Exhibit 10.27
MASTER AGREEMENT
This agreement ("Master Agreement") is made and entered into by and
between Blue Cross and Blue Shield of North Carolina, an independent licensee
of the Blue Cross and Blue Shield Association and a North Carolina
corporation with its principal offices at 1830 U.S. 00-000 Xxxxx, Xxxxxx
Xxxx, Xxxxx Xxxxxxxx 00000 ("BCBSNC"), and Health Systems Design Corporation,
a California corporation with its principal offices at 0000 Xxxxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxxxx 00000 ("HSD"), and shall be effective
______________ (the "Effective Date").
In consideration of the mutual rights, benefits, covenants and obligations
granted and provided for hereunder, the parties agree as follows:
1. DEFINITIONS. All capitalized terms used in this Agreement, as well as
in the Software License Agreement, Software Implementation Agreement, Software
Development Agreement, Software Maintenance and Support Agreement, and Software
Consulting Agreement shall have their respective meanings set forth in the
Glossary attached as Exhibit A.
2. RELATED AGREEMENTS.
a. EXECUTION OF ATTACHED AGREEMENTS. Simultaneously with the execution
of this Agreement, the parties shall execute the Software Consulting Agreement
(Exhibit B), Software Development Agreement (Exhibit C), Software Implementation
Agreement (Exhibit D), Implementation Work Order No. 1 (Attachment 1 to Software
Implementation Agreement) Software License Agreement (Exhibit E), and Software
Maintenance and Support Agreement (Exhibit F).
b. CONFLICT AMONG AGREEMENTS. If there is any conflict between the
provisions of this Agreement and those of any Related Agreement, the provisions
of the Related Agreement shall control unless the Related Agreement has an
exception referring to this Agreement, provided, however, that if the conflict
is with respect to Paragraphs 5, 6, 7, 10, 16, 17, 18, 19, 20, 26 or 31 of this
Master Agreement, the terms of the Master Agreement shall prevail.
3. TERM OF AGREEMENTS.
a. TERM OF MASTER AGREEMENT. This Master Agreement's term shall begin on
the Effective Date and continue until the expiration or termination of the last
of the Related Agreements to expire or terminate.
b. TERM OF SOFTWARE CONSULTING AGREEMENT. The Software Consulting
Agreement shall be effective from the Effective Date and, unless earlier
terminated pursuant to Paragraph 6,
Page 1
Confidential
shall terminate upon the later of: (i) BCBSNC's final acceptance of all
services and Consulting Work Product to be provided by HSD pursuant to all
Consulting Work Orders; or (ii) ninety (90) days following Project Completion.
c. TERM OF SOFTWARE DEVELOPMENT AGREEMENT. Unless earlier terminated
pursuant to Paragraph 6, the term of the Software Development agreement shall
begin upon the giving of notice of acceptance of the Design Bid by BCBSNC and
shall terminate upon the earlier of: (i) notice of termination of the Software
Development Agreement by BCBSNC or (ii) final acceptance by BCBSNC of the
Development Work Product as provided in the Software Development Agreement.
d. TERM OF SOFTWARE IMPLEMENTATION AGREEMENT. The Software
Implementation Agreement shall be effective from the Effective Date and, unless
earlier terminated pursuant to Paragraph 6, shall terminate upon the later of:
(i) BCBSNC's final acceptance of all services and Implementation Work Product to
be provided by HSD pursuant to all Implementation Work Orders; or (ii) ninety
(90) days following Project Completion.
e. TERM OF SOFTWARE LICENSE AGREEMENT. The Software License Agreement
shall be effective from the Effective Date and shall continue in perpetuity;
provided, however, that HSD shall have the right to terminate the Software
License Agreement in accordance with Paragraph 6.d.
f. TERM OF SOFTWARE MAINTENANCE AND SUPPORT AGREEMENT. Unless earlier
terminated pursuant to Paragraph 6, the term of the Software Maintenance and
Support Agreement shall be as follows:
i. The term of the Software Maintenance and Support Agreement shall
begin on the first day of Live Production and shall continue for
an initial term ending two (2) years immediately following
Project Completion.
ii. The Software Maintenance and Support Agreement shall be
automatically renewed for an additional one (1) year term at the
end of the initial term and at the end of each subsequent renewal
period for a total of five, one-year renewal terms.
4. WARRANTIES OF HSD.
a. BENCHMARK CRITERIA. Provided that the relevant portion of the HSD
Software and HSD Derivative Works has not been modified on behalf of BCBSNC by
anyone other than HSD except as provided by Paragraph 7.b. of the Development
Agreement, HSD warrants that the HSD Software and HSD Derivative Works will
perform until Project Completion at a level meeting or
Page 2
Confidential
exceeding the performance standards indicated in the Benchmark Criteria from
the time the Benchmark Test is concluded pursuant to Paragraph 4 of the
Software License Agreement.
b. MINIMUM SUPPLEMENTAL FUNCTIONS. Provided that the relevant portion of
the HSD Software has not been modified on behalf of BCBSNC by anyone other than
HSD except as provided by Paragraph 7.b. of the Development Agreement, if the
Development Bid is accepted by BCBSNC, HSD represents and warrants that upon the
delivery of the Development Work Product to BCBSNC pursuant to the Software
Development Agreement, the HSD Software will, at a minimum, provide the
functionality of the Minimum Supplemental Functions. HSD further warrants that
pursuant to the Software Development Agreement, HSD can provide the Minimum
Supplemental Functions, the Work Product associated with the design of the
Minimum Supplemental Functions, and HSD services for creation of the Development
Bid at a combined fee no greater than [ * ].
c. LIVE OPERATION PERFORMANCE CRITERIA. Provided that the relevant
portion of the HSD Software has not been modified on behalf of BCBSNC by anyone
other than HSD except as provided by Paragraph 7.b. of the Development
agreement, HSD warrants that at all times after the conclusion of the Benchmark
Test through Project Completion the HSD Software and HSD Derivative Works will
operate in the Environment at a level meeting or exceeding the performance
standards indicated in the Live Operation Performance Criteria as evaluated by
Live Operations Measurement.
d. STANDARD HSD SOFTWARE'S CONFORMANCE WITH BASIC FUNCTIONAL
SPECIFICATION. HSD represents and warrants that the Standard HSD Software
conforms and, provided that the relevant portion of the HSD Software has not
been modified on behalf of BCBSNC by anyone other than HSD except as provided
by Paragraph 7.b. of the Development Agreement, will conform with the Basic
Functional Specifications until such time as BCBSNC's duty to pay license
fees pursuant to Paragraph 5(a) of the Software License Agreement is
discharged or terminated.
e. CONFORMANCE WITH SUPPLEMENTAL FUNCTIONS GSDs. Provided that the
relevant portion of the HSD Software has not been modified on behalf of BCBSNC
by anyone other than HSD except as provided by Paragraph 7.b. of the Development
Agreement, HSD warrants that the Supplemental Functions will conform to the
Supplemental Functions GSDs and the Basic Functional Specification from the time
HSD delivers the Supplemental Functions to BCBSNC until Project Completion.
f. [ * ].
