EXHIBIT 10.28
*** TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R.SS.SS.200.80(b)(4),
200.83 AND 240.24b-2
INFORMATION TECHNOLOGY SERVICES AGREEMENT
BETWEEN
PACIFICARE HEALTH SYSTEMS, INC.
AND
XXXXX, INC.
JANUARY 11, 2002
TABLE OF CONTENTS
PAGE
1. DEFINITIONS AND CONSTRUCTION ................................... 1
1.1 Definitions ........................................... 1
1.2 Interpretation ........................................ 1
1.3 Order of Precedence ................................... 2
2. TERM ........................................................... 2
2.1 Initial Term .......................................... 2
2.2 Renewal Term; Extension Period ........................ 2
3. SERVICES ....................................................... 3
3.1 Base Services ......................................... 3
3.2 Improved Technology ................................... 3
3.3 Governmental Approvals; Changes in Laws ............... 4
3.4 Third Party Consents .................................. 5
3.5 Technical Architecture and Product Standards .......... 6
3.6 Knowledge Sharing ..................................... 6
3.7 Procurement ........................................... 6
3.8 Reports ............................................... 6
3.9 Right to Use Third Parties ............................ 8
4. TRANSITION ..................................................... 8
4.1 Transition Services ................................... 8
4.2 Milestones ............................................ 8
5. NEW SERVICES ................................................... 9
5.1 New Services .......................................... 9
5.2 Third Party Services in Connection with
New Services .......................................... 10
6. PACIFICARE RESPONSIBILITIES .................................... 10
6.1 PacifiCare Supplier Relationship Manager .............. 10
6.2 PacifiCare Resources .................................. 10
6.3 Use of PacifiCare Facilities .......................... 11
6.4 Retained Staff ........................................ 11
7. THIRD PARTY AGREEMENTS ......................................... 12
7.1 Assigned Agreements ................................... 12
7.2 Managed Agreements .................................... 12
7.3 Performance Under Agreements .......................... 13
i.
TABLE OF CONTENTS
(CONTINUED)
PAGE
8. SERVICE LEVELS ................................................. 13
8.1 Initial Base Service Levels ........................... 13
8.2 Service Levels for New Services ....................... 13
8.3 Adjustment of Service Levels .......................... 13
8.4 Root-Cause Analysis ................................... 14
8.5 Measurement Tools ..................................... 14
8.6 Continuous Improvement and Best Practices ............. 14
8.7 Service Level Credits ................................. 14
8.8 Excused Performance ................................... 15
9. PACIFICARE SATISFACTION AND BENCHMARKING ....................... 15
9.1 Satisfaction Survey ................................... 15
9.2 Benchmarking .......................................... 15
10. SERVICE LOCATIONS .............................................. 15
10.1 Service Locations ..................................... 15
10.2 Safety and Security Procedures ........................ 16
10.3 Data Security ......................................... 16
10.4 Security Relating to Competitors ...................... 16
11. HUMAN RESOURCES ................................................ 17
12. SUPPLIER STAFF ................................................. 17
12.1 Supplier Client Relationship Manager .................. 17
12.2 Key Personnel ......................................... 17
12.3 Project Staff ......................................... 18
12.4 Subcontractors ........................................ 18
12.5 Conduct of Supplier Personnel ......................... 19
12.6 Non-Competition ....................................... 19
12.7 Non-Solicitation ...................................... 19
13. MANAGEMENT AND CONTROL ......................................... 20
13.1 Steering Committee .................................... 20
13.2 Oversight and Management Process; Relationship
with Infrastructure Supplier .......................... 20
13.3 Policy & Procedures Manual ............................ 22
13.4 Change Control Procedures ............................. 23
ii.
TABLE OF CONTENTS
(CONTINUED)
PAGE
14. PROPRIETARY RIGHTS ............................................. 23
14.1 Background Technology ................................. 23
14.2 PacifiCare Software ................................... 23
14.3 Supplier Software ..................................... 24
14.4 Supplier Tools ........................................ 24
14.5 Developed Software .................................... 24
14.6 Web Development ....................................... 25
14.7 Upgrades to Software .................................. 25
15. DATA ........................................................... 25
15.1 Ownership of PacifiCare Data .......................... 25
15.2 Use of PacifiCare Data ................................ 25
15.3 Correction and Reconstruction ......................... 25
15.4 Return of Data ........................................ 26
16. CONTINUED PROVISION OF SERVICES ................................ 26
16.1 Disaster Recovery Plan ................................ 26
16.2 Force Majeure ......................................... 27
16.3 Alternate Source ...................................... 27
16.4 No Payment for Unperformed Services ................... 27
16.5 Allocation of Resources ............................... 27
17. PAYMENTS AND INVOICING ......................................... 27
17.1 Base Fees ............................................. 27
17.2 Base Fees ............................................. 28
17.3 Variable Fees and Adjustment of Baselines ............. 28
17.4 Variable Fee Report ................................... 28
17.5 Time of Payment ....................................... 28
17.6 Detailed Invoices ..................................... 28
17.7 Fee Dispute ........................................... 29
17.8 Substantial Changes ................................... 29
17.9 Adjustments to Fees ................................... 29
17.10 Expenses .............................................. 29
17.11 Rights of Set-Off ..................................... 29
17.12 Proration ............................................. 29
iii.
TABLE OF CONTENTS
(CONTINUED)
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17.13 Unused Credits ........................................ 29
17.14 [...***...] ........................................... 29
18. TAXES .......................................................... 30
19. AUDITS ......................................................... 31
19.1 Services .............................................. 31
19.2 Fees .................................................. 31
19.3 Omnibus Reconciliation Act ............................ 32
19.4 Record Retention ...................................... 32
19.5 Facilities ............................................ 32
19.6 Audit Software ........................................ 32
19.6 Relief ................................................ 32
20. CONFIDENTIALITY ................................................ 33
20.1 General Obligations ................................... 33
20.2 Exceptions ............................................ 33
20.3 Attorney-Client Privilege ............................. 33
20.4 Unauthorized Acts ..................................... 34
20.5 Injunctive Relief ..................................... 34
21. REPRESENTATIONS AND WARRANTIES ................................. 35
21.1 By PacifiCare ......................................... 35
21.2 By Supplier ........................................... 35
21.3 Disclaimer ............................................ 36
22. ADDITIONAL COVENANTS ........................................... 36
22.1 By PacifiCare ......................................... 36
22.2 By Supplier ........................................... 36
23. DISPUTE RESOLUTION ............................................. 37
23.1 Resolution Procedures ................................. 37
23.2 Exclusions ............................................ 38
23.3 Continuity of Services ................................ 38
24. TERMINATION .................................................... 38
24.1 Termination for Convenience ........................... 38
24.2 Termination for Change in Control ..................... 38
24.3 Termination for Cause ................................. 38
iv.
*CONFIDENTIAL TREATMENT REQUESTED
TABLE OF CONTENTS
(CONTINUED)
PAGE
24.4 Termination for Failure to Provide Critical Services... 39
24.5 Insolvency ............................................ 39
24.6 Other Terminations .................................... 39
25. TERMINATION FEES ............................................... 39
25.1 Early Termination Fee ................................. 39
25.2 No Other Fees ......................................... 39
26. TERMINATION ASSISTANCE ......................................... 40
26.1 Termination Assistance Services ....................... 40
26.2 Termination Services Fees ............................. 41
26.3 Exit Duties and Exit Rights ........................... 41
27. INDEMNITIES .................................................... 43
27.1 Indemnity by PacifiCare ............................... 43
27.2 Indemnity by Supplier ................................. 43
27.3 Indemnification Procedures ............................ 45
28. DAMAGES ........................................................ 45
28.1 Consequential Damages ................................. 45
28.2 Direct Damages ........................................ 45
28.3 Basis of the Bargain .................................. 45
28.4 Exclusions ............................................ 46
29. INSURANCE ...................................................... 46
29.1 Types and Amounts ..................................... 46
29.2 Supplier Agents ....................................... 47
29.3 Documentation ......................................... 47
29.4 Self Insurance ........................................ 47
29.5 Intentions ............................................ 48
30. MISCELLANEOUS PROVISIONS ....................................... 48
30.1 Amendments ............................................ 48
30.2 Assignment ............................................ 48
30.3 Bankruptcy ............................................ 48
30.4 Conflict of Interest .................................. 48
30.5 Consents, Approvals and Requests ...................... 49
30.6 Corporate Integrity ................................... 49
v.
*CONFIDENTIAL TREATMENT REQUESTED
TABLE OF CONTENTS
(CONTINUED)
PAGE
30.7 Counterparts .......................................... 49
30.8 Covenant of Further Assurances ........................ 49
30.9 Entire Agreement ...................................... 49
30.10 Export ................................................ 49
30.11 Good Faith and Fair Dealing ........................... 49
30.12 Governing Law and Venue ............................... 50
30.13 Notices ............................................... 50
30.14 Publicity ............................................. 51
30.15 Relationship .......................................... 51
30.16 Severability .......................................... 51
30.17 Survival .............................................. 51
30.18 Third Party Beneficiaries ............................. 52
30.19 Timing and Cumulative Remedies ........................ 52
30.20 Waivers ............................................... 52
vi.
*CONFIDENTIAL TREATMENT REQUESTED
INFORMATION TECHNOLOGY SERVICES AGREEMENT
THIS INFORMATION TECHNOLOGY SERVICES AGREEMENT (the "AGREEMENT"), dated as
of January 11, 2002 (the "EFFECTIVE DATE"), is between PACIFICARE HEALTH
SYSTEMS, INC., a Delaware corporation with its principal place of business at
0000 X. Xxxx Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx, 00000 ("PACIFICARE"), and
XXXXX, INC., a Massachusetts corporation with its principal place of business at
Xxx Xxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 ("SUPPLIER").
RECITALS
WHEREAS, the PacifiCare Entities (as defined below) currently receive
information technology ("IT"), data processing and related services from
internal staff and certain third party providers;
WHEREAS, the PacifiCare Entities desire to centralize the delivery of IT
services to maximize efficiency, improve the speed of delivering IT solutions
for new business opportunities and improve IT service levels;
WHEREAS, PacifiCare desires for the PacifiCare Entities to obtain from
Supplier and International Business Machines Corporation, a New York corporation
(the "INFRASTRUCTURE SUPPLIER"), and Supplier desires to provide to the
PacifiCare Entities, in cooperation with the Infrastructure Supplier, certain
IT, data processing and related services whereby the PacifiCare Entities shall
be provided with a stable and robust operating environment with sufficient
capacity and scalability to meet business objectives on a proactive, rather than
reactive, basis, in accordance with the terms and conditions of this Agreement;
and
WHEREAS, PacifiCare and Supplier have engaged in extensive negotiations
and discussions that have culminated in the formation of the relationship
described in this Agreement whereby Supplier shall provide to PacifiCare
Entities certain IT, data processing and related services, in accordance with
the terms and conditions of this Agreement.
NOW, THEREFORE, for and in consideration of the agreements set forth
below, PacifiCare and Supplier agree as follows:
AGREEMENT
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. Capitalized terms used in this Agreement shall have the
meanings set forth in EXHIBIT A.
1.2 INTERPRETATION.
(a) The schedules and exhibits attached to this Agreement are hereby
incorporated into and deemed part of this Agreement and all references to
"Agreement" include the schedules and exhibits to this Agreement.
(b) The headings preceding the text of sections, the headings to
schedules and exhibits, the table of contents and the table of schedules
included in or attached to this Agreement are used for convenience only and are
not to be considered in construing or interpreting this Agreement.
(c) The use of the terms "including," "include" or "includes" shall
in all cases herein mean "including without limitation," "include without
limitation" or "includes without limitation," respectively.
(d) Words importing the singular include the plural and words
importing the masculine include the feminine and vice versa where the context so
requires.
(e) References to any Law shall mean references to the Law as it
exists on the Effective Date as well as in changed or supplemented form or to a
newly adopted Law.
(f) The Parties acknowledge and agree that they have mutually
negotiated the terms and conditions of this Agreement and that any provision
contained herein with respect to which an issue of interpretation or
construction arises shall not be construed to the detriment of the drafter on
the basis that such Party or its professional advisor was the drafter, but shall
be construed according to the intent of the Parties as evidenced by the entire
Agreement.
1.3 ORDER OF PRECEDENCE. Except as otherwise expressly set forth in the
body of this Agreement or in any schedules or exhibits, in the event of a
conflict, ambiguity or inconsistency between the provisions in the body of this
Agreement and any schedule or exhibit, the provisions in the body of this
Agreement shall prevail.
2. TERM.
2.1 INITIAL TERM. The initial term of this Agreement (the "INITIAL TERM")
shall commence on the Effective Date and continue until 23:59 (Pacific Time) on
March 9, 2012 (the "INITIAL TERM EXPIRATION DATE"), or such earlier date upon
which this Agreement may be terminated in accordance with the provisions hereof.
2.2 RENEWAL TERM; EXTENSION PERIOD.
(a) Unless this Agreement is terminated in accordance with the
provisions hereof, PacifiCare shall notify Supplier at least one hundred eighty
(180) days prior to the Initial Term Expiration Date as to whether or not
PacifiCare desires to renew this Agreement. If PacifiCare provides Supplier with
notice that PacifiCare desires to renew this Agreement for a specified period
(the "RENEWAL TERM") and the Parties agree on the terms and conditions
applicable to the Renewal Term at least sixty (60) days prior to the Initial
Term Expiration Date, then this Agreement shall continue in effect beyond the
Initial Term Expiration Date in accordance with the terms and conditions agreed
upon by the Parties for the Renewal Term. If PacifiCare provides Supplier with
notice that PacifiCare does not desire to renew this Agreement, this Agreement
shall expire on the Initial Term Expiration Date, subject to Supplier's
obligation to provide Termination Assistance Services as set forth in this
Agreement.
2.
(b) If PacifiCare provides Supplier with notice that PacifiCare
desires to renew this Agreement and the Parties have not agreed on the terms and
conditions applicable to a Renewal Term at least sixty (60) days prior to the
Initial Term Expiration Date, then the term of this Agreement shall extend for a
period determined by PacifiCare of up to twelve (12) months beyond the Initial
Term Expiration Date (the "EXTENSION PERIOD"), at the charges, terms and
conditions in effect as of the Initial Term Expiration Date subject to a cost of
living adjustment as set forth in Schedule 17. If, during the Extension Period,
the Parties are able to reach agreement on the terms and conditions applicable
to a Renewal Term, then this Agreement shall continue in effect beyond the end
of the Extension Period in accordance with the terms and conditions agreed upon
by the Parties for the Renewal Term, and agreed upon pricing for the Renewal
Term will be applied retroactively to the Extension Period. If, during the
Extension Period, the Parties are unable to reach agreement on the terms and
conditions applicable to a Renewal Term, this Agreement shall expire at the end
of the Extension Period, subject to Supplier's obligation to provide Termination
Assistance Services as set forth in this Agreement.
3. SERVICES.
3.1 BASE SERVICES. Commencing on the Cutover Date and continuing
throughout the Term, Supplier shall be responsible for providing to PacifiCare
Entities (with respect to each PacifiCare Entity, as requested by PacifiCare)
the following services (collectively, the "BASE SERVICES"):
(a) the services, functions and responsibilities described in this
Agreement (including the services, functions, responsibilities and projects
described in EXHIBIT B);
(b) the application systems maintenance and enhancement services,
functions and responsibilities being performed during the twelve (12) month
period prior to the Cutover Date by the Affected Contractors set forth in
Schedule 3.1(b)(i) and the Affected Employees set forth in Schedule 3.1(b)(ii),
even if the service, function or responsibility is not specifically described in
this Agreement;
(c) any application systems maintenance and enhancement services,
functions or responsibilities that are not specifically described in this
Agreement, but that are required for the proper performance and delivery of the
Services; and
(d) those services otherwise identified in this Agreement as part of
the Base Services.
Subject to Section 17.3 and Section 17.8, Supplier shall increase or
decrease the amount of the Base Services according to PacifiCare's request for
the Base Services. With respect to additional business units or entities that
PacifiCare may designate as PacifiCare Included Affiliates, PacifiCare and
Supplier shall negotiate in good faith any applicable transition fees, if any,
to compensate Supplier for any material costs associated with Supplier's
provision of the Services to such PacifiCare Included Affiliates, and to the
extent the provision of the Services to such additional PacifiCare Included
Affiliates requires a material change in the delivery of the Services,
PacifiCare and Supplier shall negotiate in good faith applicable adjustments to
the Fees and Service Levels. Notwithstanding the foregoing, PacifiCare shall not
be obligated to obtain
3.
any Services from Supplier with respect to any additional entity or business
unit or in connection with any acquisition or corporate combination.
3.2 IMPROVED TECHNOLOGY. Commencing on the Cutover Date and continuing
throughout the Term and, if applicable, in accordance with the Change Control
Procedure, Supplier shall: (a) provide the Services using application management
methodologies and processes that (i) allows the PacifiCare Entities to take
advantage of technological advances in order to facilitate PacifiCare's goal to
remain competitive in the markets that the PacifiCare Entities serve, (ii) are
at least current with the methodologies and processes that Supplier uses in
providing services to its other customers who receive services substantially
comparable to the Services, and (iii) are consistent with the current level of
technology generally adopted from time to time in the PacifiCare Entities'
industries; (b) jointly, with PacifiCare, continually identify and evaluate the
least cost/highest benefit methods to implement technology advancements and
improved application management methodologies and processes that represent
advancements, improved methods, and processes in addition to the level of
technology evolution, advancement and improvement otherwise contemplated by this
Agreement (collectively, "IMPROVED TECHNOLOGY"); (c) implement such Improved
Technology after obtaining PacifiCare's consent thereto (implementation of which
shall be effectuated pursuant to Section 5.1, as agreed by the Parties); and (d)
meet with PacifiCare, upon PacifiCare's request and at least once during every
ninety (90)-day period, in accordance with the procedures agreed upon by the
PacifiCare Supplier Relationship Manager and the Supplier Client Relationship
Manager, to inform PacifiCare of any Improved Technology Supplier is developing
or technology and application management trends or directions Supplier, in the
ordinary course of its business, is aware of, that could reasonably be expected
to have an impact on PacifiCare Entities' business, taking into consideration
the PacifiCare Entities' use of the Services; provided that if the disclosure of
any such Improved Technology are subject to binding nondisclosure agreements
between Supplier and a third party, Supplier shall comply with such agreements
and only provide information regarding such Improved Technology to the extent
permitted by such agreements.
3.3 GOVERNMENTAL APPROVALS; CHANGES IN LAWS.
(a) GOVERNMENTAL APPROVALS. PacifiCare shall, at its own cost and
expense, obtain and maintain all licenses, approvals, permits, consents and
authorizations of any Governmental Authority, and provide any notice to any
Governmental Authority, that PacifiCare is required by Law to obtain, maintain,
or provide, other than Supplier Governmental Approvals ("PACIFICARE GOVERNMENTAL
APPROVALS"). Supplier shall, at its own cost and expense, obtain and maintain
all licenses, approvals, permits, consents and authorizations of any
Governmental Authority, and provide any notice to any Governmental Authority,
that Supplier is required by Law to obtain, maintain, or provide, together with
any licenses, approvals, permits, consents, authorizations and notices required
by Law in connection with or as a result of the provision or receipt of the
Services ("SUPPLIER GOVERNMENTAL APPROVALS").
(b) CHANGES IN SUPPLIER LAWS AND PACIFICARE LAWS. PacifiCare shall
monitor and promptly identify and notify Supplier of all changes in Laws
applicable to
4.
PacifiCare that affect the provision or receipt of the Services, other than
Supplier Laws ("PACIFICARE LAWS"). Supplier shall monitor and promptly identify
and notify PacifiCare of (i) all changes in Laws applicable to Supplier that
affect the provision or receipt of the Services, together with (ii) any changes
in Laws applicable to either Party that apply to the provision or receipt of
information technology outsourcing services and that affect the PacifiCare
Entities or the provision or receipt of the Services ("SUPPLIER LAWS").
(c) EFFECT OF CHANGES IN LAWS. Supplier and PacifiCare shall work
together to identify the effect of changes in Laws on the provision or receipt
of the Services. PacifiCare shall notify Supplier of changes in PacifiCare Laws
and the Parties shall discuss modifications to the Services, if any, necessary
to comply with such changes in PacifiCare Laws. Supplier shall promptly
thereafter propose any adjustment to the applicable Fees associated with such
modifications. Upon PacifiCare's consent, Supplier shall implement such
modifications to the Services in a timely manner subject to the Change Control
Procedures. Supplier shall notify PacifiCare of changes in Supplier Laws and
Supplier shall implement in a timely manner, at its own cost and expense, any
changes in the Services required to comply with such changes in Supplier Laws,
provided, however, that if a change in the Services required to comply with a
Supplier Law will have a material effect on the provision or receipt of the
Services, Supplier shall obtain PacifiCare's consent before implementing such
change. Notwithstanding the foregoing, if a Supplier Law referenced in Section
3.3(b)(ii) above requires changes to the applications functionality provided as
part of the Services, then Supplier shall propose to PacifiCare a plan to
implement such changes to the applications functionality (including the cost and
expense of such changes), and upon PacifiCare's consent, Supplier shall
implement the plan and PacifiCare shall pay the cost and expense of such plan.
3.4 THIRD PARTY CONSENTS.
(a) PacifiCare shall obtain the Front-End Consents, and Supplier
shall cooperate with PacifiCare in obtaining any Front-End Consent upon
PacifiCare's request. [...***...] In the event that PacifiCare is unable to
obtain a Front-End Consent, Supplier shall, at PacifiCare's expense, develop and
implement a workaround that shall enable Supplier to perform Supplier's
obligations under this Agreement. Each Party shall comply with the terms and
conditions of the Consents that are applicable to such Party.
(b) Before providing any Supplier Software subject to a Back-End
Consent to PacifiCare, Supplier shall have used commercially reasonable efforts
to obtain from the provider of such Supplier Software the right to provide such
Supplier Software to PacifiCare in
5.
*CONFIDENTIAL TREATMENT REQUESTED
accordance with this Agreement, and, if applicable, the right to assign such
Supplier Software to PacifiCare in accordance with Section 26.3. If Supplier has
not obtained the rights set forth in the preceding sentence, Supplier shall
first notify and obtain the consent of the PacifiCare Supplier Relationship
Manager before providing such Supplier Software to PacifiCare pursuant to this
Agreement.
3.5 TECHNICAL ARCHITECTURE AND PRODUCT STANDARDS. Supplier shall comply
with PacifiCare's information management technical architecture and product
standards set forth in Schedule 3.5, as the same may be modified through the
Change Control Procedures by PacifiCare from time to time during the Term and
the Termination Assistance Period.
3.6 KNOWLEDGE SHARING. At least once every Contract Year, or upon request
after at least fifteen (15) days notice from PacifiCare, Supplier shall provide,
at mutually-agreeable times and locations, knowledge sharing assistance to
PacifiCare, including meeting with representatives of PacifiCare in order to
explain how the Systems work and should be operated and how the Services are
provided. Supplier shall also provide, at mutually agreeable times and
locations, such training and documentation as PacifiCare may require for
PacifiCare to understand, operate, maintain and enhance the Systems and
understand and provide the Services.
3.7 PROCUREMENT.
(a) BREAK/FIX AND TECHNOLOGY REFRESH. As part of the Base Services,
Supplier is responsible for procurement activities and charges for break/fix and
technology refresh, in each case, as described in EXHIBIT B.
(b) NEW SERVICES AND PROJECTS. Whenever PacifiCare agrees to engage
Supplier to provide New Services that include any projects requiring the
procurement and deployment of any New Software that is not included in the Base
Services, then, at PacifiCare's request and in accordance with the Policy &
Procedures Manual, Supplier shall (i) identify suppliers with the most favorable
terms (including the lowest cost) available to Supplier for any New Software and
(ii) upon PacifiCare's request, (x) purchase the New Software on behalf of
PacifiCare, (y) lease, or arrange for a third party to lease, such New Software
to PacifiCare or (z) license, or arrange for a third party to license, such New
Software to PacifiCare. PacifiCare shall pay to Supplier, the supplier, third
party lessor or third party licensor, as applicable, the purchase, lease or
license fees, as applicable, in respect of the New Software. Except as otherwise
agreed in writing by the Parties or as otherwise provided in this Agreement, all
rights in and title to any New Software purchased by Supplier on behalf of
PacifiCare and paid for by PacifiCare shall belong to PacifiCare and all New
Software shall be new.
3.8 REPORTS.
(a) ANNUAL PLAN.
(i) In a mutually agreeable timeframe consistent with
PacifiCare's iterative budgeting process, PacifiCare shall provide to Supplier a
list of PacifiCare's projected projects for the subsequent calendar year (the
"PACIFICARE PROJECTED PROJECT LIST"). After
6.
receipt of the PacifiCare Projected Project List, Supplier shall provide to
PacifiCare a written response to the PacifiCare Projected Project List in a
mutually agreed upon timeframe detailing the Resource Units (for example
Billable Hours and FTPs) necessary for Supplier to meet the PacifiCare Projected
Project List ("SUPPLIER'S PROJECTED RESOURCE UNITS"). After receipt of
Supplier's Projected Resource Units, PacifiCare shall provide to Supplier in a
timeframe consistent with PacifiCare's budgeting process a projected development
plan for projected PacifiCare projects for the subsequent calendar year
including a high level description of the proposed projects and the scheduling
of the proposed projects (the "PACIFICARE PROJECTED DEVELOPMENT PLAN").
(ii) Supplier shall provide to PacifiCare its written response
to the PacifiCare Projected Development Plan in mutually agreed upon timeframe
("SUPPLIER'S REPLY"). Where appropriate, Supplier's Reply shall address:
technology strategies, operational plans (as necessary) and any program
management changes; changes to standard configurations for hardware, software,
networks and systems; changes within the organization, including new employees
and new subcontractors; changes in geographical location of subcontractors;
updates to the Fees including any retained expenses, Base Fees, ARC Rates and
RRC Rates; changes in the Base Services; changes in Service Levels and Service
Level Credits; changes to the Baselines; proposed performance changes, hardware
or software procurement in support of the proposed projects, costs associated
with such hardware or software procurement (including maintenance costs) and new
or added value projects.
(iii) In a mutually agreed upon timeframe, and after
PacifiCare's receipt of Supplier's Reply, the Parties shall formulate a written
plan to meet PacifiCare's anticipated needs for the subsequent calendar year
(the "ANNUAL PLAN"). The Parties shall use good faith efforts to review, approve
and adopt the Annual Plan prior to the end of each calendar year. After the
Annual Plan is adopted, the Parties may negotiate in good faith to make
equitable adjustments as necessary. Such equitable adjustments shall be in
writing and signed by both Parties.
(iv) In conjunction with PacifiCare's budgeting process and in
a mutually agreed upon timeframe, Supplier shall provide the following proposals
to PacifiCare.
(1) Supplier may provide a proposal to PacifiCare that
recommends relocation of particular functions or Services to one or more
Supplier ADCs, in order to improve quality or cost-effectiveness of the delivery
of Services. Such Supplier ADCs may be Near-Shore ADCs, Offshore ADCs, or
Domestic ADCs. Supplier's proposal will provide, to the extent applicable, (i)
any revised Base Fees that account for the impact of delivery at such Supplier
ADC; (ii) ARC and RRC setting forth pricing differences among current and
proposed delivery locations; (iii) any proposed transition fees for the
migration of applicable functions or Services to the Supplier ADC; and (iv) any
other fees, expenses, or costs to PacifiCare related to the relocation to or the
provision of Services from the applicable Supplier ADC. PacifiCare may, in its
sole discretion, approve or reject any proposal submitted pursuant to this
Section. For purposes of this Agreement, "DOMESTIC ADC" means any Supplier ADC
located in the United States, "NEAR-SHORE ADC" means any Supplier ADC located in
Canada, and "OFFSHORE ADC" means any Supplier ADC not located in the United
States or Canada.
7.
(v) Supplier shall provide a proposal to PacifiCare that
recommends New Development, the implementation of new technology, automation,
improvements in productivity, technology or application enhancements or changes
and other enhancements relating to the Services or the Applications ("PROPOSED
DEVELOPMENT"). Such proposal shall include for each Proposed Development
descriptions of and rationales for the Proposed Development, estimates of
related Resource Units necessary for Supplier to perform the Proposed
Development, any new or non-standard resources necessary for Supplier to perform
the Proposed Development, hardware or software procurement in support of the
Proposed Development and impacts of the Proposed Development on any Fees
including ARC Rates and RRC Rates. Supplier shall discuss the Proposed
Development with PacifiCare using an iterative process and shall provide
additional information as reasonably necessary for PacifiCare to adequately
review the Proposed Development. PacifiCare may in its sole discretion approve
or reject any Proposed Development.
(b) In addition to the Annual Plan, Supplier shall provide to
PacifiCare, in a format approved by PacifiCare, a set of reports, including
performance, billing and status reports, as set forth in Schedule 3.8(b) and as
otherwise reasonably available to Supplier. Supplier shall provide all reports
as set forth in Schedule 3.8(b) or as PacifiCare reasonably requires.
3.9 RIGHT TO USE THIRD PARTIES. PacifiCare may perform itself, or contract
with one or more third parties to perform all or any portion of the Services,
subject to appropriate adjustments to the Base Fees in accordance with and
subject to the provisions of Sections 17.3 and 17.8. If PacifiCare performs
itself, or engages a third party to provide, Services under this Agreement,
Supplier agrees, in accordance with the Change Control Procedures, to cooperate
in good faith with PacifiCare and/or any such third party to the extent
reasonably required by PacifiCare, including provision of (a) written
requirements, standards, and procedures for PacifiCare systems maintained by
Supplier so that the enhancements or developments of such third party may be
operated in conjunction with Services, (b) assistance and support services to
such third party at competitive market prices and (c) access to the Software as
may be reasonably required by such third party and PacifiCare in connection with
Services.
4. TRANSITION.
4.1 TRANSITION SERVICES. Supplier shall perform all application systems
maintenance and enhancement functions identified as Supplier's responsibility on
Schedule 4.1 on or before the last day of the Transition Period (the "TRANSITION
SERVICES"). The Transition Services shall be performed in accordance with and as
defined in the Transition Plan attached hereto as Schedule 4.1 and without
causing a material disruption to the PacifiCare Entities' business. The
Transition Services shall commence on the Cutover Date and shall continue for
the period specified in the Transition Plan (the "TRANSITION PERIOD"). Supplier
shall designate one of its Key Personnel (as defined in Section 12.2), and
notify PacifiCare of the identity of such individual, for each of the PacifiCare
Entities' facilities and functions being transitioned in accordance with this
Agreement who shall be responsible for managing and implementing the Transition
Services with respect to such functions or services. Until the completion of the
applicable Transition Services and as often as may be requested by the
PacifiCare Supplier
8.
Relationship Manager, each such individual shall review with the PacifiCare
Supplier Relationship Manager the status of the Transition Services for which
that individual is responsible.
4.2 MILESTONES. The Transition Plan and Schedule 4.2 includes a list of
milestones and deliverables that Supplier is responsible to perform and deliver
to PacifiCare and which relates to Supplier's obligations pursuant to this
Section 4, together with, for each such milestone or deliverable, (a) a
description of the applicable triggering event from which achievement of such
milestone or delivery of such deliverable shall be measured, (b) the time period
after the triggering event in which Supplier must complete such milestone or
deliver such deliverable, (c) the criteria against which to determine whether
Supplier has completed such milestone or delivered the deliverable, and (d) an
amount of the Base Fees subject to Service Level Credits in relation to such
milestone or deliverable. PacifiCare's right to receive Service Level Credits
under the Transition Plan shall not limit PacifiCare's right to recover other
damages incurred by PacifiCare as a result of the performance failure by
Supplier with regard to those Transition Services set forth in the Transition
Plan which are designated as Supplier primary responsibilities and that caused
the Service Level Credit to be incurred [...***...]
5. NEW SERVICES.
5.1 NEW SERVICES. Commencing on the Cutover Date PacifiCare may, from time
to time during the Term, request that Supplier perform a New Service. Promptly
upon receipt of such a request from PacifiCare, Supplier shall provide, and to
the extent applicable, shall cooperate with the Infrastructure Supplier to
jointly provide, a written proposal to PacifiCare for such New Service that
shall include:
(a) a description of the services, functions and responsibilities
Supplier anticipates performing in connection with such New Service;
(b) a schedule for commencing and completing such New Service;
(c) Supplier's prospective fees for such New Service, including a
detailed breakdown of such fees, together with proposed corresponding Service
Levels for such New Services ("NEW SERVICES SERVICE LEVELS");
(d) when appropriate, a description of any new Software or Equipment
to be provided by Supplier, Infrastructure Supplier or PacifiCare in connection
with such New Service;
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*CONFIDENTIAL TREATMENT REQUESTED
(e) when appropriate, the Software and Equipment and run-time
requirements necessary to develop and operate any new Software;
(f) a description of the human resources necessary to provide the
New Service;
(g) when appropriate, a list of any existing Software or Equipment
included in or to be used in connection with such New Service;
(h) when appropriate, acceptance test criteria and procedures for
any New Software or any products, packages or services; and
(i) such other information requested by PacifiCare.
