priorities for, the CHMS
Business. The Performance Standards and the Minimum Service Levels shall
not be modified or adjusted downward below the highest level agreed to
by the Parties at any time without the prior written agreement of CHMS.
The Parties agree that the Performance Standards and the Minimum Service
Levels will be improved over time. The Parties agree to cooperate and
deal with each other in good faith to promptly resolve on a reasonable
basis in consonance with the purposes of the review process, any
differences between the Parties regarding appropriate modifications to,
additions to and replacements of the Performance Standards, the Minimum
Service Levels and the Service Credits.
d) Subject to CHMS's prior approval, ISSC shall implement the necessary
measurement and monitoring tools and procedures required to measure and
report ISSC's performance of the Services against the Performance
Standards and Minimum Service Levels. Such measurement and monitoring
shall permit reporting at a reasonable level of detail sufficient to
verify compliance with the Performance Standards and Minimum Service
Levels and application of any attendant Service Credits and shall be
subject to reasonable audit by CHMS. Upon request, ISSC shall provide
CHMS with information and access to such tools and procedures for
purposes of verification of the reported performance levels.
3.3 ANNUAL TECHNOLOGY PLAN
The Parties shall jointly prepare a "Technology Plan" in accordance with the
following procedures:
a) The Technology Plan will be composed of short-term and long-range plans,
which tie into the CHMS Business goals and objectives. The long-range
plan will include strategic and flexible use of the Data Center in light
of the CHMS Business priorities and strategies. The short-term plan will
include an identification of proposed software and hardware, as
appropriate, and a projected time schedule for developing and
implementing the proposed changes.
b) CHMS will draft the Technology Plan with ISSC's active participation and
advice. ISSC will provide CHMS with its written comments regarding the
draft Technology Plan within thirty (30) days after ISSC's receipt
thereof. ISSC's response will include, without limitation, information
regarding industry trends in production capabilities and pricing and the
implementation of proposed hardware and software changes. The final
Technology Plan will be subject to mutual agreement by the Parties. If
the Parties are unable to agree on a particular element of the
Technology Plan, then with respect to such element this Agreement shall
continue without reference to the Technology Plan. Implementation of any
portion of the Technology Plan that is inconsistent with the Parties'
obligations hereunder will require an amendment to this Agreement
pursuant to Section 16.2.
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c) The first Technology Plan under this Agreement will be completed on or
before June 1, 1996. The Technology Plan for subsequent years of this
Agreement will be completed on or before December 31 of each year,
commencing 1996.
3.4 DISASTER RECOVERY SERVICES
If ISSC fails to provide Disaster Recovery Services to the extent and in
accordance with the time table set forth in Schedule G and in accordance with
the Performance Standards and Minimum Service Levels set forth in Schedules G
and E, CHMS will be entitled, at its election, to receive the Service Credits
specified in Schedule E or to terminate this Agreement pursuant to Section
10.3(a) (without giving the notices and observing the cure periods set forth in
Section 10.3(a)) upon written notice to ISSC. If CHMS elects to terminate this
Agreement as described in this Section 3.4, CHMS shall give notice to ISSC of
such election within thirty (30) days after the occurrence of the event on
which such termination is based. In the event of a termination authorized under
this Section 3.4, CHMS shall not be required to pay any Termination Charges or
Wind-Down Expenses to ISSC, and such termination shall constitute the sole and
exclusive remedy of CHMS for such failure of performance by ISSC.
3.5 AUDITS
a) ISSC will assist CHMS in meeting its audit and regulatory requirements,
including providing access to the Data Center to enable CHMS and its
auditors and examiners to conduct appropriate audits and examinations of
ISSC's operations relating to the performance of the Services to verify
the accuracy of ISSC's charges to CHMS and that the Services are being
provided in accordance with this Agreement and the Performance Standards
and Minimum Service Levels. Such access will require forty-eight (48)
hour notice to ISSC and will be provided at reasonable hours, provided
that any audit does not interfere with ISSC's ability to perform the
Services in accordance with the Performance Standards and Minimum
Service Levels. ISSC will provide access only to information reasonably
necessary to perform the audit which shall include, but not be limited
to system management facility records. ISSC shall not allow CHMS, its
examiners or auditors access to ISSC's proprietary data or other ISSC
customer's data except as reasonably necessary to permit the audits
described in this Section 3.5. ISSC will also assist CHMS's employees or
auditors in testing Authorized User Data files and Software, including,
without limitation, installing and running audit software.
b) For a period of four (4) years following the last date ISSC furnished
Services pursuant to this Agreement, ISSC shall make available upon
request of the Secretary of the United States Department of Health and
Human Services, the United States Comptroller General and their duly
authorized representatives, all contracts, books, documents and records
of ISSC to the extent required by 42 U.S.C. Section 1395x(v)(1)(I) (as
amended or recodified from to time to time or any substitute or
successor statute) and lawful regulations promulgated thereunder. ISSC
shall notify CHMS within ten (10) days of its receipt of such a request
and of ISSC's proposed response to the request.
c) If ISSC carries out any of its duties under this Agreement through a
subcontract with a value of $10,000.00 or more over a twelve (12) month
period with an Affiliate of ISSC or CHMS, such subcontract shall contain
a clause to the effect that until four (4) years after the furnishing of
such
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services pursuant to such subcontract, such related organization shall
make available, upon written request of the Secretary of the United
States Department of Health and Human Services, the United States
Comptroller General or any of their authorized representatives, the
subcontract and the books, documents and records of such organization to
the extent required by 42 U.S.C. Section 1395x(v)(1)(I) (as amended or
recodified from time to time or any substitute or successor statute) and
lawful regulations promulgated thereunder.
d) Subject to Section 12.6, ISSC agrees to make any changes and take other
actions which are necessary in order to maintain compliance with
applicable laws or regulations applicable to its performance and
provision of the Services. CHMS may submit additional findings or
recommendations regarding compliance with applicable laws and
regulations to ISSC which ISSC will analyze and consider in good faith.
ISSC shall promptly respond to CHMS regarding ISSC's evaluation and
activity plan for such findings and recommendations. If any audit or
examination reveals that ISSC's invoices for the audited period are not
correct other than amounts in dispute pursuant to Section 7.6, ISSC
shall promptly reimburse CHMS for the amount of any overcharges, or CHMS
shall promptly pay ISSC for the amount of any undercharges.
3.6 DATA CENTER
a) ISSC will not relocate the Services from the Data Center without the
prior written consent of CHMS, which consent will not be unreasonably
withheld.
b) During the Term, ISSC will provide CHMS with access to the Data Center
or an equivalent ISSC data center in order for CHMS to provide tours of
the Data Center in support of the CHMS Business.
c) ISSC will provide access to the Data Center to Third Party Providers and
third party suppliers of installation, maintenance, support and upgrade
services for the System and any other CHMS equipment or software located
in the Data Center serviced thereby. To the extent feasible in light of
such installation, maintenance, support and upgrade requirements, CHMS
will provide 24 hours notice to ISSC prior to any visits by such Third
Party Providers and third party suppliers.
d) All access to the Data Center shall be subject to reasonable Data Center
data and physical security measures and such Third Party Providers' and
third party suppliers' undertaking reasonable confidentiality
requirements relating to such visits.
3.7 SECURITY
CHMS shall administer access to all Software operated by ISSC in support of the
Services through the data security procedures described in Schedule K. ISSC
shall notify CHMS of what entities and personnel are to be authorized access to
the Systems Software utilized in support of the Services and the level of
security access required by each. The Parties shall cooperate in administering
security procedures regarding such access, in accordance with Schedule K.
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3.8 TECHNOLOGY REFRESH
As part of the Services, ISSC agrees to take commercially reasonable actions to
provide the Services to CHMS at a technological level that will enable CHMS to
take advantage of technological advancement in its industry without an increase
in charges to CHMS within the existing System technology architecture;
provided, however, that ISSC, subject to the provisions of Section 3.10
regarding "Software Currency", will maintain the Machines, at a level that is
within one generation of current technology ("N-1"). If ISSC fails to satisfy
the requirements of this Section 3.8 with respect to the technological upgrades
in the Machines, included in the Annual Service Charges and the Resource
Baselines and CHMS incurs additional costs due to CHMS's inability to exploit
the functionality provided by the N-1 technology, ISSC shall reimburse or
credit CHMS for such additional costs and expenses. If any technological
advancement has the effect of increasing, reducing or otherwise altering the
volume or capacity represented by one or more Resource Baselines or altering
the interaction of the resources represented by a Resource Baseline with other
resources provided by ISSC in connection with the Services, and as a direct
result creates an anomaly in which such Resource Baseline or the resources
represented by such Resource Baseline are no longer integrated on a practical
basis with such other resources, ISSC and CHMS will cooperate to adjust the
affected Resource Baseline(s) and the applicable ARC Rate(s) so that CHMS
receives the same or an improved level of performance and the same or improved
price-performance benefit over that provided under the methodology used at
inception of this Agreement; provided, however, it is the intent of the Parties
that CHMS will receive the price and performance benefits attendant with any
technology refresh not otherwise factored or included in price-performance
methodology to determine the Annual Service Charges and/or ARCs at the
inception of this Agreement, and the Parties must reach agreement on the extent
of the adjustments resulting from the activities described in this Section 3.8
before such adjustments are put into effect. ISSC and CHMS will review the
conversion methodology (e.g., bench-marking, historical data, technical
specifications, etc.) which ISSC proposes to use to support such adjustments.
3.9 SOFTWARE LICENSES
a) ISSC will comply with all license obligations under all licenses for the
Software, including without limitation, the obligations of nondisclosure
and scope of use; provided, however, ISSC will only be obligated under
this Section 3.9(a) with regard to the licenses for CHMS Software to the
extent the license obligations thereunder are disclosed to and accepted
by ISSC. ISSC shall be deemed to have reviewed and accepted the
obligations under the licenses for the CHMS Software listed on Schedule
F on the Effective Date.
b) All Systems Software-OEM provided by ISSC in connection with the
Services and any CHMS Software licensed under a Third Party Agreement
shall be licensed (and the attendant maintenance arrangements
contracted) in CHMS's name and as licensee with ISSC having the right to
access and use such Software in performing the Services, unless ISSC can
procure such Software (and/or attendant maintenance arrangement) on a
more cost effective basis in its own name. ISSC shall negotiate with the
applicable Software vendors to provide for a right to assign or transfer
any licenses (and attendant maintenance arrangements) for the Software
licensed and contracted in ISSC's name to CHMS upon termination or
expiration of this Agreement, and ISSC shall promptly provide written
documentation to CHMS describing in detail, and attesting to the grant,
of such rights by the vendors upon request by CHMS from time to time,
for copies of such documentation.
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c) Prior to (1) the addition to the ISSC Software of any software which is
not listed in Schedule B or (2) any upgrade, enhancement or modification
of any ISSC Software listed in Schedule B, ISSC shall (i) obtain CHMS's
prior written consent for any such actions, (ii) provide CHMS with
information regarding the amount of any fees and other reasonable
requirements CHMS would be required to undertake in order to obtain a
license to and maintenance for such ISSC Software upon the expiration or
termination of this Agreement, and (iii) use commercially reasonable
efforts to obtain a firm commitment from the providers of such ISSC
Software to license and provide maintenance for the ISSC Software to
CHMS upon the expiration or termination of this Agreement upon the
payment of such fees and satisfaction by CHMS of such requirements. ISSC
shall consider and take into account in the negotiation of its licensing
arrangements with providers of the ISSC Software, CHMS's reasonable
concerns regarding the terms and conditions of such ISSC Software
licenses and make such licenses and related documentation, excluding
pricing information, available to CHMS upon request.
d) ISSC shall not terminate, extend, replace, amend or add licenses for the
Software and/or the maintenance arrangements attendant therewith, in
CHMS's name without CHMS's prior written agreement. ISSC may terminate,
replace, amend or add licensees for the ISSC Software as it chooses so
long as ISSC continues to perform the Services in the manner required by
this Agreement; provided, however, ISSC agrees to provide sixty (60)
days written notification to CHMS prior to each such termination,
replacement, amendment or addition. In addition, if such action by ISSC
with respect to a license and/or maintenance arrangement for the ISSC
Software will have an impact on the Services in a manner that in turn
will have an impact on the operations or costs of CHMS, its Affiliates
or other Authorized Users, ISSC will provide or cause to be provided the
services, rights and other benefits that are the subject of such
licenses to CHMS, its Affiliates and other Authorized Users, as
applicable, on terms no less favorable than the terms of such license.
If CHMS in connection with or resulting from ISSC's termination,
replacement, amendment or addition of any license for ISSC Software
and/or maintenance arrangement incurs additional expenses or other
costs, including but not limited to personnel costs, ISSC shall promptly
reimburse CHMS for such costs.