Page 3
Confidential
* Confidential portions omitted and filed separately with the Commission.
g. THIRD PARTY RIGHTS. HSD represents and warrants that its performance
of all terms under this Master Agreement and each of the Related Agreements will
not result in a breach of any duty owed by HSD to another under contract, or to
HSD's knowledge, violate any confidence of another under any applicable
non-disclosure agreement. HSD agrees that it will not knowingly disclose to
BCBSNC any confidential or proprietary information belonging to any of HSD's
previous or present clients, licensees or others absent authorization to
disclose any such confidential information. HSD warrants that HSD has executed
no prior non-competition, non-disclosure or confidentiality agreements that
would in any way interfere with its work for BCBSNC.
h. RIGHTS IN SOFTWARE. HSD warrants that it owns or is the authorized
licensee of all software contained in the HSD Software and HSD Derivative Works.
HSD further warrants that it has the legal right to license the HSD Software to
BCBSNC pursuant to the Software License Agreement.
i. PROCESSING OF CALENDAR YEAR DATA. HSD warrants that at all times,
including without limitation before, upon, and after January 1, 2000, the HSD
Software and HSD Derivative Works will correctly process and operate upon data
containing, representing, that is input or output as, or relies upon expression
of time in calendar years (i.e., the HSD Software and Derivative Works will
correctly process and operate upon data with respect to the "millennium
change".)
j. HARMFUL OR UNDISCLOSED SOFTWARE CODE. HSD warrants that the HSD
Software and HSD Derivative Works contains no software code or function designed
to interrupt, terminate or diminish such software's functionality or capability
upon the passage of time, or upon a certain command or contingency that is not
disclosed to BCBSNC, including without limitation such code or function as is
commonly known in the computer industry as a "trapdoor," "trojan horse" or "time
bomb."
5. DEFAULT AND CURE.
a. Except as provided in Paragraph 6.d, in the event that one party
hereto is alleged to be in material breach of this Master Agreement or any of
the Related Agreements, the party alleging the breach may give notice to the
alleged breaching party of such alleged breach and the alleged breaching party
shall have up to forty-five (45) days to cure or correct any such alleged
breach. The failure of the allegedly breaching party after due notice of the
alleged breach to effect a cure within said cure period may constitute a Default
under the applicable agreement, with the understanding that a final
determination of breach and/or default shall be made pursuant to the dispute
resolution process specified in Paragraph 30.
Page 4
Confidential
b. In the event of a breach of any of the warranties provided in
Paragraphs a., b., c., d., e., and f. of Paragraph 4 of this Master Agreement,
in addition to the rights set forth in Paragraph 6.b.iii. below, BCBSNC shall be
entitled to full repayment by HSD of all amounts paid to HSD by BCBSNC since the
Effective Date pursuant to the License Agreement and the Development Agreement.
c. Except as otherwise provided in Paragraph 5.b. above or in Paragraph
6.d., and subject to the limitations of liability set forth in Paragraph 24 of
this Master Agreement, upon Default either party shall be entitled to pursue
damages for breach of contract as provided by law.
6. TERMINATION OF AGREEMENTS.
a. EXPIRATION OF TERM. Unless earlier terminated as provided in this
Master Agreement, this Master Agreement and each of the respective Related
Agreements shall automatically terminate upon the expiration of each of their
respective terms. The termination of any of these agreements upon expiration
of their respective terms shall not cause any of the other agreements to
terminate.
b. TERMINATION FOR CAUSE. Termination rights for cause hereunder shall
be as specified below with the understanding that determinations of Default, if
disputed, shall be determined under the provisions of Paragraph 30.
i. Either party may terminate any one of the Related Agreements for
cause with respect to a Default under such Agreement, provided
that HSD may terminate the License Agreement only as provided in
Paragraphs 6.b.iv., 6.b.v. and 6.d.
ii. BCBSNC may terminate this Master Agreement and/or any one or more
of the Related Agreements upon the occurrence of an HSD Financial
Termination Event.
iii. BCBSNC may terminate this Master Agreement and/or any one or more
of the Related Agreements upon a determination of Default with
respect to a warranty item set forth in Paragraphs a., b., c.,
d., e., and f. of Paragraph 4, subject to the dispute resolution
process specified in Paragraph 30.
iv. HSD may terminate the Software License Agreement, and all
BCBSNC's rights with respect to the HSD Software and HSD
Derivative Works thereunder, provided that BCBSNC has failed to
pay any license fees due pursuant to Paragraph 5(a) of the
Software License Agreement after the time for payment of such
fees set forth in Paragraph 16.b.i has expired, notice of
Page 5
Confidential
such failure to pay has been given as provided in Paragraph 5.a.,
and sixty (60) days have elapsed since HSD gave BCBSNC notice of
such alleged breach with BCBSNC having not timely cured such
failure to pay.
v. HSD may terminate the Software License Agreement in accordance
with Paragraph 6.d. in the event of a judicial termination that,
in the manner and to the extent set forth in said paragraph,
BCBSNC has on multiple and separate occasions used or exploited
the HSD Software or HSD Derivative Works beyond the scope of the
license rights set forth in Paragraph 3 of the Software License
Agreement.
c. VOLUNTARY TERMINATION BY BCBSNC. BCBSNC shall have the right to
terminate this Master Agreement and/or any one or more of the Related Agreements
upon providing sixty (60) days written notice thereof to HSD; provided, however,
that BCBSNC may terminate this Master Agreement and/or anyone or more of the
Related Agreements without prior notice upon BCBSNC's rejection of the Design
Bid or the Development Bid.
d. SPECIAL RIGHT OF TERMINATION.
i. If at any time HSD believes in good faith that BCBSNC is using
and/or exploiting the HSD Software or HSD Derivative Works in a
manner or to an extent that exceeds the rights granted to BCBSNC
with respect to such software under Paragraph 3 of the Software
License Agreement, HSD may give notice of such belief to BCBSNC.
Following its receipt of notice, BCBSNC shall have up to sixty
(60) days to cure the situation by (A) demonstrating that BCBSNC
is operating within the scope of the license or, (B) ceasing such
use and/or exploitation of the software and, if applicable,
demonstrating to HSD that BCBSNC is applying its reasonable best
efforts to recover where practical or otherwise destroy within a
commercially reasonable time all identifiable copies of the
software in the possession of unauthorized third parties. In
addition, where BCBSNC's Authorized Contractors or sublicensees
are involved, BCBSNC shall, at its expense, take timely and
appropriate actions, including if necessary, instituting legal
actions, to terminate and/or restrain any such unauthorized use.