PacifiCare shall not be obligated to pay for any New Service and
Supplier shall not be obligated to perform any New Service until the PacifiCare
Supplier Relationship Manager has provided Supplier with the authorization to
perform the New Service.
5.2 THIRD PARTY SERVICES IN CONNECTION WITH NEW SERVICES. Notwithstanding
any request made by PacifiCare to Supplier pursuant to Section 5.1 or any other
provision in this Agreement, PacifiCare shall have the right to perform itself,
or to contract with a third party to perform, any New Service. Upon PacifiCare's
request, Supplier shall assist PacifiCare in identifying qualified third party
suppliers to provide New Services. In the event PacifiCare performs itself, or
contracts with a third party to perform, any New Service, Supplier shall
cooperate in good faith with PacifiCare and/or any such third party to the
extent reasonably required by PacifiCare. If such cooperation related to third
parties is not subject to a Managed Agreement and requires Supplier to utilize
resources not included within the Fees, then Supplier shall, prior to providing
such cooperation and in accordance with the Change Control Procedures, notify
PacifiCare that Supplier believes that Supplier is entitled to additional
compensation for providing such cooperation and advise PacifiCare of any
proposed additional compensation for Supplier. The amount of any such additional
compensation applicable to such cooperation shall be based on, and in accordance
with, the Fees, and agreed to by the Parties. Without prejudice to PacifiCare's
right to source any New Service to third parties, PacifiCare will consider
Supplier to provide the maintenance of future new applications under the
Agreement, provided that PacifiCare does not elect to source the maintenance of
such new applications to the third party who developed the applications.
6. PACIFICARE RESPONSIBILITIES.
6.1 PACIFICARE SUPPLIER RELATIONSHIP MANAGER. PacifiCare shall appoint the
PacifiCare Supplier Relationship Manager who, from the Effective Date, shall
serve as the primary PacifiCare representative under this Agreement ("PACIFICARE
SUPPLIER RELATIONSHIP MANAGER"). The PacifiCare Supplier Relationship Manager
shall (a) have overall responsibility for managing and coordinating the
performance of PacifiCare's obligations under this Agreement and (b) be
authorized to act for and on behalf of the PacifiCare Entities with respect to
all matters relating to this Agreement. Notwithstanding the foregoing, the
PacifiCare Supplier
10.
Relationship Manager may, upon notice to Supplier, delegate such of his or her
responsibilities to other PacifiCare employees as the PacifiCare Supplier
Relationship Manager deems appropriate.
6.2 PACIFICARE RESOURCES. Commencing on the Effective Date and continuing
during the Term, PacifiCare shall provide to Supplier, at no charge to Supplier
and subject to Section 6.3, the same or similar access to and use of certain
space in PacifiCare's premises, together with reasonable office furnishings,
janitorial services, land-line telephones, workstations, computers, parking,
access to servers, printers, systems, utilities, and reasonable office supplies,
in each case, to the same extent that PacifiCare otherwise provides to its
employees and subcontractors performing similar work for PacifiCare at such
facilities. Supplier's use of such premises shall be in accordance with
PacifiCare's policies and procedures in effect from time to time.
6.3 USE OF PACIFICARE FACILITIES.
(a) Except as expressly provided in this Agreement, Supplier shall
use the PacifiCare Service Locations for the sole and exclusive purpose of
providing the Services. Use of such facilities by Supplier does not constitute a
leasehold interest in favor of Supplier or any of Supplier's customers. Use of
PacifiCare Service Locations shall be subject to the Facilities Space
Requirements and Rules & Regulations attached as Schedule 6.3(a).
(b) Supplier shall use the PacifiCare Service Locations in an
efficient manner. To the extent that Supplier operates the space in a manner
that unnecessarily and materially increases facility costs incurred by
PacifiCare, PacifiCare shall notify Supplier of such costs and Supplier shall
implement corrective action, provided, however, that PacifiCare reserves the
right to set-off such excess costs if Supplier fails to take prompt corrective
action.
(c) Supplier and Supplier Agents shall keep the PacifiCare Service
Locations in good order, not commit or permit waste or damage to such
facilities, not use such facilities for any unlawful purpose or act and shall
comply with the PacifiCare Entities' standard and site-specific policies and
procedures (including physical security procedures) as in effect from time to
time and made available to Supplier at the URL designated by PacifiCare for such
purpose.
(d) Supplier shall permit PacifiCare Entities and PacifiCare Entity
Agents to enter into those portions of the PacifiCare Service Locations occupied
by Supplier's staff at any reasonable time to perform facilities-related
services.
(e) Supplier shall not make any improvements or changes involving
structural, mechanical or electrical alterations to the PacifiCare Service
Locations without PacifiCare's prior consent. Any additions, improvements or
changes made by Supplier shall be deemed the property of PacifiCare without
further consideration.
(f) When the PacifiCare Service Locations are no longer required for
performance of the Services, Supplier shall return such locations to PacifiCare
in substantially
11.
the same condition as when Supplier began using such locations, ordinary wear
and tear excepted.
6.4 RETAINED STAFF. Commencing upon the Cutover Date and continuing for
three (3) months thereafter, PacifiCare and the PacifiCare Entities shall
provide Supplier with reasonable access to certain members of PacifiCare's or
the PacifiCare Entities' retained staff who were responsible for performing the
Base Services prior to the Effective Date for the purpose of knowledge transfer
from PacifiCare to Supplier, as reasonably requested by Supplier and at mutually
agreed upon times and locations. In addition, commencing upon the Cutover Date
and continuing for twelve (12) months thereafter, PacifiCare will assist
Supplier by providing Supplier with reasonable access to the retained Affected
Contractors who were responsible for performing the Base Services prior to the
Cutover Date and who remain engaged by PacifiCare for the purpose of knowledge
transfer from PacifiCare to Supplier.
7. THIRD PARTY AGREEMENTS.
7.1 ASSIGNED AGREEMENTS. As of Cutover Date, Supplier shall assume all
responsibility (including all obligations and post assignment liability) for the
Assigned Agreements as set forth in Schedule 7.1.
(a) Ongoing Responsibilities. Supplier may, to the extent permitted
by any Assigned Agreement, renew, modify, terminate or cancel, or request or
grant any consents or waivers under, any such Assigned Agreement. Supplier shall
have financial and administrative responsibility with respect to the Assigned
Agreements, including responsibility for performance of all obligations under
the Assigned Agreements.
(b) Assigned Agreement Invoices. Supplier shall be responsible for
payment of invoiced amounts submitted by third parties for expenses incurred on
or after the Cutover Date pursuant to the Assigned Agreements, including any
late fees in respect of such third party invoices. If PacifiCare receives any
invoices for amounts incurred under the Assigned Agreement invoices after the
Cutover Date, PacifiCare shall provide those invoices to Supplier within a
reasonable time period to permit timely payment by Supplier. PacifiCare shall be
responsible for any late fees attributable to PacifiCare's failure to provide
such invoices to Supplier within a reasonable time period to permit timely
payment by Supplier. If, prior to the Cutover Date, PacifiCare prepaid any
amounts under any Assigned Agreements that are attributable to amounts incurred
on or after the Cutover Date, then Supplier shall reimburse or credit PacifiCare
for such amounts on the next invoice delivered by Supplier for the Services. In
the event Supplier receives during the Term any refund, credit or other rebate
(including deposits) in connection with any Assigned Agreement that is
attributable to periods prior to the Cutover Date, then Supplier shall promptly
notify PacifiCare of such refund, credit or rebate and shall promptly pay to
PacifiCare the full amount of such refund, credit or rebate.
12.
7.2 MANAGED AGREEMENTS. At all times on or after the Cutover Date and
during the Term, Supplier shall manage, administer and maintain the Managed
Agreements set forth in Schedule 7.2. Supplier's responsibilities shall include
receipt of invoices and coordination of third party services under the Managed
Agreements.
(a) ONGOING RESPONSIBILITIES. Supplier shall have administrative
(but not financial) responsibility at all times on or after the Cutover Date and
during the Term with respect to the Managed Agreements, and Supplier shall
provide PacifiCare with reasonable notice of all renewal, termination or
cancellation dates and fees with respect to the Managed Agreements. Supplier
shall not renew, modify, terminate or cancel, or request or grant any consents
or waivers under, any Managed Agreements without the consent of the PacifiCare
Supplier Relationship Manager. Supplier shall pay or discharge, as applicable,
any fees or charges or other liability or obligation imposed upon PacifiCare in
connection with (i) any such renewal, modification, termination or cancellation
of, or consent or waiver under, the Managed Agreements, obtained or given
without PacifiCare's consent as required under the foregoing sentence or (ii)
Supplier's failure to comply with the terms of the Managed Agreements.
(b) MANAGED AGREEMENT INVOICES. Supplier shall (i) receive all
Managed Agreement Invoices, (ii) review and correct any errors in any such
Managed Agreement Invoices in a timely manner and (iii) submit such Managed
Agreement Invoices to PacifiCare within a reasonable period of time prior to the
due date or, if a discount for payment is offered, the date on which PacifiCare
may pay such Managed Agreement Invoice with a discount. PacifiCare shall pay the
Managed Agreement Invoices received and approved by Supplier. PacifiCare shall
only be responsible for payment of the Managed Agreement Invoices and shall not
be responsible to Supplier for any management, administration or maintenance
fees of Supplier in connection with the Managed Agreement Invoices. PacifiCare
shall be responsible for any late fees in respect of the Managed Agreement
Invoices, provided that Supplier submitted the applicable Managed Agreement
Invoices to PacifiCare for payment within a reasonable period of time prior to
the date any such Managed Agreement Invoice is due, but in any event within
three (3) business days of Supplier's receipt of such Managed Agreement Invoice.
If Supplier fails to submit a Managed Agreement Invoice to PacifiCare for
payment in accordance with the preceding sentence, Supplier shall be responsible
for any discount not received or any late fees in respect of such Managed
Agreement Invoice.
7.3 PERFORMANCE UNDER AGREEMENTS. Supplier and PacifiCare shall promptly
notify each other of any breach of, or misuse or fraud in connection with, any
PacifiCare Third Party Contracts of which such Party becomes aware, or should
reasonably be aware, and shall cooperate with the other Party to prevent or stay
any such breach, misuse or fraud. Supplier shall pay all amounts due for any
penalties or charges (including amounts due to a third party as a result of
Supplier's failure to promptly notify PacifiCare pursuant to the preceding
sentence), associated taxes, legal expenses and other incidental expenses
incurred by PacifiCare as a result of Supplier's non-performance of its
obligations under this Agreement with respect to the PacifiCare Third Party
Contracts.
13.
8. SERVICE LEVELS.
8.1 INITIAL BASE SERVICE LEVELS. Commencing on the Cutover Date and
continuing throughout the Term and Termination Assistance Period, Supplier shall
perform the Services in accordance with the applicable Service Levels. The
initial Base Service Levels shall be specified in Schedule 8, or, for Base
Service Levels not specified in Schedule 8 as of the Effective Date, determined
according to the process set forth in Schedule 8 for determining Service Levels.
8.2 SERVICE LEVELS FOR NEW SERVICES. Supplier shall provide New Services
in accordance with the New Services Service Levels as established by the Parties
in accordance with Section 5.1 and as adjusted pursuant to Section 8.3.
8.3 ADJUSTMENT OF SERVICE LEVELS. Without limitation of the automatic
adjustment process specified in Section 1.N. of Schedule 8, the Steering
Committee (a) shall review the Service Levels for the preceding twelve (12)
months during the last calendar quarter of every Contract Year, (b) with respect
to any Service Levels that require periodic adjustment pursuant to this
Agreement or are no longer appropriate because of an increase, decrease or
change to the Services, shall, as appropriate, increase or modify the Service
Levels for the subsequent Contract Year in accordance with the Change Control
Procedures and (c) with respect to all other Service Levels, may modify or
increase the Service Levels for the subsequent Contract Year in accordance with
the Change Control Procedures. In addition, either Party may, at any time upon
notice to the other Party, initiate negotiations to review and, upon agreement
by the Steering Committee, adjust any Service Level that such Party in good
faith believes is inappropriate at the time.
8.4 ROOT-CAUSE ANALYSIS. With respect to Supplier's failure to provide the
Services in accordance with the applicable Service Levels, Supplier shall, as
soon as reasonably practicable, but not later than five (5) days after such
failure (except as provided below in this Section 8.4), (a) perform a root-cause
analysis to identify the cause of such failure, (b) provide PacifiCare with a
report detailing the cause of, and procedure for correcting, such failure, (c)
implement such corrective procedure, including obtaining PacifiCare's consent to
such implementation where such procedure has a material effect on the PacifiCare
Entities' receipt of the Services, and (d) provide PacifiCare with a written
action plan satisfactory to PacifiCare that specifies the steps Supplier has
taken, or shall take, to prevent such failures following the implementation of
the procedure. If Supplier, using best efforts, cannot complete its obligations
under clauses (a), (b), (c) or (d) above within the five (5) day-period,
Supplier shall, on a regular basis until such obligations are completed, review
with PacifiCare Supplier's progress in completing such obligations (and provide
written summaries thereof and a schedule for completion). Supplier shall address
and resolve any concerns raised by PacifiCare in connection with such reviews.
8.5 MEASUREMENT TOOLS. As of the Cutover Date, Supplier shall implement
the Measurement Tools and procedures required to measure and report (as
contemplated by this Section 8.5 and Section 3.8) Supplier's performance of the
Services against the applicable Service Levels. Such Measurement Tools and
procedures shall (a) permit reporting at a level of detail sufficient to verify
compliance with the Service Levels and (b) be subject to audit by
14.
PacifiCare or its designee pursuant to Section 19. Supplier shall provide
PacifiCare and its designees with information concerning access to such
Measurement Tools and procedures upon request for inspection and verification
purposes.
8.6 CONTINUOUS IMPROVEMENT AND BEST PRACTICES. Supplier shall, on a
continual basis, (a) identify ways to improve the Service Levels and (b)
identify and apply, in accordance with the Change Control Procedures, proven
techniques and tools from other installations within its operations that would
benefit PacifiCare either operationally or financially. Supplier shall, from
time to time, include updates with respect to such improvements, techniques and
tools in the reports provided to PacifiCare pursuant to Section 3.8 and shall
discuss its progress in identifying and applying such improvements techniques
and tools in the knowledge sharing discussions with PacifiCare pursuant to
Section 3.6.
8.7 SERVICE LEVEL CREDITS. In the event of Supplier's failure to provide
the Services in accordance with the applicable Critical Service Levels, Supplier
shall incur the Service Level Credits identified in and according to Schedule 8.
The Service Level Credits shall not limit PacifiCare's right to recover, in
accordance with this Agreement, other damages incurred by PacifiCare as a result
of such failure. Where (a) Service Level Credits are incurred (i) [...***...]
consecutive months for the same measured Critical Service Level or (ii)
[...***...] out of any twelve (12) months for the same measured Critical Service
Level [...***...] PacifiCare may, upon notice to Supplier, terminate this
Agreement, in whole or in part, without regard to Section 24.3(a). Nothing in
this Section shall be deemed to limit or obviate PacifiCare's right to terminate
this Agreement pursuant to Section 24.3(a). In addition to the foregoing, within
ten (10) days following the completion of root-cause analysis as required in
Section 8.4, at PacifiCare's option, following the incurrence of a Service Level
Credit, a Group Vice President of Supplier shall meet (in person or by
telephone) with the PacifiCare Supplier Relationship Manager and other members
of PacifiCare's management at a mutually agreeable time, date and location, to
summarize and present the results of the root-cause analysis required by Section
8.4 and specify the steps Supplier has taken or shall take to prevent the
further incurrence of Service Level Credits.
8.8 EXCUSED PERFORMANCE. Supplier's requirement to perform the Services
shall be excused in accordance the principles set forth in Section I.Q. of
Schedule 8 for the following Sections of the Agreement: Section 4.1 and 4.2.
9. PACIFICARE SATISFACTION AND BENCHMARKING.
9.1 SATISFACTION SURVEY. Supplier shall conduct baseline and ongoing
customer satisfaction surveys.
9.2 BENCHMARKING.
(a) BENCHMARKER. Commencing on the Cutover Date and continuing
throughout the Term, to ensure that PacifiCare is obtaining competitive pricing,
PacifiCare reserves the right, at PacifiCare's cost and expense, to designate an
independent third party (the
15.
*CONFIDENTIAL TREATMENT REQUESTED
"BENCHMARKER") from among the list of mutually agreed upon prospective Benchmark
providers set forth in Schedule 9.2(a) to measure Supplier's performance and
pricing under this Agreement in accordance with the Benchmarking Process against
competitive providers providing services which are substantially similar in
terms of scope, volume, environment, geographic area, technologies in use
(including skill sets), and contractual terms, generally, and any other mutually
agreeable factors ([...***...]) (each a "BENCHMARK").
(b) BENCHMARKING PROCESS. Upon PacifiCare's request, the Benchmarker
shall conduct Benchmarks, [...***...]. After receiving the results of each
Benchmark, PacifiCare shall share the results of such Benchmark with Supplier
and, within thirty (30) days of PacifiCare's sharing such results, the Parties
shall complete their review of such results (the "REVIEW PERIOD"). If any
Benchmark shows that Supplier's performance is below or Supplier's pricing is
higher than that of competitive providers, then applicable prices or service
levels (or both) under this Agreement shall be promptly adjusted such that
Supplier's performance and pricing are competitive; provided, however, that the
Parties shall, during the five (5) day period following the Review Period,
discuss the Benchmark in good faith to determine if such variances are due to
Supplier's non-competitive prices or service levels or the unique requirements
of this Agreement.
10. SERVICE LOCATIONS.
10.1 SERVICE LOCATIONS. The Services shall be provided to PacifiCare
Entities from (a) the PacifiCare Service Locations, (b) the Supplier Service
Locations and (c) any other location for which Supplier has received
PacifiCare's consent, to be given in PacifiCare's sole discretion, provided
however that for Base Services Supplier may, upon prior notice to PacifiCare,
elect to provide up to a maximum of forty (40) Project Staff members from an
alternate Service Location, which may be a Domestic ADC, Near-Shore ADC, or
Offshore ADC. Any incremental expenses incurred by PacifiCare as a result of a
relocation to, or use of, any location other than the locations set forth on
Schedule 10.1 shall, at PacifiCare's sole discretion, be paid by Supplier or
reimbursed to PacifiCare by Supplier, unless the provision of Services at such
other location has been requested or otherwise directed by PacifiCare or is due
to a Force Majeure Event that precludes PacifiCare from providing a PacifiCare
Service Location, in which case PacifiCare shall be solely responsible for the
costs associated with the relocation to, or use of, such other location.
Supplier and Supplier Agents may not provide or market services to a third party
from a PacifiCare Service Location without PacifiCare's consent, to be given in
PacifiCare's sole discretion.
10.2 SAFETY AND SECURITY PROCEDURES. Supplier shall maintain and enforce
at the Service Locations safety and security procedures that are at least equal
to the most stringent of the following: (a) best practices for locations similar
to the Supplier Service Locations; (b) those procedures provided to Supplier and
applicable to the PacifiCare Service Locations, as amended by PacifiCare from
time to time during the Term; and (c) any higher standard otherwise agreed upon
by the Parties. Supplier shall comply with the safety and security procedures
that are applicable to the PacifiCare Service Locations, including the safety
and security procedures set
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*CONFIDENTIAL TREATMENT REQUESTED
forth in Schedule 10.2. Supplier shall, [...***...], provide the results of an
annual SAS 70 security audit to PacifiCare.
10.3 DATA SECURITY. Supplier shall comply with the environmental,
security, and other PacifiCare data security policies and safeguards against the
destruction, loss or alteration of PacifiCare Data in the possession of Supplier
and during Supplier's electronic transmission, storage, and shipping thereof
(the "DATA SAFEGUARDS") that shall comply with and be no less rigorous than (i)
those data security policies in effect as of the Cutover Date at each applicable
PacifiCare Service Location in respect of such PacifiCare Service Location and
Supplier Service Location, and (ii) may be required by Supplier Laws and other
Laws identified to Supplier from time to time and implemented in accordance with
the Change Control Procedures. The Data Safeguards will be incorporated into the
Policies and Procedures Manual. Supplier shall revise and maintain the Data
Safeguards at PacifiCare's request. In the event Supplier intends to implement a
Change to the Data Safeguards (including pursuant to PacifiCare's request),
Supplier shall notify PacifiCare and, upon PacifiCare's consent, implement such
Change. In the event Supplier or Supplier Agents discovers or is notified of a
breach or potential breach of security relating to PacifiCare Data, Supplier
shall immediately notify the PacifiCare Supplier Relationship Manager and the
PacifiCare Director of Information Security of such breach or potential breach
and, if the applicable PacifiCare Data was in the possession of Supplier or
Supplier Agents at the time of such breach or potential breach, Supplier shall
investigate and remediate the effects of the breach or potential breach and
provide PacifiCare with a written action plan satisfactory to PacifiCare that
specifies the steps Supplier has taken, or shall take, to prevent such breaches
or potential breaches from recurring.
10.4 SECURITY RELATING TO COMPETITORS. If (a) Supplier intends to provide
the Services from a Service Location that is shared with a third party or third
parties or (b) any part of the business of Supplier or any such third party is
now or in the future competitive with PacifiCare Entities' business, then, prior
to providing any of the Services from such a Service Location, Supplier shall
develop a process, subject to PacifiCare's prior consent, to restrict access in
any such shared environment to PacifiCare's Confidential Information so that
Supplier's employees or Supplier Agents providing services to such competitive
business do not have access to PacifiCare Confidential Information.
11. HUMAN RESOURCES.
Supplier shall offer employment to the Affected Employees set forth in
Schedule 3.1(b)(ii) , and the transitioning to Supplier of such Affected
Employees who accept such offers (the "TRANSITIONED PERSONNEL") shall be
effected in accordance with the terms and conditions set forth in Schedule 11.
12. SUPPLIER STAFF.
12.1 SUPPLIER CLIENT RELATIONSHIP MANAGER. Supplier shall appoint an
individual (the "SUPPLIER CLIENT RELATIONSHIP MANAGER") who from the Effective
Date shall serve, on a full-time basis, as the primary Supplier representative
under this Agreement. Supplier's appointment of any Supplier Client Relationship
Manager shall be subject to PacifiCare's prior consent. The
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*CONFIDENTIAL TREATMENT REQUESTED
Supplier Client Relationship Manager shall (a) have overall responsibility for
managing and coordinating the performance of Supplier's obligations under this
Agreement and (b) be authorized to act for and on behalf of Supplier with
respect to all matters relating to this Agreement.
12.2 KEY PERSONNEL. With respect to the Key Personnel set forth in
Schedule 12.2, except as otherwise agreed by PacifiCare, the Parties agree as
follows:
(a) All Key Personnel shall be dedicated to the PacifiCare account
on a full-time basis.
(b) Before assigning an individual to a Key Personnel position,
whether as an initial assignment or as replacement, Supplier shall (i) notify
PacifiCare of the proposed assignment, (ii) introduce the individual to
appropriate representatives of PacifiCare Entities, (iii) subject to applicable
Law, provide PacifiCare with any information regarding the individual that may
be reasonably requested by PacifiCare and (iv) obtain PacifiCare's consent for
such assignment. Upon Supplier's request, PacifiCare shall discuss with
Supplier, in reasonable detail, its basis for its refusal to grant such consent
and the Parties shall in good faith seek to resolve the matter in a mutually
agreeable manner, provided that in any event, Supplier shall only assign an
individual to a Key Personnel position who is approved by PacifiCare.
(c) Supplier shall not replace or reassign (i) the Supplier Client
Relationship Manager for [...***...] from the date on which such individual is
designated as the Supplier Client Relationship Manager, or (ii) any other Key
Personnel assigned as of the Effective Date for [...***...] from the Effective
Date (provided that if any Key Personnel has duties in connection with a
particular discrete project that has not been completed as of the date that is
[...***...], such Key Personnel may not be replaced or reassigned until the
completion of such project), unless PacifiCare consents in its sole discretion
to such reassignment or replacement, or such Key Personnel (1) voluntarily
resigns from Supplier, (2) is dismissed by Supplier for misconduct, (3) fails to
perform his or her duties and responsibilities pursuant to this Agreement or (4)
dies or is otherwise unable to work due to his or her disability or legally
protected leave taken pursuant to Law.
(d) If PacifiCare in good faith decides that any Key Personnel
should not continue in that position, then PacifiCare may, in its sole
discretion and upon notice to Supplier, require immediate removal of such Key
Personnel from the Project Staff; provided that, upon Supplier's request,
PacifiCare shall, prior to requiring such removal, discuss with Supplier, in
reasonable detail, its basis for requesting such removal. Supplier shall, as
soon as reasonably practicable following PacifiCare's required removal of any
Key Personnel from the Project Staff, replace such Key Personnel in accordance
with this Section 12.2.
(e) Supplier shall maintain backup procedures and conduct the
replacement procedures for any Key Personnel in such a manner so as to assure an
orderly succession for any Key Personnel who is replaced.
18.
*CONFIDENTIAL TREATMENT REQUESTED
12.3 PROJECT STAFF. Supplier shall appoint to the Project Staff
individuals with suitable training and skills to perform the Services. Supplier
shall provide PacifiCare with a list of all Supplier personnel dedicated
full-time to the Project Staff at the end of every ninety (90)-day period after
the Cutover Date. Except as otherwise approved by PacifiCare (in its sole
discretion), those Supplier personnel located on PacifiCare's premises may only
provide services on such premises that support PacifiCare's operations. Supplier
shall notify PacifiCare as soon as possible after dismissing or reassigning any
member of the Project Staff whose normal work location is at a PacifiCare
Service Location.
12.4 SUBCONTRACTORS.
(a) With the exception of those subcontractors who meet the criteria
for approval set forth in Sections 12.4(e) and 12.4(f), prior to subcontracting
the Services or any portion thereof, Supplier shall: (i) notify PacifiCare of
the proposed subcontract; (ii) provide the name of the proposed subcontractor, a
description of the work to be subcontracted, an explanation of why that work is
to be subcontracted and descriptive information about each subcontractor's
ability to perform the work; (iii) obtain PacifiCare's consent of such
subcontract. PacifiCare Entities shall not be bound by the provisions of any
agreements entered into between Supplier and its subcontractors. Prior to
amending, modifying or otherwise supplementing any subcontract relating to the
Services, the effect of which would materially increase the scope or nature of
the services provided by such subcontractor, Supplier shall notify PacifiCare of
the proposed amendment, modification or supplement and shall obtain PacifiCare's
consent thereof.
(b) No subcontracting shall release Supplier from its responsibility
for its obligations under this Agreement. Supplier shall be responsible for the
work and activities of its subcontractors, including compliance with the terms
of this Agreement.
(c) Any third party chosen by Supplier to develop products or
deliver services shall be required to adhere to PacifiCare's standards, policies
and procedures in effect at the time.
(d) Supplier shall be responsible for all payments to its
subcontractors. Supplier shall promptly pay for all services, materials,
equipment and labor used in providing the Services and Supplier shall keep
PacifiCare Entities' premises free of all liens.
(e) Those subcontractors who, as of the Effective Date, have been
pre-approved by PacifiCare are set forth in Schedule 12.4(e) attached hereto.
(f) For non-critical services for which Supplier wishes to engage
subcontractors under a contract having an annual value of Two Hundred Fifty
Thousand Dollars ($250,000) or less, Supplier may comply with this Section 12.4
by providing PacifiCare with notice as soon as practicable after engaging such
subcontractor, provided that all other provisions of this Section 12.4 shall
apply and PacifiCare's consent shall be deemed given subject to revocation for
good cause.
19.
(g) If PacifiCare in good faith objects to the continued use of a
subcontractor or the scope of the duties of a particular subcontractor, even if
such subcontractor has been previously approved pursuant to Section 12.4(a),
then, upon notice from PacifiCare of such objection (including reasonable
details concerning the basis of such objection), PacifiCare and Supplier shall
in good faith attempt to resolve such objections as soon as possible. If the
Parties have not resolved such objections within five (5) business days of
Supplier's receipt of PacifiCare's notice thereof, then Supplier shall cause
such subcontractor to cease providing services in connection with this Agreement
and shall as soon as reasonably practicable replace such subcontractor with a
replacement acceptable to PacifiCare.
12.5 CONDUCT OF SUPPLIER PERSONNEL. While at the PacifiCare Service
Locations, Supplier and Supplier Agents agree at all times to, and shall cause
the Project Staff to (a) comply with the requests, standard rules and
regulations of PacifiCare regarding safety and health, personal and professional
conduct (including adhering to general safety practices or procedures) generally
applicable to such PacifiCare Service Locations, (b) otherwise conduct
themselves in a businesslike manner and (c) maintain and enforce Section 20 of
this Agreement. If PacifiCare notifies Supplier that a particular member of the
Project Staff is not conducting himself or herself in accordance with this
Section, Supplier shall promptly: (y) investigate the matter and take
appropriate action that may include (i) removing the applicable person from the
Project Staff, (ii) providing PacifiCare with prompt notice of such removal and
(iii) replacing the applicable person with a similarly qualified individual; or
(z) take other appropriate disciplinary action to prevent a recurrence. In the
event of multiple violations of this Section by a particular member of the
Project Staff, Supplier shall promptly remove the individual from the Project
Staff.
12.6 NON-COMPETITION. Supplier shall not assign any Key Personnel to the
account of any PacifiCare Competitor without PacifiCare's prior consent for
[...***...] following the last date on which such Key Personnel ceases to
provide Services to PacifiCare pursuant to this Agreement.
12.7 NON-SOLICITATION. It is the intention of the Parties not to solicit
each other's employees, and as such each Party agrees that if it offers
employment to, employs, engages as an independent contractor, or otherwise
obtains the services of any person who is employed or was employed within
[...***...] by the other Party, and who performed duties for the other Party
pursuant to this Agreement during the Term, ("RESTRICTED EMPLOYEE"), such Party
must pay the other Party damages in an amount equal [...***...]. Notwithstanding
anything in this Section to the contrary, either Party may directly or
indirectly solicit and hire any employee of the other Party at any time after
such employee is terminated by the other Party without penalty of any kind.
13. MANAGEMENT AND CONTROL.
13.1 STEERING COMMITTEE. Prior to the Cutover Date, the PacifiCare
Supplier Relationship Manager and the Supplier Client Relationship Manager shall
determine the composition of a steering committee and each shall appoint an
equal number of representatives to serve on such committee (the "STEERING
COMMITTEE"). PacifiCare shall designate one of its representatives on the
Steering Committee to act as the chairperson of the Steering Committee.
20.
*CONFIDENTIAL TREATMENT REQUESTED
The Steering Committee shall be authorized and responsible for (a) advising with
respect to PacifiCare's tactical decisions regarding the establishment,
budgeting and implementation of PacifiCare's priorities and plans for the
Services; (b) reviewing, on a quarterly basis, and revising, as directed by the
Steering Committee, Schedules 12.6(a) and 12.6(b); and (c) monitoring and,
without limitation of the dispute resolution procedures set forth in Section 23
(Dispute Resolution), resolving disagreements regarding the provision of the
Services and the Service Levels. A Party may change any of its representatives
on the Steering Committee upon notice to the other Party; provided that such
change may be effected without causing any delays in completing the dispute
resolution procedures set forth in Section 23.
13.2 OVERSIGHT AND MANAGEMENT PROCESS; RELATIONSHIP WITH INFRASTRUCTURE
SUPPLIER. Supplier shall perform the Services in accordance with this Section
13.2.
(a) RELATIONSHIP WITH INFRASTRUCTURE SUPPLIER; OPERATIONAL
AGREEMENT. Supplier and the Infrastructure Provider shall cooperate and interact
with each other to the extent necessary for the PacifiCare Entities to receive
the Services and the Infrastructure Services in accordance with the terms and
conditions of this Agreement and the Infrastructure Agreement, respectively.