3.10 SOFTWARE CURRENCY
The Parties agree to maintain reasonable currency for Maintenance
Releases and Versions of Software, unless CHMS determines otherwise. For
purposes of this Section, "reasonable currency" shall mean that the next
Maintenance Release or Version is installed not later than the longer of
(a) 24 months after the date the licensor makes such Maintenance Release
or Version commercially available, or (b) within 1 month after the date
the licensor makes a subsequent Maintenance Release or Version
commercially available which causes CHMS to be more than one Maintenance
Release or Version behind.
In the event CHMS requests ISSC to expedite installation of a
Maintenance Release or Version or to delay upgrading of specific
Software beyond such period or requires operation and maintenance of
multiple versions of Software, ISSC shall do so, provided, that if ISSC
reasonably determines that it will incur any Out-of-Pocket Expenses as a
result of such requests (e.g., Software support costs due to withdrawal
of maintenance by the licensor, multiple version charges, etc.), then
ISSC
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will notify CHMS of the amount of such Out-of-Pocket Expenses in writing
and CHMS, at its option, will either delay installation of such
Maintenance Release or Version or update the Software to the current
level (as applicable) or reimburse ISSC for any demonstrable
Out-of-Pocket Expenses.
In addition, CHMS shall relieve ISSC from any failure to meet a
Performance Standard or Minimum Service Level to the extent directly
impacted by the delay of the next Maintenance Release or Version until
such time as the affected Software is brought to "reasonable currency"
as defined in this Section 3.10.
4. TRANSITION
4.1 TRANSITION PLAN
a) Within thirty (30) days after the Effective Date, ISSC and CHMS will
complete the development and preparation of, and will reach agreement
on, the details of the "Transition Plan" set forth in Schedule H,
describing the transition from CHMS to ISSC of the Affected Employees;
the transition of the administration, management and financial
responsibility for the Third Party Agreements; and the transition of the
performance of the other functions, responsibilities and tasks currently
performed by CHMS which constitute a part of the Services. The
Transition Plan shall be implemented and completed over a mutually
agreed period as set forth in the Transition Plan starting on the
Commencement Date, which period shall in no event extend beyond May 31,
1996, without the prior written agreement of the Parties (the
"Transition Period").
b) During the Transition Period, CHMS will cooperate with ISSC in
implementing the Transition Plan by providing the personnel (or portions
of the time of the personnel) set forth in the Transition Plan
("Transition Personnel") and performing the tasks described for CHMS in
the Transition Plan. During the Transition Period, ISSC will be
responsible for the provision of the Services (including within the
Services the implementation of the Transition Plan) and will promptly
reimburse CHMS for the amount of any salary and benefit costs incurred
by CHMS with respect to the Transition Personnel for the portion of
their time used to implement the Transition Plan.
4.2 AFFECTED EMPLOYEES
CHMS will be eliminating certain of the positions within CHMS associated with
its information management and communications services functions during or at
the end of the Transition Period. ISSC may interview and offer employment to
each of the individuals holding the positions with CHMS listed on Schedule O
(the "Affected Employees"). All costs and expenses incurred by ISSC in
connection with the offer to employ and the employment of the Affected
Employees shall be the responsibility of ISSC.
4.3 FACILITIES
To enable ISSC to provide the Services, CHMS agrees:
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a) to provide, at no charge to ISSC, the use of the CHMS Data Center and
such additional space as may be reasonably necessary for the performance
of that portion of the Services performed with the CHMS Provided
Hardware and the CHMS Software. This obligation includes the provision
of reasonable office space, storage space, analog telephone capability
(but excluding long-distance telephone charges, which CHMS will be
reimbursed by ISSC), office support services (e.g., janitorial and
security), office supplies and furniture. CHMS shall be responsible for
ensuring such CHMS facilities provide for a safe working environment,
including compliance with applicable laws and regulations;
b) to provide at the CHMS Data Center and related facilities provided to
ISSC, all heat, light, power, air conditioning, UPS and such other
similar utilities as may reasonably be necessary for ISSC to perform
that portion of the Services performed with the CHMS Provided Hardware
and the CHMS Software;
c) to provide access to CHMS parking (if any) facilities for ISSC
employees;
d) during the entire Term, CHMS shall provide to ISSC at the CHMS corporate
offices the use of office space, storage space and other facilities
necessary for the performance by ISSC and the ISSC Project Executive of
the Services. This obligation is limited to the provision of reasonable
office space for the Project Executive and an assistant to the Project
Executive, storage capacity for Network termination Machines, analog
telephone capability (but excluding long-distance telephone charges),
office support services (e.g., janitorial and security), and office
furniture; and
e) the use by ISSC of the CHMS Data Center and other CHMS facilities and
resources described in this Section 4.3 does not constitute or create a
leasehold interest.
At the expiration of the Transition Period, the obligations of CHMS, and the
rights of ISSC, under this Section 4.3(a) through (c) shall terminate.
5. SERVICES STAFFING AND MANAGEMENT AND ADMINISTRATION
5.1 PROJECT EXECUTIVES
a) Prior to the Effective Date, ISSC and CHMS will each designate a Project
Executive to whom all the appointing Party's communications may be
addressed and who has the authority to act for the appointing Party and
its subcontractors in connection with all aspects of this Agreement.
b) ISSC shall cause the person assigned as the ISSC Project Executive to
devote his or her working time and effort in the employ of ISSC
primarily to his or her responsibilities for the provision of the
Services under this Agreement, subject to ISSC's reasonable holiday,
vacation and medical leave policies and subject to occasional,
short-term, non-recurring work on other assignments by ISSC related to
the Project Executive's areas of expertise. Before the initial or
subsequent assignment of an individual to such position, ISSC shall
notify CHMS of the proposed assignment, introduce the individual to
appropriate CHMS representatives, and consistent with ISSC's personnel
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practices, provide CHMS with a resume and any other information about
the individual reasonably requested by CHMS. ISSC agrees to discuss with
CHMS any objections CHMS may have to such assignment and the Parties
will resolve such concerns on a mutually agreed basis.
c) ISSC will give CHMS at least thirty (30) days advance notice of a change
of the person appointed as the ISSC Project Executive, will discuss with
CHMS any objections CHMS may have to such change and the Parties will
resolve such concerns on a mutually agreed basis. ISSC shall not
reassign or replace any person assigned as the ISSC Project Executive
during the first year of his or her assignment to the CHMS service team,
nor shall ISSC assign more than four (4) different individuals to such
position during the Term, unless CHMS consents to such reassignment or
replacement, or the ISSC employee voluntarily resigns from ISSC, is
terminated by ISSC or is unable to work due to his or her death or
disability.
5.2 REPLACEMENT OF PERSONNEL
If CHMS reasonably and in good faith determines that it is not in CHMS's best
interests for any ISSC or subcontractor employee to be appointed to perform or
to continue performing any of the Services, CHMS shall give ISSC written notice
specifying the reasons for its position and requesting that such employee not
be appointed or be removed from the ISSC employee group servicing CHMS and be
replaced with another ISSC employee or subcontractor. Promptly after its
receipt of such a notice, ISSC shall investigate the matters set forth in the
notice, discuss with CHMS the results of the investigation, and resolve the
matter on a mutually agreed basis with CHMS.
5.3 RETENTION OF EXPERIENCED PERSONNEL
If ISSC fails to meet the Performance Standards or Minimum Service Levels
persistently or continuously and if CHMS reasonably determines such failure is
attributable in whole or in part to ISSC's turnover or position change rate of
employees and/or subcontractors assigned to the CHMS service team, CHMS will
notify ISSC of such determination. If such persistent failure is due to ISSC's
turnover rate or position change rate, (i) ISSC will promptly provide data
concerning its personnel and subcontractor turnover rate or position change
rate for providing the Services and will meet with CHMS to discuss the reasons
for the turnover rate or position change rate; (ii) ISSC shall submit to CHMS
its proposals for reducing the turnover rate or position change rate; and (iii)
in any event, ISSC shall reduce the turnover rate or position change rate to a
level at which it ceases to adversely impact Performance Standards and/or
Minimum Service Levels.
5.4 EFFICIENT USE OF RESOURCES
ISSC shall take commercially reasonable actions to efficiently administer,
manage and use the resources employed by ISSC to provide and perform the
Services that are chargeable to CHMS under this Agreement. As examples, but not
by way of limiting ISSC's obligations under this Section 5.4, ISSC will provide
data center and network technical and operations consulting resources and
services as reasonably requested by CHMS as a part of the Services and at no
additional charge to CHMS, to assist in identifying areas for improvement such
as unused datasets, fragmented datasets, inefficient DASD configuration and
management techniques, proper media use (e.g. tape versus DASD), inappropriate
January 4, 1996
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retention periods and similar operational considerations in order to insure a
continuing improvement in the Parties' efficient use of resources.
5.5 CHMS APPROVALS AND NOTIFICATION
For those areas of the Services where CHMS (a) has reserved right-of-approval,
consent or agreement, (b) is required to provide notification, and/or (c) is to
perform a responsibility set forth in this Agreement, and such approval,
consent, notification or performance is delayed or withheld beyond the period
provided in this Agreement, Supplement or the Schedules without authorization
or right and, such delay or withholding is not caused by ISSC and affects
ISSC's ability to provide the Services under this Agreement, CHMS will relieve
ISSC of the responsibility for meeting the Minimum Service Levels for that
portion of the Services to the extent, but only to the extent, directly
affected by such delay or withholding and only during the period such approval,
consent, notification or performance is delayed or withheld beyond the period
provided in this Agreement, Supplement or the Schedules. CHMS will reimburse
ISSC for its Out-of-Pocket Expenses, if any, incurred during such period as a
result thereof. If not specified otherwise in this Agreement, the period for
such approval or notification shall be fifteen (15) business days unless
another time period is otherwise agreed by the Parties.
6. CHARGES AND EXPENSES
6.1 DISBURSEMENTS
Beginning on the Commencement Date or the date specified in Schedule F, ISSC
will pay the Third Party Providers under the Third Party Agreements for the
provision of the software, products and services under such Third Party
Agreements, including without limitation, the Third Party Providers of Machines
and Software, except as specifically set forth in Schedule F as the
responsibility of CHMS. In addition, ISSC will reimburse CHMS in a timely
manner for CHMS's payments to such Third Party Providers under the Third Party
Agreements for which ISSC has financial responsibility for amounts allocable to
periods on and after the Commencement Date or the date specified in Schedule F,
as applicable.
6.2 ANNUAL SERVICE CHARGE
For each Contract Year during the Term, CHMS agrees to pay the Annual Service
Charge specified in the Supplement and Schedule J together with the other
amounts as described in this Section 6 and Schedule J.
6.3 ADDITIONAL CHARGES
Beginning for the initial full calendar month following the Transition Period
and monthly thereafter, CHMS and ISSC will review the quantity of Resource
Units utilized by CHMS during the preceding month and calculate applicable
Additional Resource Charges (ARCs) for such month in accordance with Schedule
J. Beginning for the initial full calendar quarter and for each calendar
quarter thereafter, CHMS and ISSC will review the quantity of Customer Visits
utilized by CHMS during the preceding calendar quarter and calculate the
applicable Customer Visit Charge for such calendar quarter in accordance with
Schedule J. CHMS will pay these additional charges in accordance with Section
7.4.
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6.4 COST OF LIVING ADJUSTMENT
Beginning in the first January after the Commencement Date, CHMS will pay ISSC
a Cost of Living Adjustment ("COLA"), in accordance with Section 7.2 and
Schedule J.
6.5 TAXES
a) The Annual Service Charges paid by CHMS are inclusive of applicable
sales, use, excise, personal property or other taxes attributable to the
period on or after the Commencement Date based upon or measured by
ISSC's cost in acquiring or providing equipment, materials, supplies or
third party services furnished to or used by ISSC in performing the
Services, including without limitation, all sales, personal property,
use, excise and other taxes, if any, due on the ISSC Machines and ISSC
Software; provided, however, CHMS will be responsible for paying all
personal property or use taxes due on or with respect to CHMS-Provided
Hardware and CHMS Software. Each Party shall bear sole responsibility
for all taxes, assessments and other real property-related levies on its
owned or leased real property.
b) If a sales, use, excise or services tax is assessed on ISSC's provision
of the Services (or any New Services or Replacement Services) to CHMS or
on ISSC's charges to CHMS under this Agreement, however levied or
assessed, CHMS will be responsible for and pay the amount of any such
tax.
c) The Parties agree to reasonably cooperate with each other to more
accurately determine each Party's tax liability and to minimize such
liability to the extent legally permissible. Each Party shall provide
and make available to the other any resale certificates, and other
exemption certificates or information reasonably requested by either
Party. The Parties will also work together to segregate the Annual
Service Charges into separate payment streams for Services that are
taxable, nontaxable, for which a sales, use or similar tax has already
been paid by ISSC, and for which ISSC functions merely as a paying agent
for CHMS in receiving goods, supplies or services (including licensing
arrangements) that otherwise are nontaxable or have previously been
subject to tax.