If after due notice BCBSNC has not effected said cures or taken
appropriate steps toward effecting said cures, within said cure
period, or otherwise demonstrated to the satisfaction of HSD that
BCBSNC or its sublicensees as the case may be are operating
within the scope of the license, the matter shall proceed to the
dispute resolution process set forth in Paragraph 30 and as
further described in Paragraph 6.d.ii below, and BCBSNC or its
sublicensees may elect to continue their disputed use of the
software subject
Page 6
Confidential
to the possibility that as a result of adjudication BCBSNC may be
required to pay license fees in accordance with Paragraph 6.d.ii
below and that the License Agreement may be terminated as
provided in Paragraph 6.d.ii. below.
ii. If a dispute of the nature described in Paragraph 6.d.i above
results in mediation pursuant to Paragraph 30, the parties shall
cooperate in good faith with the mediator to try to agree upon
the scope of BCBSNC's use and/or exploitation of the software as
determined with respect to the terms of the grant of license in
the Software License Agreement. If the parties cannot agree, the
parties proceed with litigation and thereafter a court of
competent jurisdiction determines that willfully, in bad faith,
and on multiple separate occasions after notice from HSD, BCBSNC
has used or exploited the HSD Software or HSD Derivative Works in
a manner or to an extent that exceeds the rights granted to
BCBSNC in more than a minor way with respect to such software
under Paragraph 3 of the Software License Agreement, then HSD
shall have the right to terminate the Software License Agreement
and all BCBSNC's rights with respect to the HSD Software and HSD
Derivative Works thereunder. Upon notice of such termination, in
order to prepare for its discontinued use and possession of the
software, BCBSNC (and its sublicensees) shall have a five (5)
year period ("Wind-Down Period") with which to further exercise:
(i) all rights arising under the Software License Agreement, and
(ii) the expanded use giving rise to the notice of termination,
provided, however, that to the extent that such expanded use
involves action with respect to the marketing and sale of
software licenses of the HSD Software and HSD Derivative Works
independent of BCBSNC's Business, such expanded use may not
continue without HSD's consent.
If during the Wind-Down Period, BCBSNC elects to continue its use
or that of BCBSNC Affiliates or Database Participants of the HSD
Software and HSD Derivative Works in the manner or to the extent
found by the court to be in excess of the original grant of
license rights, then BCBSNC shall pay incremental license fees at
the rate determined below for such continued excessive use of
the software during that portion of the Wind-Down Period that
BCBSNC actually uses and possesses the software. Such fees shall
be in addition to any other license fees as would otherwise be
due pursuant to the Software License Agreement with respect to
such period of use and possession. Further, following such notice
of termination the parties shall establish fair and reasonable
incremental license fees to be paid by BCBSNC for its excessive
use or that of its sublicense of the software during the course
of the dispute and the Wind-Down Period, first, by
Page 7
Confidential
attempting to: (A) establish a license fee by mutual agreement,
or, (B) in the absence of agreement on (A), establish a mutual
independent finder of fact who shall establish the amount of
such fee, or (C) in the absence of an agreement on A or B,
petitioning the court to establish such a fee.
iii. The remedy set forth above in this Paragraph 6.d. shall be HSD's
sole remedy by operation of law or otherwise for BCBSNC's use or
exploitation, directly or by way of its Authorized Contractors,
of the HSD Software or HSD Derivative Works in a manner or to an
extent that exceeds the rights granted to BCBSNC with respect to
such software under the Software License Agreement, and is
provided in order to address BCBSNC's requirement that this
Agreement and the associated Software License Agreement be
structured in a manner that provides for continuation of BCBSNC's
business operations.
e. AUTOMATIC TERMINATION. Termination of either the Master Agreement or
the License Agreement shall automatically terminate the remaining Related
Agreements as of the date of termination of the Master Agreement or License
Agreement, respectively.
7. EFFECT OF TERMINATION. Except as otherwise set forth below, all of
the Related Agreements shall automatically terminate upon termination of this
Master Agreement, but termination of any one of the Related Agreements shall
have no effect on any other Related Agreement, which agreements shall remain in
full force and effect in accordance with their own terms unless terminated.
a. VOLUNTARY TERMINATION. Upon voluntary termination in accordance with
Paragraph 6.c., BCBSNC shall be obligated to pay to HSD all payments otherwise
due HSD with respect to the terminated agreement(s) through the effective date
of termination, provided that HSD renders the services commensurate with such
payments if such services are requested by BCBSNC to be performed by HSD during
this period.
b. SOFTWARE DEVELOPMENT AGREEMENT. In the event that BCBSNC voluntarily
terminates the Software Development Agreement, and provided that such
termination occurs after BCBSNC's Board of Directors has approved BCBSNC's
acceptance of the Supplemental Functions HSDs and the Development Bid, then in
addition to the foregoing payments (if any), BCBSNC shall pay to HSD the amount
of twenty-five percent (25%) of the then remaining balance of the [
* ] that would be due HSD pursuant to
Paragraph 5(a) of the Software License Agreement but for the termination. Such
amount shall be payable only upon the sale of the license by BCBSNC. HSD's sole
recourse for collecting such partial payment of fees shall be through BCBSNC's
resale of the license rights granted to BCBSNC pursuant to Paragraph
Page 8
Confidential
* Confidential portions omitted and filed separately with the Commission.
5(d) of the Software License Agreement. The resale shall be in accordance
with Paragraph 5(d) of said agreement, provided that for the purpose of
determining the concurrent user limitation of the converted license, the
amount of the twenty-five percent debt shall be added to the amount of the
license fees previously paid by BCBSNC, so that the maximum number of persons
authorized to use concurrently copies of the client component of the HSD
Software and Derivative Works shall be as if the total amount had been timely
paid according to the schedule for payment set forth in Paragraph 5(a) of the
Software License Agreement. Except for obligations which accrued prior to the
giving of notice of voluntary termination, BCBSNC shall have no obligation to
make any other payments and shall have no other liability to HSD except as
set forth in this Paragraph 7.a.
c. LICENSE AGREEMENT. Upon termination of the Software License
Agreement by BCBSNC for any reason:
i. BCBSNC's duty to pay any fees to HSD under any of the Related
Agreements shall terminate immediately; provided, however, that
payment shall be made as set forth in Paragraph 16 for any fees
for which payment is due at the time of termination.
ii. BCBSNC and its Affiliates and Database Participants may continue
to use and possess the HSD Software and Derivative Works for such
additional time as is minimally necessary for them to effect a
conversion to suitable replacement software, but in no event for
a period exceeding sixty (60) days; provided, however, that
BCBSNC may continue to possess indefinitely such copies of the
HSD Software and Derivative Works as may be imbedded in archival
backups of BCBSNC's computer systems at locations identified to
HSD, which copies BCBSNC warrants shall be used, if at all,
solely to restore BCBSNC's data. Except as provided in the
foregoing sentence with regard to archival backups, following the
conversion period set forth above, BCBSNC shall no longer have
any right to use or possess any copies of HSD Software and
Derivative Works, and BCBSNC shall cease use of the HSD Software
and Derivative Works and shall, where practical, return to HSD
all copies of the HSD Software and Derivative Works, or certify
to HSD that all such copies that have not been returned have been
destroyed.
d. SOFTWARE IMPLEMENTATION AGREEMENT. Upon termination of the Software
Implementation Agreement for any reason, HSD shall advise BCBSNC of the extent
to which performance has been completed through such date with respect to each
outstanding Implementation Work Order, and, provided that HSD has first received
payment for all work performed by HSD pursuant to each such Implementation Work
Order through the effective date of such termination, shall collect and deliver
to BCBSNC whatever Implementation Work Product then exists with respect to each
such Implementation Work Order.