PacifiCare shall, as PacifiCare deems appropriate, control and be the primary
interface for the PacifiCare Entities with Supplier, the Infrastructure Provider
and third parties. Supplier and the Infrastructure Provider shall take all steps
necessary to deliver the Services and the Infrastructure Services in a
consolidated manner and as an integrated service delivery team in accordance
with the Operational Agreement, including, for example, through the utilization
of integrated tools, processes and methodologies, where applicable. In
furtherance of the foregoing, prior to the Cutover Date, Supplier and
Infrastructure Supplier shall execute an agreement acceptable in form and
substance to PacifiCare (the "OPERATIONAL AGREEMENT"), which shall include,
among other things, provisions that set forth the following terms:
(i) Supplier and the Infrastructure Provider shall establish
an integrated Program Office (the "PROGRAM OFFICE") and procedures (e.g., the
customer satisfaction methodology described on Schedule 13.2) acceptable to
PacifiCare for use by the Infrastructure Provider and Supplier to (1) prevent
problems with, or any interruptions (other than in connection with scheduled
downtime contemplated by the Policy and Procedures Manual) or degradation to,
the Services and the other services, (2) promptly resolve any such problems,
interruptions or degradation that occur and (3) determine the accountability as
between themselves for such problems, interruptions or degradation. The initial
Program Office shall consist of the individuals and positions in accordance with
Schedule 13.2. Members of the Program Office shall be deemed to be Key Personnel
for purposes of this Agreement.
(ii) With respect to (1) Supplier's failure to provide the
Services in accordance with the applicable Service Levels or (2) the
Infrastructure Provider's failure to provide the Infrastructure Services in
accordance with applicable service levels, the Supplier shall perform, in
accordance with Section 8.4 of this Agreement and shall cooperate with
Infrastructure Supplier to perform in accordance with Section 8.4 of the
Infrastructure Agreement, an integrated root cause analysis to implement
correction procedures and provide PacifiCare with the reports and action plans
as required by Section 8.4 of this Agreement. The Infrastructure Provider shall
implement measurement and monitoring tools and procedures that
21.
permit integrated reporting of compliance with applicable service levels, and
the incurrence of service level credits, with respect to the Services and the
Infrastructure Services. In the event that such service level failures result in
the incurrence of a service level credit (as provided in Section 8.8 of this
Agreement or in Section 8.8 of the Infrastructure Agreement, as applicable),
service level credits shall be apportioned among, or incurred by each of,
Supplier and the Infrastructure Provider, in accordance with the Operational
Agreement.
(iii) Supplier and the Infrastructure Provider shall establish
efficient means of communication, including through a governance structure
incorporating executive and operational committees described on Schedule 13.2,
for use by Supplier, the Infrastructure Provider and PacifiCare, such that both
routine operational information and information relating to any issue or
problems with, or any interruptions (other than in connection with scheduled
downtime contemplated by the Policy and Procedures Manual) or degradation to,
the Services and any other services flow between Supplier, the Infrastructure
Provider and PacifiCare without material delay and without requiring
coordination by, or intervention of, PacifiCare, except as PacifiCare otherwise
requires.
(iv) Supplier and the Infrastructure Provider, working with
PacifiCare to the extent PacifiCare deems appropriate, shall in good faith
attempt to resolve all disputes between Supplier and the Infrastructure Provider
relating to the provision of the Services and the Infrastructure Services or any
other services, as soon as possible and without involving PacifiCare; provided
that in the event that Supplier and the Infrastructure Provider do not resolve
such disputes themselves, Supplier and the Infrastructure Provider may, jointly,
request that PacifiCare, at no cost or expense to PacifiCare, resolve such
dispute and, if so requested, such resolution shall be final and binding on
Supplier and the Infrastructure Provider. Supplier and Infrastructure Supplier
shall indemnify PacifiCare from, and defend and hold PacifiCare harmless from
and against, any Losses suffered, incurred or sustained by PacifiCare in
connection with the resolution of any such dispute by PacifiCare, in accordance
with the terms and conditions of the Operational Agreement.
(v) Supplier and the Infrastructure Provider shall provide for
the integration of tools, processes and methodologies where applicable in
accordance with the Operational Agreement.
(vi) [...***...]
(vii) PacifiCare, Supplier and the Infrastructure Provider
shall provide for any other provisions necessary for Supplier and Infrastructure
Supplier to provide PacifiCare with the Services (including the Termination
Assistance Services) and the Infrastructure Services in an integrated manner.
Supplier shall not modify or amend the Operational Agreement in a manner that
would materially affect PacifiCare, the provision of the Services, the provision
of the Infrastructure
22.
*CONFIDENTIAL TREATMENT REQUESTED
Services or PacifiCare's ability to enforce its rights and remedies under this
Agreement, without PacifiCare's prior consent.
(b) [...***...]
13.3 POLICY & PROCEDURES MANUAL. An initial outline of an application
systems maintenance and enhancements management Policy & Procedures Manual for
the Services is set forth on Schedule 13.3 which specifies those activities
which Supplier has primary responsibility to deliver to PacifiCare as well as
those activities where Supplier will cooperate with Infrastructure Supplier in
its performance of certain Infrastructure Services. Within [...***...]
after the Cutover Date, Supplier shall deliver to PacifiCare, for PacifiCare's
review, comment and consent, an application systems maintenance and enhancements
management Policy & Procedures Manual based on the outline set forth in Schedule
13.3 for those activities designated as Supplier's primary responsibility (the
"POLICY & PROCEDURES MANUAL"). Supplier shall periodically prepare and provide
to PacifiCare, for PacifiCare's review, comment and consent, updates to such
Policy & Procedures Manual to reflect any changes in the procedures described
therein as soon as practicable after such changes are made at PacifiCare's
request or with PacifiCare's consent.
13.4 CHANGE CONTROL PROCEDURES. Supplier and Infrastructure Provider shall
establish the integrated Change Control Procedures. Within thirty (30) days of
receipt of Infrastructure Supplier's Change Control Procedures, Supplier shall
deliver to PacifiCare, for its review, comment and consent, the Change Control
Procedures. The Change Control Procedures shall provide, at a minimum, that:
(a) no Change shall be implemented without PacifiCare's consent
(which may be given in an e-mail or other electronic format), except as may be
necessary on a temporary basis to maintain the continuity of the Services, and
any projected adverse effect of any Change
23.
*CONFIDENTIAL TREATMENT REQUESTED
with respect to the Services, Service Levels or Fees shall be a reasonable basis
for disapproval of such proposed Change;
(b) with respect to all Changes, Supplier shall (i) schedule
Changes, other than those Changes made on a temporary basis, to maintain the
continuity of the Services so as not to unreasonably interrupt PacifiCare
Entities' business operations, (ii) prepare and deliver to PacifiCare each month
a rolling schedule for ongoing and planned Changes for the next twelve (12)
month period and (iii) monitor the status of Changes against the applicable
schedule; and
(c) with respect to any Change made on a temporary basis to maintain
the continuity of the Services, Supplier shall document and provide to
PacifiCare notification of the Change no later than the next business day after
the Change is made.
Supplier shall update the Change Control Procedures as necessary and
shall provide such updated Change Control Procedures to PacifiCare for its
consent.
14. PROPRIETARY RIGHTS.
14.1 BACKGROUND TECHNOLOGY. Supplier shall have and retain exclusive
ownership of all of Supplier's Background Technology and intellectual property
rights therein. Prior to including any Supplier Background Technology in any
Developed Software or Work Product that Supplier shall use or deliver to any
PacifiCare Entities in connection with the Services, Supplier must set forth in
writing such Background Technology to be included and obtain PacifiCare's
consent. PacifiCare Entities shall have and retain exclusive ownership of all of
PacifiCare Entities' Background Technology and intellectual property rights
therein. All rights not expressly granted herein with respect to Background
Technology are reserved to the owner thereof.
14.2 PACIFICARE SOFTWARE. PacifiCare shall provide Supplier with access to
and Use of the PacifiCare Software required to render the Services, current
lists of which are attached hereto as Schedules 14.2(a) and 14.2(b). Subject to
the terms and conditions of this Agreement, PacifiCare hereby grants to
Supplier, during the Term and the Termination Assistance Period and solely to
provide the Services to PacifiCare Entities, a non-exclusive, non-transferable,
royalty-free limited license to have access to and (a) Use the PacifiCare
Proprietary Software (and Related Documentation in PacifiCare's possession), and
(b) Use, to the extent permissible under the applicable third party agreements,
the PacifiCare Third Party Software (and Related Documentation in PacifiCare's
possession). Supplier may sublicense, to the extent permissible under any
applicable third party agreements, to Supplier Agents the right to have access
to and Use the PacifiCare Software solely to provide those Services that such
Supplier Agents are responsible for providing. All rights not expressly granted
to Supplier in this Agreement with respect to the PacifiCare Software are
reserved to PacifiCare.
14.3 SUPPLIER SOFTWARE. Supplier shall provide PacifiCare Entities with
access to and Use of the Supplier Software. Supplier shall obtain PacifiCare's
consent prior to using any Supplier Software (and any of Supplier's Background
Technology included in the Supplier Software) to provide the Services. A current
list of Supplier Software is attached hereto as
24.
Schedule 14.3. Subject to the terms and conditions of this Agreement, Supplier
hereby grants to PacifiCare, for itself and on behalf of the PacifiCare
Entities, during the Term and for a period of eighteen (18) months after
termination or expiration of this Agreement, a global, fully paid-up, royalty
free, non-exclusive, non-transferable, and continuing license to Use, and
sublicense and to permit third parties to Use, solely to the extent required to
utilize the Services, (a) the Supplier Proprietary Software (and any of
Supplier's Background Technology included in the Supplier Software) and (b) to
the extent permissible under the applicable third party agreements, the Supplier
Third Party Software being used to provide the Services as of the date of
expiration or termination of this Agreement. Upon PacifiCare's request, Supplier
shall provide PacifiCare with a list of all Supplier Software being used to
provide the Services as of the date of such request. All rights not expressly
granted to PacifiCare Entities in this Agreement with respect to the Supplier
Software are reserved to Supplier.
14.4 SUPPLIER TOOLS. Supplier shall obtain PacifiCare's consent prior to
using any Tools (and any of Supplier's Background Technology included in the
Tools) to provide the Services. Subject to the terms and conditions of this
Agreement, Supplier hereby grants to PacifiCare, for itself and on behalf of the
PacifiCare Entities, during the Term and for a period of eighteen (18) months
after termination or expiration of this Agreement, a global, fully paid-up,
royalty free, non-exclusive, non-transferable, and continuing license to Use,
and sublicense and to permit a third party to Use, solely to the extent required
to utilize the Services , Supplier's proprietary Tools (and any of Supplier's
Background Technology included in Supplier's proprietary Tools) to provide the
Services. Furthermore, to the extent permissible under the applicable third
party agreements, Supplier hereby grants to PacifiCare Entities, during the Term
and for a period of eighteen (18) months after the termination or expiration of
this Agreement, a global, fully paid-up, royalty free, non-exclusive,
non-transferable, and continuing license to Use, and sublicense and to permit a
third party to Use, solely to the extent required to utilize the Services, any
third-party Tools used by Supplier in furtherance of its duties pursuant to this
Agreement. All rights not expressly granted to PacifiCare Entities in this
Agreement with respect to the Tools are reserved to Supplier and its suppliers.
14.5 DEVELOPED SOFTWARE. Subject to Section 14.1, all Developed Software
and Work Product shall be owned by PacifiCare. PacifiCare shall have all right,
title and interest, including worldwide ownership of copyright, patent, trade
secret or other proprietary rights in and to the Developed Software and Work
Product and all copies made from it. Subject to Section 14.1, Supplier hereby
irrevocably assigns, transfers and conveys, and shall cause Supplier Agents to
assign, transfer and convey, to PacifiCare without further consideration all of
its right, title and interest in and to such Developed Software and Work
Product, including all worldwide rights of patent, copyright, trade secret or
other proprietary rights in such materials. Supplier acknowledges that
PacifiCare and the successors and permitted assigns of PacifiCare shall have the
right to obtain and hold in their own names any intellectual property rights in
and to the Developed Software and Work Product. Supplier agrees to obtain any
consents, authorizations, permits or assignments and to execute any documents or
take any other actions (including requiring any Supplier Agents to execute any
documents or take other actions) as may reasonably be necessary, or as
PacifiCare may reasonably request, to perfect PacifiCare's ownership of any such
Developed Software and Work Product.
25.
14.6 WEB DEVELOPMENT. In the event that Supplier performs any work in
connection with the development of Web pages or other online content under this
Agreement, PacifiCare shall have sole control over the Web pages and the
appearance, design, layout, look-and-feel, branding, advertising (if any),
content and URLs of such Web pages or other online content (collectively, "WEB
CONTENT"). All Web Content that is developed by Supplier and/or Supplier Agents
shall be Work Product. Supplier shall ensure that all URLs for any Web pages or
online content developed or hosted by Supplier shall be owned by PacifiCare and
registered in PacifiCare's name.
14.7 UPGRADES TO SOFTWARE. Supplier shall upgrade Software in accordance
with EXHIBIT B.
15. DATA.
15.1 OWNERSHIP OF PACIFICARE DATA. All PacifiCare Data is, or shall be,
and shall remain the property of PacifiCare. Supplier hereby irrevocably
assigns, transfers and conveys, and shall cause Supplier Agents to assign,
transfer and convey, to PacifiCare without further consideration all of its and
their right, title and interest in and to PacifiCare Data.
15.2 USE OF PACIFICARE DATA. Without PacifiCare's consent (subject to
PacifiCare's sole discretion), PacifiCare Data shall not be (a) used, disclosed,
monitored, analyzed, individualized, anonymized, aggregated, stored, copied, or
otherwise provided to third parties by Supplier or Supplier Agents other than as
required to provide the Services, (b) sold, assigned or leased, or (c)
commercially exploited in any form (including any individualized, anonymized or
aggregated form) by or on behalf of Supplier or Supplier Agents. Supplier shall
at all times comply with all PacifiCare data retention, use and privacy
standards and all Laws relating to Supplier's access to PacifiCare Data.
15.3 CORRECTION AND RECONSTRUCTION.
(a) Supplier shall, [...***...], promptly correct any errors or
inaccuracies in the reports delivered to PacifiCare under this Agreement that
are attributable to Supplier or Supplier Agents.
(b) Supplier shall develop and maintain procedures for the
reconstruction of lost PacifiCare Data, and Supplier shall, [...***...], correct
any errors in, or destruction, loss or alteration of, any PacifiCare Data that
are attributable to Supplier or Supplier Agents. At PacifiCare's request and
expense, Supplier shall promptly correct any errors in, or destruction, loss or
alteration of, PacifiCare Data that are not attributable to Supplier or Supplier
Agents.
15.4 RETURN OF DATA. Upon request by PacifiCare at any time during the
Term and upon expiration or termination of this Agreement, or at any time when
Supplier no longer requires any portion of the PacifiCare Data to provide the
Services, Supplier shall (a) promptly return to PacifiCare, in the format and on
the media requested by PacifiCare, all PacifiCare Data (or such portion as
requested by PacifiCare or that is no longer necessary to provide the Services)
26.
*CONFIDENTIAL TREATMENT REQUESTED
and (b) erase or destroy all PacifiCare Data (or such portion of PacifiCare Data
as requested by PacifiCare or that is no longer necessary to provide the
Services) in Supplier's possession. Supplier and Supplier Agents shall use any
archival tapes containing PacifiCare Data solely for back-up purposes and shall
maintain such back-up copies of PacifiCare Data as Confidential Information of
PacifiCare. [...***...]
16. CONTINUED PROVISION OF SERVICES.
16.1 DISASTER RECOVERY PLAN. PacifiCare will provide to Supplier a copy of
its then-current disaster recovery plans (collectively, the "DRP"), which DRP
shall be effective under this Agreement until PacifiCare approves of any
successor DRP to be developed pursuant to the Infrastructure Agreement. Promptly
following the Cutover Date, Supplier shall cooperate with Infrastructure
Supplier, to the extent that Infrastructure Supplier performs and provides the
necessary infrastructure support services to PacifiCare and Supplier, to: (a)
evaluate PacifiCare's current DRP and submit recommended DRP improvements
related to the Services for PacifiCare's review and approval and, if PacifiCare
approves of the DRP improvements, implement a revised DRP acceptable to
PacifiCare in accordance with the Change Control Procedures and within
[...***...], or such other date as may be agreed upon by PacifiCare, Supplier,
and Infrastructure Provider; (b) update and test the operability of the DRP as
it relates to the Services [...***...] during the Term; and (c) certify in
writing to PacifiCare [...***...] during the Term that the DRP is fully
operational as it relates to the Services. Subject to the foregoing sentence, if
the DRP testing encounters errors, Supplier shall develop procedures and retest
as necessary to resolve such errors and update the DRP as necessary. Supplier
shall immediately implement the DRP upon the occurrence of a disaster (as such
term is defined in the DRP) as it relates to the Services and subject to the
provisions contained herein. In the event of an interruption in services
described as "critical" in Schedule 16.1 ("CRITICAL SERVICES"), Supplier shall
use its best efforts to reinstate the Critical Services as promptly as possible,
but in any event within the number of hours identified in Schedule 16.1 with
respect to each of the Critical Services, provided that Supplier's failure to
reinstate the Critical Services shall be excused to the extent that
Infrastructure Supplier's failure to perform or provide the necessary
infrastructure support services to PacifiCare and Supplier prevents Supplier
from doing so. In the event of a disaster (as such term is defined in the DRP),
Supplier shall not increase its Fees under this Agreement or charge PacifiCare
usage fees in addition to the Base Fees or the Variable Fees.
16.2 FORCE MAJEURE. If and to the extent that a Party's performance of any
of its obligations pursuant to this Agreement is prevented, hindered or delayed
by fire, flood, earthquake, elements of nature or acts of God, acts of war,
terrorism, riots, civil disorders, rebellions or revolutions, or any other
similar cause beyond the reasonable control of such Party (but specifically
excluding [...***...]) (each, a "FORCE MAJEURE EVENT"), and such
non-performance, hindrance or delay could not have been prevented by reasonable
precautions, then the non-performing, hindered or delayed Party shall be excused
for such non-performance, hindrance or delay, as applicable, of those
obligations affected by the
27.
*CONFIDENTIAL TREATMENT REQUESTED
Force Majeure Event for as long as such Force Majeure Event continues and such
Party continues to use its best efforts to recommence performance whenever and
to whatever extent possible without delay, including through the use of
alternate sources, workaround plans or other means. The Party whose performance
is prevented, hindered or delayed by a Force Majeure Event shall immediately
notify the other Party of the occurrence of the Force Majeure Event and describe
in reasonable detail the nature of the Force Majeure Event. The occurrence of a
Force Majeure Event does not excuse, limit or otherwise affect Supplier's
obligation to provide either normal recovery procedures or any other disaster
recovery services described in Section 16.1.
16.3 ALTERNATE SOURCE. If any Force Majeure Event prevents, hinders or
delays Supplier's performance of any Services, other than a Force Majeure Event
that precludes PacifiCare from providing a PacifiCare Service Location, for the
time identified on Schedule 16.1 in the case of any Critical Service or more
than [...***...] in the case of all other Services, Supplier shall, [...***...],
procure such Services from an alternate source. PacifiCare shall continue to pay
Supplier the Fees established hereunder for Services provided during such
period.
If any Force Majeure Event precludes PacifiCare from providing a
PacifiCare Service Location, PacifiCare shall provide to Supplier substantially
similar substitute facilities in reasonably practicable geographic proximity and
as soon as reasonably possible in order to render the Services, and will pay
Supplier's costs to relocate to such substitute facilities. Supplier shall
provide reasonable assistance and support to PacifiCare during this period and
will mitigate any costs associated therewith to the extent reasonably
practicable. PacifiCare shall continue to pay Supplier the Fees in accordance
with the terms of this Agreement during such period. If the Force Majeure Event
continues to prevent, hinder, or delay performance of the Services for more than
[...***...] in the case of Critical Services, or more than [...***...] in the
case of all other Services, PacifiCare may terminate this Agreement in whole or
in part, as of the date specified by PacifiCare in a termination notice to
Supplier without regard to Section 24.4.
16.4 NO PAYMENT FOR UNPERFORMED SERVICES. Subject to Section 16.3 above,
if Supplier fails to provide the Services in accordance with this Agreement due
to the occurrence of a Force Majeure Event, the Fees shall be adjusted in a
manner such that PacifiCare is not responsible for the payment of any Fees for
Services that Supplier fails to provide.
16.5 ALLOCATION OF RESOURCES. Whenever a Force Majeure Event or a disaster
causes Supplier to allocate limited resources between or among Supplier's
customers, Supplier shall not provide to any other customers of Supplier
priority over PacifiCare. In addition, in no event shall Supplier redeploy or
reassign any Key Personnel to another account in the event of a Force Majeure
Event without the prior consent of PacifiCare.
17. PAYMENTS AND INVOICING.
17.1 BASE FEES. In consideration of Supplier providing the Base Services,
and in accordance with Section 17.2, PacifiCare shall pay to Supplier the Base
Fees. Except as expressly set forth in this Agreement, there shall be no charge
or fees payable by PacifiCare in respect of Supplier's performance of its
obligations pursuant to this Agreement.
28.
*CONFIDENTIAL TREATMENT REQUESTED
17.2 BASE FEES. Within ten (10) days after the first day of each month of
the Term, Supplier shall invoice PacifiCare for the Base Services to be
performed in accordance with this Agreement during that month. The Base Fees for
each month during the Term shall be due and payable to Supplier by the last day
of the month in which Supplier provided the Services. Undisputed Base Fees not
paid when due shall accrue Interest as set forth in Schedule 17.
17.3 VARIABLE FEES AND ADJUSTMENT OF BASELINES. At the end of every month,
Supplier shall review the amount of the Base Services used by PacifiCare during
the preceding month. In the event PacifiCare's use of such services (a)
increases above the resource baselines set forth in Schedule 17, PacifiCare
shall pay to Supplier, in addition to the Base Fees, an amount equal to the
Additional Resource Charges in connection with the services set forth in
Schedule 17 or (b) subject to Section 17.8, decreases below the resource
baselines set forth in Schedule 17, Supplier shall credit PacifiCare an amount
equal to Reduced Resource Credits in connection with the services set forth in
Schedule 17. All such payments and credits shall be made in accordance with
Section 17.5. Subject to Section 17.8, upon ninety (90) days advance notice to
Supplier, and no more than once each Contract Year, PacifiCare may adjust the
resource baselines set forth in Schedule 17 and PacifiCare and Supplier shall
implement an appropriate adjustment to the Fees to reflect the adjustment of the
resource baselines in accordance with Schedule 17.
17.4 VARIABLE FEE REPORT. Within ten (10) days after the last day of each
month of the Term, beginning after the first month after the Cutover Date,
Supplier shall provide PacifiCare with the Variable Fee Report and an invoice
for payment of the Additional Resource Charges. PacifiCare shall pay such
invoice within thirty (30) days after PacifiCare's receipt of such invoice or,
in the event the Reduced Resource Credits are in excess of the Additional
Resource Charges, Supplier shall provide PacifiCare with a credit as set forth
in the invoice for the Base Fees for the following month. In the event
PacifiCare disapproves of any of the Variable Fees set forth in the Variable Fee
Report, PacifiCare shall provide Supplier with a list of any Variable Fees of
which PacifiCare disapproves (and, with reasonable detail, the basis for such
disapproval) and Supplier shall adjust the Variable Fee Report to reflect the
changes indicated by PacifiCare and agreed to by Supplier.
17.5 TIME OF PAYMENT. Except as otherwise provided in this Section 17, any
undisputed sum due Supplier pursuant to this Agreement, including reasonable
pass-through expenses, for which payment is not otherwise specified shall be due
and payable [...***...] after receipt by PacifiCare of an invoice from Supplier.
If any payments or portion thereof are not received by Supplier within
[...***...] business days after the date by payment is due, PacifiCare shall pay
Supplier Interest on such overdue amount in accordance with Schedule 17.
17.6 DETAILED INVOICES. Supplier shall provide invoices with varying
degrees of detail (e.g., per End-User, PacifiCare Entity, department, project or
site), in accordance with the requirements set forth in Schedule 17, or as
requested by PacifiCare.
17.7 FEE DISPUTE. PacifiCare may withhold invoiced amounts that PacifiCare
disputes in good faith. PacifiCare shall notify Supplier of all such disputes
within thirty (30) days of receipt of Supplier's invoice therefor, and any such
notice shall be in writing and shall provide in
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*CONFIDENTIAL TREATMENT REQUESTED
reasonable detail an explanation of each such dispute. PacifiCare shall pay the
amount of any invoice not in dispute in accordance with the terms of this
Agreement.
17.8 SUBSTANTIAL CHANGES. Notwithstanding anything in this Agreement or
its Schedules to the contrary, in the event that PacifiCare's use of the Base
Services decreases to less than [...***...] of the resource baselines set forth
in Attachment 2 of Schedule 17, PacifiCare and Supplier shall negotiate and
implement an appropriate adjustment to the Fees.
17.9 ADJUSTMENTS TO FEES. There shall be no periodic adjustments to the
Fees except as set forth in Schedule 17.
17.10 EXPENSES. Except as expressly set forth in this Agreement or the
Schedules, all costs and expenses relating to the Services are included in the
Fees and shall not be charged to or reimbursed by PacifiCare.
17.11 RIGHTS OF SET-OFF. With respect to any amount that (a) should be
reimbursed to PacifiCare or (b) is otherwise payable to PacifiCare pursuant to
this Agreement, PacifiCare may deduct the entire amount owed to PacifiCare
against the Fees or against the expenses owed by PacifiCare to Supplier under
this Agreement.
17.12 PRORATION. All periodic Fees under this Agreement are to be computed
on a calendar month basis and shall be prorated on a per diem basis for any
partial month.
17.13 UNUSED CREDITS. Any unused credits against future payments owed to
either Party by the other pursuant to this Agreement shall be paid to the
applicable Party within thirty (30) days after the earlier of the expiration or
termination of this Agreement.
17.14 [...***...]
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*CONFIDENTIAL TREATMENT REQUESTED
[...***...]
18. TAXES.
18.1 Subject to Section 18.2, each Party shall be responsible for any
personal property taxes on property it owns or leases, for franchise and
privilege taxes on its business, and for taxes based on its net income or gross
receipts.
18.2 The Fees paid to Supplier are inclusive of, and Supplier shall be
responsible for, any applicable sales, use, gross receipts, excise, value-added,
services, consumption, withholding or other taxes attributable to periods on or
after the Cutover Date based upon or measured by Supplier's cost in acquiring or
providing equipment, materials, supplies or services furnished or used by
Supplier in performing or furnishing the Services.
18.3 [...***...]
18.4 Any taxes assessed, as determined by PacifiCare, including a gross-up
thereon, on the provision of the Services for a particular site resulting from
Supplier's relocating or rerouting the delivery of Services for Supplier's
convenience to, from or through a location other than the Service Location used
to provide the Services as of the Cutover Date shall be Supplier's
responsibility; provided that, PacifiCare may pay such taxes and PacifiCare
shall receive a credit with respect to the Fees invoiced under this Agreement
equal to such payments made pursuant to this Section 18.4.
18.5 Where applicable, PacifiCare and Supplier shall cooperate to
segregate the Fees into the following separate payment streams: (a) those for
taxable Services; (b) those for non-taxable Services; (c) those for which a
sales, use or other similar tax has already been paid; and (d) those for which
Supplier functions merely as a paying agent for PacifiCare in receiving goods,
supplies or services (including leasing and licensing arrangements) that
otherwise are nontaxable or have previously been subject to tax. In addition,
each of PacifiCare and Supplier shall reasonably cooperate with the other to
more accurately determine a Party's tax liability and to minimize such
liability, to the extent legally permissible. Each of PacifiCare and Supplier
shall provide and make available to the other any resale certificates,
information regarding out-of-state sales or use of equipment, materials or
services, and any other exemption certificates or information requested by a
Party.
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*CONFIDENTIAL TREATMENT REQUESTED
19. AUDITS.
19.1 SERVICES. Upon notice from PacifiCare, Supplier and Supplier Agents
shall provide PacifiCare, PacifiCare Agents and any of PacifiCare Entities'
regulators or other reviewing bodies (including the Joint Commission on
Accreditation of Health Care Organizations (JCAHO)) with access to and any
assistance that they may require with respect to the Service Locations and the
Systems for the purpose of performing audits or inspections of the Services and
the business of PacifiCare Entities relating to the Services, provided that
Supplier shall not be required to provide access or assistance to any PacifiCare
Agents who are Supplier Competitors. PacifiCare Agents who request access to
Supplier Service Locations or Supplier Confidential Information, including
Supplier Background Technology and Supplier Tools, shall first sign and deliver
to Supplier a confidentiality agreement in a form substantially similar to
Schedule 19.1. Upon receipt of notification from PacifiCare that PacifiCare
Agents request such access, Supplier shall furnish the confidentiality agreement
to PacifiCare Agents for signature. If any audit by an auditor designated by
PacifiCare, a PacifiCare Agent or a regulatory authority results in Supplier
being notified that Supplier or Supplier Agents are not in compliance with any
Law or audit requirement, Supplier shall, and shall cause Supplier Agents to,
promptly take actions to comply with such Law or audit requirement. Supplier
shall bear the expense of any such response that is (a) required by a Supplier
Law or audit requirement relating to Supplier's business or (b) necessary due to
Supplier's noncompliance with any Law or audit requirement imposed on Supplier
as set forth in this Agreement. To the extent the expense is not payable by
Supplier pursuant to the preceding sentence, PacifiCare shall bear the expense
of any such compliance that is required by any Law or audit requirement relating
to PacifiCare Entities' business or that is necessary due to PacifiCare
Entities' noncompliance with any Law or audit requirement imposed on PacifiCare
Entities.
19.2 FEES. Upon notice from PacifiCare, Supplier shall provide PacifiCare
and PacifiCare Agents with access to such financial records and supporting
documentation as may be requested by PacifiCare, provided that Supplier shall
not be required to provide access to any financial records or supporting
documentation to any PacifiCare Agents who are Supplier Competitors, and
PacifiCare and PacifiCare Agents may audit the Fees charged to PacifiCare to
determine if such Fees are accurate and in accordance with this Agreement
(including Section 17.11). PacifiCare Agents who request access to such
financial records and supporting documentation or Supplier Confidential
Information, including Supplier Background Technology and Supplier Tools, shall
first sign and deliver to Supplier a confidentiality agreement in a form
substantially similar to Schedule 19.1. Upon receipt of notification from
PacifiCare that PacifiCare Agents request such access, Supplier shall furnish
the confidentiality agreement to PacifiCare Agents for signature.
(a) If, as a result of such audit, PacifiCare determines that
Supplier has overcharged PacifiCare, PacifiCare shall notify Supplier of the
amount of such overcharge and Supplier shall promptly pay to PacifiCare the
amount of the overcharge, plus Interest calculated from the date of receipt by
Supplier of the overcharged amount until the date of payment to PacifiCare.
32.
(b) In addition to PacifiCare's rights set forth in Section 19.2, in
the event any such audit reveals an overcharge to PacifiCare of [...***...] or
more of the total Fees during the applicable period covered by the audit,
Supplier shall, at PacifiCare's option, issue to PacifiCare a credit against the
Base Fees or reimburse PacifiCare for the cost of such audit.
19.3 OMNIBUS RECONCILIATION ACT. Without limiting the foregoing, until the
expiration of four (4) years after the End Date, Supplier agrees that the
Secretary of the Department of Health and Human Services (the "SECRETARY") and
the Comptroller General of the United States, or the designee or duly authorized
representative of either of them, shall have access to all books and records of
Supplier directly pertaining to the subject matter of this Agreement and the
provision of Services under it, in accordance with the criteria presently or
hereafter developed by the Department of Health and Human Services as provided
in Section 1861(v)(1)(I) of the Social Security Act, 42 U.S.C. ss.
1395x(v)(1)(I). Upon request of the Secretary, the Comptroller General, the
designee oR the authorized representative of either of them, Supplier shall make
available (at reasonable times and places during normal business hours) this
Agreement, and all books, documents, and records of Supplier that are necessary
to verify the nature and extent of the costs of the Services provided by
Supplier and furnished in connection with this Agreement. Supplier further
agrees that if Supplier carries out any of the duties of this Agreement through
a subcontract with a value or cost of [...***...] or more, such subcontract
shall contain a clause to the effect that until the expiration of four (4) years
after the furnishing of such services pursuant to such subcontract, the
subcontracting party shall make available, upon written request of the
Secretary, or upon request of the U.S. Comptroller General or any of their duly
authorized representatives, the subcontract, and the books, documents and
records of such organization that are necessary to verify the nature and extent
of such costs of the Services provided by such subcontracting party and
furnished in connection with this Agreement, provided that the foregoing shall
not apply with regard to the Affected Contractors and subcontractors referenced
in Sections 12.4(e) and 12.4(f) engaged by Supplier pursuant to this Agreement.
Supplier shall promptly inform PacifiCare of any requests for information made
pursuant to this provision.
19.4 RECORD RETENTION. Supplier shall retain records and supporting
documentation sufficient to satisfy the requirements set forth in this Section
19 and to document the Services and the Fees paid or payable by PacifiCare under
this Agreement in accordance with PacifiCare's retention policies and procedures
which PacifiCare adheres to as of the Effective Date and set forth in Schedule
19.4, and as in effect from time to time.