6.6 NEW SERVICES
If CHMS requests ISSC to perform functions, responsibilities or tasks that are
not within the scope of the Services and do not simply require use of resources
for which there exists a current Resource Baseline ("New Services"), the charge
to CHMS for ISSC's performing such functions will be determined as follows:
a) If the additional function requires only those resources which have a
current Resource Baseline or charging methodology, the additional
function, responsibilities or tasks will not be considered a New
Service.
b) If the additional function, responsibility or task requires resources
not covered by an existing Resource Baseline or charging methodology,
such additional function, responsibility or task will be considered New
Services. Prior to performing such New Services, ISSC will quote to CHMS
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the increase in the Annual Service Charge or other payment method that
will be attributable to such New Services. Such increase will be based
upon the required proportional increase in System and other applicable
resources relative to the Annual Service Charge. Upon receipt of such
quote, CHMS may then elect to have ISSC perform the New Services, and
the Annual Service Charge and, if applicable, Resource Baselines will be
established and/or adjusted to reflect such New Services.
Notwithstanding the foregoing, nothing herein shall be interpreted as
obligating CHMS to obtain New Services from ISSC.
c) The Parties acknowledge that changes during the Term in functions,
responsibilities and tasks that are within the scope of the Services
will not be deemed to be New Services, if such functions,
responsibilities and tasks evolved or were supplemented and enhanced
during the Term by ISSC in its sole discretion or pursuant to the
provisions of this Agreement, including without limitation, changes made
which keep pace with technological advancements or improvements.
d) If the Parties cannot agree either that the function, responsibility or
task falls within the definition of a New Service or that the additional
compensation proposed by ISSC is an appropriate amount, ISSC shall
nevertheless perform the disputed function, responsibility or task if
requested by CHMS. The determination of whether any function,
responsibility or task is a New Service and the amount of additional
compensation, if any, to be paid by CHMS will be determined pursuant to
the dispute resolution provisions in Section 15. CHMS shall pay fifty
percent (50%) of any disputed charges under this Section 6.6 to ISSC and
fifty percent (50%) of any disputed charges under this Section 6.6 in
accordance with Section 7.6, pending a resolution of the dispute in
accordance with Section 15. Any payment to CHMS of any such disputed
charge paid by CHMS to ISSC and into escrow pursuant to this Section
6.6(d) after resolution of the applicable dispute, shall be paid first
from the amount in escrow with respect to such dispute and then by ISSC.
All amounts paid by ISSC to CHMS shall be paid promptly upon resolution
of the disputed charge together with interest at the rate of two percent
(2%) per month from the date of payment by CHMS to ISSC through the date
of payment by ISSC to CHMS.
6.7 REPLACEMENT SERVICES
If CHMS's request for different or additional services includes a request for
ISSC to correspondingly reduce or eliminate Services being provided hereunder,
such different, additional or reduced services will be deemed "Replacement
Services." In such event, the Parties shall determine the resources and
expenses related to the Services being replaced and to the services being
added. The net increase or decrease in such resources and expenses will be the
basis on which ISSC will quote a price to CHMS for Replacement Services.
6.8 AFFILIATES
If CHMS acquires any additional Affiliates during the Term and desires that
ISSC provide Services for such Affiliates, ISSC will provide such Affiliates
with Services in accordance with this Agreement, subject to additional charges
if acceptance of such responsibilities would require (1) New Services as
described in Section 6.6, (2) Replacement Services described in Section 6.7, or
(3) resource usage in excess of an existing Resource Baseline.
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6.9 REDUCTION OF CHMS REQUIREMENTS
a) During the Term, if CHMS experiences significant changes in the scope or
nature of the CHMS Business, which have or are reasonably expected to
have the effect of causing sustained decreases in the amount of any ISSC
resources used in providing the Services, such changes shall be governed
by this Section 6.9; provided, however, decreases in resources required
in the following circumstances shall not qualify under this Section 6.9:
(i) decrease of resources required to support the Minimum Customer
Visits Baselines; (ii) decreases in resources required due to CHMS
performing such Services (excluding a change in the technology platform
used by CHMS to perform such Services, subject to (i) above); and (iii)
decreases in resources required due to CHMS transferring the provision
of such Services to another vendor (excluding a change in the technology
platform used by CHMS to perform such Services, subject to (i) above).
b) CHMS will notify ISSC of any event or discrete set of events which CHMS
determines qualifies under this Section 6.9. ISSC will promptly identify
the changes and the ISSC resource disposition and asset reallocation
schedule that will need to be implemented in order to accommodate the
decrease of resource requirements for the significant change in a
cost-effective manner without disruption to CHMS's ongoing operations.
The disposition schedule and cost savings that will result therefrom
will be promptly submitted to CHMS for review and acceptance. Upon
acceptance by CHMS, ISSC will make the applicable adjustments to the
Annual Service Charge and the Resource Baselines in accordance with such
disposition schedule to reflect the foregoing in accordance with Section
16.2 and distribute an amended Supplement and Schedule J to CHMS for
acceptance.
c) CHMS may, at its option and expense, employ an accredited and mutually
agreed upon independent auditor to verify that ISSC's methodology for
calculating the savings referenced in this Section 6.9 is accurate and
conforms to generally accepted accounting principles. ISSC will
cooperate with such auditor and make such information and records
available to the auditor as the auditor may request in order to effect
the purpose of this Section 6.9(c).
6.10 BENEFIT SHARING OPPORTUNITIES
With respect to any project proposed to optimize and/or reduce the expense of
delivering the Services hereunder other than (i) technology improvements over
time pursuant to Section 3.2, (ii) the Efficiency Projects set forth in VI(K)
of Schedule J, and (iii) the tape technology migration scheduled for
implementation by December of 1996, (a "Project"), the Parties will evaluate
whether the Project lends itself to objective measurements of benefits to ISSC,
such as program run-time, network response time or System availability which
could be realized through the introduction of new technology, procedures or
other similar changes. If such measurements are practical, the Parties will
evaluate and establish the specific objective benefits and goals that may be
realized by ISSC and will jointly develop metrics to measure such benefits. The
Parties will mutually agree on separate scopes of work to implement a test or
pilot phase for the Project and for a full roll-out or implementation thereof.
ISSC shall bear the full cost of planning, testing, full roll-out and
implementation of such Project. ISSC shall first recover its Out-Of-Pocket
Expenses related to the Project from the benefits derived by it and thereafter
shall split the benefits and savings realized by ISSC in its provision of
Services under this Agreement on a 50-50 basis with CHMS. CHMS's portion of the
benefits and savings shall be paid to CHMS in the form of
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credits against the Annual Service Charges during the Term of this Agreement.
If CHMS does not realize the agreed measurable benefits of the Project and such
failure is not due to CHMS's failure to perform its responsibilities or a Force
Majeure Event as specified in this Agreement, at CHMS's option, ISSC will
either remove the Project deliverables or CHMS may elect to retain use of the
Project deliverables.
6.11 SERVICE CREDITS
If ISSC fails to provide the Services in accordance with the Minimum Service
Levels, ISSC shall incur the charges set forth in Schedule E (each, a "Service
Credit"; collectively, the "Service Credits") against the amounts owed to ISSC
for the second month following the month in which the Service Credits were
incurred. Service Credits are deemed by the Parties to be liquidated damages
awarded in lieu of actual damages which would be difficult and costly to
determine in each instance in which the Service Credits are awarded. The
Parties agree that the Service Credits are not penalties.
7. INVOICING AND PAYMENT
7.1 ANNUAL SERVICE CHARGE INVOICES
On a monthly basis ISSC will invoice CHMS the proportional amount of the Annual
Service Charge for that month in advance. The invoice will separately state
applicable taxes owed by CHMS by tax jurisdiction.
7.2 COST OF LIVING ADJUSTMENT
CHMS agrees to pay ISSC a COLA adjustment beginning in the first January after
the Commencement Date, if actual cumulative inflation exceeds the Protection
Index, in accordance with the procedures set forth in Schedule J.
7.3 OTHER CHARGES
Any amount due under this Agreement including amounts described in Sections 7.1
and 7.2 shall be payable as described in Section 7.4. No invoice for any such
amount shall be delivered to CHMS until after the Services which are the
subject of such invoice, have been provided to CHMS; provided, however, any
Services that are expressly stated as prepaid or paid in advance in this
Agreement, shall be excluded from the limitation of this sentence to the
extent, but only to the extent, expressly set forth in this Agreement.
7.4 INVOICE PAYMENT
At its election, CHMS will pay each invoice either by wire funds transfer or
other electronic means acceptable to ISSC to an account specified by ISSC or by
bank check within the calendar month in which such invoice is received by CHMS,
provided CHMS receives the invoice on or before the tenth (10th) day of the
month; otherwise such payment shall be made within thirty (30) days after the
date of CHMS's receipt of the invoice. In the event that any invoice payment is
not received by ISSC within
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five (5) days following the date specified for such payment herein, a late
payment fee of two percent (2%) per month of the unpaid, late invoice payment
will be due and payable by CHMS to ISSC from the date such payment became
overdue through the date of payment to ISSC.
7.5 PRORATION
All periodic charges under this Agreement are to be computed on a calendar
month basis, and will be prorated for any partial month, unless specifically
stated otherwise in this Agreement.
7.6 DISPUTED CHARGES/CREDITS
In the event CHMS disputes the accuracy or applicability of a charge or credit
(i.e., Customer Visit Charges/Credits, Annual Service Charge, ARC, COLA,
Service Credits, pass-through xxxxxxxx, etc.), CHMS shall notify ISSC of such
dispute as soon as practicable after the discrepancy has been discovered. The
Parties will investigate and resolve the dispute using the dispute resolution
processes provided under Section 15 of this Agreement. Any undisputed amounts
contained in an invoice containing a disputed charge, will be paid by CHMS.
CHMS, in the case of a disputed charge, or ISSC, in the case of a disputed
credit, shall place the disputed amount in an escrow account until such dispute
is resolved. Upon resolution of the dispute, the Parties shall be paid any
interest having accrued on the disputed amounts held in escrow in connection
with such dispute in proportion to the amount received by each Party with
respect to such dispute, and the Parties shall each pay a portion of the escrow
fees attributable to the disputed amount in an inverse proportion to the
percentage of the disputed amount paid to each Party. Unpaid monies that are in
dispute and placed in escrow will not be considered a basis for monetary
default under this Agreement.
7.7 OTHER CREDITS
Except as otherwise set forth in this Agreement, with respect to any amount to
be paid or reimbursed to CHMS by ISSC at the time any such amount is due and
payable to CHMS, ISSC may pay that amount to CHMS by applying a credit for the
month such amount is due and payable against the charges otherwise payable to
ISSC hereunder, at ISSC's option. Notwithstanding the foregoing, if the amount
to be so paid or reimbursed by ISSC in any specific month, exceeds the charges
to CHMS for such month, ISSC shall promptly pay any difference to CHMS by check
or wire transfer during such month. If ISSC fails to pay any amount due and
payable to CHMS or fails to apply a credit during the month such amount is due
and payable, ISSC shall pay or credit such amount together with interest
thereon payable at a rate of two percent (2%) per month of the unpaid, late
monies will be due and payable by ISSC to CHMS from the date such monies became
due to CHMS through the date of payment or credit to CHMS.
8. INTELLECTUAL PROPERTY RIGHTS
ISSC, CHMS and their subcontractors may develop, create, modify or personalize
(collectively, "Develop") certain computer programming code, including source
and object code ("Code") and documentation in order to perform the Services.
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8.1 OWNERSHIP OF MATERIALS
With respect to any Materials whether Developed solely by ISSC or its
subcontractors, or jointly by CHMS personnel and ISSC or its subcontractors,
ownership will be as follows:
a) CHMS Derivative Code, CHMS Code and CHMS Works shall be owned by CHMS.