Page 9
Confidential
e. SOFTWARE CONSULTING AGREEMENT. Upon termination of the Software
Consulting Agreement for any reason, HSD shall advise BCBSNC of the extent to
which performance has been completed through such date with respect to each
outstanding Consulting Work Order, and, provided that HSD has first received
payment for all work performed by HSD pursuant to each such Consulting Work
Order through the effective date of such termination, shall collect and deliver
to BCBSNC whatever Consulting Work Product then exists with respect to each such
Consulting Work Order.
f. SOFTWARE MAINTENANCE AND SUPPORT AGREEMENT. Upon termination of the
Software Maintenance and Support Agreement for any reason, HSD shall refund to
BCBSNC any maintenance and support fees applying to the then current Quarterly
Support Period, which refund shall be prorated to correspond to the time then
remaining in such period.
g. SURVIVAL. Upon termination of each of the following agreements for
any reason, the following clauses shall survive termination of each such
agreement, respectively, and shall continue in full force and effect:
i. Master Agreement. Paragraphs 1, 4, 7, 13, 16, 18, 19, 20, 22, 23,
24, 28, 29, 30, 34
ii. Consulting Agreement. Paragraphs 1, 4
iii. Software Development Agreement. Paragraphs 1, 6
iv. Software Implementation Agreement. Paragraphs 1, 5, 11
v. Software License Agreement. Paragraph 1
vi. Software Maintenance and Support Agreement. Paragraphs 1, 7, 8
8. APPROVAL AND RETENTION OF HSD PERSONNEL.
a. BCBSNC may interview the personnel HSD assigns to perform services
under the Related Agreements. If BCBSNC determines that any such personnel are
not suited for the work based on their specific or general skills or their
background and experience BCBSNC shall provide HSD with a written request for
replacement of the personnel, which request shall specify the reason(s) for any
such request. Upon receipt, HSD shall take such action as HSD deems appropriate
in light of the applicable facts, which action may include making reasonable and
timely efforts to assign other qualified personnel. If HSD does not have
replacement staff, BCBSNC shall have the right to request removal of the
existing staff.
b. Should BCBSNC be dissatisfied with the performance of one or more of
HSD's personnel, BCBSNC may request, on reasonable notice, that HSD terminate
their assignment to BCBSNC's work. BCBSNC shall provide any such request to HSD
in written form, which request
Page 10
Confidential
shall specify its underlying reason(s). Upon its receipt of any such
request, HSD shall take appropriate action to investigate and address the
situation, which action may include providing replacement personnel and/or
reassigning HSD personnel subject to the availability of any replacement HSD
personnel.
c. HSD's actions under this Paragraph 8 shall be subject to HSD's
reasonable discretion with due regard for applicable employment law concerns and
with the understanding that both BCBSNC and HSD recognize the importance of
fostering effective working relationships as a means of helping to ensure the
overall success of the parties' undertakings pursuant to this Agreement and the
Related Agreements.
9. INITIAL DELIVERY OF MATERIALS TO BCBSNC. As soon as practicable
following the Effective Date, HSD will deliver to BCBSNC in mutually agreeable
formats the Standard HSD Software, HSD Software Source Code, Documentation, and
such additional materials as are designated for delivery by HSD's Project
Manager from among the materials listed on HSD's standard implementation order
form.
10. STANDARD PRODUCT FUNCTIONS; CUSTOM PRODUCT FUNCTIONS.
a. DESIGNATION.
i. In its sole discretion BCBSNC may designate as a Custom Product
Function any software function that is created to any extent by
HSD or its contractors as a result of undertakings pursuant to
either the Master Agreement or the Related Agreements, provided
that such designation is communicated to HSD by BCBSNC prior to
HSD's submission of its bid for creation of the function as
Development Work Product, or, on the face of the Consulting Work
Order for the creation of the function as Consulting Work Product
prior to HSD's acceptance of such Consulting Work Order. If
BCBSNC fails to so designate any such software function at the
applicable time above, then, in its bid, or as a binding element
of its acceptance of the Consulting Work Order (as indicated by
HSD on the face of the Consulting Work Order), HSD shall
designate the function as either a Standard Product Function or a
Custom Product Function.
ii. Notwithstanding HSD's designation of a function as a Standard
Product Function pursuant to Paragraph 10.a.i, in its discretion
HSD may at any time redesignate the function as a Custom Product
Function at BCBSNC's request.
Page 11
Confidential
iii. All BCBSNC Derivative Work in the form of software functions
shall be deemed Custom Product Functions for the purpose of
determining the rights, duties and obligations of the parties
with respect to such functions under the Software License
Agreement and the Software Maintenance and Support Agreement,
unless HSD agrees to treat it as a Standard Function.
b. EFFECT OF DESIGNATION ON LICENSE RIGHTS. With respect to BCBSNC's
license rights in the HSD Software and Derivative Works, the effect of
designating a software function as a Standard Product Function or a Custom
Product Function shall be as set forth in the Software License Agreement.
c. EFFECT OF DESIGNATION ON MAINTENANCE AND SUPPORT AGREEMENT.
Designation of a software function as a Standard Product Function or a Custom
Product Function shall have the effects set forth in the Software Maintenance
and Support Agreement.
11. THIRD PARTY DEVELOPMENT. In the event that BCBSNC desires to utilize
the services of a third party developer in cases which impact services being
performed by HSD under any of the Related Agreements, such development activity
will be undertaken in accordance with the BCBSNC Change Control Procedures and
with the understanding that HSD will not offer support services fro any such
software unless it meets or exceeds HSD's QA standards.
12. ACCESS TO BCBSNC'S SOFTWARE, DATA AND COMPUTER NETWORKS.
a. ASSISTANCE FROM BCBSNC'S PERSONNEL. BCBSNC shall make a qualified
member of its information services department available to assist HSD personnel
during their visits to BCBSNC's site. Such assistance shall include resolving
problems and facilitating HSD's requests with respect to gaining direct or
dial-up access to BCBSNC's software, data and computer networks.
b. DIAL-UP ACCESS SUPPORT.
i. To support HSD's dial-up access to BCBSNC's computer networks, at
all times BCBSNC shall maintain and make available to HSD a modem
capable of attaining a data transmission rate that is to be
agreed to by the parties.
ii. BCBSNC shall inform HSD of any changes to the modem/dial-in
environment provided by BCBSNC pursuant to Paragraph 5(c) of the
Software Maintenance and Support Agreement.