19.5 FACILITIES. Supplier shall provide to PacifiCare and PacifiCare
Agents, on Supplier's premises (or, if the audit is being performed of a
Supplier Agent, the Supplier Agent's premises if necessary), space, office
furnishings (including lockable cabinets) and utilities as PacifiCare or such
PacifiCare Agents may reasonably require to perform the audits described in this
Section.
19.6 AUDIT SOFTWARE. Supplier shall operate and maintain such audit
software as PacifiCare may request from time to time during the Term.
33.
*CONFIDENTIAL TREATMENT REQUESTED
19.7 RELIEF. In the event that the frequency or scope of PacifiCare's
audits of Supplier's records under Sections 19.1 and 19.2 above are such that
Supplier can demonstrate to PacifiCare that Supplier's compliance with the
requirements of the aforesaid sections will have a material adverse effect on
Supplier's ability to provide the Services in accordance with the applicable
Service Levels, the Parties will negotiate in good faith to determine an
appropriate duration and level of applicable Service Level relief for Supplier
to be able to comply with its obligations under Sections 19.1 and 19.2.
PacifiCare and PacifiCare Entities shall reimburse Supplier its actual and
reasonable costs and expenses in excess of five thousand dollars ($5,000) per
audit associated with an audit of Supplier's records pursuant to Sections 19.1
and 19.2.
20. CONFIDENTIALITY.
20.1 GENERAL OBLIGATIONS. All Confidential Information relating to or
obtained from PacifiCare Entities or Supplier shall be held in strict confidence
by the recipient to the same extent and in at least the same manner as the
recipient protects its own confidential information of similar importance.
Neither PacifiCare nor Supplier shall disclose, publish, release, transfer or
otherwise make available Confidential Information of, or obtained from, the
other Party in any form to, or for the use or benefit of, any person or entity
without the disclosing Party's consent.
20.2 EXCEPTIONS. Notwithstanding the foregoing, each of PacifiCare and
Supplier shall be permitted to disclose relevant aspects of the other's
Confidential Information to its officers, directors, agents, professional
advisors, contractors (including the Benchmarker), subcontractors and employees
and to the officers, directors, agents, professional advisors, contractors,
subcontractors and employees of its affiliates, to the extent such disclosure is
not restricted under any Assigned Agreements, any Managed Agreements, any
Consents or any Laws or Governmental Approvals and only to the extent that such
disclosure is reasonably necessary for the performance of its duties and
obligations or the determination, preservation or exercise of its rights and
remedies under this Agreement; provided, however, that the recipient shall take
all reasonable measures to ensure that Confidential Information of the
disclosing Party is not disclosed or duplicated in contravention of the
provisions of this Agreement by such officers, directors, agents, professional
advisors, contractors, subcontractors and employees and Confidential Information
shall not be disclosed to PacifiCare Competitors or Suppler Competitors. Third
parties who request access to Supplier Confidential Information or PacifiCare
Confidential Information shall first sign and deliver to the disclosing party a
confidentiality agreement containing terms substantially similar to Schedule
19.1. Furthermore, nothing in this Agreement shall limit the ability of a Party
in possession of the Confidential Information of the other Party to disclose
such Confidential Information, and such Party shall have no liability for such
disclosure, if such disclosure is: (a) required to be made pursuant to Law,
government authority, duly authorized subpoena or court order, whereupon the
receiving Party shall provide prompt notice to the disclosing Party and give
such Party an opportunity to respond prior to such disclosure; (b) required to
be made to a court or other tribunal in connection with the enforcement of such
Party's rights under this Agreement; or (c) is approved by the prior consent of
the disclosing Party.
20.3 ATTORNEY-CLIENT PRIVILEGE. Supplier recognizes that it may obtain
access to client documents, data and databases created by and for PacifiCare
Entities and associated
34.
communications related thereto that are marked "privileged" or contain a similar
marking or are otherwise identified by PacifiCare as privileged (collectively,
"PRIVILEGED WORK PRODUCT") that are confidential attorney work product or
subject to the attorney-client privilege. Supplier shall not intentionally
reveal Privileged Work Product to third parties and Supplier shall institute
adequate safeguards to prevent the unintentional disclosure of Privileged Work
Product to third parties. The only Project Staff who may have access to
Privileged Work Product shall be those for whom such access is necessary for the
purpose of providing services to PacifiCare Entities as provided in this
Agreement. All Project Staff who shall need access to Privileged Work Product
shall first sign and deliver to PacifiCare a confidentiality agreement
satisfactory to PacifiCare. Supplier recognizes that Privileged Work Product has
been prepared in anticipation of litigation and that Supplier is performing the
Services in respect of Privileged Work Product as an agent of PacifiCare, and
that all matter related thereto is protected from disclosure by Rule 26 of the
United States Federal Rules of Civil Procedure (or any similar Law in other
local jurisdictions). Should Supplier ever be notified of any judicial or other
proceeding seeking to obtain access to Privileged Work Product, Supplier shall
(a) immediately notify PacifiCare and (b) take such reasonable actions as may be
specified by PacifiCare to resist providing such access. PacifiCare shall have
the right and duty to represent Supplier in such resistance or to select and
compensate counsel to so represent Supplier or to reimburse Supplier for
reasonable attorneys' fees and expenses incurred in resisting such access.
20.4 UNAUTHORIZED ACTS. Without limiting either Party's rights in respect
of a breach of this Section, each Party shall:
(a) promptly notify the other Party of any unauthorized possession,
use or knowledge, or attempt thereof, of the other Party's Confidential
Information by any person or entity that may become known to such Party;
(b) promptly furnish to the other Party full details of the
unauthorized possession, use or knowledge, or attempt thereof, and assist the
other Party in investigating or preventing the recurrence of any unauthorized
possession, use or knowledge, or attempt thereof, of Confidential Information;
(c) cooperate with the other Party in any litigation and
investigation against third parties deemed necessary by the other Party to
protect its proprietary rights (provided that the other Party shall pay such
Party's reasonable costs and expenses arising out of its cooperation with any
litigation hereunder); and
(d) promptly use its best efforts to prevent a recurrence of any
such unauthorized possession, use or knowledge, or attempt thereof, of
Confidential Information.
Except as otherwise noted, each Party shall bear the cost it incurs
as a result of compliance with this Section.
20.5 INJUNCTIVE RELIEF. The Parties acknowledge and agree that monetary
damages may be inadequate to compensate for a breach of the provisions contained
in this Section 20 or other confidentiality provisions of this Agreement. In the
event of such breach, the injured Party
35.
may be entitled to seek injunctive relief and any and all other remedies
available at law or in equity. This Section in no way limits the liability or
damages that may be assessed against a Party in the event of a breach by the
other Party of any of the provisions of this Section.
21. REPRESENTATIONS AND WARRANTIES.
21.1 BY PACIFICARE. PacifiCare represents and warrants that:
(a) PacifiCare is a corporation duly incorporated, validly
existing and in good standing under the Laws of the State of Delaware;
(b) PacifiCare has all requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement;
(c) the execution, delivery and performance of this Agreement
by PacifiCare (i) has been duly authorized by PacifiCare and (ii) shall not
conflict with, result in a breach of or constitute a default under any other
agreement to which PacifiCare is a party or by which PacifiCare is bound;
(d) PacifiCare is duly licensed, authorized or qualified to do
business and is in good standing in every jurisdiction in which a license,
authorization or qualification is required for the ownership or leasing of its
assets or the transaction of business of the character transacted by it, except
where the failure to be so licensed, authorized or qualified would not have a
material adverse effect on PacifiCare's ability to fulfill its obligations under
this Agreement;
(e) PacifiCare has obtained all applicable permits and
licenses required of PacifiCare in connection with its obligations under this
Agreement except where the failure to obtain such permits and licenses would not
have a material adverse effect on PacifiCare's ability to fulfill its
obligations under this Agreement; and
(f) the PacifiCare Proprietary Software and, to the best of
PacifiCare's knowledge, the PacifiCare Third Party Software, does not infringe
upon the proprietary rights of any third party.
21.2 BY SUPPLIER. Supplier represents and warrants that:
(a) Supplier is a corporation duly incorporated, validly existing
and in good standing under the Laws of the Commonwealth of Massachusetts;
(b) Supplier has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement;
(c) the execution, delivery and performance of this Agreement by
Supplier (i) has been duly authorized by Supplier and (ii) shall not conflict
with, result in a breach of or constitute a default under any other agreement to
which Supplier is a party or by which Supplier is bound;
36.
(d) Supplier is duly licensed, authorized or qualified to do
business and is in good standing in every jurisdiction in which a license,
authorization or qualification is required for the ownership or leasing of its
assets or the transaction of business of the character transacted by it, except
where the failure to be so licensed, authorized or qualified would not have a
material adverse effect on Supplier's ability to fulfill its obligations under
this Agreement;
(e) Supplier is in compliance with all Supplier Laws applicable to
Supplier's obligations under this Agreement and has obtained all applicable
permits and licenses required of Supplier in connection with its obligations
under this Agreement;
(f) there is no outstanding litigation, arbitrated matter or other
dispute to which Supplier is a party that, if decided unfavorably to Supplier,
would reasonably be expected to have a material adverse effect on Supplier's
ability to fulfill its obligations under this Agreement; and
(g) the Supplier Software does not infringe upon the proprietary
rights of any third party (except as may have been caused by a modification by
PacifiCare Entities or PacifiCare Entity Agents).
21.3 DISCLAIMER. EXCEPT AS SPECIFIED IN SECTION 21.1 AND SECTION 21.2,
NEITHER PACIFICARE NOR SUPPLIER MAKES ANY OTHER WARRANTIES WITH RESPECT TO THE
SERVICES OR THE SYSTEMS AND EACH EXPLICITLY DISCLAIMS ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A SPECIFIC PURPOSE, TITLE, AND NONINFRINGEMENT OF THIRD PARTY RIGHTS.
22. ADDITIONAL COVENANTS.
22.1 BY PACIFICARE. PacifiCare covenants and agrees with Supplier that
during the Term and the Termination Assistance Period:
(a) PacifiCare shall comply with all Laws applicable to PacifiCare,
except where the failure to comply would not have a material adverse effect on
PacifiCare's ability to fulfill its obligations under this Agreement; and
(b) the PacifiCare Proprietary Software set forth in Schedule
14.2(a) shall not infringe upon the proprietary rights of any third party
(except as may have been caused by a modification by Supplier or Supplier
Agents).
22.2 BY SUPPLIER. Supplier covenants and agrees with PacifiCare that
during the Term and the Termination Assistance Period:
(a) in addition to meeting or exceeding all Service Levels, Supplier
shall at all times render the Services promptly and diligently and perform in a
professional and workmanlike manner;
(b) Supplier shall at all times use qualified individuals with
suitable training, education, competence and skill to perform the Services;
37.
(c) Supplier shall comply with all Supplier Laws;
(d) subject to Section 3.3(b), from and after the Effective Date, in
providing the Services, Supplier shall comply with Medical Confidential
Information Laws, including Medical Confidential Information Laws that
PacifiCare, as a Covered Entity, is required to require Supplier to comply with
as a Business Associate, and in the event that the requirements of any Medical
Confidential Information Laws are more restrictive or protective of information
than the confidentiality and nondisclosure provisions of this Agreement, the
Medical Confidential Information Laws shall control;
(e) none of the Services, the Developed Software, the Work Product
(including Web Content, if any), the Supplier Software, any enhancements or
modifications to the PacifiCare Software performed by Supplier or Supplier
Agents or any other resources or items provided to PacifiCare by Supplier or
Supplier Agents shall infringe upon the proprietary rights of any third party
(except as may have been caused by a modification by PacifiCare Entities or
PacifiCare Entity Agents);
(f) Supplier shall use commercially reasonable efforts to prevent
the introduction or coding of viruses or similar items into the Systems, and, in
the event a virus or similar item is introduced into the Systems, Supplier shall
use commercially reasonable efforts to assist PacifiCare Entities in reducing
the effects of the virus or similar item and, if such virus or similar item
causes a loss of operational efficiency or loss of data, to assist PacifiCare
Entities to the same extent to mitigate and restore such losses; and
(g) without the consent of PacifiCare, Supplier shall not insert
into the Software used to provide the Services any code that would have the
effect of disabling or otherwise shutting down all or any portion of the
Services. Supplier further covenants that, with respect to any disabling code
that may be part of the Software used to provide the Services, Supplier shall
not invoke such disabling code at any time, including upon expiration or
termination of this Agreement, without PacifiCare's consent.
23. DISPUTE RESOLUTION.
23.1 RESOLUTION PROCEDURES. Except as otherwise provided below, the
Parties shall attempt to resolve any dispute arising under or related to this
Agreement (a "DISPUTE") in accordance with the procedures set forth in this
Section 23.1.
(a) RELATIONSHIP MANAGERS. Within [...***...] after either Party
notifies the other Party of a Dispute, the PacifiCare [...***...] and the
Supplier [...***...] shall consider the Dispute in person or by telephone and
shall attempt in good faith to resolve the Dispute for a period of [...***...]
in the event of a Dispute regarding any Fees. If the Dispute is not resolved, as
agreed by the Parties in writing, within such [...***...] (or, in the case of a
Dispute regarding Fees, [...***...] period, the Dispute shall be escalated in
accordance with Section 23.1(b) below.
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(b) SENIOR EXECUTIVES. If a Dispute is not resolved in accordance
with Section 23.1(a) above in the case of PacifiCare, a Senior Executive-level
executive, and in the case of Supplier, a Group Vice President (each, a "SENIOR
EXECUTIVE"), shall consider the Dispute in person at a mutually agreeable time
and date and at a PacifiCare Service Location or other mutually agreeable
location and shall attempt in good faith to resolve the Dispute for a period of
[...***...] in the event of a Dispute regarding Fees. Unless such Senior
Executives otherwise agree in writing, either Party may pursue its rights and
remedies under this Agreement after the expiration of [...***...] period.
23.2 EXCLUSIONS. Notwithstanding the foregoing, no Dispute relating to
Section 15.4, Section 20 or Section 26 shall be subject to Section 23.1. In
addition, nothing in this Agreement shall limit either Party's right to seek
immediate injunctive or other equitable relief whenever the facts or
circumstances would permit a Party to seek such relief in a court of competent
jurisdiction.
23.3 CONTINUITY OF SERVICES. Supplier acknowledges that the timely and
complete performance of its obligations pursuant to this Agreement is critical
to the business and operations of PacifiCare Entities. In the event of a dispute
between PacifiCare and Supplier, each of the Parties shall continue to perform
its respective obligations under this Agreement in good faith during the
resolution of such dispute unless and until this Agreement is terminated in
accordance with the provisions hereof.
24. TERMINATION.
24.1 TERMINATION FOR CONVENIENCE. [...***...], PacifiCare may terminate
this Agreement, [...***...] by giving Supplier notice of the termination at
least one hundred eighty (180) days prior to the termination date specified in
the notice.
24.2 TERMINATION FOR CHANGE IN CONTROL. In the event of a Change in
Control of Supplier, PacifiCare or either Party's respective parent companies,
PacifiCare may terminate this Agreement, at its sole discretion, by giving
Supplier notice of the termination at least one hundred eighty (180) days prior
to the termination date specified in the notice.
24.3 TERMINATION FOR CAUSE.
(a) If Supplier defaults in the performance of any of its material
obligations (including by repeatedly defaulting in the performance of any of its
obligations which, when combined, constitute a breach of a material obligation)
under this Agreement (except as provided in Section 24.4), and does not cure
such default within [...***...] days (the "SUPPLIER DEFAULT CURE PERIOD") after
receipt of a notice of default from PacifiCare (the "SUPPLIER DEFAULT NOTICE"),
then PacifiCare may, without limiting PacifiCare's other rights or remedies
under this Agreement, by giving notice to Supplier, terminate this Agreement, in
whole or in part, as of the termination date specified in the Supplier Default
Notice.
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*CONFIDENTIAL TREATMENT REQUESTED
(b) If PacifiCare fails to make undisputed payments due to Supplier
under this Agreement and does not pay such undisputed amounts within [...***...]
days (the "PACIFICARE DEFAULT CURE PERIOD") of receipt of Supplier's notice of
PacifiCare's failure to pay such undisputed amounts (the "PACIFICARE DEFAULT
NOTICE"), then Supplier may, by giving notice to PacifiCare, terminate this
Agreement in whole as of the termination date specified in the PacifiCare
Default Notice. If PacifiCare disputes any amounts that are the subject of the
PacifiCare Default Notice and fails to pay such amounts in accordance with
Section 17.7 (Fee Dispute) during the PacifiCare Default Cure Period (subject to
resolution of such dispute), then Supplier may, by giving notice to PacifiCare,
terminate this Agreement in whole as of the termination date specified in the
PacifiCare Default Notice.
24.4 TERMINATION FOR FAILURE TO PROVIDE CRITICAL SERVICES. If Supplier
fails to provide any Critical Service and does not, within [...***...] after
such failure identified on Schedule 24.4 with respect to such Critical Service,
cure such failure or, if such failure cannot be cured within [...***...]
identified on Schedule 24.4 with respect to such Critical Service, provide
PacifiCare with a workaround that allows PacifiCare to receive such Critical
Service.
24.5 INSOLVENCY. Either Party may, by giving notice thereof to the Party,
terminate this Agreement in whole as of the date specified in such termination
notice if the other Party:
(a) admits in writing its inability to pay its debts as such debts
become due;
(b) applies for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee, examiner or liquidator of itself
or of all or a substantial part of its property or assets;
(c) makes a general assignment for the benefit of its creditors;
(d) commences a voluntary case under the Bankruptcy Code (11
U.S.C.ss.101 et seq., as amended);
(e) files a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, liquidation, dissolution,
arrangement or winding-up, or composition or readjustment of debts; or
(f) fails to controvert in a timely and appropriate manner, or
acquiesce in writing to, any petition filed against it in an involuntary case
under the Bankruptcy Code, or takes any corporate, partnership or other action
for the purpose of affecting any of the foregoing.
24.6 OTHER TERMINATIONS. In addition to the provisions of this Section,
this Agreement may be terminated as provided in Section [...***...] and Section
16.3.
25. TERMINATION FEES.
25.1 EARLY TERMINATION FEE. If PacifiCare terminates this Agreement for
any reason, then PacifiCare shall pay Supplier the applicable early termination
fees in accordance with
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*CONFIDENTIAL TREATMENT REQUESTED
Schedule 17 (the "EARLY TERMINATION FEES"), provided, however, that PacifiCare
shall not pay any Early Termination Fees if PacifiCare terminates this Agreement
pursuant to Section 24.1 with such Termination to be effective, commencing at
any time during the eighth (8th), ninth (9th), or tenth (10th) Contract Year of
this Agreement. PacifiCare shall pay the Early Termination Fee within thirty
(30) days of the last day of the month in which Supplier is providing
Termination Services following termination.
25.2 NO OTHER FEES. Except as expressly set forth in this Section 25 and
Section 26 below, PacifiCare shall have no obligation to pay any termination fee
or other fees to Supplier in connection with the termination of this Agreement,
and any recovery or remedy sought by Supplier for such termination shall be
limited to the Early Termination Fee set forth in this Section 25 and the
Termination Services Fees (as defined in Section 26.2).
26. TERMINATION ASSISTANCE.
26.1 TERMINATION ASSISTANCE SERVICES.
(a) Commencing up to six (6) months before the expiration or earlier
termination of this Agreement, upon the request of and as specified by
PacifiCare, and continuing through the effective date of expiration or
termination of this Agreement, Supplier shall provide, at no additional charge
to PacifiCare to the extent that such assistance can be provided through
resources included in the Fees, all information and assistance necessary to
ensure the smooth transition of the Services (and other functions being
performed by Supplier and Supplier Agents at the time of such expiration or
termination) to PacifiCare or another service provider of PacifiCare's choosing,
which such assistance shall include, if applicable, capacity planning,
consulting services, facilities planning, telecommunications planning, Software
configuration, reviewing all system Software with a new service provider or its
agents, generating machine readable listings of source code, uploading
production databases, providing parallel processing, testing and, where
applicable, providing Equipment (individually and collectively, the "TERMINATION
SERVICES").
(b) PacifiCare may also (i) upon the request of and as specified by
PacifiCare, require Supplier to provide Base Services and the Termination
Services for an extension period of up to twelve (12) months following the
effective date of expiration or termination of this Agreement and (ii) at the
end of the first extension period and upon the request of and as specified by
PacifiCare, require Supplier to provide the Base Services and Termination
Services for an additional extension period of up to six (6) months following
the end of the first extension period (collectively, the period of Termination
Services prior to the effective date of expiration or termination of this
Agreement together with any extension periods referred to as the "TERMINATION
ASSISTANCE PERIOD"). PacifiCare will provide Supplier with written notice of its
intent to request assistance under this Section at least ninety (90) days prior
to the expiration or termination of this Agreement or the first extension
period, as appropriate.
(c) During the Termination Assistance Period, Supplier shall
continue to provide the Base Services in addition to the Termination Services
until PacifiCare, in its sole discretion, provides Supplier notice that the Base
Services have been satisfactorily transferred to
41.
PacifiCare or another service provider, at which time Supplier shall cease
providing any Base Services or Termination Services.
(d) The quality and level of Termination Services and other Service
performed during the Termination Assistance Period shall not be degraded from
the Service Levels provided by Supplier and Supplier Agents for similar Services
prior to such termination.
(e) After the expiration of the Termination Assistance Period,
Supplier shall (i) answer questions from PacifiCare Entities regarding the
Services on an "as needed" basis at Supplier's then-standard billing rates and
(ii) deliver to PacifiCare any remaining PacifiCare Entity-owned reports and
documentation still in Supplier's possession.
26.2 TERMINATION SERVICES FEES.
(a) With respect to Termination Services that were Services
performed under this Agreement prior to the Termination Assistance Period:
(i) During the Termination Assistance Period prior to the
expiration or termination of this Agreement, Supplier shall provide Termination
Services at no additional charge to PacifiCare to the extent that such
assistance can be provided through resources included in the Fees. To the extent
that any Termination Services cannot be so provided, PacifiCare shall pay
Supplier at the rates then applicable under this Agreement for such Services.
(ii) During the Termination Assistance Period after the
expiration or termination of this Agreement, if applicable, PacifiCare shall pay
Supplier at the ARC rates then applicable and set forth in Attachment 3 of
Schedule 17 under this Agreement for such Services.
(b) With respect to Termination Services that were not Services
performed under this Agreement prior to the Termination Assistance Period,
PacifiCare shall pay Supplier the New Services Fees set forth in Attachment 4 of
Schedule 17.
(c) The fees paid for Termination Services (the "TERMINATION
SERVICES FEES") are to be paid in accordance with the payment terms for Base
Fees set forth in Section 17.2.
26.3 EXIT DUTIES AND EXIT RIGHTS. Upon the later of the expiration or
termination of this Agreement and the last day of the Termination Assistance
Period (the "END DATE"):
(a) The rights granted to Supplier and Supplier Agents in Section
14.2 shall immediately terminate and Supplier shall, and shall cause Supplier
Agents to, (i) deliver to PacifiCare, at no cost to PacifiCare, a current copy
of the PacifiCare Software in the form in use as of the End Date and (ii)
destroy or erase all other copies of the PacifiCare Software in Supplier's or
Supplier Agents' possession. Supplier shall, upon PacifiCare's request, certify
to PacifiCare that all such copies have been destroyed or erased.
(b) Subject to Sections 14.3 and 14.4 herein, Supplier shall
promptly deliver to PacifiCare a copy of the Supplier Proprietary Software and
Supplier proprietary Tools in the
42.
form in use for performance of the Services as of the End Date. Supplier shall
also provide to PacifiCare Entities support and maintenance services for such
Software and Tools on terms, conditions and prices agreed upon by the Parties,
which shall in no event [...***...]
(c) Subject to Sections 14.3 and 14.4 herein, upon PacifiCare's
request, with respect to Supplier Third Party Software and the Tools that
Supplier has licensed from a third party and is using to provide the Services as
of the End Date, Supplier shall, to the extent permissible under Supplier's
agreements with such third parties, transfer, assign or sublicense such Supplier
Third Party Software and Supplier Third Party Tools to PacifiCare or its
designee. Upon PacifiCare's request and expense, Supplier shall assist
PacifiCare Entities in obtaining directly from third parties any Third Party
Software and/or Tools for which PacifiCare does not elect to assume the
applicable third party agreements.
(d) Subject to the license terms set forth in Sections 14.3 and 14.4
above, upon PacifiCare's request, for a period of [...***...], with respect to
any Supplier Software or Tools, to the extent permissible under Supplier's
agreements with any third parties, that Supplier is using to provide the
Services as of the date of termination or expiration of this Agreement and that
Supplier operates on equipment located at one or more Supplier Service
Locations, Supplier shall provide to PacifiCare Entities or PacifiCare's
designees remote access to and use of such Supplier Software and Tools, together
with all hosting, maintenance, support and other services required for
PacifiCare Entities or PacifiCare's designees to Use such Supplier Software and
Tools solely to the extent required to continue the Services after the End Date,
all on terms, conditions and prices agreed upon by the Parties, which shall in
no event [...***...]. Supplier shall provide such additional assistance as may
be necessary to permit PacifiCare to establish the same or similar functions on
equipment at PacifiCare's or another service provider's locations at
PacifiCare's cost.
(e) Supplier shall (i) deliver to PacifiCare a copy of all of the
Developed Software and Work Product, in the form in use as of the End Date, and
(ii) destroy or erase all other copies of the Developed Software and the Work
Product in Supplier's possession.
(f) Upon PacifiCare's request and to the extent permissible by the
applicable third party agreements, with respect to (i) any agreements for
maintenance or other third party services, and (ii) any Assigned Agreements not
otherwise covered by the preceding subsection, Supplier shall, and shall cause
Supplier Agents to, transfer or assign such agreements to PacifiCare Entities or
PacifiCare's designees, on terms and conditions acceptable to all applicable
parties. Upon PacifiCare's request and cost, Supplier shall assist PacifiCare
Entities in obtaining directly from third parties any third party services for
which PacifiCare does not elect to assume the applicable third party agreements.
(g) Upon PacifiCare's request, Supplier shall return to PacifiCare
or its designee any assets transferred by PacifiCare Entities to Supplier or
Supplier Agents not covered by the preceding subsection, free and clear of all
liens, security interests or other encumbrances.
43.
*CONFIDENTIAL TREATMENT REQUESTED
Supplier shall also return to PacifiCare Entities all user and other
documentation in its possession that relates to such assets.
(h) Commencing on the End Date, or such earlier date that Supplier
is no longer required to meet Service Levels, PacifiCare shall have the right to
extend offers of employment to all Supplier and Supplier Agent personnel who
have been or are assigned to or have or are performing any Services or other
work on behalf of Supplier or Supplier Suppliers with respect to PacifiCare.
Supplier and Supplier Suppliers shall provide reasonable access to such
personnel and shall not interfere with any such solicitation by PacifiCare.
Where any of the foregoing rights under this Section 26.3 may be
requested by PacifiCare, PacifiCare may request such rights before the End Date.
27. INDEMNITIES.
27.1 INDEMNITY BY PACIFICARE. PacifiCare shall indemnify Supplier from,
and defend and hold Supplier harmless from and against, any Losses suffered,
incurred or sustained by Supplier or to which Supplier becomes subject,
resulting from, arising out of or relating to any claim:
(a) that the PacifiCare Proprietary Software infringes upon the
proprietary rights of any third party (except as may have been caused by a
modification by Supplier or Supplier Agents or by written directions or
specifications provided to PacifiCare by Supplier or Supplier Agents);
(b) relating to the inaccuracy, untruthfulness or breach of any
representation or warranty made by PacifiCare under this Agreement;
(c) relating to (i) a violation by PacifiCare or PacifiCare Agents
of Law for the protection of persons or members of a protected class or category
of persons, including unlawful discrimination, (ii) work-related injury (except
as may be covered by PacifiCare's workers' compensation plan) or death caused by
PacifiCare or PacifiCare Agents, (iii) accrued employee benefits not expressly
assumed by Supplier, (iv) any representations, oral or written, made by
PacifiCare or PacifiCare Agents to the Affected Employees and (v) any other
aspect of the Affected Employees' employment relationship with PacifiCare or
termination of such employment relationship with PacifiCare (including claims
for breach of an express or implied contract of employment);
(d) relating to any amounts, including taxes, interest and
penalties, assessed against Supplier that are the obligation of PacifiCare
pursuant to Section 18;
(e) relating to personal injury (including death) or property loss
or damage resulting from PacifiCare's acts or omissions;
(f) relating to a breach of Section 20;
44.
(g) relating to PacifiCare's failure to comply with the Governmental
Approvals applicable to PacifiCare, and PacifiCare's failure to obtain and
maintain the PacifiCare Government Approvals;
(h) relating to a breach of any of the covenants in Section 22.1.
[...***...]
27.2 INDEMNITY BY SUPPLIER. Supplier shall indemnify PacifiCare Entities
from, and defend and hold PacifiCare Entities harmless from and against, any
Losses suffered, incurred or sustained by PacifiCare Entities or to which
PacifiCare Entities become subject resulting from, arising out of or relating to
any claim:
(a) that the Developed Software, Work Product, Supplier Tools,
Supplier Software, any enhancements or modifications to the PacifiCare Software
performed by Supplier or Supplier Agents or any other resources or items
provided to PacifiCare Entities by Supplier or Supplier Agents infringe upon the
proprietary or other rights of any third party (except as may have been caused
by a modification by PacifiCare Entities or PacifiCare Entity Agents, or by
written directions or specifications provided to Supplier by PacifiCare or
PacifiCare Entities);
(b) relating to any duties or obligations of Supplier or Supplier
Agents in respect of a third party or any subcontractor of Supplier;
(c) by a third party arising from services or systems provided by
Supplier or Supplier Agents from a Supplier Service Location that is shared with
other customers of Supplier;
(d) relating to the inaccuracy, untruthfulness or breach of any
representation, warranty or covenant set forth in Section 21.2 made by Supplier
under this Agreement;
(e) relating to Supplier's failure to obtain, maintain, and comply
with the Supplier Governmental Approvals;
(f) relating to (i) a violation by Supplier or Supplier Agents of
Law for the protection of persons or members of a protected class or category of
persons, including unlawful discrimination, (ii) work-related injury (except as
may be covered by Supplier's workers' compensation plan) or death caused by
Supplier or Supplier Agents, (iii) accrued employee benefits not expressly
retained by PacifiCare Entities, (iv) any representations, oral or written, made
by Supplier or Supplier Agents to PacifiCare Entities' employees, including the
Affected Employees and (v) any other aspect of the Transitioned Personnels'
employment relationship with Supplier or the termination of the employment
relationship with Supplier (including claims for breach of an express or implied
contract of employment);
(g) relating to Supplier's breach of Section 10.2, 10.3, 10.4 or
15.4;
45.
*CONFIDENTIAL TREATMENT REQUESTED
(h) relating to any amounts, including taxes, interest and
penalties, assessed against PacifiCare Entities that are the obligation of
Supplier pursuant to Section 18;
(i) relating to personal injury (including death) or property loss
or damage resulting from Supplier's or Supplier Agents' acts or omissions;
(j) relating to a breach of Supplier obligations with respect to
PacifiCare Data (in Section 15);
(k) relating to a breach of Section 20; and
(l) relating to a breach of any of the covenants in Section 22.2(c),
(d), (f), and (g).
[...***...]
27.3 INDEMNIFICATION PROCEDURES. If any claim is commenced against a
person or entity entitled to indemnification under Section 27.1 or Section 27.2
(the "INDEMNIFIED PARTY"), notice thereof shall be given to the Party that is
obligated to provide indemnification (the "INDEMNIFYING PARTY") as promptly as
practicable. If, after such notice, the Indemnifying Party shall acknowledge
that this Agreement applies with respect to such claim, then the Indemnifying
Party shall be entitled, if it so elects, in a notice promptly delivered to the
Indemnified Party, but in no event less than ten (10) days prior to the date on
which a response to such claim is due, to immediately take sole control of the
defense and investigation of such claim and to employ and engage attorneys
reasonably acceptable to the Indemnified Party to handle and defend the same, at
the Indemnifying Party's sole cost and expense. The Indemnified Party shall
cooperate, at the cost of the Indemnifying Party in all reasonable respects with
the Indemnifying Party and its attorneys in the investigation, trial and defense
of such claim and any appeal arising therefrom. The Indemnified Party may, at
its own cost and expense, participate, through its attorneys or otherwise, in
such investigation, trial and defense of such claim and any appeal arising
therefrom, provided that such participation does not unreasonably interfere with
the Indemnifying Party's ability to defend such claim. 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. After notice
by the Indemnifying Party to the Indemnified Party of its election to assume
full control of the defense of any such claim, the Indemnifying Party shall not
be liable to the Indemnified Party for any legal expenses incurred thereafter by
such Indemnified Party in connection with the defense of that claim. If the
Indemnifying Party does not assume full control over the defense of a claim
subject to such defense as provided in this Section, the Indemnifying Party may
participate in such defense, at its sole cost and expense, and the Indemnified
Party shall have the right to defend the claim in such manner as it may deem
appropriate, at the cost and expense of the Indemnifying Party.