During the Term, ISSC shall have an irrevocable, nonexclusive,
worldwide, paid-up license to use, execute, reproduce, display, perform,
operate, distribute, modify, develop, personalize and create Derivative
Works from such Materials internally, and the right to sublicense third
parties to do any of the foregoing, for the sole purpose of performing
the Services.
b) ISSC Derivative Code, ISSC Code, ISSC Works and ISSC Interfaces, shall
be owned by ISSC. During the Term, CHMS and its Affiliates shall have an
irrevocable, nonexclusive, worldwide, paid-up license to use in the CHMS
Business, execute, operate, reproduce, display, perform, distribute,
modify, Develop, personalize and create Derivative Works from, such
Materials internally, and the right to sublicense third parties to do
any of the foregoing for CHMS and its Affiliates.
c) With respect to any Materials whether or not Developed under this
Agreement, which are or have been Developed solely by CHMS personnel,
such Materials shall be owned by CHMS. At CHMS's sole option ISSC shall
have an irrevocable, nonexclusive, worldwide, paid-up license to use,
execute, operate, reproduce, display, perform, distribute, modify,
Develop, personalize and create Derivative Works from such Materials
internally and the right to sublicense third parties to do any of the
foregoing, for the sole purpose of performing the Services during the
Term.
d) Any ownership or license rights herein granted to either Party are
limited by and subject to any patents and copyrights held by, and terms
and conditions of any license agreements with, applicable Third Party
Providers.
e) To the extent that by operation of law, any of the Materials may not be
owned by the Party to which ownership has been allocated under this
Section 8, each Party agrees to promptly assign and take such actions
and execute and deliver such documents as shall be necessary or
appropriate to effect such assignment. Each Party hereby assigns,
without further consideration, the ownership of all right, title and
interest in all U.S. and foreign copyrights, mask work rights (if any)
and patents in the Materials to the other Party as set forth in this
Section 8. Such assignee Party shall have the right to obtain and hold
in its own name copyrights, registrations, renewals and all other rights
relating or pertinent thereto.
8.2 OBLIGATIONS REGARDING MATERIALS
a) The Parties agree to reproduce copyright legends which appear on any
portion of the Materials which may be owned by the Parties and any and
all third parties.
b) Except as set forth in Section 9, this Agreement shall not preclude
either Party from Developing materials or providing services which are
competitive to the Materials or Services which might be
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delivered pursuant to this Agreement, except to the extent any of same
may infringe any of the other Party's patent rights, copyrights or mask
work rights.
c) Neither this Agreement nor any disclosure made hereunder grants any
license to either Party under any patents or copyrights, mask work
rights of the other Party, except for the licenses expressly granted
under this Section 8.
9. CONFIDENTIALITY/DATA SECURITY
9.1 CONFIDENTIAL INFORMATION
ISSC and CHMS each acknowledge that the other Party possesses and will continue
to possess information, which has commercial value in its business and is not
in the public domain, that has been created, discovered, developed by it or
provided to it by a third party, and in which property rights have been
assigned or otherwise conveyed to it. "Confidential Information" means any and
all proprietary business information of the disclosing Party treated as secret
by the disclosing party that does not constitute a Trade Secret (defined
below), including, without limitation, any and all proprietary information of
such Party of which the receiving Party becomes aware as a result of its access
to and presence at the other Party's facilities. "Trade Secrets" mean
information related to the services or business of the disclosing Party or its
Affiliates which (a) derives economic value, actual or potential, from not
being generally known to or readily ascertainable by other persons who can
obtain economic value from its disclosure or use; and (b) is the subject of
efforts by the disclosing Party or its Affiliates that are reasonable under the
circumstances to maintain its secrecy, including without limitation (1) marking
any information reduced to tangible form clearly and conspicuously with a
legend identifying its confidential or proprietary nature; (2) identifying any
oral presentation or communication as confidential immediately before, during
or after such oral presentation or communication; or (3) otherwise, treating
such information as confidential or secret. Assuming the criteria in clauses
(a) and (b) above are met, Trade Secrets include, but are not limited to,
technical and nontechnical data, formulas, patterns, compilations, computer
programs and software, devices, drawings, processes, methods, techniques,
designs, programs, financial plans, product plans, and lists of actual or
potential customers and suppliers. "Company Information" means collectively the
Confidential Information and Trade Secrets. Company Information also includes
information which has been disclosed to either Party by a third party which
such Party is obligated to treat as confidential or secret.
9.2 OBLIGATIONS
a) CHMS and ISSC will each refrain from disclosing, will hold as
confidential and will use the same level of care to prevent disclosing
to third parties, the Company Information of the other Party as it
employs to avoid disclosure, publication or dissemination of its own
information of a similar nature but in no event less than a reasonable
standard of care. Notwithstanding the foregoing, the Parties may
disclose Company Information to authorized subcontractors and Authorized
Users involved in providing and using the Services under this Agreement
where: (i) such disclosure is necessary to permit the subcontractor or
Authorized User to perform its duties hereunder or use the Services;
(ii) the subcontractor or Authorized User agrees in writing to observe
the confidentiality and restricted use and disclosure covenants and
standards of care set forth in this
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Section 9 and under which the disclosing Party is a third party
beneficiary for all purposes; and (iii) the receiving Party assumes full
responsibility for the acts or omissions of its subcontractor, no less
than if the acts or omissions were those of the receiving Party.
b) Neither CHMS nor ISSC shall use the Company Information of the other
Party except in the case of ISSC and its subcontractors, in connection
with the performance of the Services, and as otherwise specifically
permitted in this Agreement, and in the case of CHMS and its Authorized
Users, as specifically permitted in this Agreement and in connection
with the use of the Services. ISSC shall be responsible to ensure that
its subcontractors comply with this Section 9.2(b) and CHMS shall be
responsible to ensure that its Authorized Users comply with this Section
9.2(b).
c) Without limiting the generality of the foregoing, neither Party will
publicly disclose the terms of this Agreement, except to the extent
permitted by Sections 9.3 and 14.1 without the prior written consent of
the other. Furthermore, neither ISSC nor CHMS will make any use of the
Company Information of the other Party except as contemplated by this
Agreement; acquire any right in or assert any lien against the other
Party's Company Information except as contemplated by this Agreement; or
refuse to promptly return, provide a copy of or destroy such Company
Information upon the request of the disclosing Party.
d) Neither Party will be restricted in using, in the development,
manufacturing and marketing of its products and services and in its
operations, any data processing or network management ideas, concepts,
know-how and techniques which are retained in the minds of employees who
have had access to the other Party's Company Information (without
reference to any physical or electronic embodiment of such information),
unless such use shall infringe any of such Party's patent rights,
copyrights or mask works rights.
9.3 EXCLUSIONS
Notwithstanding the foregoing, this Section 9 will not apply to any information
which ISSC or CHMS can demonstrate was: (a) at the time of disclosure to it, in
the public domain; (b) after disclosure to it, published or otherwise becomes
part of the public domain through no fault of the receiving Party; (c) without
a breach of duty owed to the disclosing Party, is in the possession of the
receiving Party at the time of disclosure to it; (d) received after disclosure
to it from a third party who had a lawful right to and, without a breach of
duty owed to the disclosing Party, did disclose such information to it; or (e)
independently developed by the receiving Party without reference to Company
Information of the disclosing Party. Further, either Party may disclose the
other Party's Company Information to the extent required by law or order of a
court or governmental agency. However, the recipient of such Company
Information must give the other Party prompt notice and make a reasonable
effort to obtain a protective order or otherwise protect the confidentiality of
such information, all at the discloser's cost and expense. It is understood
that the receipt of Company Information under this Agreement will not limit or
restrict assignment or reassignment of employees of ISSC and CHMS within or
between the respective Parties and their Affiliates.
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9.4 LOSS OF COMPANY INFORMATION
The receiving Party will immediately notify the disclosing Party, orally or in
writing in the event of any disclosure, loss, or use in violation of this
Agreement of a disclosing Party's Company Information known to the receiving
Party.
9.5 LIMITATION
The covenants of confidentiality set forth herein (a) will apply after the
Effective Date to any Company Information disclosed to the receiving Party
before and after the Effective Date and (b) will continue and must be
maintained from the Effective Date through the termination of the relationship
between the Parties and (i) with respect to Trade Secrets, at any and all times
after termination of the relationship between the Parties during which such
Trade Secrets retain their status as such under applicable law; and (ii) with
respect to Confidential Information for a period equal to the shorter of two
(2) years after termination of the Parties' relationship, or until such
Confidential Information no longer qualifies as confidential under applicable
law. ISSC will not be responsible for the security of data during transmission
via public communications facilities if the breach of security occurred through
access to the public communications facilities, except to the extent that such
breach of security is caused by the failure of ISSC to perform its obligations
under this Agreement, or the negligent acts or omissions of ISSC, its
subcontractors or Affiliates.
10. TERM AND TERMINATION
10.1 TERM
The term of this Agreement will begin as of 12:01 a.m. on the Effective Date
and will end as of 12:00 midnight on December 31, 2005, (the "Term"), unless
earlier terminated or extended in accordance with this Agreement.
10.2 RENEWAL AND EXPIRATION
ISSC shall notify CHMS in writing, whether it desires to renew this Agreement
and of the proposed prices and terms to govern such renewal not less than
sixteen (16) months prior to the expiration of the Term. If ISSC notifies CHMS
that it desires to renew this Agreement, CHMS agrees to inform ISSC in writing
whether it desires to renew not less than nine (9) months prior to the
expiration of the Term. If CHMS notifies ISSC that it desires to renew the
Agreement, but the Parties are unable to agree upon renewal prices, terms and
conditions as of six (6) months prior to the expiration of the Term, this
Agreement will be extended for one (1) year at the then-current prices, terms
and conditions. If the Parties are unable to reach agreement on renewal during
such extension period, this Agreement will expire at the end of such extension
period.
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10.3 TERMINATION BY CHMS
CHMS may terminate this Agreement for the following reasons:
a) A material breach of this Agreement by ISSC that remains uncured for ten
(10) days after receipt of written notice thereof; provided, however, if
a material breach of this Agreement by ISSC occurs that cannot be cured
by ISSC in such ten (10) day period but ISSC submits a written plan to
CHMS within such period to cure such breach after the ten (10) day
period (but in no event more than thirty (30) days after such breach)
and the plan (including the timing of the cure set forth in the plan) is
accepted by CHMS in writing, the cure period for such breach shall be
extended to the date set forth in the plan; or
b) There exists a series of non-material or persistent breaches by ISSC
that in the aggregate have a significant adverse impact on the Services
support of the administrative, management, planning or operations
functions of CHMS or its customers, or on the management of the
Services; or
c) For convenience upon one hundred eighty (180) days prior notice by CHMS
to ISSC given after the expiration of the first Contract Year, unless
there is a CHMS Sale within nine (9) months before or after the
effective date of a termination for convenience in the first three (3)
Contract years, in which event, after the expiration of the first three
(3) Contract Years; or
d) Upon a Change of Control of ISSC with one hundred eighty (180) days
notice given within ninety (90) days after the later to occur of (i) the
effective date of the Change of Control, or (ii) the date on which ISSC
gives CHMS written notice of the effective date of the Change of Control
of ISSC; or
e) ISSC becomes insolvent or is unable to pay its debts or enters into or
files (or has filed or commenced against it) a petition, arrangement,
application, action or other proceeding seeking relief or protection
under the bankruptcy laws of the United States or any similar laws of
the United States or any state of the United States or any other
country, or changes its legal status, or transfers all or substantially
all of its assets to another person or entity.
10.4 TERMINATION BY ISSC
ISSC may terminate this Agreement for a material default by CHMS that remains
uncured for a period of thirty (30) days after written notice thereof to CHMS
from ISSC.
10.5 TERMINATION CHARGES
a) In the event of a termination by CHMS pursuant to Sections 10.3(c)
Convenience or (d) Change of Control and notwithstanding any other
provision of this Agreement except Section 10.5(c), CHMS shall only be
responsible for the following payment obligations (i) all fee due and
payable through the termination date, (ii) the Termination Charge, and
(iii) the Wind-Down Expenses incurred by ISSC. However, in the event of
a termination by CHMS pursuant to Sections 10.3(a) Cause or (b)
Persistent Failure or (e) Bankruptcy and notwithstanding any other
provision of this Agreement except Section 10.5(c), CHMS shall only be
responsible for the payment obligations
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described in Section 10.5(a)(i) above, but not for the amounts set forth
in Sections 10.5(a)(ii) and (iii) above. Moreover, in the instances of
a termination by CHMS pursuant to Sections 10.3(a) Cause or (e)
Bankruptcy, CHMS may recover damages from ISSC for the defaults and
breaches by ISSC giving rise to the termination, but in the instance of
a termination by CHMS pursuant to Section 10.3(b) Persistent Failure,
CHMS may not recover any damages from ISSC for the defaults and breaches
by ISSC giving rise to the termination, except as set forth in Section
10.5(c).
b) In the event of a termination by ISSC under Section 10.4 above and
notwithstanding any other provision of this Agreement except Section
10.5(c), (i) if such termination is effective at any time while CHMS is
not permitted to terminate for convenience under Section 10.3(c), ISSC
may recover only the amount of its projected profits for the period
between the effective date of such termination and the first date on
which a termination for convenience by CHMS could be effective under
Section 10.3(c), plus the amounts payable by CHMS to ISSC in Section
10.5 for a termination by CHMS pursuant to Section 10.3(c) on such date,
and (ii) if such termination is effective at any time during the Term
other than as described in item (i) above, ISSC may recover only the
amounts payable by CHMS to ISSC in Section 10.5 for a termination by
CHMS pursuant to Section 10.3(c) Convenience.
c) The limitations on damages and recoveries set forth in Sections 10.3 and
10.4 shall be effective in all instances except such limitations shall
not apply to the following: (i) monetary damages and recoveries covered
under the Parties' respective indemnification obligations pursuant to
Section 11; and monetary damages and recoveries arising out of or
resulting from breaches of the confidentiality provisions of Section 9.