Page 12
Confidential
iii. BCBSNC shall inform and continually update HSD of BCBSNC's
security procedures with respect to dial-in access to BCBSNC's
computer networks. HSD shall observe such procedures in each
instance that HSD accesses BCBSNC's computer networks.
13. EXPENSES. BCBSNC shall reimburse HSD for its reasonable and
documented out-of-pocket expenses incurred in connection with the provision of
services under the Related Agreements, including expedited delivery, telephone,
facsimile, and photocopying expenses, as well as those travel expenses that are
consistent with the HSD Travel Policy attached to this Agreement as Exhibit H;
provided, however, that HSD alone shall bear the expense of the toll-free
telephone line HSD maintains in connection with its provision of maintenance and
support services under the Software License Agreement and the Software
Maintenance and Support Agreement.
14. TRAVEL TIME. The time devoted to travel by HSD's personnel between
BCBSNC's site and HSD's site(s) shall not be charged to BCBSNC, provided that
HSD may charge BCBSNC for that portion of such travel time as is devoted
simultaneously to work on BCBSNC's behalf and recorded as such in accordance
with Paragraph 17.
15. SEPARATION OF COSTS. HSD shall make good faith efforts to exclude
from the cost structure of its proposals in the Design Bid and the Development
Bid, the costs associated with the materials, services and personnel to be
provided pursuant to the Software Implementation Agreement.
16. BILLING AND PAYMENT; TAXES.
a. INVOICES.
i. HSD shall invoice BCBSNC for payment of the software license fees
set forth in Paragraph 5(a) of the Software License Agreement
when each such payment becomes due, except that no invoice shall
be issued with respect to the license fee payment to be made upon
execution of the Software License Agreement.
ii. For its services rendered under the Software Development
Agreement, HSD shall invoice BCBSNC for payment of the amounts
set forth in Paragraph 6 thereto upon each instance that HSD
receives notice that BCBSNC has made an acceptance in accordance
with said paragraph; provided, however, that in the event that
BCBSNC's acceptance is deemed to have occurred pursuant to
Paragraph 8(b) of the Software Development Agreement, HSD shall
invoice BCBSNC upon the date of deemed acceptance.
Page 13
Confidential
iii. HSD shall invoice BCBSNC twenty (20) days prior to the first day
of each Quarterly Support Period for the maintenance and support
services to be performed during that Quarterly Support Period in
an amount determined pursuant to Paragraph 7 of the Software
Maintenance and Support Agreement; provided, however, that HSD
shall invoice BCBSNC on the first day of the initial Quarterly
Support Period for the maintenance and support fees due for such
period, which fees shall be prorated to correspond to the actual
duration of the initial Quarterly Support Period.
iv. For all work undertaken by HSD pursuant to the Software
Implementation Agreement, the Software Consulting Agreement, and
Paragraph 7(b) of the Software Maintenance and Support Agreement:
(1) HSD will submit invoices to BCBSNC on a monthly basis,
with each covering charges accrued during the
immediately preceding month. To the extent expenses
may be billed, the invoice shall also include an
itemization of all expenses for which reimbursement is
to be made.
(2) Each invoice shall indicate the specific Related
Agreement and/or Work Order under which each charge and
expense was incurred, as well as a summary of the hours
worked by each of HSD's personnel each day by contract;
provided, however, that no summary of hours worked
shall be required with respect to Implementation
Analysts and HSD's Project Manager and other staff, if
any, provided on a monthly fee basis and/or for work
done pursuant to a xxxx.
v. HSD shall invoice BCBSNC for payment of license fees for any
Oracle database software licensed by Oracle through HSD to BCBSNC
upon HSD's or Oracle Corp.'s shipment of the software to BCBSNC.
b. TIME FOR PAYMENT.
i. With respect to each of the Related Agreements, without
triggering a Default BCBSNC may withhold from any payment,
including the final payment: (A) any amount incorrectly invoiced
provided that BCBSNC timely informs HSD of the amounts alleged to
be incorrectly invoiced and the basis for any such assertion for
review, resolution and rebilling purposes; or (B) any amount in
dispute. Following BCBSNC's receipt of each invoice for
Page 14
Confidential
payment to be made pursuant to the Maintenance and Support
Agreement, BCBSNC shall deduct from the amount indicated on such
invoice all reductions applicable under Paragraph 8 of the
Maintenance and Support Agreement, and shall provide to HSD,
along with payment, a statement setting forth the basis of each
reduction in the amount of payment. Payments on undisputed
invoices, or undisputed portions of invoices, shall be made
within thirty (30) days after submission of the invoice to BCBSNC.
ii. BCBSNC shall have the right to suspend payments on Implementation
Work Orders during any time after the ninety (90) day Benchmark
Test Period, plus any extension of that time as provided in
Section 4(a) of the License Agreement, HSD is seeking to cure its
failure to meet the Benchmark Criteria during the Benchmark Test.
BCBSNC shall have no obligation to pay HSD for lost time during
the suspension period with respect to services related to remedy
any failure to meet the Benchmark Criteria.
iii. BCBSNC shall have thirty (30) days after receipt to pay such
invoice rendered by HSD pursuant to this Master Agreement or any
of the Related Agreements.
c. INTEREST ON UNPAID AMOUNTS. If payment of any amount is not made
within the time provided in Paragraph 16.b, HSD may give notice to BCBSNC of its
default in payment. In the event that BCBSNC has not made the payment within
ten (10) days following BCBSNC's receipt of notice that the payment is overdue,
BCBSNC agrees to pay interest on all unpaid amounts at an annual rate of twelve
per cent (12%); provided, however, that such interest charges shall not apply to
any amount incorrectly invoiced or in dispute.
d. RESPONSIBILITY FOR TAXES. BCBSNC shall be responsible for sales or
use taxes, and state or local property or excise taxes associated with BCBSNC's
licensing, possession, or use of the HSD Software and Derivative Works, except
such taxes as may be based on HSD's income.
