EXHIBIT 10(ii)
CS - MCM MANAGEMENT SYSTEM AGREEMENT, FOR COMPUTER SERVICES
THIS AGREEMENT ("Agreement") is made effective as of the date executed by
Corporate Systems Ltd. ("CS"), a Texas Limited Partnership, having a principal
place of business at 0000 Xxxx Xxxxxx, Xxxx Xxxxxx Xxx 00000, Xxxxxxxx, Xxxxx,
00000 and The Travelers Insurance Company including its subsidiaries, affiliates
and agents ("Customer"), a Connecticut corporation having a principal place of
business at Xxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000.
WHEREAS, it is the desire of the Customer to utilize Workers' Compensation
medical cost management software program known as CS + Managed Care a software
product owned by CS, which incorporated several certain third-party
technologies, as identified in EXHIBIT G attached hereto and incorporated
herein and certain software modules owned by CS and incorporated as a part of
its claims administration system, herein referred to as "Third-Party
Programs," and collectively referred to as the "Computer Services"; CS shall
notify Customer as additional third party technology partners are contracted
with and;
WHEREAS, it is the desire of CS to grant to Customer a non-exclusive license
for Customer's access to remote direct on-line interactive processing and/or
batch processing capabilities utilizing CS + Managed Care and the requested
Customer specific modifications, as described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION OF THE OBLIGATIONS, MUTUAL COVENANTS AND
AGREEMENTS CONTAINED HEREIN, THE PARTIES AGREE AS FOLLOWS:
1. Description of Property and Services:
A. CS shall provide to Customer access to the CS + Managed Care System
remote direct on-line interactive processing and/or batch processing
capabilities necessary to facilitate the Computer Services as
described in EXHIBIT F (The Work Flow), and with such custom designs
otherwise provided in this Agreement.
B. In preparation for the commencement of the above identified services,
the parties have by mutual assent developed Design Requirements for
the Pilot Implementation of the Contract, attached hereto and
incorporated herein as Exhibit C.
Provide that the Design Requirements of Exhibit C are implemented by
December 21 of 1992, the Pilot Implementation phase, Exhibit C, of the
Agreement shall begin on January 25, 1993. At Customer's option,
given the successful completion of the Pilot Implementation in Dallas,
Quincy and Xxxxxx Plains and Country Wide Implementation, Customer at
its option, may request a design and development plan of an and or all
items listed in Day 2 and/or Day 3. Prior to this, the parties shall
by mutual agreement determine the total development costs. If such
price is satisfactory to Customer, Customer will authorize CS to
complete the work. The parties shall, by agreement, establish the
order in which the Day 2 components shall be completed. The Day 3
portion, (EXHIBIT E), shall be provided to Customer at Customer's
request, subject to CS's ability to develop the necessary components.
* Certain portions of this contract have been redacted for confidentiality.
Redacted portions are marked [ ]. The registrant has filed the redacted
portions with the SEC as required pursuant to Rule 406.
The parties, however, agree that some or all of the Day 3 components
as described in Exhibit E can be developed before any or all of the
Day 2 portions are completed.
C. Customer reserves the right to use these Computer Services for the
repricing of medical bills other than Workers' Compensation bills,
specifically, automobile medical bills and automobile no-fault medical
bills. The Pricing Schedule, described herein on Exhibit A, shall
apply to these additional services. The implementation of these
additional services shall begin when the parties have, in a signed
writing, provided for their implementation.
2. Term of Agreement:
No termination of this Agreement, other than for cause, shall be effective
earlier than 3 years from the date of execution. Either party may however
give notice of its intention to terminate this Agreement, effective at the
end of the initial term, by providing the other party 180 days written
notice. If neither party exercises its option to terminate, this Agreement
shall continue in successive 1 year terms or such other terms as agreed to
in writing by the parties.
3. Prices and Payment Terms:
A. Customer agrees to pay for the comprehensive Computer Services
furnished by CS at the prices specified in Exhibit A, "PRICING
SCHEDULE" attached hereto and incorporated herein by reference, or if
none are specified, at published prices in effect on the date of
usage.