10.6 TERMINATION PRORATION
Any Termination Charge will be prorated according to the following formula:
[((A-B) / 12 months) x C] + B = Prorated Termination charge.
where:
A = the Termination Charge specified in the Supplement for the
year in which termination is effective;
B = the Termination Charge specified in the Supplement for the
year after the year in which termination is effective; and
C = the number of months remaining during the year in which
termination is effective.
10.7 EXTENSION OF SERVICES
CHMS may request and ISSC will once extend the provision of Services for not
more than one hundred eighty (180) days ("Extension Period") upon not less than
sixty (60) days prior written notice before the scheduled termination or
expiration of this Agreement. However, in the event of a material breach by
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CHMS either prior to or after the start of the Extension Period, ISSC will
extend the provision of Services as described in this Section 10.7, only if
CHMS prepays the Annual Service Charges and a reasonable projection of other
charges due under this Agreement for the entire period CHMS requests such
extension.
10.8 SERVICES TRANSFER ASSISTANCE
a) It is the intent of the Parties that ISSC will cooperate with CHMS to
assist in the orderly transfer of the services, functions,
responsibilities, tasks and operations provided by ISSC hereunder to
CHMS itself or another services provider in connection with the
expiration or earlier termination of this Agreement. Upon CHMS's request
ISSC shall provide transfer assistance in connection with migrating the
work of CHMS to CHMS itself or another services provider ("Services
Transfer Assistance") commencing six (6) months prior to expiration or
upon any notice of termination, or of non-renewal of this Agreement. In
the event CHMS shall fail to pay any amounts when due and payable under
this Agreement with or without an attendant termination for cause by
ISSC, ISSC shall not be required to provide Services Transfer Assistance
unless CHMS prepays the Annual Service Charge, if any, and a reasonable
projection of other charges due under this Agreement for the entire
period CHMS requests Services Transfer Assistance. In no event will
CHMS's escrow of monies pursuant to Section 7.6 be considered a failure
by CHMS to pay amounts due and payable hereunder. Further, ISSC shall
provide the Services Transfer Assistance in accordance with this Section
10.8 even in the event of CHMS's material breach (other than a payment
default) with or without an attendant termination for cause by ISSC, if
CHMS prepays a reasonable projection of the Out-of-Pocket Expenses for
the Services Transfer Assistance for the entire period CHMS desires ISSC
to provide such services to CHMS or its designees. Notwithstanding the
provisions of Sections 10.8(a) and (b), if ISSC terminates this
Agreement for cause or CHMS terminates this Agreement for convenience,
CHMS will pay the then current standard hourly rates of ISSC, discounted
by fifteen percent (15%), in each instance in which CHMS is to be
charged the Out-of-Pocket Expenses of ISSC in connection with the
Services Transfer Assistance services of ISSC under this Agreement.
Services Transfer Assistance shall be provided through the effective
date of expiration or termination of the Services, and upon request by
CHMS, for up to one hundred eighty (180) days thereafter. Services
Transfer Assistance shall include, but not be limited to, providing CHMS
and its Affiliates and their agents, contractors and consultants, as
necessary, with services described in Schedule N.
b) If any Services Transfer Assistance provided by ISSC requires the
utilization of additional resources that ISSC would not otherwise use in
the performance of this Agreement but for which there is a current
Resource Baseline, CHMS will pay ISSC for such usage at the then-current
Agreement charges and in the manner set forth in this Agreement. If the
Services Transfer Assistance requires ISSC to incur Out-of-Pocket
Expenses that ISSC would not otherwise incur in the performance of this
Agreement (such as providing Services Transfer Assistance after the
expiration or termination of this Agreement), then ISSC shall notify
CHMS of the identity and scope of the activities requiring that ISSC
incur such expense and the projected Out-of-Pocket Expenses associated
with the performance of such activities. Upon CHMS's authorization, ISSC
shall perform the activities and invoice CHMS for the associated
Out-of-Pocket Expenses. Within thirty (30) business days after the date
of the invoice, CHMS shall pay ISSC for authorized,
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additional Out-of-Pocket Expenses incurred to provide such additional
services to perform the authorized activities.
c) If CHMS exercises its option to prepay the Annual Service Charges and
other costs reasonably projected by ISSC for Services Transfer
Assistance and it is determined that such prepayment is in excess of the
actual costs associated with the Services Transfer Assistance, then ISSC
shall apply such overpayment to monies otherwise due ISSC or, if no
monies are due ISSC, promptly refund such overpayment to CHMS at the end
of such Services Transfer Assistance. Conversely, if the amount prepaid
by CHMS to ISSC for Services Transfer Assistance does not fully
reimburse ISSC for the actual Annual Service Charges due and
Out-of-Pocket Expenses incurred by ISSC for the provision of Services
Transfer Assistance to CHMS, then ISSC shall invoice CHMS and CHMS shall
pay ISSC for such additional amounts as incurred.
10.9 OTHER RIGHTS UPON TERMINATION
At the expiration or earlier termination of this Agreement for any reason,
however described, ISSC agrees:
a) Upon CHMS's request, ISSC agrees to sell to CHMS or its designee at fair
market value, the ISSC Machines owned by ISSC then currently being used
by ISSC on a dedicated basis to perform the Services. In the case of
dedicated ISSC Machines that ISSC is leasing, ISSC agrees to permit CHMS
or its designee to either buy-out the lease on the ISSC Machines and
purchase the ISSC Machines from the lessor or assume the lease(s) and
secure the release of ISSC thereon. CHMS shall be responsible for any
sales, use or similar taxes associated with such purchase of such ISSC
Machines.
b) ISSC will grant to CHMS and its Affiliates an irrevocable, nonexclusive,
worldwide, perpetual, paid-up license to use, execute, operate,
reproduce, display, perform, distribute, modify, Develop and
personalize, and create Derivative Works from, the ISSC Derivative Code,
ISSC Code, ISSC Works and ISSC Interfaces as a part of and in connection
with the CHMS Business, and the right to sublicense third parties to do
any of the foregoing for CHMS and its Affiliates.
c) ISSC will provide to CHMS and its Affiliates a source code and object
code license for ISSC Software proprietary to ISSC and not otherwise
owned by or licensed to CHMS in accordance with Section 10.9(b) and not
generally commercially available, with rights that are the same as those
granted to CHMS and its Affiliates in Section 10.9(b) for use by CHMS
and its Affiliates as a part of and in connection with the CHMS
Business, upon terms and prices to be mutually agreed upon by the
Parties (which prices shall not be greater than those offered to other
Similarly Situated Customers or, in the case where no Similarly Situated
Customers exist, other third parties). At CHMS's option, ISSC will
recommend a mutually agreeable commercially available substitute to
perform the same function.
d) If ISSC has licensed or purchased and is using any generally
commercially available ISSC Software to provide the Services to CHMS at
the date of expiration or termination, CHMS may elect to take a transfer
or an assignment of the license for such software (and any attendant
maintenance agreement) and reimburse ISSC for the initial license or
purchase charges for such
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ISSC Software in an amount equal to the remaining unamortized cost of
such ISSC Software, if any, depreciated over a five (5) year life. CHMS
shall also pay any transfer fee or charge imposed by the applicable
vendor and such licensed Software shall be transferred or assigned to
CHMS.
e) If ISSC has licensed or purchased and is using any generally
commercially available ISSC Software to provide the Services to CHMS and
other ISSC customers in a shared environment at the date of expiration
or termination, ISSC, upon request by CHMS, will assist CHMS in
obtaining licenses for such software subject to CHMS's payment of any
license fee or charge imposed by the applicable vendor.
f) ISSC will use commercially reasonable efforts to negotiate license
arrangements with third parties that will minimize the amount of license
transfer and assignment fees to be paid by CHMS. CHMS may participate in
the negotiation of such license arrangements. ISSC shall provide
reasonable advance written notice to CHMS of such anticipated
negotiations.
g) Upon the date of expiration or termination of this Agreement, CHMS shall
have the right to make offers of employment to any or all ISSC employees
performing Services for CHMS or its Affiliates hereunder ("Service
Employees"). Promptly after either Party sends the other Party written
notice of termination or expiration, ISSC agrees to supply CHMS with the
names and resumes requested by CHMS for the purpose of exercising its
rights under this Section 10.9, at no charge. CHMS's rights under this
Section 10.9 will take precedence over any ISSC/employee employment
contract or covenant that may otherwise limit an employee's right to
accept employment with CHMS.
h) Upon CHMS's request, ISSC will transfer or assign to CHMS or its
designee, on mutually acceptable terms and conditions, any Third Party
Agreements not otherwise treated in this Section 10.9, applicable solely
to services being provided to CHMS, including, without limitation, Third
Party Agreements for maintenance, Disaster Recovery Services and other
necessary third party services then being used by ISSC to perform the
Services subject to the payment by CHMS of any transfer fee or charge
imposed by the applicable vendors.
11. LIABILITY
11.1 LIABILITY CAPS
The liability of ISSC to CHMS arising out of or resulting from the performance
or non-performance of ISSC and its subcontractors of the Services and its
obligations under this Agreement shall be limited (a) to "Direct Damages"
incurred by CHMS for each event which is the subject matter of a claim or cause
of action with a liability cap for each such event which is not declared by
CHMS as the basis for its termination of this Agreement pursuant to Section
10.3(a) or (c), equal to the actual charges to CHMS for the Services during the
three (3) calendar months immediately following each such event; and (b) to the
"Direct Damages" incurred by CHMS for the event(s) which are the subject matter
of claim(s) or cause(s) of action which are declared by CHMS as the basis for
its termination of this Agreement pursuant to Section 10.3(a) or (c), with a
liability cap for such event(s) and termination equal to the actual
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charges to CHMS for the Services during the twelve (12) month period
immediately preceding such event(s) (the "ISSC Direct Damages Cap"). The
liability of CHMS to ISSC arising out of or resulting from the performance and
non-performance of its obligations under this Agreement shall be limited in all
cases to Direct Damages which in the aggregate shall not exceed the amounts
payable by CHMS upon a termination for convenience under Section 10.5(b) (the
"CHMS Direct Damages Cap"). The ISSC Direct Damages Cap and the CHMS Direct
Damages Cap are herein collectively called the "Direct Damages Caps".
11.2 EXCLUSIONS
The Direct Damages Caps will not apply to (a) failure to pay charges for the
Services that are due and payable hereunder up to the effective date of the
early termination of this Agreement (excluding from this exception any payments
due and payable by CHMS upon a termination by CHMS for convenience or upon a
change of control pursuant to Section 10.3(c) and (d) or upon a termination by
ISSC pursuant to Section 10.4); (b) Losses covered under the Party's
indemnification obligations to others pursuant to Section 13; (c) Losses
arising from a violation of the confidentiality provisions of Section 9; (d)
amounts to be paid or credited to CHMS as Service Credits; (e) Losses incurred
by either Party caused by or arising out of the inaccuracy or untruthfulness of
the representations and warranties of the other Party contained in this
Agreement; (f) amounts payable by ISSC under the force majeure provision of
Section 16.3 of this Agreement; and (g) amounts payable to CHMS under Section
7.7 (Other Credits).
11.3 DIRECT DAMAGES
Unless specifically provided to the contrary in this Agreement, neither party
shall have any liability whether based on contract, tort (including without
limitation, negligence), warranty, guarantee or any other legal or equitable
grounds to the other party for any damages other than Direct Damages. "Direct
Damages" mean actual, direct damages incurred by the claiming Party which
include, by way of example but without limitation, (i) the costs of cover
incurred by CHMS to obtain services which are the same as or substantially
similar to the Services, (ii) the costs to correct any deficiencies in the
Services rendered by ISSC, (iii) the costs incurred by CHMS to transition to
another provider of information management and communication services and/or to
take some or all of such functions and responsibilities in-house, (iv) the
difference in the amounts to be paid to ISSC hereunder and the charges to be
paid to such other provider and/or the costs of providing such functions,
responsibilities and tasks in-house, (v) payments incurred by CHMS to third
parties (including customers of CHMS and its Affiliates) in connection with the
failure of ISSC to provide the Services in accordance with this Agreement, (vi)
the Service Credits, and (vii) similar damages, but "Direct Damages" shall not
include loss of interest, profit (except as provided in Section 10.5(b)(i), as
included in the Termination Charge and as included as a part of the Service
Credits) or revenue of the claiming Party or any indirect, punitive or
exemplary damages suffered by the claiming Party arising from or related to
this Agreement, even if such Party has been advised of the possibility of such
losses or damages.