17. RECORDS; AUDIT RIGHT.
a. RECORDS OF HSD.
i. HSD shall keep and maintain detailed books of account in support
of all chargeable hours and reimbursable expenses under this
Agreement, the Related Agreements, and/or all Work Orders
thereto. Such books shall include without limitation a record of
the hours worked by each of HSD's personnel who are billed in
hourly increments to BCBSNC, which record
Page 15
Confidential
shall identify the Work Order or Related Agreement to which each
chargeable unit of time is attributed and include a summary of
the hours worked by each of HSD's personnel who are billed in
hourly increments to BCBSNC each day by contract. The record of
hours worked shall be made available for BCBSNC's inspection
with the understanding that all such records will be used only
for the purpose specified herein and will otherwise be maintained
in confidence.
ii. No more frequently than once a year, BCBSNC shall have the right
(upon ten business days prior notice) to have a certified public
accountant selected by BCBSNC audit those records of HSD as may
be necessary to verify the amounts invoiced to BCBSNC by HSD for
all such chargeable hours and reimbursable expenses.
b. RECORDS OF BCBSNC.
i. BCBSNC shall provide a list of the BCBSNC Affiliates to HSD upon
reasonable request which list shall include the name, address,
and phone number of each such Affiliate.
ii. Upon reasonable request, BCBSNC shall provide to HSD a copy of
each sublicense agreement entered into between BCBSNC and any
party to which BCBSNC distributes HSD Software and Derivative
Works.
iii. BCBSNC shall maintain and make available for HSD's inspection a
list of all sublicensees of the HSD Software and Derivative
Works.
iv. In the event that the number of persons authorized to use
concurrently copies of the client component of the HSD Software
and Derivative Works becomes subject to limitation pursuant to
Paragraph 3(d) of the Software License Agreement, BCBSNC shall
maintain and make available to HSD upon request a list of the
client stations on which the client component of the HSD Software
and Derivative Works is installed, which list shall include the
name, address, and phone number of each such Affiliate.
v. HSD shall have the right (upon ten business days prior Notice) to
audit those records of BCBSNC as may be necessary to verify the
lists maintained and provided by BCBSNC pursuant to Paragraphs
17.b.iii and 17.b.iv above, with the understanding that any
information obtained in the course of such audits shall be shared
with BCBSNC, retained in confidence by HSD and used only for the
audit purpose specified herein. With respect to each of the
Page 16
Confidential
two forms of audit, HSD may conduct one such audit in any given
year for each list provided pursuant to Paragraphs 17.b.iii and
17.b.iv above; provided, however, that HSD may conduct such an
audit within a reasonable time after HSD gives the Notice
required to initiate the process set forth in Paragraph 6.d.
18. OWNERSHIP OF INTELLECTUAL PROPERTY.
a. TITLE TO HSD SOFTWARE. Title to the HSD Software shall remain with
HSD at all times. The HSD Software is a trade secret and the proprietary
property of HSD. BCBSNC will not remove, modify or destroy any proprietary
markings of HSD.
b. TITLE TO DERIVATIVE WORKS. All Derivative Works shall be the property
of HSD.
c. TITLE TO CONSULTING WORK PRODUCT. Consulting Work Product shall be
owned by the party identified as owner in the Consulting Work Order pursuant to
which the Consulting Work Product is created. If no owner is so identified, HSD
shall be the owner of the Consulting Work Product.
d. TITLE TO SOFTWARE INTERFACES CREATED BY HSD. All software interfaces
created by HSD for delivery to BCBSNC, including without limitation all computer
code designed to interface among components of the HSD Software and HSD
Derivative Works and with third party software, shall be the property of HSD
except such interfaces as are created to meet BCBSNC specific needs, are not
otherwise Derivative Work and serve only as an external link to the HSD Software
or Derivative Works (as opposed to an interlink between the internal components
of such software of Derivative Works). Any such BCBSNC specific interfaces and
their designs shall constitute work made for hire under the Copyright Act. In
the event that such materials are deemed not to constitute work made for hire,
HSD agrees to assign the materials to BCBSNC without further compensation upon
their creation.
e. TITLE TO INDEPENDENTLY CREATED MATTER. All computer code, software
interfaces, user documentation or other matter created by BCBSNC, or by BCBSNC
Affiliates or Database Participants, shall be owned by the person or entity that
created such matter, including without limitation such computer code as may be
developed to interface the HSD Software or Derivative Works with any other
software used by BCBSNC, or by BCBSNC Affiliates or Database Participants;
provided, however, that HSD shall own all such matter to the extent it consists
of Derivative Works.
f. TITLE TO REPORTS AND DOCUMENTS; LICENSE TO BCBSNC. All reports and
documents created by HSD for delivery to BCBSNC, including without limitation
the Design Bid, the Development Bid and the Supplemental Functions GSDs, shall
be the property of HSD.
Page 17
Confidential
g. TITLE TO JOINTLY CREATED MATTER. Notwithstanding the provisions of
Paragraph 18(e) above, any programs, documentation, reports, techniques, designs
and other materials that are created jointly by the parties shall be jointly
owned by the parties; provided that such materials shall be owned solely by HSD
to the extent they constitute Joint Derivative Works.
h. REQUIREMENT OF AUTHORIZED CONTRACTORS. BCBSNC agrees that it shall
require any Authorized Contractor BCBSNC may engage to create a Derivative Work
to agree in a signed writing, executed prior to the Authorized Contractor's
commencement of work on development of the Derivative Work, that the Derivative
Work shall be owned by HSD, and that the Authorized Contractor will execute any
subsequent documents or instruments necessary to vest or evidence title to such
Derivative Work in HSD.
19. CONFIDENTIALITY.
a. CONFIDENTIAL INFORMATION. Each party recognizes that during the term
of this Agreement it shall receive from the other party information, much of
which will be confidential. "Confidential Information" shall be defined as:
i. all disclosures, written or oral, by either party related to (A)
software design, development and implementation activities
undertaken pursuant to this Agreement and the Related Agreements;
(B) the source code for the HSD Software and Derivative Works as
well as its technical documentation (i.e., documentation for
technical aspects of the HSD Software and Derivative Works that
are not apparent from the HSD such software's ordinary use and
display in business operations); (C) all data and information of
or pertaining to BCBSNC's enrollees, group accounts or health
care provider constituents, as well as all financial information
relating to the operations of BCBSNC, BCBSNC Affiliates, and
Database Participants; (D) information in HSD's books and records
made available to BCBSNC pursuant to Paragraph 17; and (E) the
terms and conditions of this Agreement and the Related
Agreements; regardless of whether such disclosures are marked or
otherwise designated as "Confidential" or otherwise specifically
designated as Confidential; and
ii. any information or material any employee or representative of
either party designates as confidential, either orally or in
writing prior to its disclosure; and
Page 18
Confidential
iii. any information, software, or other materials created by either
party using, reflecting or including any part of the Confidential
Information.
b. EXCLUSIONS FROM CONFIDENTIAL INFORMATION. Notwithstanding Paragraph
19.a above, no information shall be considered as Confidential, regardless of
its having been marked or otherwise designated as such: (i) if it is or becomes
publicly available through no fault of the other party; or (ii) if it is
disclosed to the receiving party by a third party entitled to disclose it; or
(iii) if it is known to the receiving party prior to disclosure of it to that
party by the disclosing party; (iv) if it is developed by the receiving party,
as can be shown by tangible evidence, without any reference to the Confidential
Information; or (v) to the extent that either party is required by law or
regulation to disclose such information, including without limitation in
situations such as those contemplated in Paragraph 19(c)(iv) below.