B. All expenses incurred as a result of a Customer request for goods
and/or services, other than those set out in Exhibit A, including but
not limited to labor, computer time, printing, shipping, and expenses
reasonably incurred for travel and lodging as well as art services,
mailing or delivery expenses, shall be paid by Customer on a time
and/or material basis.
C. Invoices requesting payment for items described in Exhibit B and
subsection B above will be sent to Customer for goods and services
provided. Terms are net cash payable within thirty (30) days after
date of invoice, unless notified otherwise by CS in writing. After
thirty (30) days, one and one-half (1-1/2%) percent interest is
charged monthly [eighteen 18% percent annually] from invoice date.
4. Title:
A. Customer information retained on CS data files is the sole property of
the Customer, and such information may not be used, disclosed to third
parties, transferred or altered without the written approval of the
Customer, except as required to provide regulatory reporting or
analysis or to meet the aggregate reverse data feed requirements of
the Third-Party Programs.
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B. CS retains title to and reserves all rights in the programs, data,
information, or other property developed by CS hereunder.
5. Revisions:
(A) Either party, by giving to the other reasonable notice, may request
reasonable revisions of the goods and services offered, method of
operation, documentation provided, and equipment used. Any verbal
notices shall be followed up by a written notice of such change. In
no case will service or goods be less than agreed without
renegotiation of this Agreement. If the parties cannot agree after
attempting to renegotiate the agreement, then either arty may
terminate this agreement by giving the other ninety (90) days prior
written notice of its intention to terminate.
(B) The initial load of the Provider File will be furnished by CS. Such
Provider File revision shall be performed by Customer through the
utilization of CS' realtime and Managed Care production screens.
6. Security:
Precautions have been taken by CS to prevent the loss or alteration of or
improper access to Customer programs, data, information, or other property.
Customer is responsible for utilizing, as desired, those features of the CS
system which enhance the security of Customer programs, data, information,
and materials.
In the event that either party discovers improper access, such party will
notify the other, and the parties will cooperate with each other to
identify the person or persons responsible and to prevent future
occurrences.
7. Property:
A. Customer in its use of any CS property in accordance with this
Agreement; shall not misuse or modify, and shall otherwise protect and
maintain such property; shall maintain any labels which identify
ownership; shall not retain such property as a set-off or in full or
partial satisfaction of any claim against CS, and shall return such
property upon termination of usage in accordance with CS' instructions
and in the same condition as received, normal wear and tear excepted.
B. The compatibility of Customer's interfacing equipment and methods
shall be identified by the parties prior to the Pilot Program. After
this identification, should the Customer modify or revise its
interfacing equipment or methods, thereby causing CS to modify its
interfacing equipment or methods in order to continue the repricing
service, all costs to do so will be the responsibility of the
Customer.
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8. Audits and Governmental Examinations:
CS agrees to permit auditors retained by Customer to audit the procedures
for handling and processing data hereunder upon reasonable notice and
compliance with CS's reasonable security procedures. The parties also
acknowledge that certain federal and state agencies may require access to
facilities and records of CS to audit the performance of the Computer
Services by CS for Customer under this Agreement, and CS will cooperate
with respect to all such governmental audits.
9. Disposition of Customer Programs, Data, Information, or other Property:
If Customer fails to remove or instruct CS in writing on the disposition of
Customer program, data, information, or other property on CS premises
within thirty (30) days after termination of this Agreement, or after
written notice from CS, CS may destroy or otherwise dispose of same.
Customer information retained on CS data files is the sole property of the
Customer and upon termination of this Agreement will be available to
Customer in the form of one hard copy and one magnetic tape copy at an
additional cost to Customer and upon Customer's remittance to CS of such
reasonable fees to cover such final servicing and handling of materials.