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11.4 DEPENDENCIES
In no event will ISSC or its subcontractors be liable for any damages if and to
the extent caused by CHMS's failure to perform its responsibilities hereunder.
Neither CHMS nor its subcontractors shall be liable for any damages if and to
the extent caused by any failure to perform by ISSC or its subcontractors.
11.5 REMEDIES
At its option, CHMS may seek all remedies available to it under law and in
equity or recover as liquidated damages the Service Credits, subject to the
limitations and provisions specified in this Section 11. If ISSC's provision of
the Services is such that ISSC would otherwise owe CHMS a Service Credit and
CHMS elects to recover Service Credits, CHMS's recovery of Service Credits
shall constitute acknowledgement by CHMS of full satisfaction and release of
any claim by CHMS that ISSC has breached its obligations under this Agreement
with respect to any such event(s) giving rise to the Service Credits. However,
within six (6) months of the receipt of any Service Credits CHMS received with
respect to any action or inaction by ISSC upon which CHMS is basing termination
for cause under Section 10.3(a) or termination for persistent breaches under
Section 10.3(b), CHMS may return, such Service Credits and pursue a damage
claim against ISSC, if any such claim exists.
12. WARRANTIES/COVENANTS
12.1 WORK STANDARDS
ISSC warrants and covenants that (a) it has, and each of the ISSC employees and
subcontractors that it will use to provide and perform the Services has, the
necessary knowledge, skills, experience, qualifications, rights and resources
to provide and perform the Services in accordance with the Agreement; (b) it
has successfully provided and performed the Services or services that are
substantially equivalent to the Services for other customers of ISSC; and (c)
the Services will be performed for CHMS in a diligent, workmanlike manner in
accordance with industry standards and best practices applicable to the
performance of such services.
12.2 NONINFRINGEMENT
The Parties represent and warrant that they will perform their responsibilities
under this Agreement in a manner that does not infringe, or constitute an
infringement or misappropriation of, any patent, Trade Secret, copyright or
other proprietary right of any third party. Notwithstanding this provision or
any other provision in this Agreement, CHMS makes no warranty or representation
with respect to any claims for such infringement or misappropriation by virtue
of its compliance with obligations herein to provide ISSC access to, use of or
benefits of any Third Party Agreements prior to receiving the necessary
Required Consents.
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12.3 DISABLING CODE
ISSC represents and warrants that ISSC will take commercially reasonable steps
to ensure that no code in the Systems Software which could have the effect of
disabling or otherwise shutting down all or any portion of the Services, will
be permitted to be invoked without the prior written consent of CHMS. ISSC
further represents and warrants that with respect to any disabling code that
may be part of the Software, ISSC will not invoke disabling code at any time,
including upon expiration or termination of this Agreement for any reason,
without CHMS's prior written consent.
12.4 AUTHORIZATION AND ENFORCEABILITY
Each Party hereby represents that:
a) it has all requisite corporate power and authority to enter, and fully
perform pursuant to, into this Agreement;
b) the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
properly authorized by all requisite corporate action on the part of
each Party; and
c) this Agreement has been duly executed and delivered by such Party.
12.5 DISCLAIMER
a) ISSC does not warrant the accuracy of any advice, report, data or other
product delivered to CHMS to the extent any inaccuracies are caused by
data and/or software provided by CHMS. Such products are delivered AS
IS, and ISSC shall not be liable for any inaccuracy thereof. ISSC will
promptly notify CHMS of any such inaccuracies of which ISSC becomes
aware and the cause therefore. ISSC will provide reasonable assistance
to CHMS to remedy any problems.
12.6 REGULATORY PROCEEDINGS
Each Party agrees at its cost and expense to obtain all necessary regulatory
approvals applicable to its business, obtain any necessary permits, and to
comply with all regulatory requirement applicable to the performance of its
services to its customers.
13. INDEMNITIES
13.1 INDEMNITY BY ISSC
ISSC will indemnify and hold CHMS and the other Authorized Users and their
respective officers, directors, employees, agents, customers, successors and
assigns (each an "Indemnitee") harmless from and against any and all Losses
incurred by any of them arising from or in connection with:
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a) any Claims of infringement of any United States letters patent, or any
copyright, trademark, service xxxx, trade name, trade secret, or similar
property right conferred by contract or by common law or by any law of
the United States or any state alleged to have been incurred because of
any information technology and information management and communications
services, equipment, software or other resources provided by ISSC or its
subcontractors in its performance of the Services; provided, however,
ISSC will have no obligation with respect to any Losses to the extent
arising from or in connection with Claims for copyright infringement
and/or breach of software licenses related to the Services committed by
an Indemnitee or any employee of an Indemnitee that is not the result of
ISSC failing to perform its obligations under this Agreement including,
without limitation, obtaining any Required Consent for which it has
responsibility; provided, further, that ISSC will have no obligation
with respect to any Losses to the extent arising out of or in connection
with an Indemnitee's modification of a program or a machine provided by
ISSC or its subcontractors or an Indemnitee's combination, operation or
use of the services, equipment, software or other resources provided by
ISSC or its subcontractors with devices, data or programs not furnished
by ISSC or its subcontractors;
b) any Claims accruing on or after the Effective Date regarding any Third
Party Agreements, however described (including without limitation,
failure to obtain Required Consents); provided, however, ISSC will have
no obligation with respect to any Losses to the extent arising out of or
in connection with Claims for copyright infringement and/or breach of
software licenses related to the Services committed by any Indemnitee or
any employee of an Indemnitee that is not the result of ISSC failing to
perform its obligations under this Agreement including, without
limitation, obtaining any Required Consent for which it has
responsibility;
c) the untruthfulness or inaccuracy of any representation or warranty made
by ISSC in this Agreement;
d) any amounts, including without limitation, taxes, interest and penalties
assessed against CHMS which are obligations of ISSC under this
Agreement;
e) personal injuries, death or damage to tangible personal or real property
of third parties including employees of ISSC, its contractors and
subcontractors; provided that ISSC will have no obligation under this
part, to the extent the same arise out of or in connection with the
negligence or willful misconduct of CHMS;
f) any Claims resulting from or arising out of the Services or operations
of ISSC (including, without limitation, Claims by customers of CHMS and
its Affiliates arising out of the failure of ISSC to provide the
Services in accordance with this Agreement, subject to Section 11.3(b),
if such Claims do not arise out of a breach of this Agreement by CHMS
and are not the subject of a specific indemnity provided to ISSC by CHMS
in Section 13.2; provided, however, that ISSC will have no obligation
under this item, to the extent the Claims arise out of or result from
the negligence or wilful misconduct of ISSC;
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g) any Claims for copyright infringement and/or breach of software licenses
related to the Services, committed by ISSC or any of its subcontractors
or any employee of ISSC and its subcontractors that is not the result of
CHMS failing to perform its obligations under this Agreement including
obtaining any Required Consent for which it has responsibility; and
h) any environmental Claim arising out of this Agreement or as a result of
the Services performed at the CHMS Data Center facilities if ISSC or its
subcontractors has caused the environmental damage or violation of
environmental laws or regulations from which the Claim arises.
i) any Claims directly attributable to ISSC's decision to request that CHMS
terminate, cancel, change or breach any Third Party Agreement and CHMS'
assent to and compliance with such decision and any Losses incurred by
CHMS associated with such decision by ISSC and compliance by CHMS.
In the event and to the extent that a Claim is made against an Indemnitee by an
employee of ISSC, its contractors or subcontractors providing Services
hereunder, the Parties agree that ISSC shall indemnify and hold harmless the
Indemnitee to the same extent as if the Claim was made by a non-employee of
ISSC, its contractors or subcontractors. ISSC's indemnification hereunder
shall be primary and immediate. Accordingly, in addition to other provisions
herein, and in order to render the Parties' intent and this indemnification
agreement fully enforceable, ISSC, in an indemnification claim hereunder,
expressly and without reservation waives any defense or immunity it may have
under any applicable workers' compensation law(s) or any other statute or
judicial decision disallowing or limiting such indemnification and consents to
a cause of action for indemnity. This waiver and consent to indemnification is
made irrespective of and specifically waiving any defense or immunity under any
statute or judicial decision.
13.2 INDEMNITY BY CHMS
CHMS will indemnify and hold harmless ISSC and its officers, directors,
employees, agents, successors and assigns (each an "ISSC Indemnitee") harmless
from and against any and all Losses incurred by ISSC arising from or in
connection with
a) any Claims of infringement of any United States letters patent, or any
copyright, trademark, service xxxx, trade name, trade secret, or similar
property right conferred by contract or by common law or by any law of
the United States or any state alleged to have been incurred because of
any information technology and information management and communications
services equipment, software or other resources provided to ISSC by CHMS
in connection with the performance of the Services; provided, however,
CHMS will have no obligation with respect to any Losses to the extent
arising out of or in connection with Claims for copyright infringement
and/or breach of software licenses related to the Services, committed by
an ISSC Indemnitee or any employee of an ISSC Indemnitee that is not the
result of CHMS failing to perform its obligations under this Agreement
including, without limitation, obtaining any Required Consent for which
it has responsibility; and provided, further, that CHMS will have no
obligation with respect to any Losses to the extent arising out of or in
connection with an ISSC Indemnitee's modification of a program or a
machine or an ISSC Indemnitee's combination, operation or use of the
equipment, software or other resources provided by CHMS;
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b) any Claims accruing before the Effective Date regarding any Third Party
Agreements between CHMS and a third party, including without limitation,
failure to obtain Required Consents;
c) the untruthfulness or inaccuracy of any representation or warranty made
by CHMS under this Agreement;
d) any amounts, including without limitation, taxes, interest and penalties
assessed against ISSC which are obligations of CHMS under this
Agreement;
e) personal injuries, death or damage to tangible personal or real property
of third parties including employees of CHMS, its contractors and
subcontractors; provided that CHMS will have no obligation, under this
part, to the extent the same arise out of or in connection with the
negligence of ISSC;
f) any Claims arising out of or resulting from the operations of CHMS,
including the remarketing of the Services by CHMS (except as provided in
Section 11), if such Claims do not arise out of a breach of this
Agreement by ISSC and are not the subject of a specific indemnity
provided to CHMS by ISSC in Section 13.1; provided, however, that CHMS
will have no obligation under this item, to the extent the Claims arise
out of or result from the negligence or wilful misconduct of ISSC;
g) any Claims for copyright infringement and/or breach of software licenses
related to the Services, committed by CHMS or any employee of CHMS that
is not the result of ISSC failing to perform its obligations under this
Agreement including, without limitation, obtaining any Required Consent
for which it has responsibility; and
h) any environmental Claim arising out of this Agreement or as a result of
the Services performed at the CHMS Data Center facilities unless ISSC or
its subcontractors has caused the environmental damage or violation of
environmental laws or regulations from which the Claim arises.
In the event and to the extent that a Claim is made by an employee of CHMS
against an ISSC Indemnitee, the Parties agree that CHMS shall indemnify and
hold harmless the ISSC Indemnitee to the same extent as if the Claim was made
by a non-employee of CHMS. CHMS's indemnification hereunder shall be primary
and immediate. Accordingly, in addition to other provisions herein, and in
order to render' the Parties' intent and this indemnification agreement fully
enforceable, CHMS, in an indemnification Claim hereunder, expressly and without
reservation waives any defense or immunity it may have under any applicable
workers' compensation law(s) or any other statute or judicial decision
disallowing or limiting such indemnification and consents to a cause of action
for indemnity. This waiver and consent to indemnification is made irrespective
of and specifically waiving any defense or immunity under any statute or
judicial decision.
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13.3 EMPLOYMENT ACTIONS
It is understood and agreed that ISSC shall be solely and exclusively
responsible for personnel decisions affecting ISSC's employees, contractors and
agents (including without limitation, hiring, promotions, training,
compensation, evaluation, discipline, and discharge). CHMS shall be solely and
exclusively responsible for personnel decisions affecting CHMS's employees,
contractors, and agents (including without limitation, hiring, promotion,
training, compensation, evaluation, discipline and discharge).
13.4 EXCLUSIVE REMEDY
The indemnification rights of each Indemnitee and ISSC Indemnitee (individually
an "Indemnified Party") for third party Claims pursuant to Sections 13.1 and
13.2, shall be the sole and exclusive remedy of such Indemnified Party with
respect to each such third party Claim to which such indemnification relates.