46.
*CONFIDENTIAL TREATMENT REQUESTED
28. DAMAGES.
28.1 CONSEQUENTIAL DAMAGES. In no event shall either PacifiCare Entities
or Supplier be liable for any indirect, incidental, special or consequential
damages, arising out of or relating to its performance or failure to perform
under this Agreement, even if advised of the possibility of such damages.
28.2 DIRECT DAMAGES. Each of the Parties shall be liable to the other for
any direct damages arising out of or relating to its performance or failure to
perform under this Agreement; [...***...]
28.3 BASIS OF THE BARGAIN. Each Party acknowledges that the foregoing
limitations are an essential element of this Agreement between the Parties and
that in the absence of such limitations the pricing and other terms set forth in
this Agreement would be substantially different.
28.4 EXCLUSIONS. The limitations or exculpations of liability set forth in
Section 28.1 and Section 28.2 shall not apply to [...***...]
29. INSURANCE.
29.1 TYPES AND AMOUNTS. During the term of this Agreement, Supplier shall
procure and maintain, at Supplier's sole cost and expense, the following
insurance coverages:
(a) COMMERCIAL GENERAL LIABILITY INSURANCE, including premises,
products (if products are being provided) /completed operations (if services are
being provided) and contractual liability with limits of not less than
[...***...] per occurrence and [...***...] annual aggregate for bodily injury
and property damage. Said insurance shall be provided on an "occurrence" form.
(b) AUTOMOBILE LIABILITY INSURANCE (if performing any activities on
PacifiCare's premises) with limits of not less than [...***...] per occurrence,
combined single limit for bodily injury and property damage, covering owned
non-owned and hired vehicles.
47.
*CONFIDENTIAL TREATMENT REQUESTED
(c) WORKERS COMPENSATION AND EMPLOYERS LIABILITY. If the Supplier is
an employer of one or more employees, workers compensation and employers
liability coverage with minimum limits of:
(i) Workers Compensation - statutory as required by law
(ii) Employers Liability-
bodily injury by accident: [...***...] each accident
bodily injury by disease: [...***...] each employee
bodily injury by disease: [...***...] policy limit
(d) CONSULTANT'S ERRORS AND OMISSIONS LIABILITY INSURANCE in an
amount of not less than [...***...] per occurrence and annual aggregate. The
aggregate limit shall apply separately to the liabilities arising out of this
Agreement.
(e) If Supplier has a claims-made based policy (or policies) and
such policy (or policies) are cancelled or not renewed, Supplier agrees to
exercise any option contained in said policy (or policies) to extend the
reporting period to the maximum period permitted; provided, however, that
Supplier need not exercise such option if the superseding insurer shall accept
all prior claims.
(f) Supplier may satisfy the coverage minimums set forth in
29.1(a)-(d) by any combination of primary or umbrella coverage, provided that
any umbrella coverage used to meet the coverage minimums set forth in
29.1(a)-(d) must meet or exceed the aggregate coverage minimums for all claims
required to be covered by such umbrella coverage.
29.2 SUPPLIER AGENTS. Supplier shall require that each Supplier Agent
carry Commercial General Liability insurance, including premises, products,
completed operations and contractual liability insurance, and in addition, carry
Automobile Liability insurance (if performing on PacifiCare's premises), Workers
Compensation and Employers Liability insurance, Consultant's Errors and
Omissions and Internet Errors and Omissions insurance. Except with regard to the
Affected Contractors and subcontractors referenced in Sections 12.4(e) and
12.4(f) engaged by Supplier pursuant to this Agreement, Supplier shall require
that all Supplier Agents shall carry the aforementioned insurance with the same
minimum limits as required for Supplier in Section 29.1 above.
29.3 DOCUMENTATION. Each of Supplier's and Supplier Agents' insurance
policies shall:
(a) be issued by companies that are admitted insurers in the
jurisdiction in which the services or products are being provided;
48.
*CONFIDENTIAL TREATMENT REQUESTED
(b) be issued by companies that have an A. M. Best rating of not
less than "A-", and are in a size category which is not lower than "VIII";
(c) be primary and noncontributory with any of PacifiCare's
insurance;
(d) name PacifiCare as an additional insured; (except Workers
Compensation, Employers Liability and Errors and Omissions coverages) and
(e) provide PacifiCare with thirty (30) days prior notice of
cancellation, non-renewal or material change in the form or limits of coverage.
(f) Supplier and Supplier Agents shall cause its insurance carriers,
brokers or agents to issue to PacifiCare certificates of insurance evidencing
all insurance coverages, and any renewals thereof, required by this Section.
(g) Notwithstanding any other provision of this Agreement, failure
to provide the certificates of insurance shall be considered a default by
Supplier subject to termination of this Agreement pursuant to Section 24.3.
29.4 SELF-INSURANCE. If any of the required coverages are provided by a
self-insurance arrangement, a wholly owned insurance subsidiary (captive) or a
risk retention group, the above requirement may be waived at the sole discretion
of PacifiCare, but only after review of the self-insured's, captive's or risk
retention group's most current audited financial statement and actuarial report.
In addition Supplier agrees, during the Term of this Agreement, to provide
PacifiCare with updated financial statements and actuarial reports within a
reasonable time after the close of each of the self-insurance program's plan
year.
29.5 INTENTIONS. None of the foregoing requirements as to the type and
limits of insurance to be maintained by Supplier and Supplier Agents are
intended to and shall not in any manner limit or qualify the liabilities and
obligations assumed by Supplier under this Agreement.
30. MISCELLANEOUS PROVISIONS.
30.1 AMENDMENTS. No amendment to, or change, waiver or discharge of, any
provision of this Agreement shall be valid unless in writing and signed by, in
the case of PacifiCare, the PacifiCare Supplier Relationship Manager, and in the
case of the Supplier, the Supplier Client Relationship Manager.
30.2 ASSIGNMENT.
(a) Neither Party shall, without the consent of the other Party,
assign this Agreement or any amounts payable pursuant to this Agreement, except
that PacifiCare may assign this Agreement to an affiliate or another entity or
business unit of PacifiCare or pursuant to a reorganization or Change in Control
of PacifiCare without such consent. Upon PacifiCare's assignment of this
Agreement to an affiliate or another PacifiCare entity or business unit or
pursuant to a reorganization or Change in Control of PacifiCare, PacifiCare
shall be released from any obligation or liability under this Agreement,
provided that, except with respect to a
49.
Change in Control of PacifiCare, Supplier consents to such release (which
consent may only be withheld based solely on reasonable good faith
considerations relating to the assignee's ability to perform PacifiCare's
financial obligations under this Agreement). The consent of a Party to any
assignment of this Agreement shall not constitute such Party's consent to
further assignment. This Agreement shall be binding on the Parties and their
respective successors and permitted assigns. Any assignment in contravention of
this Section 30.2(a) shall be void.
(b) In the event that PacifiCare divests an entity or business unit
of PacifiCare, Supplier shall, for a period of up to two (2) years from the
effective date of such divestiture, at PacifiCare's request, continue to provide
the Services to such divested PacifiCare entity or business unit at the
applicable Fees then in effect. The applicable Fees attributable to that portion
of the Services of such divested PacifiCare entity or business unit shall be
paid to Supplier, at PacifiCare's discretion, by the successor entity owning or
controlling such divested entity or business unit and the same amount shall be
deducted for the Fees payable by PacifiCare to Supplier.
30.3 BANKRUPTCY. The Parties acknowledge and agree that this Agreement
constitutes a license of an intellectual property right by Supplier to
PacifiCare Entities as such term is used in Section 365(n) of Title 11 of the
United States Code.
30.4 CONFLICT OF INTEREST. Supplier shall not pay any salaries,
commissions, fees or make any payments or rebates to any employee of PacifiCare
Entities, or to any designee of such employee, or favor any employee of
PacifiCare Entities, or any designee of such employee, with gifts or
entertainment of significant cost or value or with services or goods sold at
less than full market value. Supplier agrees that its obligation to PacifiCare
Entities under this Section shall also be binding upon Supplier Agents. Supplier
further agrees to insert the provisions of this Section in each contract with a
Supplier Agent.
30.5 CONSENTS, APPROVALS AND REQUESTS. Except as specifically set forth in
this Agreement, all consents and approvals to be given by either Party under
this Agreement shall not be unreasonably withheld or delayed and each Party
shall make only reasonable requests under this Agreement.
30.6 CORPORATE INTEGRITY. Supplier acknowledges that PacifiCare operates
under a compliance program known as the "PACIFICARE ETHICS AND INTEGRITY
PROGRAM"). Supplier further acknowledges that, notwithstanding anything
contained herein, PacifiCare shall not be required to engage in any conduct that
may violate any policies, procedures or directives of the PacifiCare Ethics and
Integrity Program or its Medical Confidential Information Laws-related policies
and procedures. Supplier further represents that it neither has been, nor
currently is, excluded from participation in government funded healthcare
programs, including Medicare, Medicaid, CHAMPUS and FEHP.
30.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one single agreement between the Parties.
50.
30.8 COVENANT OF FURTHER ASSURANCES. PacifiCare and Supplier covenant and
agree that, subsequent to the execution and delivery of this Agreement and
without any additional consideration, each of PacifiCare and Supplier shall
execute and deliver any further legal instruments and perform any acts that are
or may become necessary to effectuate the purposes of this Agreement.
30.9 ENTIRE AGREEMENT. This Agreement and the Schedules and Exhibits to
this Agreement represent the entire agreement between the Parties with respect
to its subject matter, and there are no other representations, understandings or
agreements between the Parties relative to such subject matter. Notwithstanding
the foregoing, neither Party shall be relieved of any of its respective
obligations with regard to information subject to any confidentiality agreement
entered into by the Parties prior to the Effective Date.
30.10 EXPORT. Supplier shall not knowingly export or re-export any
personal computer system, part, technical data or sub-elements under this
Agreement, directly or indirectly, to any destinations prohibited by the United
States Government. The term "technical data" in this context, means such data as
is defined as technical data by applicable United States export regulations.
30.11 GOOD FAITH AND FAIR DEALING. PacifiCare and Supplier acknowledge and
agree that all aspects of the business relationship and dealings between
PacifiCare and Supplier contemplated by this Agreement, including the
performance of all obligations and the exercise of all rights hereunder, shall
be governed by the fundamental principle of good faith and fair dealing.
30.12 GOVERNING LAW AND VENUE. The rights and obligations of the parties
under this Agreement shall be governed in all respects by the laws of the State
of [...***...] exclusively, as such laws apply to contracts between [...***...]
residents performed entirely within [...***...]. Supplier agrees that it shall
only bring any action or proceeding arising from or relating to this Agreement
in a federal court in the [...***...] or in state court in [...***...], and
Supplier irrevocably submits to the personal jurisdiction and venue of any such
court in any such action or proceeding or in any action or proceeding brought in
such courts by PacifiCare.
30.13 NOTICES. Except as otherwise specified in this Agreement, all
notices, requests, consents, approvals, agreements, authorizations,
acknowledgements, waivers and other communications required or permitted under
this Agreement shall be in writing. Wherever under this Agreement one Party is
required to give notice to the other, such notice shall be deemed effective: (a)
five (5) calendar days after deposit in the United States Mail, postage prepaid,
certified or registered mail, return receipt requested; (b) three (3) calendar
days after deposit with a national overnight courier; (c) if given by telex,
telegraph or facsimile, one (1) day after transmission, provided confirmation of
such notice is also sent by national overnight courier or delivered in person;
or (d) upon delivery if delivered in person or by messenger, in each case,
addressed to the following addresses (or such other address as either party may
be notified of as described above):
*CONFIDENTIAL TREATMENT REQUESTED
51.
To PacifiCare: Attention - Chief Information Officer
PacifiCare Health Systems, Inc.
0000 X. Xxxx Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
With a copy to: Attention - Chief Financial Officer
PacifiCare Health Systems, Inc.
0000 X. Xxxx Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Attention - Xxxxxx X. Xxxxxxx
Xxxxxx Godward LLP
Five Palo Alto Square, 0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attention - Xxxxx X. Xxxxx, Esq.
Konowiecki & Rank LLP
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
To Supplier: Attention - Senior Vice President & CFO
Xxxxx, Inc.
Xxx Xxxx Xxxxxx
Xxxxxx, XX 00000
With a copy to: Attention - Managing Director
Xxxxx, Inc.
000 Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
Either Party may change its address or telecopy number for notification
purposes by giving the other Party ten (10) days notice of the new address or
telecopy number and the date upon which it shall become effective.
30.14 PUBLICITY. Each Party shall (a) submit to the other all advertising,
written sales promotions, press releases and other publicity matters relating to
this Agreement in which the other Party's name or xxxx is mentioned or that
contain language from which the connection of said name or xxxx xxx be inferred
or implied and (b) not publish or use such advertising, sales promotions, press
releases or publicity matters without the other Party's consent.
30.15 RELATIONSHIP. The Parties intend to create an independent contractor
relationship and nothing contained in this Agreement shall be construed to make
either PacifiCare Entities or Supplier partners, joint venturers, principals,
agents (except as expressly set forth in Section 7) or employees of the other.
No officer, director, employee, agent, affiliate or contractor retained by
Supplier to perform work on PacifiCare Entities' behalf under this Agreement
shall be deemed to
52.
be an employee, agent or contractor of PacifiCare Entities. Neither Party shall
have any right, power or authority, express or implied, to bind the other.
30.16 SEVERABILITY. If any provision of this Agreement is held by a court
of competent jurisdiction to be contrary to Law, then the remaining provisions
of this Agreement, if capable of substantial performance, shall remain in full
force and effect.
30.17 SURVIVAL. The terms of Section 14, Section 15.1, Section 15.2,
Section 15.4, Section 17.1, Section 17.5, Section 17.6, Section 17.7, Section
17.10, Section 17.11, Section 17.12, Section 17.13, Section 18, Section 19.3,
Section 19.4, Section 19.5, Section 20, Section 21, Section 23, Section 25,
Section 26, Section 27, Section 28 and Section 30 shall survive the expiration
or termination of this Agreement.
30.18 THIRD PARTY BENEFICIARIES. Each Party intends that this Agreement
shall not benefit, or create any right or cause of action in or on behalf of,
any person or entity other than the Parties and the PacifiCare Entities.
30.19 CUMULATIVE REMEDIES. No right or remedy herein conferred upon or
reserved to either Party is intended to be exclusive of any other right or
remedy, and each and every right and remedy shall be cumulative and in addition
to any other right or remedy under this Agreement, or under applicable Law,
whether now or hereafter existing, provided, that through the exercise of its
rights and remedies under this Agreement, a Party shall not be entitled to any
financial recovery which is duplicative of any other financial recovery
hereunder.
30.20 WAIVERS. No delay or omission by either Party to exercise any right
or power it has under this Agreement shall impair or be construed as a waiver of
such right or power. A waiver by any Party of any breach or covenant shall not
be construed to be a waiver of any succeeding breach or any other covenant. All
waivers must be signed by the Party waiving its rights.
53.
IN WITNESS WHEREOF, each of PacifiCare and Supplier has caused this
Agreement to be executed and delivered by its duly authorized representative.
PACIFICARE HEALTH SYSTEMS, INC.
By: /s/ Xxxxx Xxxxxxxxxxx
------------------------------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: Senior Vice President/Chief Information Officer
By: /s/ Xxxx Xxxxxx
------------------------------------------------------
Name: Xxxx Xxxxxx
Title: Executive Vice President/Chief Strategic Officer
XXXXX, INC.
By: /s/ Xxxx Xxxxx
------------------------------------------------------
Name: Xxxx Xxxxx
Title: Chief Financial Officer
EXHIBIT A
DEFINITIONS
"ADDITIONAL RESOURCE CHARGES" or "ARC" means the resource charges
specified in Schedule 17 for the use of Services above the resource baselines
set forth in Schedule 17.
"AFFECTED CONTRACTORS" means those PacifiCare contractors identified in
Schedule 3.1(b)(i).
"AFFECTED EMPLOYEES" means those PacifiCare employees identified in
Schedule 3.1(b)(ii).
"AGREEMENT" means this Information Technology Services Agreement between
PacifiCare and Supplier, including all schedules and exhibits attached hereto.
"ANNUAL PLAN" means the plan described in Section 3.8(a)(iii).
"ASSIGNED AGREEMENTS" means the third party agreements that are assigned,
in whole or in part, to Supplier and that are set forth in Schedule 7.1.
"BACK-END CONSENTS" means all third party licenses, approvals, permits,
consents and authorizations that are necessary to allow: (a) the PacifiCare
Entities and PacifiCare Entity Agents (i) to use the Supplier Third Party
Software and Supplier third party Tools, and (ii) to assign any contracts with
respect to third party services used by Supplier or Supplier Agents to provide
the Services to the extent requested by PacifiCare (and to the extent Supplier
is able to obtain such assignments using all reasonable efforts), in each case
for PacifiCare's use after the expiration or termination of this Agreement; and
(b) necessary for Supplier and Supplier Agents to assign to PacifiCare the
Developed Software and Work Product.
"BACKGROUND TECHNOLOGY" of a Party means all algorithms, designs,
drawings, formula, know-how, protectable business methods, practices,
methodologies, inventions, software, materials, works of authorship, tools, and
other technology that (a) is owned by such Party and is in existence in
electronic or written form on or prior to the Effective Date or (b) is
developed, acquired or licensed by such Party after the Effective Date
excluding, as it relates to Supplier, Developed Software and Work Products.
"BASE FEES" means the fees for the Base Services, as set forth in Schedule
17.
"BASE SERVICE LEVELS" means the service levels and standards for the
performance of the Base Services as described in, or determined in accordance
with, Schedule 8.
"BASE SERVICES" has the meaning set forth in Section 3.1.
"BENCHMARKER" has the meaning specified in Section 9.2(a).
"BENCHMARKING PROCESS" means the objective measurement and comparison
process established by the Parties utilizing baselines and standards agreed upon
by PacifiCare and Supplier, which, in any case provides for a comparison of
Supplier's performance and pricing under this Agreement against competitive
providers providing services which are substantially similar in terms of scope,
volume, environment, geographic area, technologies in use (including skill
sets), contractual terms generally, and any other factors mutually agreed upon
by the Parties (e.g., agreed upon amortization of expenses and start-up costs
during the Term).
"BUSINESS ASSOCIATE" has the meaning given in 45 C.F.R. 160.103.
"CHANGE(S)" means any change to (a) the Services, (b) the Software used to
provide the Services or (c) the Equipment used to provide the Services, that
would materially alter the functionality, performance standards or technical
environment of the Software used to provide the Services or the Equipment used
to provide the Services, the provision of the Services, the Service Levels, the
composition of the Services, or the cost to PacifiCare of the Services.
"CHANGE CONTROL PROCEDURES" has the meaning specified in Section 13.4.
"CHANGE IN CONTROL" means any event or series of events that results
directly or indirectly in a change in the management or Control of a Party.
Without limiting the generality of the foregoing, each of the following shall be
considered a Change in Control: (a) the consolidation or merger of a Party with
or into any entity where the management of such Party is not in control of the
surviving entity; (b) the sale, transfer or other disposition of all or
substantially all of the assets of a Party; (c) any change in the beneficial
ownership of fifty percent (50%) or more (or such lesser percentage that
constitutes Control) of the outstanding voting securities or other ownership
interests of a Party; or (d) the resignation, removal appointment or election of
a majority of a Party's board of directors or management team within a six (6)
month period.
"CONFIDENTIAL INFORMATION" of PacifiCare Entities or Supplier means all
information and documentation of PacifiCare Entities and Supplier, respectively,
whether disclosed to or accessed by PacifiCare Entities or Supplier in
connection with this Agreement, including (a) with respect to PacifiCare
Entities, all PacifiCare Data and all information of PacifiCare Entities or
their respective customers, suppliers, contractors and other third parties doing
business with PacifiCare Entities, (b) with respect to PacifiCare Entities all
IIHI, PHI and all other data and information of or relating to patients, (c)
with respect to PacifiCare Entities and Supplier, the terms of this Agreement
and (d) any information developed by reference to or use of PacifiCare Entities'
or Supplier's Confidential Information; provided, however, that except to the
extent otherwise provided by Law, the term "Confidential Information" shall not
include information that (w) is already known by the recipient at the time of
disclosure (other than through unauthorized disclosure), as demonstrated by the
recipient's written records, and the recipient has no obligation of
confidentiality other than pursuant to this Agreement or any confidentiality
agreements between PacifiCare Entities and Supplier entered into before the
Effective Date, (x) is independently developed by the recipient, as demonstrated
by the recipient's written records, without violating the disclosing Party's
proprietary rights, (y) is or becomes publicly known (other than through
unauthorized disclosure) or (z) is rightfully received by a Party free of any
obligation of confidentiality.
"CONSENTS" means Back-End Consents and Front-End Consents, collectively.
"CONTRACT YEAR" means each twelve (12) month period commencing, in the
case of the first Contract Year, on the Cutover Date and thereafter upon the
completion of the immediately preceding Contract Year.
"CONTROL" means, with respect to any entity, the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such entity, whether through the ownership of voting securities (or
other ownership interest), by contract or otherwise.
"COVERED ENTITY" has the meaning given in 45 C.F.R. 160.103.
"CRITICAL SERVICES" means those services described as Critical Services in
Schedule 16.1.
"CUTOVER DATE" means [...***...]
"DATA SAFEGUARDS" has the meaning set forth in Section 10.3.
"DEFAULT CURE PERIOD" means the PacifiCare Default Cure Period or the
Supplier Default Cure Period, as applicable.
"DEFAULT NOTICE" means the PacifiCare Default Notice or the Supplier
Default Notice, as applicable.
"DEVELOPED SOFTWARE" means any Software, modifications or enhancements to
Software and Related Documentation developed pursuant or incident to this
Agreement by or on behalf of (a) Supplier, (b) Supplier Agents, (c) Supplier and
PacifiCare or PacifiCare Agents jointly, (d) Supplier Agents and PacifiCare
Entities or PacifiCare Entity Agents jointly or (e) Supplier, Supplier Agents,
PacifiCare and PacifiCare Entity Agents jointly.
"DISASTER RECOVERY PLAN" or "DRP" means the disaster recovery plan
described in Section 16.1.
"DISPUTE" has the meaning set forth in Section 23.1.
"DOMESTIC ADC" has the meaning set forth in Section 3.8(a)(ii)(1).
"EFFECTIVE DATE" means January 11, 2002.
"END DATE" has the meaning set forth in Section 26.3.
"END-USER" means a user of the Services, as specified by PacifiCare.
"EQUIPMENT" means computers and related equipment, including central
processing units and other processors, controllers, moderns, communications and
telecommunications equipment (voice, data and video), cables, storage devices,
printers, terminals, other peripherals and input and output devices, and other
tangible mechanical and electronic equipment intended for the
*CONFIDENTIAL TREATMENT REQUESTED
processing, input, output, storage, manipulation, communication, transmission
and retrieval of information and data.
"EXTENSION PERIOD" has the meaning set forth in Section 2.2(b).
"FEES" means the Base Fees, the Additional Resource Charges and any other
amounts payable by PacifiCare to Supplier pursuant to this Agreement.
"FORCE MAJEURE EVENT" means a force majeure event as defined in Section
16.2.
"FRONT-END CONSENTS" means all third party licenses, approvals, permits,
consents and authorizations that are necessary to allow: (i) Supplier and
Supplier Agents to use (1) PacifiCare Entities' owned and leased assets, (2) the
services provided for the benefit of PacifiCare Entities under PacifiCare's
third party services contracts (other than PacifiCare Third Party Contracts),
(3) the PacifiCare Software and PacifiCare Tools, (4) the Supplier Software and
Supplier Tools and (5) any assets owned or leased by Supplier and used to
provide the Services; (ii) PacifiCare to assign the Assigned Agreements to
Supplier pursuant to Section 7.1 and Supplier to manage and administer the
Managed Agreements pursuant to Section 7.2; (iii) Supplier and Supplier Agents
to use any third party services required by Supplier to provide the Services
during the Term and the Termination Assistance Period; and (iv) PacifiCare
Entities and PacifiCare Entity Agents to Use the Supplier Third Party Software
and Tools.
"GOVERNMENTAL AUTHORITY" means any Federal, state, municipal, local,
territorial, or other governmental department, regulatory authority, judicial or
administrative body, whether domestic, foreign or international.
"GOVERNMENTAL APPROVALS" means all PacifiCare Governmental Approvals and
Supplier Governmental Approvals.
"HIPAA" means the Health Care Insurance Portability and Accountability Act
of 1996, as amended and as may be further amended, including all rules and
regulations promulgated thereunder.
"INDIVIDUALLY IDENTIFIABLE HEALTH INFORMATION" or "IIHI" has the meaning
specified in Section 1171 of HIPAA.
"IMPROVED TECHNOLOGY" has the meaning set forth in Section 3.2.
"INDEMNIFIED PARTY" has the meaning set forth in Section 27.3.
"INDEMNIFYING PARTY" has the meaning set forth in Section 27.3.
"INFRASTRUCTURE AGREEMENT" means the agreement between PacifiCare and
Infrastructure Supplier that governs Infrastructure Supplier's provision of
information technology services to PacifiCare, and is dated as of December 31,
2001.
"INFRASTRUCTURE SERVICES" the services provided by Infrastructure Supplier
pursuant to the Infrastructure Agreement.
"INFRASTRUCTURE SUPPLIER" means International Business Machines
Corporation, a New York corporation with its principal place of business at
Xxxxx 000, Xxxxxx, Xxx Xxxx 00000.
"INITIAL TERM" means the initial term of this Agreement, as set forth in
Section 2.1.
"INITIAL TERM EXPIRATION DATE" has the meaning set forth in Section 2.1.
"INTEREST" has the meaning set forth in Schedule 17.
"KEY PERSONNEL" means the individuals and positions identified by
PacifiCare as Key Personnel in Schedule 12.2, as such schedule is updated from
time to time by the Parties , including the Supplier Client Relationship
Manager.
"LAW" means any applicable law, statute or other legislative enactment,
declaration, decree, directive, order, ordinance, regulation, rule or other
binding restriction of or by any Governmental Authority, including any Medical
Confidential Information Laws.
"LOSSES" means any and all damages, fines, penalties, deficiencies,
losses, liabilities (including settlements and judgments) and expenses
(including interest, court costs, reasonable fees and expenses of attorneys,
accountants and other experts and professionals or other reasonable fees and
expenses of litigation or other proceedings or of any claim, default or
assessment).
"MANAGED AGREEMENT INVOICE(S)" means any invoice submitted by third
parties in connection with the Managed Agreements.
"MANAGED AGREEMENTS" means all agreements to be retained by PacifiCare,
but managed by Supplier, including those listed in Schedule 7.2.
"MEASUREMENT TOOL" means [...***...], or any additional or replacement
measurement tool implemented by Supplier pursuant to the Change Control
Procedures, used in connection with Supplier's provision of Services.
"MEDICAL CONFIDENTIAL INFORMATION LAWS" means all Laws applicable to the
provision of healthcare services, including the HIPAA and all Laws governing
medical confidentiality, including disclosure of AIDS or human immunodeficiency
virus-related information.
"NEAR-SHORE ADC" has the meaning set forth in Section 3.8(a)(ii)(1).
"NEW SERVICES" means any service that is outside of the scope of the Base
Services.
"NEW SERVICES SERVICE LEVELS" means the service levels and standards for
the performance of any New Services.
"NEW SOFTWARE" means any Software obtained by Supplier on behalf of
PacifiCare, as requested by PacifiCare pursuant to Section 3.7.
*CONFIDENTIAL TREATMENT REQUESTED
"NEW TAXES" means any sales, use, gross reciepts, excise, value-added,
services, consumption, withholding or other taxes assessed on the provision of
any of the Services by a taxing authority of competent jurisdiction on or after
the Cutover Date.
"OFFSHORE ADC" has the meaning set forth in Section 3.8(a)(ii)(1).
"OPERATIONAL AGREEMENT" means the agreement between Supplier and
Infrastructure Supplier as set forth in Section 13.2(a).
"PACIFICARE AGENTS" means the agents, contractors and representatives of
PacifiCare, other than Supplier and Supplier Agents.
"PACIFICARE COMPETITOR" means any competitor of PacifiCare Entities set
forth or described in Schedule 12.6(a).
"PACIFICARE DATA" means (a) any data and information that is provided or
submitted to Supplier or Supplier Agents by or on behalf of PacifiCare Entities
or PacifiCare Entities' respective suppliers, clients or patients, (b) any data
and information that is obtained, generated, developed, collected, processed or
produced by Supplier or Supplier Agents in connection with this Agreement, (c)
any data and information to which Supplier or Supplier Agents have access in
connection with the provision of the Services and (d) any derivatives of
subsections (a)-(c) of this definition. PacifiCare Data includes reports,
service level data, patterns of service requirements and other data and
information with respect to the businesses, operations, facilities, suppliers,
clients, patients, products, services, assets and finances of PacifiCare
Entities, or their respective suppliers, clients or patients.
"PACIFICARE DEFAULT CURE PERIOD" has the meaning set forth in Section
24.3.
"PACIFICARE DEFAULT NOTICE" has the meaning set forth in Section 24.3.
"PACIFICARE ENTITIES" means PacifiCare and the PacifiCare Included
Affiliates, collectively.
"PACIFICARE ENTITY AGENTS" means agents, subcontractors and
representatives of PacifiCare Entities, other than Supplier and Supplier Agents.
"PACIFICARE ESTIMATED BASELINE REQUIREMENTS" has the meaning set forth in
Section 3.9(a)(i).
"PACIFICARE GOVERNMENTAL APPROVALS" has the meaning set forth in Section
3.3(a).
"PACIFICARE INCLUDED AFFILIATES" means any person, firm, corporation,
partnership, associate, or other entity that agrees to be bound by the terms of
this Agreement and who (a) now or in the future is Controlling, Controlled by or
under common Control with PacifiCare, (b) is managed or operated by PacifiCare,
(c) is owned through stock ownership or membership interest, in whole or in
part, by a shareholder or member of PacifiCare or (d) is listed on EXHIBIT C as
the same may be updated from time to time by PacifiCare.
"PACIFICARE PROPRIETARY SOFTWARE" means the Software set forth in Schedule
14.2(a), and Related Documentation, that is owned, acquired or developed by
PacifiCare and used in connection with the provision of the Services.
"PACIFICARE SERVICE LOCATION(S)" means any PacifiCare service location set
forth in Schedule 10.1 and any other service location owned or leased by
PacifiCare from which Supplier has been authorized by PacifiCare to provide the
Services.
"PACIFICARE SOFTWARE" means the PacifiCare Proprietary Software and the
PacifiCare Third Party Software.
"PACIFICARE SUPPLIER RELATIONSHIP MANAGER" has the meaning specified in
Section 6.1.
"PACIFICARE THIRD PARTY CONTRACTS" means the Managed Agreements and the
Assigned Agreements, collectively.
"PACIFICARE THIRD PARTY SOFTWARE" means the Software set forth in Schedule
14.2(b), and Related Documentation, that is licensed or leased to PacifiCare
from a third party and used in connection with the provision of the Services.
"PARTIES" means PacifiCare and Supplier, collectively.
"PARTY" means either PacifiCare or Supplier, as the case may be.
"PRIVILEGED WORK PRODUCT" has the meaning set forth in Section 20.3.
"POLICY & PROCEDURES MANUAL" means a listing of policies and procedures
that governs the delivery and receipt of the Services and that is based on the
outline set forth in Schedule 13.3.
"PROJECT STAFF" means the personnel of Supplier, including Transitioned
Personnel, and Supplier Agents who provide the Services.
"PROTECTED HEALTH INFORMATION" or "PHI" has the meaning given in 45 C.F.R.
164.501.
"REDUCED RESOURCE CREDITS" or "RRC" means the credits in the amounts equal
to the Additional Resource Charges specified in Schedule 17 for the use of
Services below the resource baselines set forth in Schedule 17.
"REGULATORY REQUIREMENTS" means the Laws to which PacifiCare Entities are
required to submit or voluntarily submit from time to time.
"RELATED DOCUMENTATION" means, with respect to Software, Equipment, and
Tools, all materials, documentation, specifications, technical manuals, user
manuals, flow diagrams, file descriptions and other written information that
describes the function and use of such Software or Tools, as applicable.
"SERVICE LEVEL CREDITS" means the performance credits set forth in
Schedule 8.
"SERVICE LEVELS" means the Base Service Levels and the New Services
Service Levels, collectively.