10. Default:
Any of the following shall constitute an event of default:
1) If either party shall petition for relief under any chapter of the
Federal Bankruptcy Act, as amended, or if any involuntary petition
thereunder should be filed against either party, and is not set aside
within thirty (30) days, or if either party is adjudicated bankrupt,
or if a receiver is appointed for either party's business and if CS as
a debtor-in-possession, or a trustee in bankruptcy in a case under the
Bankruptcy Code rejects this Agreement or any agreement supplementary
hereto,
2) If either party makes an assignment for the benefit of creditors, or
admits in writing its inability to pay its debts generally as they
become due; or
3) If either party breaches this Agreement and fails to cure such breach
within a minimum of 30 days, or such other mutually agreeable
extension of time after receipt of written notice of such breach from
the non-defaulting party. If CS fails to cure such breach(es) within
the cure period, Customer may at its option terminate this Agreement.
In cases where such breach(es) amounts to a failure by CS to provide
the Computer Services as contemplated by the parties, and Customer can
no longer utilize the Computer Services on behalf of its clientele,
Customer may, at its option, terminate this Agreement and require CS
to reimburse Customer the amount of Customer's then provable monthly
expenses in excess of what Customer would have paid to CS. [ ]
[ ] Material Redacted for Confidentiality
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If CS breaches this Agreement but only a diminishment of the Computer
Services occurs, then Customer will have the option of continuing its
use of the Computer Services but at a reduced rate in proportion to
the diminished services.
11. Warranties, Remedies, and Disclaimers:
A. CS warrants any processing or storage services including the repricing
services furnished hereunder against malfunctions, errors, or loss of
data which are due to errors on the part of CS, its equipment, or its
employees. If Customer notifies CS in writing and furnishes adequate
documentation of any malfunction, error, or loss of data covered by
the above warranty within twenty (20) days after its occurrence or if
CS discovers any malfunction, error, or loss of such data, then:
(1) With respect to malfunction or error, CS shall without charge
reprocess reports designated by the Customer which fall within
reasonable check point intervals; and
(2) With respect to lost data, CS shall either (i) regenerate without
charge any lost data if Customer provides adequate backup materials in
machine readable form, or (ii) if Customer does not provide such
backup materials, grant Customer a credit in an amount equal to the CS
estimated cost of regeneration, such estimate to be made as if such
backup materials were available.
(3) If such errors not attributable to Customer, shall result in the
imposition of State(s) penalties against Customer, CS shall reimburse
Customer for the total amount of such penalties. If requested,
Customer will provide evidence of the imposition of such penalties to
CS.
B. CS warrants that the repricing is correct and is in accordance with
the applicable rules and regulations of the States, and CS will pay
any penalties that may occur if the repricing is found to be incorrect
and such error is not attributable to Customer. The warranty covers
only those fee schedules and repricing rules of the States which CS
has available in its Managed Care System.
C. THE COMPUTER SERVICES REQUIRES THE USE OF THIRD PARTY SOFTWARE
PROGRAMS OBTAINED BY CS FROM VARIOUS THIRD PARTY LICENSORS AND OTHER
SOURCES. CS WARRANTS THAT THE THIRD PARTY PROGRAMS AND DATA RECEIVED
BY AND THROUGH THE THIRD PARTY PROGRAMS IS RELIABLE AND CS AGREES TO
RUN REASONABLE CONTROL CHECKS THEREON. CS WARRANTS THAT IT OWNS THE
SOFTWARE NECESSARY TO PROVIDE THE COMPUTER SERVICES AND/OR HAS THE
AUTHORITY TO ALLOW CUSTOMER TO USE THE SOFTWARE WHICH IS THE SUBJECT
OF THIS AGREEMENT INCLUDING ANY THIRD-PARTY SOFTWARE."