13.5 INDEMNIFICATION PROCEDURES
a) Written notice shall be given to the Party that is obligated to provide
indemnification under Sections 13.1 and 13.2 (the "Indemnifying Party"),
if any civil, criminal, administrative or investigative action or
proceeding is commenced or threatened (any of the above being a "Claim")
against any Indemnified Party. Such notice shall be given as promptly as
practicable but in all events, within a period that will not prejudice
the rights of the Indemnified Party under this Agreement or to defend
the Claim. After such notice, if the Indemnifying Party acknowledges in
writing to the Indemnified Party that this Agreement applies with
respect to such Claim, then the Indemnifying Party shall be entitled to
take control of the defense and investigation of such Claim and to
employ and engage attorneys of its sole choice to handle and defend the
same, at the Indemnifying Party's sole cost and expense. The
Indemnifying Party must deliver written notice of its election of taking
such control of the claim to the Indemnified Party not fewer than ten
(10) days prior to the date on which a response to such Claim is due or
such lesser period as is reasonable given the nature of the Claim and
the notice and response time permitted by law or the facts and
circumstances. The Indemnified Party shall cooperate in all reasonable
respects with the Indemnifying Party and its attorneys in the
investigation, trial, defense and settlement of such Claim and any
appeal arising therefrom. The Indemnified Party may participate in such
investigation, trial, defense and settlement of such Claim and any
appeal arising therefrom, through its attorneys or otherwise, at its own
cost and expense. No settlement of a Claim that involves a remedy other
than the payment of money by the Indemnifying Party shall be entered
into without the consent of the Indemnified Party, which consent will
not be unreasonably withheld.
b) After notice to the Indemnified Party of the Indemnifying Party's
election to assume full control of the defense of any such Claim, the
Indemnifying Party shall not be liable for any legal expenses incurred
thereafter in connection with the defense of that Claim by the
Indemnified Party. If the Indemnifying Party does not promptly assume
full control over and diligently pursue the defense of a Claim as
provided in this Section 13.5, the Indemnified Party shall have the
right to defend, settle or otherwise resolve the Claim in such manner as
it may deem appropriate, at the cost and expense of the Indemnifying
Party, and the Indemnifying Party may participate in such defense, at
its sole cost and expense. In no event shall any settlement of the Claim
require the consent of the Indemnifying Party which consent shall not be
unreasonably withheld.
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13.6 CUSTOMER CONTRACTUAL CLAIMS
Notwithstanding the foregoing provisions of Sections 13.1 through 13.5, ISSC
shall promptly upon request by CHMS and/or its Affiliates pay sixty percent
(60%) of any Losses paid by CHMS and its Affiliates to their respective
customers for each Claim arising pursuant to a contractual obligation of CHMS
and its Affiliates with their respective customers and resulting from the
failure of ISSC to provide the Services in accordance with this Agreement, but
ISSC shall not be obligated to pay the other forty percent (40%) of any such
Losses. Notwithstanding any other provision of this Agreement, CHMS and its
Affiliates shall also have the right to recover the Service Credits, if any,
and other damages associated with such failure by ISSC to provide the Services
in accordance with this Agreement.
14. INSURANCE AND RISK OF LOSS
14.1 ISSC INSURANCE
During the Term of this Agreement, ISSC and each ISSC contractor and
subcontractor shall maintain and keep in force, at its own expense, the
following minimum insurance coverages and minimum limits:
a) workers' compensation insurance, with statutory limits as required by
the various laws and regulations applicable to the employees of ISSC or
any ISSC contractor or subcontractor;
b) employer's liability insurance, for employee bodily injuries and deaths,
with a limit of $500,000 each accident;
c) comprehensive or commercial general liability insurance, covering claims
for bodily injury, death and property damage, including premises and
operations, independent contractors, products and completed operations,
personal injury, contractual, and broad-form property damage liability
coverages, with limits as follows: (1) occurrence/aggregate limit of
$1,000,000 for bodily injury, death and property damage each occurrence
of $2,000,000 general aggregate; or (2) split liability limits of (i)
$1,000,000 for bodily injury per person; (ii) $1,000,000 for bodily
injury per occurrence; and (iii) $500,000 for property damage;
d) comprehensive automobile liability insurance, covering owned, non-owned
and hired vehicles, with limits as follows (1) combined single limit of
$500,000 for bodily injury, death and property damage per occurrence; or
(2) split liability limits of (i) $500,000 for bodily injury per person;
(ii) $500,000 for bodily injury per occurrence; and (iii) $250,000 for
property damage; and
e) all-risk property insurance, on a replacement cost basis, covering the
real property of ISSC which ISSC is obligated to insure by this
Agreement. Such real property may include buildings, equipment,
furniture, fixtures and supply inventory.
All such policies of insurance of ISSC and its contractors and subcontractors
shall provide that the same shall not be canceled nor the coverage modified nor
the limits changed without first giving thirty (30) days prior written notice
thereof to CHMS. No such cancellation, modification or change shall affect
ISSC's obligation to maintain the insurance coverages required by this
Agreement. Except for workers'
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compensation insurance, CHMS shall be named as an additional insured on all
such required policies. All liability insurance policies shall be written on an
"occurrence" policy form. CHMS shall be named as loss payee as its interest may
appear on the property insurance policies of ISSC. ISSC shall be responsible
for payment of any and all deductibles from insured claims under its policies
of insurance. The coverage afforded under any insurance policy obtained by ISSC
pursuant to this Agreement shall be primary coverage regardless of whether or
not CHMS has similar coverage. ISSC or its contractors and subcontractors shall
not perform under this Agreement without the prerequisite insurance and/or
self-insurance in effect. Upon CHMS's request, ISSC shall provide CHMS with
certificates of such insurance including renewals thereof. ISSC shall have the
right to self-insure any of the insurance coverages required by this Agreement
upon prior written notification to CHMS. Unless previously agreed to in writing
by CHMS, ISSC's contractors and subcontractors shall comply with the insurance
requirements herein. The minimum limits of coverage required by this Agreement
may be satisfied by a combination of primary and excess or umbrella insurance
policies. If ISSC or its contractors or subcontractors shall fail to comply
with any of the insurance requirements herein, upon written notice to ISSC by
CHMS and a thirty (30) day cure period, CHMS may, without any obligation to do
so, procure such insurance and ISSC shall pay CHMS the cost thereof plus a
reasonable administrative fee as designated by CHMS. The maintenance of the
insurance coverages required under this Agreement shall in no way operate to
limit the liability of ISSC to CHMS under the provisions of this Agreement.
14.2 CHMS INSURANCE
During the Term of this Agreement, CHMS and each CHMS contractor and
subcontractor shall maintain and keep in force, at its own expense, the
following minimum insurance coverages and minimum limits:
a) worker's compensation insurance, with statutory limits as required by
the various laws and regulations applicable to the employees of CHMS or
any CHMS contractor or subcontractor;
b) employer's liability insurance, for employee bodily injuries and deaths,
with a limit of $500,000 each accident;
c) comprehensive or commercial general liability insurance, covering claims
for bodily injury, death and property damage, including premises and
operations, independent contractors, products and completed operations,
personal injury, contractual, and broad-form property damage liability
coverages, with limits as follows: (1) occurrence/aggregate limit of
$1,000,000 for bodily injury, death and property damage each occurrence
of $2,000,000 general aggregate; or (2) split liability limits of (i)
$1,000,000 for bodily injury per person; (ii) $1,000,000 for bodily
injury per occurrence; and (iii) $500,000 for property damage;
d) comprehensive automobile liability insurance, covering owned, non-owned
and hired vehicles, with limits as follows (1) combined single limit of
$500,000 for bodily injury, death and property damage per occurrence; or
(2) split liability limits of (i) $500,000 for bodily injury per person;
(ii) $500,000 for bodily injury per occurrence; and (iii) $250,000 for
property damage; and
e) all-risk property insurance, on a replacement cost basis, covering the
real property of CHMS which CHMS is obligated to insure by this
Agreement. Such real property may include buildings, equipment,
furniture, fixtures and supply inventory.
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All such policies of insurance of CHMS and its contractors and subcontractors
shall provide that the same shall not be canceled nor the coverage modified nor
the limits changed without first giving thirty (30) days prior written notice
thereof to ISSC. No such cancellation, modification or change shall affect
CHMS's obligation to maintain the insurance coverages required by this
Agreement. Except for workers' compensation insurance, ISSC shall be named as
an additional insured on all such required policies. All liability insurance
policies shall be written on an "occurrence" policy form. CHMS shall be named
as loss payee as its interest may appear on the property insurance policies of
CHMS. CHMS shall be responsible for payment of any and all deductible's from
insured claims under its policies of insurance. The coverage afforded under any
insurance policy obtained by CHMS pursuant to this Agreement shall be primary
coverage regardless of whether or not ISSC has similar coverage. CHMS or its
contractors and subcontractors shall not perform under this Agreement without
the prerequisite insurance or self insurance in effect. CHMS shall have the
right to self-insure any of the insurance coverages required by this Agreement
upon prior written notification to ISSC. Unless previously agreed to in writing
by ISSC, CHMS's contractors and subcontractors shall comply with the insurance
requirements herein. The minimum limits of coverage required by this Agreement
may be satisfied by a combination of primary and excess or umbrella insurance
policies. If CHMS or its contractors or subcontractors shall fail to comply
with any of the insurance requirements herein, upon written notice to CHMS by
ISSC and a thirty (30) day cure period, ISSC may, without any obligation to do
so, procure such insurance and CHMS shall pay ISSC the cost thereof plus a
reasonable administrative fee as designated by ISSC. The maintenance of the
insurance coverages required under this Agreement shall in no way operate to
limit the liability of CHMS to ISSC under the provisions of this Agreement.
14.3 RISK OF PROPERTY LOSS
ISSC is responsible for risk of loss of, or damage to, the Software, Computer
Hardware and Authorized User Data in its possession, and CHMS is responsible
for risk of loss of, or damage to, the Software, Computer Hardware and
Authorized User Data in its possession.
14.4 MUTUAL WAIVER OF SUBROGATION
a) To the extent permitted by law, ISSC, its contractors and subcontractors
hereby waive their rights of subrogation against CHMS, its directors,
officers, employees and agents for any loss or damage to the ISSC
Machines, ISSC Software, and other tangible and intangible, real and
personal property of ISSC, its contractors and subcontractors resulting
from operations in connection with this Agreement. Each property
insurance policy of ISSC, its contractors and subcontractors shall be
endorsed to provide a waiver of any and all rights of subrogation
against CHMS, its directors, officers, employees and agents for loss
resulting from operations in connection with this Agreement.
b) To the extent permitted by law, CHMS, its directors, officers, employees
and agents hereby waive their rights of subrogation against ISSC, its
contractors and subcontractors for any loss or damage to the
CHMS-Provided Hardware, CHMS Software and other tangible and intangible,
real and personal property of CHMS, its directors, officers, employees
and agents resulting from operations in connection with this Agreement.
Each property insurance policy of CHMS shall be endorsed to provide a
waiver of any and all rights of subrogation against ISSC, its
contractors and subcontractors for loss resulting from operations in
connection with this Agreement.
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15. ADVISORY COMMITTEES/DISPUTE RESOLUTION
15.1 CHMS/ISSC MANAGEMENT COMMITTEE
The "CHMS/ISSC Management Committee" shall consist of two or more
representatives from each organization, including representatives from CHMS's
lines of business as determined by CHMS. The CHMS/ISSC Management Committee
will: (a) conduct monthly and quarterly reviews on the progress of projects;
(b) prioritize projects and identify any applicable expected ARCs that will be
incurred to accomplish the workload; (c) attempt to resolve disputes between
the Parties; (d) review the "look ahead" schedule for ongoing and planned
changes, on a monthly basis; (e) review ongoing operations and discuss areas of
concern and appropriate action plans; (f) identify new application development
projects and Applications Software requirements; (g) develop new project action
plans; (h) provide advice and direction on technology changes; (i) target areas
for improved efficiency and cost reduction and assign responsibility and report
on progress of efficiency and cost reduction initiatives; (j) commit resources
as required; (k) review the operating and strategic plans prepared by the
Project Executives, on an annual basis; (l) review performance objectives and
measurements, on an annual basis; (m) set priorities for projects; (n) review
that portion of the CHMS Business plan affecting information system strategy,
on an annual basis; and (o) set annual targets for cost reduction and
efficiency initiatives and monitor performance against targets.
15.2 DISPUTE RESOLUTION PROCEDURES
a) Any dispute between the Parties either with respect to the
interpretation of any provision of this Agreement or with respect to the
performance by ISSC or by CHMS hereunder shall be resolved as specified
in this Section 15.2.
1) Upon the written request of either Party, each of the Parties
will appoint a designated representative who does not devote
substantially all of his or her time to performance under this
Agreement, whose task it will be to meet for the purpose of
endeavoring to resolve such dispute.