"SERVICE LOCATION(S)" means any PacifiCare Service Location or Supplier
Service Location, as applicable.
"SERVICES" means, collectively, the Base Services, the New Services being
provided by Supplier pursuant to this Agreement, and, during the Termination
Assistance Period, the Termination Assistance Services.
"SOFTWARE" means the source code and object code versions of any
applications programs, operating system software, computer software languages,
utilities, other computer programs and Related Documentation, in whatever form
or media, including the tangible media upon which such applications programs,
operating system software, computer software languages, utilities, other
computer programs and Related Documentation are recorded or printed, together
with all corrections, improvements, updates and releases thereof.
"STEERING COMMITTEE" has the meaning set forth in Section 13.1.
"SUPPLIER ADC" means a Supplier application development center.
"SUPPLIER AGENTS" means the agents, subcontractors and representatives of
Supplier.
"SUPPLIER CLIENT RELATIONSHIP MANAGER" has the meaning specified in
Section 12.1.
"SUPPLER COMPETITOR" means any competitor of Supplier set forth or
described in Schedule 12.6(b).
"SUPPLIER DEFAULT CURE PERIOD" means the Supplier default cure period
defined in Section 24.3.
"SUPPLIER DEFAULT NOTICE" means the means the Supplier default notice
defined in Section 24.4.
"SUPPLIER GOVERNMENTAL APPROVALS" has the meaning set forth in Section
3.3(a).
"SUPPLIER PROPRIETARY SOFTWARE" means the Software, including the Software
set forth in Schedule 14.3, and Related Documentation owned, acquired or
developed by or on behalf of Supplier, excluding in each case the Developed
Software, and used in connection with the Services or with any Supplier Software
or PacifiCare Software.
"SUPPLIER'S REPLY" has the meaning specified in Section 3.8(a)(ii).
"SUPPLIER SERVICE LOCATION(S)" means any Supplier service location set
forth in Schedule 10.1 and any other service location owned or leased by
Supplier from which Supplier has been authorized by PacifiCare to provide the
Services.
"SUPPLIER SOFTWARE" means the Supplier Proprietary Software and the
Supplier Third Party Software (excluding PacifiCare Software), collectively, of
which a current list is attached hereto as Schedule 14.3.
"SUPPLIER THIRD PARTY SOFTWARE" means the Software and Related
Documentation licensed, leased or otherwise obtained by Supplier from a third
party that is used in connection with the Services or with any Supplier Software
or PacifiCare Software.
"SYSTEMS" means the Software and the Equipment, collectively, used to
provide the Services.
"TERM" means the Initial Term and, if applicable, any Renewal Term or
Extension Period.
"TERMINATION ASSISTANCE PERIOD" has the meaning specified in Section
26.1(b).
"TERMINATION ASSISTANCE SERVICES" has the meaning specified in Section
26.1(a).
"TOOLS" means any Software development and performance testing tools, know
how, processes, technologies or algorithms and Related Documentation used by
Supplier in providing the Services.
"TRANSITION PERIOD" has the meaning specified in Section 4.1.
"TRANSITIONED PERSONNEL" has the meaning set forth in Section 11.
"TRANSITION PLAN" means the transition plan set forth in Schedule 4.1.
"TRANSITION SERVICES" has the meaning specified in Section 4.1.
"USE" means the right-to-load, execute, store, transmit, display, copy,
maintain, modify, enhance, create derivative works, make and have made.
"VARIABLE FEE REPORT" means the detailed invoice provided to PacifiCare by
Supplier on a monthly basis describing the Variable Fees incurred by PacifiCare
and Supplier during the preceding month.
"VARIABLE FEES" means the Additional Resource Charges and the Reduced
Resource Credits, collectively.
"WEB CONTENT" shall have the meaning specified in Section 14.6.
"WORK PRODUCT" means any literary work or other work of authorship created
under this Agreement, including the Policy & Procedures Manual, other manuals,
application training materials and documentation, but excluding Software and
Related Documentation.
TABLE OF EXHIBITS AND SCHEDULES
Exhibit A Definitions
Exhibit B Statement of Work
Exhibit C PacifiCare Included Affiliates
Schedule 3.1(b)(i) Affected Contractors
Schedule 3.1(b)(ii) Affected Employees
Schedule 3.5 Technical Architecture Governance Document
Schedule 3.8(b) Reports
Schedule 4.1 Transition Plan
Schedule 4.2 Critical Transition Milestones
Schedule 6.3(a) Facilities Space Requirements and Rules & Regulations
Schedule 7.1 Assigned Agreements
Schedule 7.2 Managed Agreements
Schedule 8 Service Level Agreement
Schedule 9.2(a) Approved Benchmark Providers
Schedule 10.1 Service Locations
Schedule 10.2 Safety and Security Procedures
Schedule 11 Human Resources Provisions
Schedule 12.2 Key Personnel
Schedule 12.4(e) Approved Subcontractors for Xxxxx
Schedule 12.6(a) PacifiCare Competitors
Schedule 12.6(b) Supplier Competitors
Schedule 13.2 Oversight and Management Process
Schedule 13.3 Policy & Procedures Manual
Schedule 14.2(a) PacifiCare Proprietary Software
Schedule 14.2(b) PacifiCare Third Party Software
Schedule 14.3 Supplier Software
Schedule 16.1 Critical Services
Schedule 17 Charges Schedule
Schedule 19.1 Form of Nondisclosure Agreement
Schedule 19.4 PacifiCare Records Retention Policies
Schedule 24.4 Failure to Provide Critical Services
PACIFICARE CONFIDENTIAL
SERVICES AGREEMENT BETWEEN PACIFICARE AND XXXXX
EXHIBIT B
--------------------------------------------------------------------------------
STATEMENT OF WORK
--------------------------------------------------------------------------------
PACIFICARE(R)
INFORMATION SERVICES
PACIFICARE CONFIDENTIAL
I. GENERAL PROVISIONS..................................................................................... 1
A. General....................................................................................... 1
B. Attachments................................................................................... 1
C. Definitions................................................................................... 1
D. Business Terms................................................................................ 1
E. PacifiCare Resource Pool...................................................................... 1
F. Account Approach.............................................................................. 2
G. Scope of Services............................................................................. 2
H. Assumptions................................................................................... 2
II. APPLICATIONS, PROJECT, APPLICATION MAINTENANCE AND CUSTOMER SUPPORT - SERVICE DESCRIPTIONS............. 4
A. Projects...................................................................................... 4
B. Applications Maintenance...................................................................... 4
1. Correction........................................................................... 4
2. Preventive Maintenance............................................................... 6
3. Customer Support..................................................................... 6
4. Other Services....................................................................... 6
5. Infrastructure Support............................................................... 7
III. SUPPLIER'S APPROACH TO PROJECT SERVICE REQUIREMENTS.................................................... 8
A. General Services.............................................................................. 8
B. Management of the Integration of Retained Systems with Outsourced Systems:.................... 8
C. Development Services:......................................................................... 9
1. Project, Customer Support and Application Maintenance Services....................... 9
2. Database Services:................................................................... 9
3. Development and Testing Environments:................................................ 10
D. Oversight of Application Change Management:................................................... 10
E. Testing:...................................................................................... 10
F. Software Quality Assurance Program:........................................................... 10
G. Release Management:........................................................................... 11
H. Production Control, Monitoring and Scheduling:................................................ 12
I. Application Documentation:.................................................................... 12
J. Training and Education:....................................................................... 12
K. Data Security:................................................................................ 13
L. Retained Data:................................................................................ 13
PACIFICARE CONFIDENTIAL
M. Data Interfaces:.............................................................................. 13
N. Logical Database Administration:.............................................................. 13
O. Transition to Production:..................................................................... 14
P. Architecture and Standards:................................................................... 14
Q. Software Development Methodology, Tools and Practices:........................................ 14
R. Problem Management:........................................................................... 14
S. Help Desk:.................................................................................... 15
T. Project Management:........................................................................... 15
U. Capacity Planning and Configuration Management:............................................... 16
V. Application Response Time Measurement and Analysis............................................ 16
W. Crisis Management:............................................................................ 17
X. Continuity of Business Services:.............................................................. 17
Y. License Management and Compliance:............................................................ 18
Z. Asset Management:............................................................................. 18
AA. Systems Administration, Development Lab:...................................................... 19
IV. CROSS FUNCTIONAL SERVICES.............................................................................. 20
A. New Technology and Automation:................................................................ 20
B. Logical Security Administration:.............................................................. 20
C. On-going Business Divestitures and Acquisitions:.............................................. 23
D. Long-range Information Systems Plan and Equipment/Software Architecture:...................... 23
V. DEFINITION OF TERMS USED IN STATEMENT OF WORK:......................................................... 24
ATTACHMENT A SUPPLIER WORK PRODUCT FUNCTIONAL DESCRIPTION MATRIX............................................... 27
ATTACHMENT B SOFTWARE DEVELOPMENT METHODOLOGY ROLES AND RESPONSIBILITIES....................................... 30
ATTACHMENT C PACIFICARE PRIORITIZATION AND GOVERNANCE AND SERVICE REQUEST PROCESSES............................ 36
PACIFICARE CONFIDENTIAL
STATEMENT OF WORK
I. GENERAL PROVISIONS:
A. GENERAL:
This Exhibit B to the Agreement, including all attachments hereto,
("STATEMENT OF WORK" or "SOW") describes specific Services, functions and
responsibilities of Supplier in the areas of (a) Applications Maintenance,
(b) Project, (c) Customer Support and (d) Cross Functional Services
support for PacifiCare (the "PROJECT, CUSTOMER SUPPORT AND APPLICATION
MAINTENANCE SERVICES"). For the purposes of this SOW, references to
"PacifiCare" shall mean "PacifiCare Entities." Supplier shall provide the
Services set forth in this Statement of Work as they may evolve during the
Term and the Termination Assistance Period. In the event of any
inconsistency, ambiguity or conflict, the terms and conditions of the
Agreement shall govern unless specifically superseded in this Statement of
Work.
B. ATTACHMENTS:
The following Attachments to this Statement of Work provide supporting
details and are referenced in this Statement of Work:
a. Attachment A Supplier Work Product Functional Description Matrix;
b. Attachment B Software Development Methodology Roles and
Responsibilities; and
c. Attachment C PacifiCare Prioritization and Governance and Service
Request Processes.
C. DEFINITIONS:
Capitalized terms used herein shall have the meanings provided in the
Agreement, and, for capitalized terms not defined in the Agreement, such
capitalized terms shall have the applicable meanings set forth herein or
in other schedules, exhibits or attachments to the Agreement, as
applicable.
D. BUSINESS TERMS:
Beginning on the Cutover Date, Supplier shall provide the services
described herein, including the FTPs defined in Schedule 17, as part of
the Base Services. Attachment A to this Statement of Work contains
additional details of PacifiCare and Supplier work responsibilities. All
Supplier tasks described within this Statement of Work shall be included
in the Resource Baseline set forth in Schedule 17 of the Agreement.
E. PACIFICARE RESOURCE POOL:
Supplier shall manage the Project Staff and any other staff responsible
for the Services so that an individual's unavailability due to holidays,
vacation or sick time shall not degrade Supplier's provision of the
Services. Supplier shall prepare reports on the basis agreed upon by the
Parties in the Policy and Procedures Manual and as otherwise provided in
Schedule 3.8(b) or elsewhere in the Agreement detailing the work efforts
by project or work activities with sufficient detail to identify the hours
and activities directly associated with PacifiCare-related work. Supplier
shall
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require all personnel to track their respective daily time entries into
the ABT tool (time keeping system) or an alternative method approved by
PacifiCare.
F. ACCOUNT APPROACH:
Supplier shall provide the Services set forth in this Statement of Work
through the implementation of several key disciplines, processes and
organizational elements including:
a. Establishment of a project office to manage consistency of
project disciplines across the Applications and to establish,
implement and monitor project accountabilities using
Supplier's methodology (in alignment with PacifiCare's SDM
process as described in Attachment B of this Statement of
Work);
b. Resource allocation as necessary to support PacifiCare's
identified business objectives and as approved or directed by
PacifiCare;
c. Implementation of performance and quality management practices
as set forth by the Parties during the Transition Period in an
approach for providing reports to enable PacifiCare to confirm
that resources are appropriately concentrated on PacifiCare
initiatives;
d. Access to specialized skill sets to assist PacifiCare in
meeting its development needs; and
e. Provide for additional resources as requested by PacifiCare in
accordance with the Agreement and the terms described in
Schedule 17.
To objectively monitor and measure the effective use of processes and
deployment of resources in support of PacifiCare's identified business
objectives, Supplier shall comply with Schedule 8 to the Agreement
(Service Level Agreement).
G. SCOPE OF SERVICES:
Supplier shall provide support functions required for performing the
Services, functions and responsibilities described in this Statement of
Work and in the Agreement.
The scope of Project, Customer Support and Application Maintenance
Services is as follows:
a. Application Maintenance and support of the Applications;
b. Application Projects; and
c. Customer Support of the Applications.
H. ASSUMPTIONS:
Services shall be governed following PacifiCare's current processes and
procedures, including PacifiCare's change management procedure, until such
date as the Policy and Procedures Manual described in Section 13.3 of the
Agreement is in effect, in which case the Services shall be governed by
the processes and procedures described in the Policy and Procedures
Manual.
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Supplier shall deliver Services using Supplier's methodologies and
procedures, called Suppliers Application Management Methodology (the
"AMM").
Supplier acknowledges that regardless of any tests or other procedures
performed by PacifiCare or any other PacifiCare organization on the
Applications, Supplier shall remain responsible for the performance of,
and for correcting any errors in, such Applications (regardless of whether
such performance issues or errors are discovered during such tests or
other procedures) and for meeting all Service Levels as described in
Schedule 8 to the Agreement.
PacifiCare may retire, replace or add Applications throughout the Term and
Termination Assistance Period.
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II. APPLICATIONS, PROJECT, APPLICATION MAINTENANCE AND CUSTOMER SUPPORT -
SERVICE DESCRIPTIONS:
A. PROJECTS
In order to implement, to develop and to enhance Applications as required
and necessary to accommodate the evolution of PacifiCare's environments
and business requirements, Supplier shall develop, test and introduce
changes to the Applications that modify or add functionality to existing
Applications and/or New Development ("PROJECT SERVICES"). Project Services
shall be performed in accordance with the activities as set forth in the
project requirements as set forth in Attachment A hereto. Project Services
that require more than [...***...] of work to perform shall be performed
as major projects ("MAJOR PROJECTS") and shall be performed according to
the requirements for Major Projects as set forth in Attachment A. Project
Services that require [...***...] of work or less to perform shall be
performed as minor projects ("MINOR PROJECTS") and shall be performed
according to the requirements for Minor Projects as set forth in
Attachment A. All Project Services must be approved in accordance with the
PacifiCare Prioritization and Governance and Service Request Processes.
Supplier shall provide Project Services initiatives within the FTP
authorized by PacifiCare through the PacifiCare Prioritization and
Governance and Service Request Process and Supplier shall perform all
Project Services according to the schedules established for individual
projects in accordance with the PacifiCare Prioritization and Governance
and Service Request Process.
Supplier shall complete all Projects which are in progress as of the
Cutover Date. Supplier shall complete these projects within the PacifiCare
authorized FTPs and schedules. Supplier shall verify the FTP estimates and
schedules associated with such projects during the Transition Period and
report to PacifiCare any discrepancies. Such projects shall be measured
from the Cutover Date. For Projects that are not on schedule as of the
Cutover Date, Supplier and PacifiCare shall agree on new FTP estimates and
schedules for such Projects.
Supplier shall be responsible for End-User training on System Projects,
modifications and new features to the Applications as described in the
Training and Education section of this Statement of Work.
B. APPLICATIONS MAINTENANCE:
The Application Maintenance services to be provided by Supplier include
[...***...]. Supplier shall have the discretion to utilize the portion of
the budget allocated for Application Maintenance to perform the
Application Maintenance services.
1. CORRECTION:
Correction of production errors requires timely repair of
Application code and operational modifications. Production errors
include Severity Level 0, 1, 2 and 3 production problems that result
in Application failures or non-conformance to the Application
specifications. Application Maintenance requests are approved in
accordance with current PacifiCare procedures until such date as
such provisions are incorporated into the Policy and Procedures
Manual.
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For purposes of this Statement of Work, "ERROR CORRECTION" means the
correction of any failure or error that results in non-conformance
of an Application with applicable written baseline specifications.
Supplier shall be responsible for resolution of all Application
Maintenance problems that require either code or operational
modifications (or both) as a result of Error Correction.
With respect to PacifiCare Third Party Software, Supplier shall:
a. Identify Application problems;
b. Notify the applicable vendor;
c. Arrange for corrections to be made;
d. Coordinate the corrections;
e. Test the corrections - including the End-User acceptance test,
as necessary;
f. Schedule the installation of the corrections into production;
and
g. Submit the change to production.
Supplier shall report Application problems in accordance with
PacifiCare's problem management process for each Application, until
such time as these procedures are set forth in the Policy and
Procedures Manual.
Supplier shall manage, resolve and escalate, as required, reported
problems for the Applications.
[...***...]
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2. PREVENTIVE MAINTENANCE:
Supplier shall provide preventive Application Maintenance services,
including monitoring production processing and results, application
tuning, code restructuring and other efforts usually undertaken to
improve the efficiency and reliability of Software ("PREVENTIVE
MAINTENANCE").
Supplier shall recommend for PacifiCare's approval any Preventive
Maintenance that exceeds the Preventative Maintenance that can be
accomplished within the portion of the budget allocated for
Application Maintenance. Such Preventive Maintenance support efforts
are subject to the PacifiCare Prioritization and Governance and
Service Request Processes.
Preventive Maintenance is performed to improve the efficiency and
reliability of the Application and to help minimize ongoing
Application Maintenance requirements, improve performance and
prevent errors. Supplier shall monitor and analyze trends to
identify potential problems and implement Preventative Maintenance
to avoid and minimize such problems. PacifiCare may request
Preventive Maintenance. [...***...] Supplier and Infrastructure
Supplier shall evaluate and report the impact in terms of ARCs and
RRCs to PacifiCare.
3. CUSTOMER SUPPORT
Supplier shall provide Customer Support for End-Users.
Requests for Customer Support may be initiated from the End-User
community or special business requests.
Supplier shall provide support, advice and assistance to End-Users
in a manner consistent with PacifiCare practices prior to the
Cutover Date. In addition, Supplier shall address requests that
require immediate action, including [...***...] in accordance with
the Change Management Procedures.
4. OTHER SERVICES
Supplier shall:
[...***...]
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[...***...]
5. INFRASTRUCTURE SUPPORT
All Equipment and Software conversions or refreshes or
technology-mandated changes to support existing Services are
categorized as Project Services. Supplier shall maintain a current
Application environment in accordance with this Statement of Work.
Supplier shall assess the need for upgrades to PacifiCare Third
Party Software to maintain such Software within one (1) generation
of currency and shall provide such assessment to PacifiCare for
PacifiCare's approval. Supplier shall maintain all PacifiCare Third
Party Software upgrades approved by PacifiCare. Certain Application
changes shall require expedited implementation; for example, changes
to include new clinical codes mandated by a regulatory change must
be implemented as quickly as possible following the update by the
regulatory body. These changes shall be identified, pre-approved by
PacifiCare and documented in the Policy and Procedures Manual.
Supplier shall perform all Application modification including test
plan development, testing and Acceptance Testing needed to maintain
this degree of currency. In conformance to the applicable Project
plan and test plan, End-Users shall approve the Application testing,
as necessary, to ensure that End-User functionality is maintained.
Infrastructure support efforts are subject to the PacifiCare
Prioritization and Governance and Service Request Processes.
Prior to the start of each calendar quarter, Supplier shall provide
to PacifiCare all planned Software for the upcoming quarter.
Supplier shall fully test any new release of System Software before
installing it for production use. Supplier shall coordinate with
Infrastructure Supplier to fully test operating Systems Software for
PacifiCare and perform coordination in accordance with the Change
Management Procedure and the Test Plan (described in Schedule 13.3)
for each Software modification.
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III. SUPPLIER'S APPROACH TO PROJECT SERVICE REQUIREMENTS
A. GENERAL SERVICES:
Supplier shall identify opportunities to provide cost-effective support
(including Application Maintenance, Customer Support and Project support)
for the Applications.
Supplier shall assist PacifiCare in developing high-level and long-range
architecture migration plans for existing Applications and for any new
and/or future Applications that may be added to Supplier's scope as New
Services.
Supplier representatives shall meet with representatives of PacifiCare as
necessary and appropriate to manage and deliver the Services effectively.
Supplier shall support and participate in the various account management
committees called for by the Agreement and the procedures adopted by the
Parties to charter each such committee. Supplier shall participate in
related PacifiCare business and technology planning meetings upon request
to review operations and business plans and recommend appropriate
information technology services to support plan execution.
Supplier shall maintain appropriate levels of industry knowledge in
PacifiCare's business through, among other activities, participation in
industry meetings, forums and conferences.
B. MANAGEMENT OF THE INTEGRATION OF RETAINED SYSTEMS WITH OUTSOURCED SYSTEMS:
Supplier shall provide appropriately skilled resources to support
PacifiCare's business planning and strategic planning process, based upon
PacifiCare's identified business requirements.
Supplier shall provide resources to support integrated projects for
PacifiCare retained Applications as directed and scheduled by PacifiCare
for:
[...***...]
Supplier shall follow identified PacifiCare guidelines, where they exist
within the Applications, for program turnover and acceptance.
Supplier shall implement standard project reviews for all Projects as
defined within each of the Applications' project plans and in accordance
with Supplier's standards.
Supplier shall recommend, with PacifiCare's approval, relevant technical
architecture that is in compliance with PacifiCare's technical
architecture.
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Supplier shall provide access to performance data, project management
information, project plans and status, cost estimates and information and
service level performance in accordance with Service Levels specified in
Schedule 8 of the Agreement.
C. DEVELOPMENT SERVICES:
1. PROJECT, CUSTOMER SUPPORT AND APPLICATION MAINTENANCE SERVICES
Supplier shall be responsible for performing services that support
the functions and services performed as part of the Project,
Customer Support and Application Maintenance Services, which support
shall increase the efficiency and productivity of the Project,
Customer Support and Application Maintenance Services and provide a
single control point for the Project, Customer Support and
Application Maintenance Services to insure that common standards and
methodologies for Project, Customer Support and Application
Maintenance Services are addressed and followed by personnel
performing the Project, Customer Support and Application Maintenance
Services ("DEVELOPMENT SERVICES"). Supplier's responsibilities with
respect to Development Services shall include the following:
a. Administering the development and test environments for the
Project, Customer Support and Application Maintenance
Services, including administering and controlling access to
the development and test environment; and
b. Managing the development environment and Systems in
conjunction with the Infrastructure Supplier to ensure
efficient use, including ensuring that appropriate versions of
Software and code are being used, that the Systems are
available for use and providing first-level trouble shooting
for any problems with the Systems with respect to use for
Project, Customer Support and Application Maintenance
Services.
2. DATABASE SERVICES:
With respect to Supplier's database setup and Application
Maintenance functions, Supplier's responsibilities shall include the
following:
[...***...]
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[...***...]
3. DEVELOPMENT AND TESTING ENVIRONMENTS:
With respect to establishing development/testing environments,
Supplier's responsibilities shall include the following:
a. Determine the requirements for the development/testing
environment;
b. Build and establish test environments in conjunction with the
Infrastructure Supplier; and
c. Administer the restoration of database required files required
to support the development/testing environment.
D. OVERSIGHT OF APPLICATION CHANGE MANAGEMENT:
Provide oversight for change management for Project, Customer Support and
Application Maintenance Services (as set forth in the Change Management
Procedure portion of the Policy and Procedures Manual) and report to
PacifiCare on compliance with the Change Management Procedures.
Supplier shall coordinate the transfer of all changes into the production
environment to achieve continuity of operations, including risk
assessment, communication of all scheduled changes to PacifiCare and the
Infrastructure Supplier, back-out plans and contingencies.
Supplier shall participate in the existing change management meetings with
representatives of PacifiCare to identify impacts of and to coordinate
changes to the Systems. Where the forums do not exist, Supplier shall
conduct regular change management meetings with representatives of
PacifiCare to identify the impacts of and to coordinate changes to the
Systems.
E. TESTING:
Supplier shall provide testing including unit, System, integration,
performance, load, stress and regression testing, as required by the
Project plan, and, as appropriate, to the scale of the PacifiCare
authorized work as determined by the PacifiCare Prioritization and
Governance and Service Request Process. Test plans shall document test
cases and expected results. This phase shall include testing of input and
output interfaces. All Applications shall be production ready upon
completion of the System test plan.
End-User acceptance test results shall be used by Supplier to validate
project deliverables. Software comprising the Applications shall be
production quality at the conclusion of the End-User acceptance test.
F. SOFTWARE QUALITY ASSURANCE PROGRAM:
Supplier and PacifiCare shall establish a quality assurance program to
apply to the Application Maintenance, Projects, management activities and
products at a level consistent with best industry standards and practices.
Supplier shall continuously improve the products and processes. In this
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regard, Supplier shall use process maturity and process assessment
concepts at CMM Level 3 within the timeframe established by the Service
Level Schedule to the Agreement.
As part of the quality assurance program, Supplier shall implement a
delivery assurance process that includes reviews at key milestones,
including design completion and code completion. Supplier shall ensure
compliance with Supplier's established quality assurance procedures
through such methods as quality audits.
G. RELEASE MANAGEMENT:
Supplier shall support PacifiCare's process for priority setting, planning
and scheduling of Application releases. Supplier shall assume full
responsibility for release packaging and project commitments for the
Applications. Supplier shall support the feasibility sub-processes of
concept proposal and definition.
When implementing changes, upgrades or Projects to the Application
environment, Supplier shall observe the Change Management Procedure and
shall perform installation planning, product installation, testing and
verification. In addition, for any Software changes, upgrades or Projects
proposed to PacifiCare, Supplier shall advise PacifiCare and
Infrastructure Supplier of any additional Equipment, LAN or environmental
requirements, which are observed during integration testing and/or are
otherwise known to be necessary for implementation of the changes,
upgrades or Projects.
Supplier shall provide the necessary interfaces during the development
testing and implementation phases.
Supplier shall monitor the release schedule and report all schedule
exceptions to PacifiCare.
Supplier shall coordinate the transfer of all changes into the production
environment to ensure continuity of operations, including risk assessment,
communication of all scheduled changes to PacifiCare and Infrastructure
Supplier, back-out plans and contingencies.
As requested by PacifiCare, Supplier shall support, in conjunction with
the Infrastructure Supplier, the installation of department or End-User
specific Software in accordance with the Change Management Procedures.
Supplier shall report to PacifiCare the installation of such Software on a
monthly basis.
Should Supplier be made aware of problems that have not been corrected in
the Software release, or if Supplier has reason to believe that the
Software release could adversely affect PacifiCare's or Supplier's ability
to meet Service Level targets, Supplier shall notify PacifiCare of the
concern and work with PacifiCare to provide an appropriate course of
action, regardless of whether it fell within the window of installation as
requested. This shall also include problems that are encountered during
System and integration testing.
Prior to the start of each calendar quarter, Supplier shall provide to
PacifiCare all planned releases for the upcoming quarter. Supplier shall
fully test any new release of System Software before installing it for
production use.
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H. PRODUCTION CONTROL, MONITORING AND SCHEDULING:
Supplier has responsibility for the integrity of the production output to
include quality output and appropriate data results.
Supplier shall coordinate with Infrastructure Supplier to define and
support production schedules based on PacifiCare's requirements. Supplier
shall use the existing PacifiCare production scheduling procedures until
such time as Supplier's procedures are in place.
Supplier shall coordinate with Infrastructure Supplier to determine and
support specific production schedules within the context of PacifiCare
approved release. Supplier shall support the integration of these specific
release schedules into the data center and distributed computing
production and control scheduling functions.
Supplier shall create and maintain a list of jobs to be monitored and a
list of PacifiCare contact names and phone numbers for each job, defining
the conditions under which Supplier shall notify PacifiCare and document
actions to be taken in the event an abnormal condition arises. This
includes the development and Application Maintenance of
application-automated tools.
Supplier shall review production control reports, indicators and complete
data integrity checks to ensure expected results. Supplier shall perform
escalation procedures for the Applications to ensure resolution of
production problems as required by the Severity Levels.
I. APPLICATION DOCUMENTATION:
Supplier shall maintain Application related procedures and Related
Documentation unless it is agreed by the Parties not to do so. All
Applications produced by Supplier shall be documented in form and content
and consistent with that required by the CMM Level 3 practices.
Supplier shall provide business analysts to develop and document business
requirements for PacifiCare and its business units as budgeted and
required by PacifiCare.
Supplier shall produce System requirements and detailed design for each
New Development or Project as required by the current PacifiCare
development process.
Supplier shall develop and maintain all Related Documentation and
reference manuals for the Applications.
Supplier shall provide documentation of database administration
requirements and data definition as required.
During the Transition Period, Supplier shall review the results of the
Related Documentation assessment with PacifiCare and Supplier shall update
the Related Documentation based on the approved results of the assessment.
J. TRAINING AND EDUCATION:
Without limiting or altering any of Supplier's obligations set forth in
the Agreement, Supplier shall:
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[...***...]
K. DATA SECURITY:
In accordance with Section 10.2 of the Agreement, Supplier shall comply
with PacifiCare's Safety and Security Procedures. Supplier shall
demonstrate compliance with Information Security policies, procedures and
standards where applicable. Supplier shall monitor these policies and keep
PacifiCare informed of any recommended improvements in industry standards
or in PacifiCare's internal policies.
Supplier shall continuously review and refine data retention policies and
practices to allow for compliance with external regulatory requirements
identified by PacifiCare and PacifiCare data retention policies as
approved by PacifiCare.
L. RETAINED DATA:
For any data, including PacifiCare Data, that shall be retained as
required by law, by the order of a court or similar judicial or
administrative body, pursuant to a settlement agreement, finding of a
court, arbitrator or mediator, in preparation for or use in a matter
relating to litigation or upon the request of PacifiCare, Supplier shall
identify the Application that processes the relevant data and the relevant
output files for the data and shall increase the retention period for such
output files to comply with the applicable retention requirement.
M. DATA INTERFACES:
Supplier shall manage any changes to Application interfaces, data
definition or content affecting out-of-scope PacifiCare Systems. These
changes shall be approved by PacifiCare in accordance with the PacifiCare
Prioritization and Governance and Service Request Process prior to
implementation.
Supplier shall maintain and update Application data interfaces unless
PacifiCare agrees that an interface may be removed. Changes or additions
to interfaces that are initiated by parties other than Supplier shall be
prioritized and approved by PacifiCare in accordance with the Change
Management Procedures.
N. LOGICAL DATABASE ADMINISTRATION:
Supplier shall perform logical database administration ("DATABASE
ADMINISTRATION" or "DBA") for the Applications, including documentation
requirements, data definition data administration and metadata management.
Supplier shall maintain the data dictionary System, assist in design
considerations, periodically review the database activity in conjunction
with the Infrastructure
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[...***...]
O. TRANSITION TO PRODUCTION:
In conjunction with the Infrastructure Supplier and following the Change
Management Procedures, Supplier shall support implementation and
installation of the appropriate technical, environment and data
requirements to ensure a smooth migration of the new/enhanced System to
production and to provide a basis for project closure. This includes
supporting the migration of Application changes to production, including
setting up production processes in the scheduler tools, converting code to
production and monitoring production processes for the first month.
Supplier shall provide operations documentation to the Infrastructure
Supplier, perform final training and perform database and file conversions
as necessary.
P. ARCHITECTURE AND STANDARDS:
Supplier's deliverables shall conform to the current PacifiCare Technical
Architecture and Product Standards Procedures set forth in Schedule 3.5 of
the Agreement and as set forth in the Agreement. Supplier may request
exceptions as set forth in PacifiCare's defined process and PacifiCare may
or may not grant such requests for exceptions.
Q. SOFTWARE DEVELOPMENT METHODOLOGY, TOOLS AND PRACTICES:
Supplier shall implement Supplier's preferred methodology. Supplier shall
provide linkage to PacifiCare processes and provide for walk-through
reviews of changes and Projects as required by the Change Management
Procedures.
R. PROBLEM MANAGEMENT:
Supplier shall support existing PacifiCare problem management processes
until such time as the Policy and Procedures Manual is completed. Supplier
shall escalate problems and coordinate support groups as needed until
problems are resolved for the Applications.
Supplier shall implement, in collaboration with the Infrastructure
Supplier, a process for problem identification and management. The process
shall include:
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a. Key process metrics for establishing problem ownership, root
cause analysis, resolution and corrective action; and
b. Notification, escalation and closure-reporting procedures.
Supplier shall identify preventive measures and corrective actions and
conduct appropriate risk assessments in order to resolve problems for the
Applications.