D. CS agrees to defend, indemnify and hold Customer harmless from any
loss, cost, expenses, damage or liability resulting from any action
brought or threatened against Customer based on an allegation that the
Computer Services or any component part thereof, or Customer's proper
use of the Computer Services or any component part thereof,
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supplied under this Agreement infringes a patent, copyright, or any
other proprietary rights of a third party, provided Customer shall
promptly notify CS in writing of such action, and gives CS
authority, information and assistance at CS's expense for the
defense of such suit or proceedings. In the event any such claim
of infringement is made or threatened or injunctive relief is
granted to a claimant, CS shall (a) obtain the right for Customer
to continue use of the Computer Services; or (b) substitute another
product of like capability; or (c) replace or modify the Computer
Services product to render it non-infringing while retaining like
capability; or (d) refund to Customer all sums rendered to CS to
date for the use of the Computer Services or any such part affected
by a claim or lawsuit; or (e) in the event any such claims or
infringement results in injunctive relief relative to a portion of
the Computer Services so that such claims for infringement relief
results in only a diminishment of the Computer Services provided by
CS occurs, then Customer shall, at its option, elect to continue
its use of the Computer Services but at a reduced rate in
proportion to the diminished services. Such rate to be determined
by mutual written agreement of the parties. The protections
afforded by this paragraph shall survive the cancellation,
termination or expiration of this Agreement.
E. CS shall defend, indemnify and hold Customer harmless from and against
all cost, claims, expenses, damages, and liability which Customer may
suffer or be required to pay arising out of any act or omission of CS,
its employees or agents, including but not limited to injuries to
person (including death) or damage to property in connection with
services rendered under this Agreement. The extent of CS' liability
to Customer for purposes of this Section shall be no more than the
policy limits of all applicable CS insurance policies, but in no event
shall the aggregate limit of such policies provide less than
$5,000,000.00 (five million dollars) coverage.
12. Claim Payment Decisions:
Customer understands that it is responsible for making all claim payment
decisions, and that Computer Services, as defined under this Agreement,
provides only data files and/or information to the Customer's staff.
13. Professional Services; Service Bureaus:
Customer is authorized to utilize the Computer Services in the course of
processing Customer's workers' compensation claims or other Property
Casualty claims or rendering professional advice to Customer's clients or
customers; provided, however, that Customer is expressly prohibited without
prior written consent of CS from (i) giving any person, including without
limitation, its clients and customers, direct access to the Computer
Services, or (ii) operating at anytime on a regular basis an on-line or
off-line customer service bureau involving the Computer Services' programs.
A customer service bureau is defined as providing medical xxxx processing
as an unbundled service to clients for whom Customer is not the insurer or
claims administrator.
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14. Confidentiality; Non-Competition:
A. CS and any assignees agree to hold in confidence any and all
information about Customer's business that may be provided to it, or
that it may be exposed to, during the performance of this Agreement.
B. Customer shall not sell, transfer, publish, disclose, display, or
otherwise make available any computer program, systems specifications,
systems documentation, flow charts, or other information, (all herein
referenced as "Proprietary and Confidential Information") including
but not limited to all such information in oral, written, or other
form. Both parties will exercise the same degree of care with respect
to the use, confidentiality and protection of any Proprietary and
Confidential Information as the other exercises with respect to its
own information of like importance. Both parties' obligations as set
forth in this Agreement will not apply to any Proprietary and
Confidential Information which (i) already was in either parties'
possession without restriction and without breach of any standard of
confidentiality at the time it was received from the other party, (ii)
was in or enters into the public domain through no wrongful act of
either party, (iii) was rightfully received by either party from a
third party without restriction on disclosure, or (iv) was
independently developed or acquired by either party without reference
to such Proprietary and Confidential Information.
C. Customer shall not use the Computer Services or any Proprietary and
Confidential Information disclosed by CS under this Agreement, to
compete with, or otherwise unduly take advantage of CS.
15. Enhancements and Customization of Computer Services:
A. From time to time, CS may create enhancements to the Computer
Services, but CS will have no obligation to do so. CS shall make
available without charge to Customer any available enhancements
generally provided to other subscribers of CS's Computer Services.
B. From time to time, Customer may request specific customization or
modifications to the Computer Services in addition to the
customization contemplated by the parties in Exhibits C, D, and E. CS
agrees to negotiate in good faith towards the development of such
customization upon mutually agreeable prices, terms, and conditions.