2) The designated representatives shall meet as often as
necessary to gather and furnish to the other Party all
information with respect to the matter in issue which is
appropriate and germane in connection with its resolution.
3) Such representatives shall discuss the problem and negotiate
in good faith in an effort to resolve the dispute without the
necessity of any formal proceeding relating thereto.
4) During the course of such negotiation, all reasonable requests
made by one Party to the other for nonprivileged information
reasonably related to this Agreement, will be honored in order
that each Party may be fully advised of the other Party's
position.
5) The specific format for such discussions will be left to the
discretion of the designated representatives, but may include
the preparation of agreed upon statements of fact or written
statements of position furnished to the other Party.
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b) If the designated representatives do not resolve the dispute within
thirty (30) days after the date of receipt by the other Party of a
request to appoint a designated representative as described in Section
15.2(a)(1) (the "Notice"), then the dispute shall be escalated to the
Vice President of Technology of CHMS and the ISSC Vice President of
Cross Industry Services, for their review and resolution within
forty-five (45) days after receipt of the dispute for resolution.
c) If the designated representatives do not resolve the dispute within
forty-five (45) days after the Notice, then the dispute shall be
escalated to the President of CHMS and the President of ISSC, for their
review and resolution within sixty (60) days after the Notice.
d) If the dispute is not resolved by the Parties' Presidents within ninety
(90) days after the Notice, the Parties agree to try in good faith to
resolve the dispute by mediation under the Commercial Mediation Rules of
the American Arbitration Association, before resorting to litigation or
some other dispute resolution procedure.
e) If the dispute is not resolved by mediation within one hundred twenty
(120) days after the Notice, then the Parties may initiate formal
proceedings; however, formal proceedings for the judicial resolution of
any such dispute may not be commenced until the earlier of:
1) the designated representatives concluding in good faith that
amicable resolution through continued negotiation of the
matter in issue does not appear likely; or
2) one hundred twenty (120) days after the Notice; or
3) thirty (30) days before the statute of limitations governing
any cause of action relating to such dispute would expire.
Notwithstanding anything to the contrary in this Section 15.2(e), the CHMS/ISSC
Management Committee shall have the authority to stay the time periods set
forth in this Section 15.2 upon unanimous vote of its members to take such
action.
f) Notwithstanding any other provision of this Section 15.2, either Party
may resort to court action for injunctive relief at any time if the
dispute resolution processes set forth in this Section would permit or
cause irreparable injury due to delay to such Party or any third party
claiming against such Party.
15.3 CONTINUED PERFORMANCE
The Parties agree to continue performing their respective obligations under
this Agreement while the dispute is being resolved unless and until such
obligations are terminated or expire in accordance with the provisions of this
Agreement.
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16. GENERAL
16.1 CONTROL OF SERVICES
This Agreement shall not be construed as constituting either Party as partner
of the other or to create any other form of legal association that would impose
liability upon one Party for the act or failure to act of the other or as
providing either Party with the right, power or authority (express or implied)
to create any duty or obligation of the other Party. Each Party shall be
responsible for the management, direction and control of its employees and such
employees shall not be employees of the other Party.
Each Party will submit to the other Party all advertising, written sales
promotion, press releases and other publicity matters relating to this
Agreement in which the other Party's name or xxxx is mentioned or language from
which the connection of said name or xxxx xxx be inferred or implied, and will
not publish or use such advertising, sales promotion, press releases, or
publicity matters without prior written approval of the other Party. However,
either Party may include the other Party's name and a factual description of
the work performed under this Agreement on employee bulletin boards, in its
list of references and in the experience section of proposals to third parties,
in internal business planning documents and in its annual report to
stockholders, and whenever required by reason of legal, accounting or
regulatory requirements.
16.2 ENTIRE AGREEMENT, UPDATES, AMENDMENTS AND MODIFICATIONS
This Agreement including the Supplement and Schedules A through O, constitute
the entire agreement of the Parties with regard to the Services and matters
addressed therein, and all prior agreements, letters, proposals, discussions
and other documents regarding the Services and the matters addressed in this
Agreement (including the Supplement and Schedules) and are superseded and
merged into this Agreement (including the Supplement and Schedules). Updates,
amendments and modifications to this Agreement may not be made orally, but
shall only be made by a written document signed by both Parties. Any terms and
conditions varying from this Agreement (including the Supplement and Schedules)
on any order or written notification from either Party shall not be effective
or binding on the other Party.
16.3 FORCE MAJEURE
a) Neither Party shall be liable for any default or delay in the
performance of its obligations hereunder if and to the extent and while
such default or delay is caused, directly or indirectly, by fire, flood,
earthquake, elements of nature or acts of God, acts of war, terrorism,
riots, civil disorders, rebellions or revolutions in the United States,
strikes, lockouts, or labor difficulties or any other similar cause
beyond the reasonable control of such Party other than strikes,
lockouts, or labor difficulties initiated by such Party's or its
subcontractor's employees; and provided such default or delay could not
have been prevented by reasonable precautions and cannot reasonably be
circumvented by the nonperforming Party through the use of alternate
sources, work-around plans or other means, (individually, each being a
"Force Majeure Event").
b) If a Force Majeure Event occurs, the nonperforming Party will be excused
from any further performance or observance of the obligation(s) so
affected for as long as such circumstances prevail and such Party
continues to use commercially reasonable efforts to recommence
performance or
January 4, 1996
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observance whenever and to whatever extent possible without delay. Any
Party so delayed in its performance will immediately notify the other by
telephone and describe at a reasonable level of detail the circumstances
causing such delay (to be confirmed in writing within twenty-four (24)
hours after the inception of such delay).
c) If any Force Majeure Event substantially prevents, hinders, or delays
performance of the Services necessary for the performance of CHMS's
critical functions for more than fifteen (15) consecutive days, then at
CHMS's option:
1) CHMS may procure such Services from an alternate source. ISSC
will directly and timely pay the alternate source the full
amount charged by such alternate source for the provision of
such Services to CHMS until such time as ISSC is able to
restore the Services and meet the Performance Standards; or
2) CHMS may terminate this Agreement as of a date specified by
CHMS in a written notice of termination to ISSC, and CHMS will
pay all fees due and payable through the termination date. If
CHMS elects such termination, CHMS shall not be obligated to
pay any other termination or other fees, however described, to
ISSC, except for Services Transfer Assistance.
d) This Section 16.3 does not limit or otherwise affect ISSC's obligation
to provide Disaster Recovery Services in accordance with Schedule G. In
the event of a Force Majeure Event affecting CHMS this Section 16.3 will
not limit or otherwise relieve CHMS's obligation to pay any monies due
ISSC under the terms of this Agreement, except as provided in Section
16.3(c)(2).
16.4 NONPERFORMANCE
Except as otherwise provided in this Agreement, to the extent any
nonperformance by either Party of its nonmonetary obligations under this
Agreement results from or is caused by the other Party's failure to perform its
obligations under this Agreement, such nonperformance shall be excused.
16.5 WAIVER
No waiver of any breach of any provision of this Agreement shall constitute a
waiver of any prior, concurrent or subsequent breach of the same or any other
provisions hereof.
16.6 SEVERABILITY
If any provision of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby, and such
provision shall be deemed to be restated to reflect the Parties' original
intentions as nearly as possible in accordance with applicable law(s).
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16.7 LIMITATIONS PERIOD UPON TERMINATION
Neither Party may bring an action, regardless of form, arising out of this
Agreement more than three (3) years after the cause of action has arisen or the
date such cause of action was or should have been discovered.
16.8 COUNTERPARTS
This Agreement shall be executed in counterparts. Each such counterpart shall
be an original and together shall constitute but one and the same document.
16.9 GOVERNING LAW
This Agreement shall be governed by the laws of the State of Georgia as such
laws are applied to contracts which are entered into and performed entirely
within the State of Georgia. The Parties agree that any lawsuit commenced by
either Party shall be commenced in the appropriate court for Xxxxxx County,
Georgia or the U.S. District Court for the Northern District, Atlanta division
of Georgia. Each of the Parties hereby consents to the jurisdiction of and
service of process from the appropriate court for Xxxxxx County, Georgia or the
U.S. District Court for the Northern District, Atlanta division of Georgia.
16.10 BINDING NATURE AND ASSIGNMENT
This Agreement will be binding on the Parties and their respective successors
and permitted assigns. Except as provided in this Section 16.10, neither Party
may, or will have the power to, assign this Agreement without the prior written
consent of the other, which consent shall not be unreasonably withheld, except
that either Party may assign its rights and obligations under this Agreement to
an Affiliate which expressly assumes such Party's obligations and
responsibilities hereunder, without the approval of the other Party. The
assigning Party shall remain fully liable for and shall not be relieved from
the full performance of all obligations under this Agreement. Any attempted
assignment that does not comply with the terms of this Section 16.10 shall be
null and void. Any Party assigning its rights or obligations to an Affiliate in
accordance with this Agreement shall provide written notice thereof to the
other Party together with a copy of the assignment document, within three (3)
business days of such assignment.
16.11 NOTICES
a) Under this Agreement whenever one Party is required or permitted to give
notice to the other Party, such notice will be in writing unless
otherwise specifically provided herein and will be deemed given when
delivered in hand, one day after being given to an express courier with
a reliable system for tracking delivery, or three (3) days after the day
of mailing, when mailed by United States mail, registered or certified
mail, return receipt requested, postage prepaid, or when sent by
facsimile and thereafter delivered by one of the foregoing methods of
delivery.
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b) Notifications will be addressed as follows:
1) For termination, breach or default, notify:
In the case of ISSC: with a courtesy, but not legally required, copy to:
ISSC Project Executive ISSC General Counsel
6666 Powers Ferry Road Xxxxx 0, Xxx 000
Xxxxxxx, Xxxxxxx 00000 Xxxxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000 Facsimile: 000-000-0000
In the case of CHMS: with a courtesy, but not legally required, copy to:
Services Technology CHMS General Counsel
Officer 0000 Xxxxxx Xxxxx Xxxx
0000 Xxxxxx Xxxxx Xxxx Xxxxxxx, Xxxxxxx 00000
Xxxxxxx, Xxxxxxx 00000 Facsimile: 000-000-0000
Facsimile: 000-000-0000
2) For all other notices:
In the case of ISSC: In the case of CHMS:
ISSC Project Executive CHMS Project Executive
0000 Xxxxxx Xxxxx Xxxx 0000 Xxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000 Xxxxxxx, Xxxxxxx 00000
Facsimile: 000-000-0000 Facsimile: 000-000-0000
Either Party hereto may from time to time change its address for notification
purposes by giving the other prior written notice of the new address and the
date upon which it will become effective.
16.12 NO THIRD PARTY BENEFICIARIES
Except as specified in this Agreement for Authorized Users and Affiliates of
CHMS and in Sections 4 and 13, the Parties do not intend, nor will any Section
hereof be interpreted, to create for any third party any third party
beneficiary rights with respect to either of the Parties.
16.13 OTHER DOCUMENTS
Upon request of the other Party, on or after the Effective Date and the date(s)
of any amendments or revisions hereto each Party shall furnish to the other
such certificate of its Secretary, certified copy of resolutions of its Board
of Directors, or opinion of its counsel as shall evidence that this Agreement
or any amendment or revision hereto has been duly executed and delivered on
behalf of such Party.
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16.14 CONSENTS AND APPROVALS
The Parties agree that in any instance where consent, approval or agreement is
required of a Party in order for the other Party to perform under or comply
with the terms and conditions of this Agreement, then such Party will not
unreasonably withhold or delay such consent, approval or agreement and where
consent, approval or agreement cannot be provided, the Party shall notify the
other Party in a timely manner.
16.15 HEADINGS
All headings herein and the table of contents are not to be considered in the
construction or interpretation of any provision of this Agreement. This
Agreement was drafted with the joint participation of both Parties and shall be
construed neither against nor in favor of either, but rather in accordance with
the fair meaning thereof. In the event of any apparent conflicts or
inconsistencies between the Agreements, the Schedules or other attachments to
this Agreement, to the extent possible such provisions shall be interpreted so
as to make them consistent, and if such is not possible, the provisions of this
Agreement shall prevail.
16.16 REMARKETING
CHMS may not remarket all or any portion of the Services provided under this
Agreement, or make all or any portion of the Services available to any party,
without the prior written consent of ISSC; provided, however, CHMS may sell or
make available to the Authorized Users and potential Authorized Users, the
Services under this Agreement. CHMS shall independently set its own pricing and
policies in connection with any such disposition of the Services. Nothing
herein may be construed to limit or hinder CHMS from (i) marketing, selling or
performing its services to and for any Authorized Users, and/or (ii) from
providing any portion of the Services to any Authorized Users.
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