c. TREATMENT OF CONFIDENTIAL INFORMATION.
i. With respect to any Confidential Information, the receiving party
shall (i) receive the Confidential Information in strict
confidence; and (ii) accord to such Confidential Information at
least the same level of protection against unauthorized use or
disclosure that the receiving party customarily accords its own
Confidential Information; and (iii) use or permit use of the
Confidential Information solely and exclusively in carrying out
its obligations under this Agreement, consistent with the terms
of Paragraph 19.c.iii below; and (iv) use its best efforts to
ensure that access to such Confidential Information is not
provided to any third parties or to any employees without a
specific need to know the information. Also, with respect to
Confidential Information identified in Paragraph 19.a.i(A)
hereof, nothing in this Agreement will restrict or inhibit
BCBSNC's rights of use granted in Paragraph 3 of the Software
License Agreement.
ii. Either party shall have the right to reveal Confidential
Information in the context of mediation undertaken pursuant to
Paragraph 30. The parties hereby agree that in the event that a
dispute between them with respect to this Agreement or any of the
Related Agreements results in litigation, they shall seek a
protective order preserving the secrecy of the Confidential
Information to the maximum extent.
iii. Within ninety (90) days of this Agreement's termination, each
party shall return or destroy all copies, in whatever media or
form, of the Confidential Information received from the other
party, except to the extent that: (A) either party may be
required by law or regulation to retain such information, or (B)
retention of the Confidential Information, including without
limitation
Page 19
Confidential
the HSD Software Source Code and the source code for all
Derivative Works and Work Product, would be consistent with
BCBSNC's continued enjoyment of its license rights under the
Software License Agreement.
iv. The parties acknowledge that each has certain obligations under
law and governmental regulations to report financial and
operational information to the public and to governmental
entities which are inherently in conflict with the high degree of
confidentiality sought to be imposed by the provisions above in
this Paragraph 19. Notwithstanding any other provision of this
Paragraph 19 to the contrary, either party may make such
disclosure of confidential information as are required by law or
regulation disclose Confidential Information. Each party agrees
that such disclosures shall be made to the minimum extent
possible under the circumstances, shall wherever possible such to
utilize available procedures to exempt or protect proprietary or
medical information, and such party shall give the other notice
of such disclosure.
v. In the event that BCBSNC or a BCBSNC Affiliate is or contains a
division that is a software business that competes with HSD,
BCBSNC will establish a "Chinese Wall" such that the competing
division will not have access to the source code or confidential
proprietary information of HSD and such obligation shall be
binding upon any entity into which BCBSNC may become merged or
which is acquired by BCBSNC, and provided further, competing
divisions will not utilize the object code versions to reverse
engineer or decompile the software.
vi. Where the disclosure may involve trade secrets any such trade
secret disclosure shall only be made pursuant to appropriate
trade secret protection and the disclosing party shall notify the
other of any such disclosure.
20. TRADEMARKS. Neither party may use the other party's names, trademarks
or service marks without the other party's written consent. The parties may
provide to one another, upon request, general guidelines for the use of such
names and marks.
21. NO AGENCY. The parties agree that HSD shall act solely as an
independent contractor in performing under the Related Agreements and under any
Work Orders issued pursuant to the Software Implementation Agreement, Software
Development Agreement or Software Consulting Agreement. BCBSNC shall have no
responsibility pursuant to this Agreement or the Related Agreements, or
otherwise, to fulfill any obligation of HSD to any third party. Notwithstanding
any other provision of this Agreement, any Related Agreement or Work Order
Page 20
Confidential
issued thereunder, neither party shall not be construed as the agent or acting
as the agent of the other in any respect.
22. SOLICITATION OF PERSONNEL. Neither party shall solicit for employment
any employee or contracted personnel of the other until a period of six (6)
months after any such employee or contracted person was last employed or engaged
by the other party to perform work directly related to this Agreement or any of
the Related Agreements.
23. INDEMNIFICATION.
a. HANDLING OF CLAIMS OR SUITS. HSD shall, at its cost, defend or settle
any claim or suit brought against BCBSNC on the issue that the HSD Software or
any Work Product infringes a United States patent or copyright, provided that
BCBSNC (i) notifies HSD promptly in writing of any such claim or suit; (ii)
gives HSD full information and assistance in settling and/or defending the suit;
and (iii) gives HSD full authority and control of the defense and/or settlement
of any such action.
b. INFRINGEMENT LIABILITY. If the HSD Software, HSD Derivative Works, or
any Work Product become subject to a claim of infringement for which HSD may
become liable and which negatively impacts BCBSNC's use of the HSD Software, HSD
may at its option and at its sole expense (i) obtain the right for BCBSNC to
continue using the applicable HSD Software and/or Work Product; (ii) replace or
modify the HSD Software and/or Work Product to make them non-infringing, so long
as the replacement or modification meets the specifications or GSDs for the HSD
Software and/or Work Product; or (iii) refund the total amounts BCBSNC has paid
to HSD pursuant to the License Agreement and the Development Agreement as
follows: (A) the total amount, if the claim of infringement is asserted incident
to a judicial proceeding within five (5) years of the Effective Date, (B) two
thirds of the total amount, if the claim of infringement is asserted incident to
a judicial proceeding at a time more than five (5) but less than ten (10) years
after the Effective Date, or (C) one third of the total amount, if the claim of
infringement is asserted incident to a judicial proceeding ten (10) years after
the Effective Date or thereafter. EXCEPT FOR THESE REMEDIES, HSD SHALL HAVE NO
LIABILITY TO BCBSNC, ITS LICENSEES, SUBLICENSEES AND/OR ANY OTHER ENTITY
AUTHORIZED TO POSSESS AND/OR UTILIZE THE HSD SOFTWARE UNDER THE TERMS OF THIS
MASTER AGREEMENT AND/OR ANY RELATED AGREEMENT, FOR ANY CLAIM OF INFRINGEMENT.
24. LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY'S AGGREGATE
LIABILITY UNDER THIS MASTER AGREEMENT OR ANY OF THE RELATED AGREEMENTS TO THE
OTHER EXCEED THE TOTAL AMOUNT BCBSNC HAS PAID TO HSD UNDER THE LICENSE AND
DEVELOPMENT AGREEMENTS.
Page 21
Confidential
25. NOTICES. Any notice made in relation to this Agreement and to the
Related Agreements shall be sent to the addresses set forth below, or such other
address as the intended recipient has previously designated by written notice.
The notice shall be sent by Certified Mail, return receipt requested, or by a
prepaid courier service which requires signature for receipt. A notice shall be
deemed to be given when the Certified Mail or courier package is signed for at
the address. Notices to BCBSNC with respect to any claim or notice of breach
shall be addressed to the attention of the Legal Department. Notices to BCBSNC
with respect to all other matters shall be addressed to the attention of the
Senior Director, Future Systems.