16. Termination Rights:
Either arty shall have the right to terminate this Agreement
written notice in the event that either party, its officers or employees
violate any other provision of this Agreement. Termination of this
Agreement shall be in addition to, and not in lieu of any equitable
remedies available to either party. Either party's duties under this
Article 16 shall survive any termination of any other provision of this
Agreement.
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17. Taxes:
Customer shall pay all applicable state, local and federal sales, use and
service taxes, (exclusive of personal ad valorem property taxes and taxes
based on the net income of CS.) Customer shall not be liable and shall have
no obligation to pay any penalties, interest, or late charges imposed as a
result of CS's failure to pay its taxes on a timely basis, unless such late
payment is attributable to Customer's non-payment of applicable sales and
service taxes. CS shall notify Customer, in writing, within sixty (60)
days after CS has knowledge of a State sales tax audit which can cause
Customer's obligation to pay additional taxes hereunder. Failure of CS to
so notify Customer shall release Customer of any obligation to pay any
additional taxes assessed as a result of such audit. All CS invoices to
Customer shall separately state on the invoice in which they apply all
applicable taxes. Where permitted by law, Customer shall pay its taxes
directly to the appropriate taxing authority.
19. Force Majeure; Excused Performance:
Either party shall not be liable for, and is excused from any failure to
deliver or perform or for delay in delivery or performance due to a cause
beyond its reasonable control, including, but not limited to, acts of
nature, governmental actions, fire, labor difficulty, shortages, civil
disturbances, transportation problems, interruption of power or
communications, failure of either party suppliers or subcontractors, or
natural disasters.
In the event of the inability of CS to perform due to Force Majeure,
Customer will have the option to terminate this Agreement, or substitute
CS' services for that of another if the condition which excuses non-
performance or late performance causes a delay in excess of five (5) days.
20. Assignment or Transfer:
CS may with prior written notice to Customer assign or transfer its rights
or obligation under this Agreement to a successor of Corporate Systems,
Ltd. The Travelers Insurance Company may transfer the right to use the
services as detailed under this Agreement to any subsidiary, affiliate,
department or division specifically for a period up to one year after it
ceases to be a subsidiary, affiliate, department or division of the
Customer, This assignment or transfer does not relieve the Customer of any
of its obligations hereunder. Notwithstanding the foregoing, Customer may
after receipt of such notice from CS, terminate this Agreement if assignee
of CS is a competitor of Customer and the disclosure of Customer's claims
data to such assignee will in Customer's opinion compromise the proprietary
and/or confidentiality of Customer's profits data, and business and trade
secrets.
21. Publicity:
Neither party shall use the name of the other in publicity releases,
advertising, or similar activity without the prior written consent of the
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other, except Customer will permit CS to include Customer name in its
client list.
22. Notices:
All notices, demands or other communications hereunder shall be in writing
and shall be deemed to have been duly given if delivered in person, or by
United States mail, certified or registered, postage prepaid, return
receipt requested, or otherwise actually delivered to the appropriate party
as follows:
If to CS: Xxxxxx Xxxx
Corporate Systems
0000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
cc to: Director - MCM Services
Corporate Systems
0000 Xxxxxxxxxxx Xxxx
Xxxxx, XX 00000
If to Customer: The Travelers Insurance Company
Attn: Xxxx Xxxxxxx
Xxx Xxxxx Xxxxxx - 0XX
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
cc to: Xxxxxxx Costigar
P.C. Claim - 8PB
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
23. Enforcement:
In the event that any provision of this Agreement is determined to be
invalid or unenforceable, the remainder of this Agreement shall be valid
and enforceable to the maximum extent possible.
24. Headings:
The headings at the beginning of the Articles of this Agreement are for
identification purposes and shall not, by themselves, determine the
interpretation or construction of this Agreement.
25. Waiver:
The waiver or failure of either party to exercise in any respect any rights
provided for herein shall not be deemed a waiver of any further right
hereunder.