S. HELP DESK:
Infrastructure Supplier's help desk solution for PacifiCare results in a
single-point-of-contact (SPOC) for all End-User Service Requests.
End-Users shall submit Service Requests to the Help Desk including by
placing a call to the Infrastructure Supplier-provided 1-800 number (for
non-international calls), by submitting a Service Request ticket via
Infrastructure Supplier's Web-based tool interface into the help desk or
by submitting an e-mail if the primary avenues are unavailable.
Supplier shall provide resources required to provide Application support
and assistance to the Infrastructure Supplier and End-Users in a manner
consistent with current practices, including providing the training and
Related Documentation to the Infrastructure Supplier necessary for the
Infrastructure Supplier to provide Xxxxx 0 Xxxx Xxxx support. Supplier
shall provide Level 2 Help Desk support for The Applications. Both Level 1
Help Desk support and Level 2 Help Desk support collectively and
individually, as applicable, shall be referred to as "HELP DESK SUPPORT."
Supplier shall provide clearly defined points of contact, available
24-hours-a-day, seven-days-a-week, to receive and appropriately respond to
Service Request notifications from the Infrastructure Supplier Help Desk.
Supplier shall inform the Infrastructure Supplier or applicable PacifiCare
party, of the estimated time Supplier requires to resolve the Service
Request at the time Supplier is notified thereof based on guidelines
within the applicable production Severity Level.
Supplier shall provide status updates during Service Request resolution as
defined, with the existing escalation procedures.
T. PROJECT MANAGEMENT:
Supplier shall perform project management functions, including planning,
organizing, monitoring and controlling of Software resources,
functionality and quality of project activities for all Applications.
Supplier shall coordinate with appropriate PacifiCare personnel or third
party vendors as needed to perform project management functions and
responsibilities. Supplier shall facilitate communication and coordination
among parties relative to the Services.
Supplier shall provide appropriately skilled resources to participate in
the resolution of issues that cross Systems and between retained
application Software and the Applications.
Supplier shall establish detailed project plans as appropriate based upon
the Policy and Procedures Manual and Supplier's AMM processes, which
include: project scope, Equipment, Software and network selections,
project acceptance criteria, project risk, constraints and
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migration plan, implementation and migration plans, project plan (with
dates, milestones, resources), description of deliverables, development,
support and Application Maintenance costs and developing and/or assisting
PacifiCare in developing business benefits and ROI.
Supplier shall provide project control information, including time
tracking, issue tracking, Change Management Procedures and status as
defined in the Policy and Procedures Manual.
Supplier shall be responsible for the support and maintenance of the time
accounting Software [...***...].
Supplier shall provide adhoc reporting on an as needed basis, but at a
minimum shall provide [...***...] of effort per year. PacifiCare shall
retain ownership of the data and shall have access to it.
PacifiCare shall be responsible for the licensing of the time accounting
application Software.
U. CAPACITY PLANNING AND CONFIGURATION MANAGEMENT:
Supplier shall support Infrastructure Supplier with capacity planning and
configuration management.
Supplier shall identify to PacifiCare opportunities for collaboration with
the Infrastructure Supplier to help maximize capacity utilization and
configuration management.
[...***...]
V. APPLICATION RESPONSE TIME MEASUREMENT AND ANALYSIS
Supplier shall support Infrastructure Supplier with Application response
time measurement and analysis.
Supplier shall identify to PacifiCare opportunities for collaboration with
the Infrastructure Supplier to help improve response time.
In conjunction with the Infrastructure Supplier, Supplier shall:
[...***...]
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[...***...]
W. CRISIS MANAGEMENT:
Supplier shall provide increased support to address any crisis or
emergency problem as approved by and funded by PacifiCare.
Supplier understands that emergency support includes those things
reasonably critical to End-Users or to provide critical support to the
Infrastructure Supplier or to PacifiCare's information technology
organization to comply with immediate and critical business directives of
PacifiCare senior management.
X. CONTINUITY OF BUSINESS SERVICES:
Supplier shall assist in maintaining and upgrading existing PacifiCare
procedures to support disaster recovery of the Applications and shall
perform Disaster Recovery testing as stated in the Agreement, section 16.1
and in Schedule 8. Other specific Supplier responsibilities include:
Continuously review and refine retention policies and practices to comply
with outside regulators' changes as provided to Supplier by PacifiCare in
accordance with Section 3.3(b) of the Agreement;
Identifying Equipment inventory, which simulates the production
environment in support of the Applications and providing required data to
secure capital budget for updated recovery site configuration; and
Provide operational and technical management support for Disaster Recovery
planning, testing and execution in crisis situations. Supplier is
responsible for training personnel in Disaster Recovery procedures and
providing access to these procedures in a crisis situation. Supplier shall
also be responsible for making sure all contingency policies and
procedures comply with PacifiCare standards and are current with no
exceptions. Other Supplier responsibilities include:
Identifying and training resources required to implement the
Disaster Recovery Plan upon the occurrence of a disaster;
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Develop and maintain Application recovery plans;
Assisting in the set-up and performance of Application recovery
testing as required for compliance with the Disaster Recovery Plan
and the Business Continuity Plan;
Perform Disaster Recovery testing as stated in the Agreement,
section 16.1 and in Schedule 8. Supplier shall also be responsible
to conduct testing of those plans and shall retest within ninety
(90) days if any disaster simulation(s) fail to achieve specified
results due to Supplier's failure to perform its responsibilities.
If the DRP testing encounters errors, Supplier shall develop
procedures and retest as necessary to resolve such errors and update
the DRP as necessary;
Report and review with PacifiCare disaster test results;
Maintain Disaster Recovery procedures manuals;
Implement the Disaster Recovery Plan upon the occurrence of a
disaster; and
In conjunction with the Infrastructure Supplier, identify single
points of failure.
Y. LICENSE MANAGEMENT AND COMPLIANCE:
Supplier shall monitor, audit and advise PacifiCare concerning Software
license compliance. Supplier is responsible for providing Software for
Supplier-provided Applications development tools. Supplier shall be
responsible to acquire the correct number of the foregoing licenses to be
compliant. PacifiCare shall be responsible to acquire the appropriate
number of Software licenses used for Applications and for third-party
End-User tools. Supplier shall advise PacifiCare of the number of users
that Supplier has become aware are using the licenses for which PacifiCare
is responsible and Supplier shall notify PacifiCare if such number exceeds
the number of users as provided by PacifiCare. When Supplier becomes aware
of the presence of unauthorized Software, Supplier shall promptly notify
PacifiCare.
Supplier shall:
Provide periodic reporting of such license information to
PacifiCare, as required;
File and track Software license agreements;
Ensure compliance with Software licenses;
Proactively scan for pirated Software;
Proactively forecast Software license requirements; and
Report Software license anomalies.
Z. ASSET MANAGEMENT:
Supplier shall assist Infrastructure Supplier in tracking inventory of
in-scope assets, Equipment, Software and Services in accordance with
Schedules 3.8(a), 7.1, 7.2, 14.2(a), 14.2(b) and 14.3 of the Agreement.
Supplier shall track and report Third Party Software inventory to include
seat accountability.
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Supplier inventory tracking service shall meet PacifiCare's requirements
for Software asset tracking and inventory tracking services. Tracking and
making optimal use of the Software inventory is central to the effective
management of any computing environment. Supplier shall deliver the degree
of accuracy necessary for sound business decision-making.
AA. SYSTEMS ADMINISTRATION, DEVELOPMENT LAB:
Infrastructure Supplier shall create a general-purpose development lab for
PacifiCare's use. Prior to the time that such development lab is available
for use, the intended utilization and the procedures governing the
utilization of such lab shall be proposed by Supplier and agreed upon by
the Parties in conjunction with the Infrastructure Supplier. Prior to the
time that such lab is available for use and on an ongoing basis, Supplier
shall propose to PacifiCare the extent to which approved Projects can
benefit from the use of such lab as part of the Base Services.
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IV. CROSS FUNCTIONAL SERVICES
A. NEW TECHNOLOGY AND AUTOMATION:
Working with the retained PacifiCare staff, Supplier shall support new
application technology and automation, including emerging Equipment,
Software, methodologies, techniques and various platforms. Services shall
include investigation, evaluation, selection, training, implementation and
consulting on new technology and automation of manual tasks. Supplier's
responsibilities for new technology and automation shall include the
following:
- Support PacifiCare in the management and representation of
technology product and service offerings to its internal clients.
Supplier shall work with PacifiCare as required to identify new
products and services that reflect evolving technology and/or client
demands;
- Facilitate and encourage active cross-functional, cross-group and
cross-location coordination and communication. This working practice
shall be a key element in most functions and processes, but
especially Problem Management, Change Management and Project
Management;
- Provide, on the schedule specified by PacifiCare in support of
PacifiCare's annual budget development cycle, the input, assistance,
comment and review support for preparation of the long-range
Information Systems Plan and Equipment/Software Architecture Plan or
as otherwise requested by PacifiCare;
- Participate, from time to time, in evaluations involving other third
party suppliers;
- Evaluate new third party products and provide, upon PacifiCare's
request, any reports, summaries or results of such evaluation and
testing;
- Define requirements for automation;
- Automate manual monitoring functions;
- Automate Application alerts to System operators; and
- Research tools to improve Service Levels or performance of operating
environments.
B. LOGICAL SECURITY ADMINISTRATION:
Supplier shall adhere and demonstrate compliance to an information
security approach which protects PacifiCare information as prescribed by
its data owners and complies with (1) all established PacifiCare security
policies and standards and (2) applicable federal and state regulatory
requirements. Supplier shall conduct [...***...] scheduled reviews of the
Systems development methodology to ensure adequacy and effectiveness of
security and control touch points with the reports to be reported to
PacifiCare security personnel. Supplier shall:
[...***...]
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[...***...]
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[...***...]
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[...***...]
C. ON-GOING BUSINESS DIVESTITURES AND ACQUISITIONS:
Supplier shall support PacifiCare Included Affiliates per Exhibit C to the
Agreement in accordance with the Agreement. Supplier shall provide
services to additional business units in accordance with the Agreement.
D. LONG-RANGE INFORMATION SYSTEMS PLAN AND EQUIPMENT/SOFTWARE ARCHITECTURE:
PacifiCare internal staff shall be responsible for the development of and
annual updates to a long-range information systems plan and
equipment/software architecture plan. While PacifiCare shall be primarily
responsible for this activity, Supplier shall serve as a key collaborator
with PacifiCare. As such, Supplier shall provide reasonable access to
specialists within its organization as needed to assist PacifiCare to
develop and maintain the long-range information systems plan and
equipment/software architecture plan. Supplier's responsibility for such
functions shall also include the following:
- Assist PacifiCare in developing an understanding of and
confirm the business requirements;
- Assist in identifying information and associated technology
needs;
- Assist in identifying the projects to be performed along with
helping define schedules and high-level cost benefit analysis;
and
- Assist in specifying the Equipment/Software architecture and
participate in continuously keeping PacifiCare's information
systems architecture current.
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V. DEFINITION OF TERMS USED IN STATEMENT OF WORK:
The following terms when used in this Statement of Work with initial
capital letters shall have the respective meanings set forth herein. Terms
used with initial capital letters that are not defined herein shall have
the meaning set forth in the Agreement.
a. ACCEPTANCE TEST means the process, as specified in the
Agreement through which the applicable Products, Services,
Software, Systems, Equipment, proposal or plan are subjected
to the applicable acceptance test.
b. AMM (APPLICATION MANAGEMENT METHODOLOGY) is defined in Section
I.H of this Statement of Work.
c. APPLICATIONS MAINTENANCE means any effort where modifications
to existing Systems are made to correct/fix code or processes
that are either no longer operational or shall cease to
function properly without the correction. Maintenance
activities include those described in Section II.B of this
Statement of Work and handling Help Desk tickets related to
resolving production issues or coding bugs; production
monitoring and trouble-shooting; routine capacity assessment
and tuning; SQM (Service Quality Metrics) reporting.
d. BUSINESS CONTINUITY PLAN means PacifiCare's business
continuity plan as of the Cutover Date as may be shared with
Supplier during the Transition Period and as required to be
expanded and improved by Infrastructure Supplier.
e. CALL means a call to the Help Desk from an End-User requesting
assistance that is related to the Services.
f. CHANGE MANAGEMENT PROCEDURE shall have the meaning set forth
in the Policy and Procedures Manual. This is the process that
controls day-to-day introduction of changes into the
environment.
g. CMM means the Capability Maturity Model from the Carnegie
Mellon Software Engineering Institute.
h. CUSTOMER SUPPORT means any effort required prior to
establishing a development project or work on minor data
changes, reports, End-User questions or training requests.
PacifiCare shall approve Customer Support work and prioritize
the activities, but not all Customer Support requests are
approved. Customer Support includes: Help Desk tickets not
related to resolving production issues or bugs; minor End-User
training; answering and addressing direct calls from business
partners; business management requests for pre-project
consultation (research, analysis, brainstorming, estimating);
regular business partner/status meetings - not project
related; business requested support for Application
demonstrations to customers; business requested support for
generating presentation materials, not project related;
meetings with employer groups/providers as requested by
business partners; updates to production data or tables done
outside of the normal Application functionality.
i. DATABASE ADMINISTRATION (DBA) is defined in Section III.N of
this Statement of Work.
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j. DEVELOPMENT SERVICES is defined in Section III.C.1 of this
Statement of Work.
k. DISASTER RECOVERY means the ability to recover those services
designated as Critical Services by PacifiCare within
PacifiCare specified time frames and sequences specified by
PacifiCare (when changes to existing plans are required such
changes shall be processed through the Change Management
Procedure) via the use of a recovery capability provided by
PacifiCare, the Infrastructure Supplier or other third party
suppliers.
l. ERROR CORRECTION is defined in Section II.B.1 of this
Statement of Work.
m. HELP DESK means a help desk that provides reactive and
proactive problem determination, resolution and/or tracking
and an initial response to End-Users as described in Section
III.S of this Statement of Work. The typical Help Desk
functions include call answer, Service Request tracking,
escalation to second or third-level support, dispatch of
support and problem management as applicable. [...***...]
n. HELP DESK SUPPORT is defined in Section III.S of this
Statement of Work.
o. MAJOR PROJECT is defined in Section II.A of this Statement of
Work.
p. METHODOLOGY is defined in Section 1.1 of Attachment B to this
Statement of Work.
q. MINOR PROJECT is defined in Section II.A of this Statement of
Work.
r. NEW DEVELOPMENT means any approved effort to develop or
implement new Applications. PacifiCare shall retain control
over awarding this New Development to Supplier or another
third party.
s. PACIFICARE PRIORITIZATION AND GOVERNANCE AND SERVICE REQUEST
PROCESSES means the existing PacifiCare processes used to
collect and filter proposals from the business and information
systems, estimate, prioritize and submit them for senior
management approval, then manage scope, schedule and budget
changes for the approved projects.
t. PREVENTATIVE MAINTENANCE is defined in Section II.B.2 of this
Statement of Work.
u. PROJECT means any approved effort to implement, to develop and
to enhance the Applications as required and necessary to
accommodate the evolution of PacifiCare's environments and
business requirements.
v. PROJECT, CUSTOMER SUPPORT AND APPLICATION MAINTENANCE SERVICES
is defined in Section I.A of this Statement of Work.
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w. PROJECT SERVICES is defined in Section II.A of this Statement of
Work.
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ATTACHMENT A
SUPPLIER WORK PRODUCT FUNCTIONAL DESCRIPTION MATRIX
This attachment identifies the processes and deliverables required for services
for which the Supplier provides.
------------------------------------------------------------------------------------------------------------------------
SUPPORT PROJECTS
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
END-USER MINOR MAJOR
PROJECT TASKS MAINTENANCE SUPPORT (Less than or (> 750 HOURS)
equal to 750 HOURS)
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
[...***...] [...***...] [...***...] [...***...] [...***...]
------------------------------------------------------------------------------------------------------------------------
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SUPPORT PROJECTS
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
END-USER MINOR MAJOR
PROJECT TASKS MAINTENANCE SUPPORT (Less than or (> 750 HOURS)
equal to 750 HOURS)
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
[...***...] [...***...] [...***...] [...***...] [...***...]
------------------------------------------------------------------------------------------------------------------------
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SUPPORT PROJECTS
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
END-USER MINOR MAJOR
PROJECT TASKS MAINTENANCE SUPPORT (Less than or (> 750 HOURS)
equal to 750 HOURS)
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
[...***...] [...***...] [...***...] [...***...] [...***...]
------------------------------------------------------------------------------------------------------------------------
All items identified as "YES" are required, those as "No" are not
required. Those identified as Yes or No shall be tailored to the requirements
and revised periodically when the Policy and Procedures Manual is reviewed.
For purposes of additional clarification selected project tasks are
further described as follows:
[...***...]
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ATTACHMENT B
SOFTWARE DEVELOPMENT METHODOLOGY ROLES AND RESPONSIBILITIES
1.1 DEFINITION OF PACIFICARE IS METHODOLOGY
The development and deployment of information systems requires a common
discipline framed by standard concepts and techniques.
This framework (or METHODOLOGY) represents an integral part of the
PacifiCare infrastructure that enables and enhances our ability to manage,
develop, and deliver quality products. Methodology is a powerful tool that
can deliver value to an organization by describing repeatable processes
for building information systems. The intent of IS Methodology is to
reduce risk by consistently applying proven processes to project
development.
The dynamics of the development effort demands a FLEXIBLE Methodology.
Even though the Methodology appears to be linear, left to right, most
projects actually return back to early phases to repeat some activities
with more detail. [...***...]
PRODUCT METHODOLOGY recommends appropriate phases, activities,
deliverables, roles and Q/A, but does not prevent or imply the use of a
specific style. Development style or approach selection is a Project
Management decision based on the project's requirements along with
adherence to IS standards and practices.
The I.S. Methodology has been created to support the PacifiCare
environment and designed to maximize efficiency and ensure consistency in
the development, implementation, and maintenance of systems across
Corporate IS.
PACIFICARE I.S. METHODOLOGY COMPONENTS
PacifiCare Information Services believes that a quality I.S.
Methodology must include the following three components:
1. PRODUCT METHODOLOGY
[...***...]
2. PROJECT MANAGEMENT METHODOLOGY
Project Management is used to manage, track and control
project:
[...***...]
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3. QUALITY ASSURANCE (Q/A)
[...***...]
1.2 PURPOSE & APPROACH
The purpose of this guide is to provide:
- GUIDELINES AND DEFINITIONS THAT ARE NEEDED TO CREATE AND EFFORT
DEMANDS A FLEXIBLE MANAGE QUALITY APPLICATION SOFTWARE AND
TECHNOLOGY SOLUTIONSRT DEMANDS A FLEXIBLE AT PACIFICARE. THIS GUIDE
IS NOT DESIGNED TO PROVIDET DEMANDS A FLEXIBLE STEP-BY-STEP
INSTRUCTIONS. IT IS DESIGNED TO PROVIDE A ROADMAP OF ACTIVITIES THAT
WILL RESULT IN CONSISTENT RESULTS.P
The following approach was used in constructing the Methodology :
[...***...]
1.3 IMPORTANT METHODOLOGY ACCESS INFORMATION
A. WHO NEEDS TO USE IT
[...***...]
B. REQUIRED ACCESS PRIVILEGES
[...***...]
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[...***...]
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ATTACHMENT C
PACIFICARE PRIORITIZATION AND GOVERNANCE AND SERVICE REQUEST PROCESSES
[...***...]
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B. PACIFICARE CURRENT PROJECT RANKING AND GOVERNANCE PROCESS
PacifiCare systems solutions are firmly integrated with our business processes
and are key to our success as a corporation. Information Services Systems
Development is working to implement standards and incorporate best practices in
developing and rolling out new and enhanced applications. These standards enable
us to better manage our IS resources and budgets, and allow us to repeat those
things that make projects successful while avoiding those that don't. The first
step in this process is to provide business teams with a template to capture
business requirements for all new projects.
[...***...]
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[...***...]
PRAG Fast Track Flowchart
[...***...]
[FLOWCHART]
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[...***...]
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[...***...]
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[...***...]
** ELECTRONIC FORM ** - TO BE COMPLETED ON-LINE AND ROUTED VIA E-MAIL
PACIFICARE(R)
HEALTH SYSTEMS
A. Date Submitted:__________
INFORMATION SERVICES
NEW PROJECT PROPOSAL / SERVICE REQUEST (NPP / SR) - VALUATION WORKSHEET
[...***...]
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Information Services Priorities Worksheet
[...***...]
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EXHIBIT C
PACIFICARE INCLUDED AFFILIATES
Antero Health Plans, Inc.
(an Colorado corporation)
FHP Reinsurance Limited
(a Bermuda corporation)
Health Maintenance Life, Inc.
(a Guam corporation)
PacifiCare of Arizona, Inc.
(an Arizona corporation)
PacifiCare Asia Pacific Insurance Brokers, Inc.
(a Guam corporation)
PacifiCare Behavioral Health of California, Inc.
(a Delaware corporation)
PacifiCare Behavioral Health, Inc.
(a Delaware corporation
PacifiCare of California
(a California corporation)
PacifiCare of Colorado, Inc.
(a Colorado corporation)
PacifiCare Dental of Colorado, Inc.
(a Colorado corporation)
PacifiCare Dental
(a California corporation)
PacifiCare eHoldings, Inc.
(a California corporation)
PacifiCare Health Insurance Company of Micronesia, Inc.
(a Guam corporation)
PacifiCare Health Plan Administrators, Inc.
(an Indiana corporation)
PacifiCare Health Systems Foundation
(a California nonprofit corporation)
PacifiCare Health Systems, Inc.
(a Delaware corporation)
PacifiCare International Limited
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PACIFICARE CONFIDENTIAL
(an Irish Company)
PacifiCare Life Assurance Company
(a Colorado corporation)
PacifiCare Life and Health Insurance Company
(an Indiana corporation)
PacifiCare Life Insurance Company
(an Arizona corporation)
PacifiCare of Nevada, Inc.
(a Nevada corporation)
PacifiCare of Ohio, Inc.
(an Ohio corporation)
PacifiCare of Oklahoma, Inc.
(an Oklahoma corporation)
PacifiCare of Oregon, Inc.
(an Indiana corporation)
PacifiCare of Texas, Inc.
(an Oregon corporation)
PacifiCare Ventures, Inc.
(a California corporation)
PacifiCare of Washington, Inc.
(a Washington corporation)
RxConnect Acquisition Corporation
(a California corporation)
RxSolutions, Inc.
(a California corporation)
SecureHorizons USA, Inc.
(a California corporation)
SeniorCo, Inc.
(a Delaware corporation)
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SCHEDULE 3.1 (b) (i)
AFFECTED CONTRACTORS
For confidentiality purposes, the information in this schedule will only be
accessible to the PacifiCare Supplier Relationship Vice President, the Xxxxx
Account Executive, and other personnel (e.g., Human Resources, Legal, etc.) as
deemed necessary.
[...***...]
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SCHEDULE 3.1 (b) (ii)
AFFECTED EMPLOYEES
For confidentiality purposes, the information in this schedule will only be
accessible to the PacifiCare Supplier Relationship Vice President, the Xxxxx
Account Executive, and other personnel (e.g., Human Resources, Legal, etc.) as
deemed necessary.
[...***...]
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SCHEDULE 3.5
TECHNICAL ARCHITECTURE AND PRODUCT STANDARDS PROCEDURES
PACIFICARE (R)
HEALTHSYSTEMS
ENTERPRISE-WIDE
TECHNICAL ARCHITECTURE
FOR
PACIFICARE HEALTH SYSTEMS
[LOGO] PACIFICARE (R)
DOMAIN ARCHITECTURE DOCUMENT
GOVERNANCE DOMAIN
[...***...]
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TABLE OF CONTENTS
GOVERNANCE DOMAIN ARCHITECTURE................................................................................... 3
About This Document........................................................................................... 3
Document History.............................................................................................. 3
Related Documents............................................................................................. 3
Governance Domain Participants................................................................................ 3
Governance Domain Definition.................................................................................. 5
Governance Domain Vision...................................................................................... 5
Governance Domain Executive Summary........................................................................... 5
Governance Principles......................................................................................... 7
Governance Organizations...................................................................................... 8
Key Architecture Entities................................................................................... 9
Architecture Oversight Bodies............................................................................... 12
Governance Processes.......................................................................................... 15
Management Processes........................................................................................ 16
Consulting Processes........................................................................................ 23
Communication Processes..................................................................................... 25
Gap Analysis.................................................................................................. 29
Appendices.................................................................................................... 32
Appendix 1. Roles and Responsibilities for Enterprise Architecture Processes................................ 32
Appendix 2. EWTA Domain Ratification and Maintenance Process................................................ 32
Appendix 3. EWTA Exception Management and Compliance Process................................................ 32
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GOVERNANCE DOMAIN ARCHITECTURE
ABOUT THIS DOCUMENT
The Governance Domain details the principles, organizations, roles and
responsibilities, services, processes and the workflow for the PacifiCare Health
Systems (PacifiCare) Enterprise Architecture (EA).
DOCUMENT HISTORY
--------------------------------------------------------------------------------
Version Date Team Member Reason
--------------------------------------------------------------------------------
[...***...] [...***...] [...***...] [...***...]
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
RELATED DOCUMENTS
--------------------------------------------------------------------------------
Document Title Relevance Owner How to obtain
--------------------------------------------------------------------------------
[...***...] [...***...] [...***...] [...***...]
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GOVERNANCE DOMAIN PARTICIPANTS
DOMAIN TEAM LEADER: [...***...]
DOMAIN PARTICIPANTS: [...***...]
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GOVERNANCE DOMAIN DEFINITION
Te Governance Architecture details the overall governance process for
PacifiCare's Enterprise Architecture (EA), including the various oversight
committees and their roles/responsibilities. Governance is the framework for
defining who is responsible for what and how decisions are made related to the
evolution of PacifiCare's Enterprise-Wide Technical Architecture (EWTA). It is
also the mechanism for ensuring compliance with the principles set forth in the
conceptual architecture and various domain architectures.
The terms EWTA and EA are utilized extensively throughout this document. EWTA
refers to the principles, standards and technology elements that make up
PacifiCare's architecture, i.e., "the What". EA refers to the governance of the
processes, touchpoints, and organizations that determine how the architecture
operates at PacifiCare, i.e., "the Who, What, Where and When."
GOVERNANCE DOMAIN VISION
PacifiCare facilitates the evolution of its technology infrastructure via
proactive and unified governance of the EWTA by all stakeholders. The conceptual
and domain design principles, which make up the EWTA, are the primary criteria
for decisions related to evolution of the EWTA and will be employed by all
stakeholders.
GOVERNANCE DOMAIN EXECUTIVE SUMMARY
EA Governance consists of four key elements: the EWTA, governance principles,
organizations and processes that must be established and maintained to insure
effective and sustainable governance and evolution of the ETWA. The following
describes each of these key EA Governance elements:
- EWTA - Consists of the Common Requirements Vision (CRV), Conceptual
Architecture principles (CA), Domain Architecture design principles,
standards, products, design patterns and technology roadmaps that
guide PacifiCare's IT investments. [...***...]
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[...***...]
- GOVERNANCE PRINCIPLES - Guiding principles for governance of the
evolution of PacifiCare's EA. The principles provide a context for
consistent architecture and program management decision-making.
- ORGANIZATION - The organizations that make up PacifiCare's EA
function, their roles and responsibilities and the services they
provide.
- PROCESSES - The processes and workflow for the services that make up
EA at PacifiCare. These include strategy, EWTA maintenance, EWTA
compliance, administration, project architecture, communications,
knowledge management, and training processes.
Figure 1 graphically depicts the elements EA Governance:
FIGURE 1. EA GOVERNANCE
[EA GOVERNMENT TRIANGLE]
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GOVERNANCE PRINCIPLES
The following governance principles will guide the establishment and evolution
of PacifiCare's EA governance process:
1. UNIFIED. [...***...]
2. INCLUSIVE. [...***...]
3. COMPREHENSIVE. [...***...]
4. EVOLUTIONARY. [...***...]
5. COLLABORATIVE. [...***...]
6. ACCESSIBLE. [...***...]
7. EFFICIENT. [...***...]
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GOVERNANCE ORGANIZATIONS
(ARCHITECTURE ORGANIZATIONS, ROLES AND RESPONSIBILITIES)
There are a number of entities that are critical to the management of the
PacifiCare EA. In addition there is a hierarchy of architecture oversight bodies
responsible for the maintenance of and compliance to the EWTA. These are
depicted and described below:
[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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[...***...]
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GOVERNANCE PROCESSES
(ARCHITECTURE PROCESSES AND WORKFLOW)
There are eight EA core processes. [...***...]
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MANAGEMENT PROCESSES
Management processes define, develop, evolve and manage the EA for the
enterprise.
- STRATEGY - As business direction and IT strategy of PacifiCare
evolve, the IT Executive and EA Teams work to ensure that the vision
and strategic intent of EA evolve to meet these changing business
needs.
[...***...]
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- ADMINISTRATION - Administration encompasses the day-to-day EA
governance activities performed by the EA Team to ensure effective
operation of the EWTA at PacifiCare.
[...***...]
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[...***...]
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- MAINTENANCE - The ARB governs evolution of the EWTA to ensure that
it is responsive to changes in PacifiCare's business environment and
the technology market. The ARB authorizes the EA Team to update the
EWTA to continually align PacifiCare's technology standards and
products with the goals and objectives of the business and the
changing technology marketplace. Appendix 2. EWTA Domain
Ratification and Maintenance Process flowcharts the EWTA Maintenance
process and responsibilities.
[...***...]
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[...***...]
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- COMPLIANCE - Compliance is crucial to the long-term success of the
EA because it details the means by which the EWTA technology
standards and products will be adhered to throughout the enterprise.
[...***...]
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[...***...]
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CONSULTING PROCESSES
Consulting processes support the application and utilization of the EWTA
standards and EA methodology throughout the enterprise.
- PROJECT ARCHITECTURE - The EA Team provides support to Project
Architects on large Technology and Application Software projects to
assist them with their architecture needs. The Project Architect
position is both strategic and tactical in nature. From the
strategic perspective, the Project Architect provides alignment with
the EWTA and overall architectural leadership and vision for the
project team. From the tactical perspective, the Project Architect
must transform conceptual architectural vision into concrete
deliverables used by the project, program, development,
infrastructure, logistics, and business teams.
[...***...]
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TRAINING - The EA Team establishes an architecture training framework to align
training offerings with architectural principles and standards and promote
overall architecture education within the IT community.
[...***...]
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COMMUNICATION PROCESSES
Communication processes support the means for EA information dissemination and
sharing throughout the enterprise and promote awareness and understanding of the
EA process and guidelines.
- KNOWLEDGE MANAGEMENT - The EA Team provides a readily accessible and
useable EA knowledge base that stores, manages and makes available
the EWTA principles, standards, methodologies, templates, tools and
other resources that comprise the EA.
[...***...]
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[...***...]
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- COMMUNICATIONS - A consistent, broadly shared and readily available
view of the EA is critical to building organizational understanding
and adoption of EA processes within PacifiCare. Promoting a shared
understanding requires a focused and ongoing communications effort.
[...***...]
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[...***...]
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GAP ANALYSIS
The Gap Analysis provides a description of the gaps between current state of EA
Governance and the ideal state as outlined in this document as of September of
2001.
[...***...]
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[...***...]
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[...***...]
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APPENDICES
APPENDIX 1. ROLES AND RESPONSIBILITIES FOR ENTERPRISE ARCHITECTURE PROCESSES
The enclosed spreadsheet summarizes the involvement of the Governance
Organizations with each process.
APPENDIX 2. EWTA DOMAIN RATIFICATION AND MAINTENANCE PROCESS
The enclosed swimlane diagram flowcharts the workflow for this process.
APPENDIX 3. EWTA EXCEPTION MANAGEMENT AND COMPLIANCE PROCESS
The enclosed swimlane diagram flowcharts the workflow for this process.
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APPENDIX 1
ROLES AND RESPONSIBILITIES FOR ENTERPRISE
ARCHITECTURE PROCESSES
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
APPENDIX 2
EWTA DOMAIN RATIFICATION
AND MAINTENANCE PROCESS
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
APPENDIX 3
EWTA EXCEPTION MANAGEMENT AND COMPLIANCE PROCESS
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 3.8(b)
SCHEDULE 3.8(b)
REPORTS
Without limiting or altering Supplier's responsibility to provide any reports,
updates, invoices or similar documentation to PacifiCare as set forth in the
Agreement or any exhibit, schedule or attachment thereto, and without limiting
any of Supplier's other responsibilities as set forth in the Agreement or any
exhibit, schedule or attachment thereto, Supplier shall provide PacifiCare the
reports set forth in this SCHEDULE 3.8(b) (the "REPORTS") in accordance with the
terms of this SCHEDULE 3.8(b) and APPENDIX 1 hereto ("SCHEDULE 3.8(b)").