Addresses for Notice
TO BCBSNC: Blue Cross and Blue Shield
of North Carolina
Attn.: (as above)
0000 Xxxxxx Xxxx Xxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
TO HSD: Health Systems Design Corporation
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
26. ASSIGNMENT. BCBSNC may assign this Agreement and any or all of the
Related Agreements only to any BCBSNC Affiliate. HSD shall not assign or,
transfer this Agreement or any Related Agreement or Work Order, or any of its
obligations thereunder, without the prior written consent of BCBSNC. HSD may
assign its right to payment under this Agreement and any of the Related
Agreements.
27. WAIVER OF COMPLIANCE. Any failure by either party to enforce at any
time any term or condition under this Agreement or any of the Related Agreements
shall not be considered a waiver of the party's right thereafter to enforce each
and every term and condition of such agreements.
28. PARTIAL ILLEGALITY. It is agreed that if any provision, or part of a
provision, of this Agreement or of any of the Related Agreements is held to be
invalid or unenforceable under any applicable statute or rule of law, then the
parties shall use their best efforts to replace the invalid or unenforceable
provision with a provision that, to the extent permitted by applicable law,
achieves the purposes intended under the original provision and to allow the
parties to have the intended benefit of their bargain. If it cannot be so
reformed it shall be omitted. The balance of the affected agreement shall
remain valid and unchanged and in full force and effect.
Page 22
Confidential
29. MUTUALLY PREPARED AGREEMENT. This Agreement and each of the Related
Agreements shall not be construed more strictly against one party than the other
by virtue of the fact that it may have been prepared by counsel for one of the
parties, it being recognized that each party has contributed substantially and
materially to the preparation of this Agreement.
30. DISPUTE RESOLUTION.
a. GENERAL APPLICABILITY. Any dispute regarding this Agreement, any
Related Agreement or any Work Order that the parties are unable to resolve
themselves after escalation to at least the vice president level shall be
submitted for mediation to be conducted in Wake County, North Carolina, by and
in accordance with the rules of the Private Adjudication Center (PAC) located at
the North Carolina State Bar Center in Cary, North Carolina.
b. OUTCOME OF DISPUTE RESOLUTION PROCESS.
i. The parties agree that if the dispute results from HSD's
assertion that BCBSNC is using and/or exploiting the HSD Software
or HSD Derivative Works in a manner or to an extent that exceeds
the rights granted to BCBSNC with respect to such software under
Paragraph 3 of the Software License Agreement, then subject to
Paragraph 30.c below, all remedial rights, procedures,
determinations and effects, including those of mediation, shall
be as set forth in Paragraph 6.d.
ii. With respect to all disputes other than those contemplated in
Paragraph 30.b.i, the parties agree to cooperate in good faith
with the mediator in order to reach a satisfactory resolution and
deposition of the dispute. If, after reasonable efforts, the
parties are unable to reach compromise, each party shall have all
rights and privileges afforded to it by law.
c. FEES AND EXPENSES. Payment of fees and expenses associated with the
mediation process will be split equally between the parties. The parties agree
that this Agreement and each of the Related Agreements shall be governed and
construed by the laws of the state of North Carolina, and that no
conflict-of-laws provision shall be invoked to permit application of the laws
of any other state or jurisdiction.
31. ADDENDUM UNDER THE HEALTH INSURANCE FOR THE AGED AND DISABLED ACT.
The parties hereby agree that this Agreement and the Related Agreements shall be
subject to the "Addendum to Subcontract Under the Health Insurance for the Aged
and Disabled Act" attached hereto as Exhibit G.
Page 23
Confidential
32. INSURANCE. HSD shall maintain liability insurance in the amount of $1
million per occurrence and $3 million in the aggregate and shall furnish proof
of such insurance to BCBSNC upon request.
33. ADHERENCE TO BCBSNC SCOPE CHANGE CONTROL PROCEDURES. The parties
shall adhere to the BCBSNC Scope Change Control Procedures when making any
change to the Master Workplan, to this Agreement, to any Related Agreement, or
to any Exhibit, Attachment, or Work Order thereto if such change would otherwise
be a deviation from the Master Workplan.
34. PRIOR AGREEMENTS; ENTIRE AGREEMENT.
a. PRIOR AGREEMENTS AND OBLIGATIONS.
i. Upon the Effective Date, the Implementation Planning Project
License Agreement entered between the parties on March 30, 1996,
and the software license agreement entered between the parties on
September 30, 1996, shall terminate and neither party shall have
any remaining duty or obligation under said agreements.
ii. The parties acknowledge that prior to the Effective Date they
entered into an oral agreement pursuant to which HSD has
undertaken certain work on BCBSNC's behalf in the nature of the
work contemplated under the Software Implementation Agreement,
and that BCBSNC owes payment for such work as of the Effective
Date. The parties agree that any future work under said oral
agreement shall be undertaken on a time and materials basis with
compensation for HSD's labor to be paid at the levels specified
in the Software Implementation Agreement.
iii. The parties agree that all remaining prior payment obligations
between the parties other than the obligation identified in
Paragraph 32.a.ii above, if any, shall terminate upon execution
of this Agreement. All duties and obligations with respect to
confidentiality and ownership of proprietary information and
materials that were to have survived termination of such
agreements are hereby superseded and replaced by the terms of
this Agreement pertaining to such matters.
b. EXCLUSIVE UNDERSTANDING. This Agreement and the Software License
Agreement, Software Implementation Agreement, Software Development Agreement,
Software Consulting Agreement and Software Maintenance and Support Agreement,
together with all their Exhibits, Work Orders and attachments, constitute the
exclusive understanding of the parties with respect to
Page 24
Confidential
the subject matter hereof. The parties shall not be bound by or liable for
any statement, writing, representation, promise, inducement or understanding
not set forth above or within the aforementioned agreements, Exhibits, Work
Orders or attachments.
The parties do hereby indicate their agreement to the foregoing by
executing this instrument in four duplicate originals as provided below.
***[Signatures on following page]***
Page 25
Confidential
LIST OF EXHIBITS
Exhibit A Glossary of Terms
Exhibit B Software Consulting Agreement
Exhibit C Software Development Agreement
Exhibit D Software Implementation Agreement
Exhibit E Software License Agreement
Exhibit F Software Maintenance and Support Agreement
Exhibit G Addendum to Subcontract Under the
Health Insurance for the Aged and Disabled Act
Exhibit H HSD Travel Policy
Exhibit I Minimum Supplemental Functions
Exhibit J Basic Functional Specifications
(i) Functions and Features Checklist
(ii) User Documentation
(iii) HSD Products New Customer Order
Exhibit K Recommended Environment
Exhibit L Live Operation Performance Criteria and Live Operation Performance
Measurement Method
Exhibit M Master Workplan
Exhibit N BCBSNC Scope Change Control Procedures
Exhibit O Elements of General Systems Design
(i)