26. Arbitration:
Any controversy or claim, legal or equitable, arising out of or relating
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to this Agreement, or the breach thereof, shall be settled by binding
arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, and judgement upon the award rendered by
the arbitrators may be entered in any court having jurisdiction thereof.
Notwithstanding the above, any party may seek provisional relief pending
arbitration, including a temporary restraining order or preliminary
injunction, from any court of competent jurisdiction, either prior to,
during, or subsequent to the filing of any arbitration proceeding. Such
arbitration shall be conducted in Texas, pursuant to the Commercial
Arbitration Rules of the American Arbitration Association, which are
incorporated by reference herein, and the law of evidence of the State of
Texas shall govern the presentation of evidence and discovery therein,
unless the arbitrator shall for good cause determine otherwise. The
decision of the arbitrator shall be final and binding on all parties to the
proceeding. The prevailing party in the arbitration proceeding shall be
awarded reasonable attorney's fees, expert witness costs and expenses, and
all other costs and expenses incurred directly or indirectly in connection
with the proceedings, unless the arbitrator shall for good cause determine
otherwise.
27. Multiple Copies:
For the convenience of the Parties hereto, this Agreement may be executed
simultaneously in one or more originals, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument,
without necessity of production of the others.
28. Software Lockup:
CS warrants that it will not install, trigger or in any intentional manner
restrict the Customer from access to the Computer Services as described in
this Agreement, except if Customer breaches this Agreement in accordance
with Section 10, Subsection 3 and fails to cure such breach within thirty
(30) days of receipt of written notice from CS.
29. Availability of Backup System and Disaster Recovery System
CS warrants that it has a data Recovery System whereby copies of all data
generated by Company's business with CS is copied on magnetic tape and
located off site of CS's facilities. When CS has developed a Backup System
located at a site other than a CS place of business comprised of hardware
and software capable of providing Customer with the direct on-line
interactive services described herein, then CS will give Customer access.
Requests for such access shall be provided to Customer at fees to be agreed
to by the parties.
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30. Operational Performance
a. Systems Access
CS will provide systems access as follows:
7:00 a.m. to 10:00 p.m., EST Monday - Friday
7:00 a.m. to 5:00 p.m., EST Saturday
No access on Sunday, and the following holidays observed by Customer.
These include New Year's Day, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas.
Questions by Customer's Customer Services Representatives about the
system's availability shall be answered by CS Network Operations
representatives during the access hours stated above via a toll free
"800" number, which CS will provide to Customer.
b. System Availability
After execution of this Agreement, CS shall, by way of written
Warranty Addendum, provide Customer with reasonable estimates of CS
System availability percentages in relation to the total systems
access hours as stated above, excluding availability related to
Xxxxxxx 00, Xxxxx Xxxxxxx. Failure of CS to meet such percentages
shall constitute a default in accordance with Section 10(3).
c. CS' Host Response Time
After execution of this Agreement, CS shall by way of written Warranty
Addendum provide a reasonable estimate of the percentage of real time
transactions that shall execute at one seconds or less within the
Corporate Systems host computer. CS' failure to meet these
requirements shall constitute a default in accordance with Section
10(3).
31. Entire Agreement:
This Agreement constitutes the entire agreement between CS and Customer,
and supersedes all prior contracts, agreements, proposals, understandings,
representations, correspondence, or communications relative to the subject
hereof. This Agreement may be modified only by a written instrument
executed by authorized representatives of CS and Customer.
32. Choice of Laws:
The parties agree that this Agreement shall be construed in accordance with
the laws of Texas.
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Accepted : Accepted:
THE TRAVELERS INSURANCE COMPANY CORPORATE SYSTEMS, LTD ("CS")
By: CSC GENERAL PARTNER, INC.
Signature: /s/ Xxxxxxx X. Costigar Signature:
------------------------ ----------------------
Name: Xxxxxxx X. Costigar Name: Xxxxx Xxxx
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Title: Vice President Title: President
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Date: 2/24/93 Date: 2-19-93
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