Supplier shall not change or discontinue producing any Report without the
approval of PacifiCare.
Supplier shall work with PacifiCare to determine the best means and formats by
which to provide Reports, including options such as Web access, online graphical
reports, and file transfer. For any Reports not set forth herein or otherwise
described in the Agreement or any exhibit, schedule or attachment thereto,
PacifiCare and Supplier shall mutually determine the content, format and
frequency of such Reports.
All Reports and all contents thereof shall be PacifiCare Data.
PRODUCTION REPORTS:
PRODUCTION REPORTS. [...***...]
OPERATIONAL REPORTS.
In addition to any Reports required above, Supplier shall produce operational
reports for PacifiCare that describe the operations and Services performed by
Supplier ("OPERATIONAL REPORTS"). The Operational Reports shall include:
1. SECURITY BREACH REPORT. As set forth in SECTION 10.4 of the Agreement,
Supplier shall deliver to PacifiCare Reports of all security breaches and
potential breaches discovered by or made known to Supplier. Supplier shall
deliver such Reports regarding security breaches and potential breaches
immediately following such breach or the discovery of such breach or potential
breach by Supplier.
2. DISASTER RECOVERY TEST SUMMARY. As set forth in SECTION 16.1 of the Agreement
and elsewhere, Supplier shall provide PacifiCare Reports of disaster recovery
test and retest results as required pursuant to SECTION 16.1 of the Agreement
and in Section III.X of Exhibit B and as otherwise conducted by Supplier, which
such Reports shall be delivered promptly following any such disaster recover
test or retest ("DISASTER RECOVERY TEST SUMMARY REPORTS").
3. VARIABLE FEES REPORT AND RELATED REPORTS. During the Term and Termination
Assistance Period Supplier shall provide PacifiCare a monthly Variable Fees
Report as set forth in SECTION 17 of the Agreement.
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4. APPLICATIONS SOFTWARE REPORT. Supplier shall provide PacifiCare a Report for
each calendar quarter during the Term and the Termination Assistance Period of
all Software subject to or used in connection with the Services, including all
modifications, enhancement, maintenance updates and other changes thereto (each,
an "APPLICATIONS SOFTWARE REPORT").
5. SERVICE LEVEL REPORTS. Supplier shall provide PacifiCare a monthly Service
Level Report as defined in SECTION I.C of SCHEDULE 8 to the Agreement ("SERVICE
LEVEL REPORTS"). [...***...]
6. SERVICE LEVEL MANAGEMENT REPORTS.
a) [...***...]
b) [...***...]
7. PROBLEM MANAGEMENT REPORTS. Supplier shall produce a monthly Report
containing number and types of problems [...***...]
8. CHANGE MANAGEMENT REPORTS. Supplier shall produce a monthly Report detailing
all changes, modifications, updates, revisions and other functions relevant to
Change Management Process (as defined in the Policy & Procedures Manual),
[...***...]
9. BILLING RESOLUTION REPORTS. As requested by PacifiCare, Supplier shall
provide to PacifiCare Reports that shall provide detailed summaries of issues
with respect to billing [...***...]
10. PROJECT MANAGEMENT REPORTS. Supplier shall provide Reports regarding the
status of all current and planned Projects as set forth in EXHIBIT B to the
Agreement ("PROJECT STATUS REPORTS").
11. CUSTOMER SATISFACTION REPORTS. Supplier shall provide PacifiCare a monthly
Report with respect to the customer satisfaction surveys, results and other
related functions as set forth in SCHEDULE 8 to the Agreement ("CUSTOMER
SATISFACTION REPORTS").
12. TRANSITION REPORTS.
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(a) TRANSITION XXXXX CHART UPDATE. In conjunction with the Infrastructure
Supplier, on the last day of each month during the Transition Period, Supplier
shall provide PacifiCare with an updated hard copy Xxxxx chart detailing the
current status of all transition tasks ("TECHNICAL XXXXX CHART UPDATE").
(b) TRANSITION STATUS REPORT. In conjunction with the Infrastructure Supplier,
on the last day of each month during the Transition Period, Supplier shall
provide PacifiCare with a written Report detailing Supplier's status with
respect to the Transition Services and Transition Plan ("TRANSITION STATUS
REPORTS"), which shall include the following:
(i) STATUS SUMMARY - Each Transition Status Report shall include an
executive-level summary of transition progress to-date, including an updated
summary with respect to the Transition Plan and relevant accomplishments and
failures of Supplier with respect thereto.
(ii) CRITICAL MILESTONE STATUS - Each Transition Status Report shall
include a listing of all Critical Milestones as set forth in SECTION 4.2 of the
Agreement, along with: estimated time to completion of such Critical Milestones,
days that each Critical Milestone is overdue, anticipated completion date for
each Critical Milestone and related comments.
(iii) CRITICAL ISSUES LIST - Each Transition Status Report shall
include a listing of all unresolved issues related to the Transition Plan and
Transition Services, including those for which PacifiCare has primary
responsibility, including due dates, priority lists, identification of the
responsible Party for tasks and projects related to the Transition Plan,
potential and actual business and Transition Plan execution impact assessment.
13. CAPACITY AND PERFORMANCE REPORT. In conjunction with Infrastructure
Supplier, the Supplier shall publish a capacity and performance report,
[...***...]
14. AD HOC REPORTS. Supplier shall produce other reports requested by PacifiCare
("AD HOC REPORTS") as set forth in EXHIBIT B to the Agreement.
15. SECURITY REPORTS. In conjunction with the Infrastructure Supplier, the
Supplier shall produce monthly reports for PacifiCare that describe various
functions that impact on security ("SECURITY REPORTS"). [...***...]
(a) [...***...]
16. AUDIT REPORTS. Supplier shall produce audit reports for PacifiCare for the
auditing functions described in EXHIBIT B Statement of Work ("AUDIT REPORTS").
17. CLAIMS PROCESSING REPORTS. Supplier shall produce reports for PacifiCare
relating to Claims Processing.
(a) [...***...]
(b) [...***...]
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18. SUPPLIER STAFFING REPORTS. Supplier shall review the following reports with
the PacifiCare Supplier Relationship Manager, or other applicable PacifiCare
personnel, each month and shall work with such PacifiCare personnel, to create
plans to address any problems or concerns resulting from the content of such
reports.
(a) [...***...]
(b) [...***...]
(c) [...***...]
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APPENDIX 1 TO SCHEDULE 3.8(b)
The following is a summary of the Reports described in Schedule 3.8(b), the
frequency and timing of such Reports and the date Supplier shall begin to
deliver such Reports to PacifiCare. Unless otherwise indicated, during the Term
and Termination Assistance Period (1) any Report that is described as "Monthly"
shall be due [...***...] and shall address the appropriate information for the
immediately preceding month, (2) any Report that is described as "Quarterly"
shall be due [...***...] and shall address the appropriate information for the
immediately preceding quarter, and (3) any Report that is described as "Weekly"
shall be due on the first Business Day immediately following the week for which
such Report is provided.
----------------------------------------------------------------------------------------------------------------------
NO. REPORT TITLE FREQUENCY AND TIMING COMMENCEMENT DATE FOR REPORTING
----------------------------------------------------------------------------------------------------------------------
Production Reports [...***...] Cutover Date
----------------------------------------------------------------------------------------------------------------------
As noted below or as otherwise
Operational Reports [...***...] agreed by the Parties
----------------------------------------------------------------------------------------------------------------------
1 Security Breach Report [...***...] Cutover Date
----------------------------------------------------------------------------------------------------------------------
Disaster Recovery Test Summary
2 Reports [...***...] Cutover Date
----------------------------------------------------------------------------------------------------------------------
Variable Fees Report and
3 Related Reports [...***...] Cutover Date
----------------------------------------------------------------------------------------------------------------------
4 [...***...] [...***...] Cutover Date
----------------------------------------------------------------------------------------------------------------------
5 Service Level Reports [...***...] As provided Schedule 8
----------------------------------------------------------------------------------------------------------------------
6 Service Level Management Reports [...***...] As noted below
----------------------------------------------------------------------------------------------------------------------
6(a) [...***...] [...***...] Cutover Date
----------------------------------------------------------------------------------------------------------------------
6(b) [...***...] [...***...] Cutover Date
----------------------------------------------------------------------------------------------------------------------
7 Problem Management Reports [...***...] Cutover Date
----------------------------------------------------------------------------------------------------------------------
8 Change Management Reports [...***...] Cutover Date
----------------------------------------------------------------------------------------------------------------------
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9 Billing Resolution Report [...***...] Effective Date
----------------------------------------------------------------------------------------------------------------------
10 Project Management Reports [...***...] Cutover Date
----------------------------------------------------------------------------------------------------------------------
Customer Satisfaction and
11 Initiative Reports [...***...] Cutover Date
----------------------------------------------------------------------------------------------------------------------
12 Transition Reports
----------------------------------------------------------------------------------------------------------------------
12(a) Technical Xxxxx Chart Update [...***...] Effective Date
----------------------------------------------------------------------------------------------------------------------
12(b) Transition Status Report [...***...] Effective Date
----------------------------------------------------------------------------------------------------------------------
13 Capacity and Performance Report [...***...] Cutover Date
----------------------------------------------------------------------------------------------------------------------
14 Ad Hoc Reports [...***...] Cutover Date
----------------------------------------------------------------------------------------------------------------------
15 Security Reports [...***...] Cutover Date
----------------------------------------------------------------------------------------------------------------------
16 Audit Reports [...***...] Cutover Date
----------------------------------------------------------------------------------------------------------------------
17 Claims Processing Reports
----------------------------------------------------------------------------------------------------------------------
17(a) Daily Processing Times [...***...] Cutover Date
----------------------------------------------------------------------------------------------------------------------
17(b) Claims Processing Threshold [...***...] Cutover Date
Limit
----------------------------------------------------------------------------------------------------------------------
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SCHEDULE 4.1
PACIFICARE TRANSITION SCHEDULE
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
PACIFICARE
DRAFT TRANSITION SCHEDULE
------------------------------------------------------------------------------------------------------------------------------------
ID WBS Task Name Owner Assisting Duration Start Finish Predecessors
------------------------------------------------------------------------------------------------------------------------------------
1 1 PacifiCare Integrated Transition Schedule IBM/Xxxxx PHS [...***...] [...***...] [...***...]
------------------------------------------------------------------------------------------------------------------------------------
[...***...] [...***...] [...***...] [...***...] [...***...] [...***...] [...***...]
------------------------------------------------------------------------------------------------------------------------------------
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 4.2
CRITICAL TRANSITION MILESTONES
ITEM # TRANSITION MILESTONE DUE DATE
-----------------------------------------------------------------------------------------
1 Contract Effective Date [...***...]
-----------------------------------------------------------------------------------------
2 Transition Team Key Personnel Secured [...***...]
-----------------------------------------------------------------------------------------
3 Project Schedule Finalized [...***...]
-----------------------------------------------------------------------------------------
4 PacifiCare Employees Transitioned to Supplier(s) [...***...]
-----------------------------------------------------------------------------------------
5 SM&E CMM Processes defined [...***...]
-----------------------------------------------------------------------------------------
6 SME Transition Complete [...***...]
-----------------------------------------------------------------------------------------
Xxxxx assumes that the Contract Effective Date of [...***...] and the Cutover
Date shall be [...***...]. If either the Contract Effective Date or Cutover Date
changes, the remaining Item #'s shall shift the appropriate number of days.
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 6.3(a)
FACILITIES SPACE REQUIREMENTS AND RULES & REGULATIONS
A. INTRODUCTION
This Schedule defines the use of PacifiCare Service Locations by Supplier in
order to provide Services as well as the Rules and Regulations that must be
followed for use of the facilities.
B. FACILITIES PLAN
Initial space requirements will include space that is currently being used by
the "in-scope" personnel as of the Effective Date. Within [...***...] of
Transition start, Steady State facilities plans and space requirements will be
documented.
STAFFING PLAN AND SPACE REQUIREMENTS
------------------------------------------------------------------------------------------------------------------------
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2003 2004
02 02 02 02 02 02 02 02 02 02 02 02
------------------------------------------------------------------------------------------------------------------------
Program Office Employees
(IBM/Xxxxx) Contractors
Total
Transition Employees
(IBM) Contractors [...***...]
Total
Transition Employees
(Xxxxx)* Contractors
Total
SM&E ** Employees
(Xxxxx) Contractors
Total
Total Employees
Contractors
Grand Total
------------------------------------------------------------------------------------------------------------------------
PROGRAM OFFICE & TRANSITION - [...***...]
** SM&E ENGAGEMENT TRANSITION [...***...]
IBM HR TRANSITION - [...***...]
SM&E HR TRANSITION - [...***...]
* IBM - [...***...]
** SM&E - [...***...]
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C. RULES, REGULATIONS AND RESTRICTIONS AT PACIFICARE SERVICE LOCATIONS
Supplier agrees to comply with all of the rules, regulations and restrictions
set forth below, and with any reasonable amendments or additions thereto as
PacifiCare or its landlord may deem necessary from time to time in accordance
with Section 6.4 of the Agreement.
(1) Except in emergency situations, supplier shall refrain from contacting
any landlord of PacifiCare for any reason or purpose whatsoever. Whenever any
matter provided for herein requires that any such landlord be contacted for
approval, consent, or otherwise, Supplier shall so advise PacifiCare and
PacifiCare will contact the landlord.
(2) Except in emergency situations, supplier shall refrain from going onto
the roof of any building or building complex in which a PacifiCare Service
Location is situated for any purpose without first having obtained the prior
written consent of PacifiCare and its landlord.
(3) General office hours and the business hours of operation in relation
to truck dock activity shall be limited to 7:00 a.m. to 9:00 p.m. daily.
(4) Each of the Supplier's employees and other personnel shall at all
times while at any PacifiCare Service Location wear and display a standard
identification badge issued to them in a manner that allows easy identification
of the employee or personnel. PacifiCare may deny an employee or other Supplier
personnel access to any PacifiCare Service Location if current and proper
identification is not presented and worn while entering and working at any
PacifiCare Service Location.
(5) Any and all loading and unloading of goods shall be done only at such
times, in the areas and through the entrances designated for such purpose by
PacifiCare or its landlord.
(6) Supplier shall not, without first having obtained PacifiCare's and its
landlord's prior written consent, make any structural or non-structural interior
or exterior alterations, additions, improvements or utility installations
(including without limitation, alterations to the plumbing, electrical and other
building systems, the boring, cutting or stringing of wires, the laying of
linoleum or other floor coverings, the attachment to or suspension from floors,
walls or ceilings of curtains, blinds, shades, sunscreens, planters, television
sets, telephones, call boxes and other office equipment,) in, on or about any
PacifiCare Service Location.
(7) Supplier shall (a) promptly pay for all costs of alterations or other
work done or permitted to be done by it or caused by it to be done on or about
any PacifiCare Service Location unless otherwise agreed; (b) keep each
PacifiCare Service Location free and clear of any liens arising out of any such
alterations or work; and (c) in the event any lien is filed against any
PacifiCare Service Location in connection with any alterations or other work
done, permitted or caused to be done by Supplier, Supplier shall, at its sole
cost and expense, obtain a release bond in the statutorily required amount and
issued by a surety approved by PacifiCare and its landlord, immediately after
written request to do so from PacifiCare.
(8) Any and all garbage, trash and refuse shall be kept in the type of
container specified by PacifiCare's landlord, and shall be placed in the
designated trash enclosures for collection. Supplier shall not burn any trash or
garbage of any kind in or about the building or building complex housing any
PacifiCare Service Location.
(9) No satellite dish, antenna or other telecommunications equipment shall
be erected in or outside of any PacifiCare Service Location, without in each
instance the written consent of PacifiCare and its landlord. Any such equipment
so installed without such written consent shall be subject to removal without
notice at any time by PacifiCare or its landlord, at the sole cost of Supplier.
In the event any such equipment, installed by or at the request of Supplier
within any PacifiCare Service Location or elsewhere within the building which
houses a PacifiCare Service Location causes interference with or to equipment
used by PacifiCare or another tenant within said building, Supplier shall assume
and pay or discharge all liability arising from or related to such interference
and shall take all necessary actions to eliminate such interference.
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(10) Supplier shall not make or permit to be made any unseemly or
disturbing noises, sounds or vibrations or disturb or interfere with occupants
of the building housing any PacifiCare Service Location or any building complex
which includes such building (collectively, the "Development") by the use of any
musical instrument, radio, phonograph, unusual noise, or in any other way. No
loudspeakers, televisions, phonographs, radios or other devices shall be used in
a manner so as to be heard or seen outside of the PacifiCare Service Location
without the prior written consent of PacifiCare and its landlord. Supplier shall
conduct its business in a quiet and orderly manner so as not to create
unreasonable or unrelated noise.
(11) Supplier shall not solicit business within the Development by
circulars or otherwise, or take any action which would interfere with the rights
of other persons to use such facilities without the written consent of Landlord,
and shall cooperate with PacifiCare and its landlord to prevent same.
(12) Supplier shall not place or permit any obstruction in the common
areas immediately adjoining any building housing a PacifiCare Service Location
without the written consent of PacifiCare and its landlord. Supplier shall not
display or sell merchandise, or allow carts, portable signs, signed vehicles,
devices or other objects to be stored or to remain outside of any building
housing a PacifiCare Service Location without the written consent of PacifiCare
and its landlord.
(13) Supplier and its employees shall be required to park their vehicles
in an area designated by PacifiCare and its landlord for such parking. Supplier
shall not permit any parking by its employees, agents, subtenants, customers,
invitees, concessionaires or visitors on the streets surrounding such building
in violation of any ordinances or postings of any public authorities having
jurisdiction.
(14) Supplier shall not cause or permit the existence of any obnoxious or
foul odors that disturb the public or other tenants. Should such odors be
evident, Supplier shall be required to take immediate steps to remedy same at
Supplier's expense.
(15) Supplier shall not obstruct the sidewalks, entrances, passages,
corridors or halls, nor use same for any purpose other than ingress and egress.
The halls, passages, entrances and roof are not for the use of the general
public, and PacifiCare and its landlord shall in all cases retain the right to
control and prevent access thereto by all persons whose presence in the judgment
of PacifiCare or its landlord shall be prejudicial to the safety, character,
reputation or interests of the Development and its tenants, provided that
nothing contained herein shall be construed to prevent such access by persons
with whom the Supplier normally deals in the ordinary course of its business
unless such persons are engaged in illegal activities.
(16) PacifiCare and its landlord shall have the right to determine and
prescribe the weight and proper position of any unusually heavy equipment,
including, but not limited to, equipment, libraries, safes, large files, and the
like that are to be placed in a PacifiCare Service Location, and only those
which in the opinion of PacifiCare or its landlord will not do damage to the
floors, structure and/or elevators may be moved into a PacifiCare Service
Location. Any damage occasioned in connection with the moving or installing of
such aforementioned articles in a PacifiCare Service Location or the existence
of same therein shall be paid for by Supplier.
(17) Any telephone mainline and all cabling and gas lines shall be run
only with the prior written approval of PacifiCare and its landlord, and only in
accordance with detailed plans which have been submitted to and approved by
PacifiCare and its landlord.
(18) The plumbing facilities installed in any PacifiCare Service Location
shall be used only for the purpose for which they were constructed. No foreign
substance shall be deposited in any toilet or sink, and the cost of repair from
any breakage, stoppage or damage resulting therefrom shall be borne by Supplier.
(19) Supplier shall not overload the electrical circuit breaker panels.
(20) When cleaning the glass windows and/or aluminum framing, Supplier
must use only mild soap and water and apply with a sponge. No abrasive materials
shall be used. If the window frames are aluminum, ammonia must not be used to
clean the windows.
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(21) No signs, advertisements or notices shall be exhibited, painted or
affixed by Supplier to any PacifiCare Service Center so as to be seen from the
outside of such location without the prior written consent of PacifiCare and its
landlord. In the event Supplier violates the foregoing, PacifiCare and its
landlord may remove same without any liability and may charge Supplier for the
cost of such removal.
(22) Supplier shall not xxxx, paint, drill into, or in any way deface any
part of any PacifiCare Service Location or the rest of the Development.
(23) The PacifiCare Service Locations shall not be used for manufacturing
or for storage of merchandise except as such storage may be incidental to the
use of such locations for those uses contemplated by the Agreement. Supplier
shall not occupy or permit any portion of any PacifiCare Service Location to be
occupied for the manufacture of any illegal substance. The PacifiCare Service
Locations shall not be used for any illegal purposes.
(24) PacifiCare and its landlord shall have the right to prohibit any
advertising by Supplier which, in PacifiCare or its landlord's opinion, tends to
impair the reputation of any Development, and upon written notice from
PacifiCare or its landlord, Supplier shall refrain from or discontinue such
advertising.
(25) Canvassing, soliciting and peddling in any Development are prohibited
and Supplier shall cooperate to prevent same.
(26) All parking ramps and areas, pedestrian walkways, plazas and other
public areas forming a part of any Development shall be under the sole and
absolute control of PacifiCare's Landlord, who has the exclusive right to
regulate and control these areas.
(27) Suppler shall not place anything or allow anything to be placed near
the glass of any window, door, partition or wall which may appear unsightly from
outside the PacifiCare Service Locations, nor shall Supplier sunscreen any
window without the prior written consent of PacifiCare and its landlord.
(28) Suppler shall not alter any lock or install any new or additional
locks or bolts on any doors or windows of the PacifiCare Service Locations
without the written consent of PacifiCare and its landlord; provided that in the
event such consent is given, Supplier shall provide PacifiCare with keys to such
locks or bolts.
(29) Supplier shall see that the windows and doors of the PacifiCare
Service Locations are closed and securely locked, that all water faucets and
other apparatus are entirely shut off, and that, when feasible, all lights and
electrical equipment are entirely shut off before leaving, so as to prevent
waste or damage.
(30) Supplier shall exercise due care to protect the PacifiCare Service
Locations from theft, robbery or pilferage.
(31) Supplier shall not place any live load exceeding fifty (50) pounds
per square foot on the floor of any PacifiCare Service Location.
(32) No animals (except for service animals for persons with disabilities)
or birds may be brought or kept in or about any PacifiCare Service Location or
any building housing a PacifiCare Service Location.
(33) Supplier shall not use or keep in any PacifiCare Service Location or
any building housing a PacifiCare Service Location any kerosene, gasoline or
other flammable or combustible fluid or material, or use any method of heating
or air conditioning other than that supplied by PacifiCare or its landlord,
except in such quantities and in such containers as are commonly found in
offices and are in compliance with all applicable governmental laws, statutes,
rules, regulations, ordinances and life, safety and fire codes.
(34) No commercial cooking for sale to the public shall be done or
permitted in any PacifiCare Service Location; nor shall any PacifiCare Service
Location be used for the storage of merchandise, for washing clothes or for
lodging.
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PacifiCare/Xxxxx Confidential
(35) PacifiCare and its landlord shall have the right to exclude or expel
from any PacifiCare Service Location and the building housing any PacifiCare
Service Location any person who, in the judgment of PacifiCare or its landlord,
is intoxicated or under the influence of liquor or drugs, or who shall in any
manner do any act in violation of any of the rules or regulations of the
building housing a PacifiCare Service Location.
(36) No vending machine or machines of a similar type shall be installed,
maintained or operated at any PacifiCare Service Location without the prior
written consent of PacifiCare and its landlord, provided that any such consent
may be conditioned on Supplier's written undertaking and agreement to indemnify,
defend and hold PacifiCare and its landlord harmless from and against any and
all liability arising out of or resulting from the acts or omissions of persons
supplying goods or services in connection therewith.
(37) PacifiCare or its landlord shall have the right to control and
operate the public portions of the building housing any PacifiCare Service
Location, any the public facilities, and heating and air conditioning, as well
as any facilities furnished for the common use of all tenants, in such manner as
it deems best for the benefit of such tenants.
(38) All entrance doors in a PacifiCare Service Location shall be left
locked when such PacifiCare Service Location is not in use, and all doors
opening to public corridors shall be kept closed except for normal ingress and
egress thereto and therefrom.
(39) Supplier shall, upon termination of its possession of any PacifiCare
Service Location, surrender all keys thereto to PacifiCare and shall make known
to PacifiCare the combination of all combination locks and safes, cabinets and
vaults in such PacifiCare Service Location.
(40) Supplier shall not employ any person for the purpose of cleaning or
taking care of such location without the written consent of PacifiCare and its
landlord. The janitor of the building housing the PacifiCare Service Location
may at all times keep a pass key, and such janitor or other agents of PacifiCare
and its landlord shall at all times be allowed admittance to said location.
(41) Bicycles and other vehicles shall not be permitted in the offices,
halls, corridors and elevators in the building housing any PacifiCare Service
Location, nor shall any obstruction of sidewalks or entrances of such building
by such vehicles be permitted.
(42) All right, title and interest in and to any alternations made by
Supplier to any PacifiCare Service Location shall belong to PacifiCare or its
landlord, free and clear of any claim or interest of Supplier.
(43) Supplier shall not continue to occupy or conduct business in any
PacifiCare Service Location beyond the expiration or termination of the lease
under which PacifiCare holds such PacifiCare Service Location.
(44) Supplier shall not use any PacifiCare Service Location for any
purpose or activity which has not been specifically provided for or authorized
under the Agreement or these Rules and Regulations.
(45) Supplier shall not cause or permit any hazardous materials to be
brought upon, kept or used in or about any PacifiCare Service Location.
(46) To prevent the generation, growth, or deposit of any mold, mildew,
bacillus, virus, pollen or other micro-organisms (collectively, "Biologicals")
and the deposit, release or circulation of any indoor contaminants, including
emissions from paint, carpet and drapery treatments, cleaning, maintenance and
construction materials and supplies, pesticides, pressed wood products,
insulation, and other materials and products (collectively with Biologicals,
"Contaminants"), that could adversely affect the health, safety or welfare of
any tenant, employee or other occupant of the Building or their invitees,
Supplier shall, at Supplier's sole cost and expense, at all times (i) operate
the Premises in a manner consistent with preventing or minimizing the
generation, growth, circulation, release or deposit of any Contaminants, and
(ii) maintain, operate and repair each PacifiCare Service Location in such a
manner to prevent or minimize the accumulation of stagnant water and moisture in
planters, kitchen appliances and vessels, carpeting, insulation, water coolers
and any other locations where stagnant water and moisture could accumulate, and
(iii) otherwise maintain, operate and repair the Premises to prevent the
generation, growth, deposit, release or circulation of any Contaminants.
(47) Supplier shall permit PacifiCare or its landlord to enter any
PacifiCare Service Location at reasonable times upon prior notice (except that
in the case of emergencies no prior notice shall be required) to examine such
location, and to show the same to prospective purchasers, lenders or tenants, to
make such
Page 5 of 6
PacifiCare/Xxxxx Confidential
repairs, alterations, additions or improvements as may be required in
connection with the development or maintenance of said location, without the
same constituting an eviction of Supplier or a trespass.
PacifiCare/Xxxxx Confidential
Page 6 of 6
SCHEDULE 7.1
Assigned Agreements
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 7.2
Managed Agreements
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
CONFIDENTIAL
PACIFICARE AND XXXXX SERVICES AGREEMENT
================================================================================
SERVICE LEVEL SCHEDULE
================================================================================
SCHEDULE 8
[LOGO] PACIFICARE(R)
Information Services
Confidential Page 1
TABLE OF CONTENTS
I. GENERAL PROVISIONS:................................................... 4
A. GENERAL:........................................................... 4
B. ATTACHMENTS:....................................................... 5
C. REPORTING:......................................................... 5
D. DEFINITIONS:....................................................... 6
E. NOTICE REQUIREMENTS FOR ADDITIONS, DELETIONS AND MODIFICATIONS:.... 8
F. SERVICE LEVEL CREDITS:............................................. 8
G. EARN BACK:......................................................... 10
H. ADDITIONS AND DELETIONS OF PERFORMANCE CATEGORIES:................. 11
I. ADDITIONS AND DELETIONS OF SERVICE LEVELS:......................... 11
J. MODIFICATIONS OF SERVICE LEVEL CREDIT ALLOCATION PERCENTAGES
FOR CRITICAL SERVICE LEVELS:...................................... 13
K. CRITICAL DELIVERABLES:............................................. 14
L. COMMENCEMENT OF OBLIGATIONS:....................................... 14
M. COOPERATION:....................................................... 14
N. [ *** ] - CRITICAL SERVICE LEVELS:............................. 15
O. ROOT-CAUSE ANALYSIS:............................................... 15
P. MEASURING & MONITORING TOOLS:...................................... 16
Q. EXCEPTIONS:........................................................ 16
R. EXCEPTIONS - MISSING SOURCE CODE................................... 17
S. EXCLUSIONS:........................................................ 18
T. BALANCED SCORECARD:................................................ 18
U. VOLUME MEASUREMENT................................................. 18
II. CRITICAL SERVICE LEVELS:.............................................. 19
A. PERFORMANCE CATEGORY -CRITICAL APPLICATION AVAILABILITY:........... 19
B. PERFORMANCE CATEGORY- APPLICATION AVAILABILITY:.................... 19
C. PERFORMANCE CATEGORY - CRITICAL APPLICATION RESPONSE TIME:......... 19
D. PERFORMANCE CATEGORY - APPLICATION RESPONSE TIME:.................. 19
E. PERFORMANCE CATEGORY - CRITICAL PROCESSES:......................... 19
F. PERFORMANCE CATEGORY - PROJECTS:................................... 20
G. OTHER APPLICATION SERVICE LEVELS:.................................. 21
Page 2 of 36 [LOGO] PACIFICARE(R)
*CONFIDENTIAL TREATMENT REQUESTED
III. CRITICAL DELIVERABLES:................................................ 22
A. POLICY AND PROCEDURE MANUAL DRAFT:................................. 22
B. REPORT FORMAT DRAFT:............................................... 22
C. ANNUAL PLAN:....................................................... 22
D. PACIFICARE IS CUSTOMER SATISFACTION SURVEY DRAFT QUESTIONS:........ 22
E. PACIFICARE IS CUSTOMER SATISFACTION SURVEY KEY MEASUREMENTS PLAN:.. 22
F. ACHIEVEMENT OF CMM LEVEL 3 FOR SUPPLIER SOFTWARE DEVELOPMENT
ORGANIZATIONS:.................................................... 23
IV. KEY MEASUREMENTS:..................................................... 24
A. PERFORMANCE CATEGORY- APPLICATION AVAILABILITY:.................... 24
B. PERFORMANCE CATEGORY APPLICATION RESPONSE TIME:.................... 24
C. PERFORMANCE CATEGORY - APPLICATION PERFORMANCE DEGRADATION:....... 24
D. PERFORMANCE CATEGORY CRITICAL PROCESSES:........................... 24
E. OTHER APPLICATION SERVICE LEVELS:.................................. 25
F. PERFORMANCE CATEGORY - PROBLEM RESPONSE AND RESOLUTION:............ 25
G. PERFORMANCE CATEGORY - APPLICATION MANAGEMENT:..................... 27
H. PERFORMANCE CATEGORY - APPLICATIONS PERFORMANCE:................... 28
I. PERFORMANCE CATEGORY - DISASTER RECOVERY:.......................... 29
V. DEFINITION OF TERMS USED IN SERVICE LEVELS............................ 31
Page 3 of 36 [LOGO] PACIFICARE(R)
SERVICE LEVEL SCHEDULE
I. GENERAL PROVISIONS:
A. GENERAL:
This Service Level Schedule, including any attachments hereto, (this
"SCHEDULE") is a schedule to that certain Information Technology Services
Agreement entered into and made to be effective as of January 12, 2002 by
and between PacifiCare and Supplier (the "AGREEMENT").
In the event of any conflict, ambiguity or inconsistency between this
Schedule and the provisions in the body of the Agreement, the provisions
in the body of the Agreement shall prevail.
This Schedule sets forth certain quantitative Critical Service Levels, Key
Measurements and Critical Deliverables against which Supplier's
performance shall be measured and does not replace any requirements or
obligations of Supplier to provide the Services or any subset thereof.
Supplier shall perform the Services at or above the levels of performance
indicated in this Schedule. Critical Service Levels are identified in
Section II below. Critical Deliverables are identified in Section III
below. Key Measurements are described in Section IV below.
As of the Cutover Date, Supplier shall perform the Services consistent
with the documented levels of performance, measured for [...***...]
consecutive full months that have been achieved by PacifiCare immediately
prior to the Cutover Date. In the event that PacifiCare does not have
documented levels of performance, Supplier shall perform the measurements
in accordance with Section I.I.1. During such measurement period, Service
Level Credits shall not apply.
In the case of Services that do not have corresponding Service Levels
specified in this Schedule as of the Cutover Date, Supplier shall provide
such Services to PacifiCare Entities at least at the same level of
performance (including the degree of accuracy, quality, completeness,
responsiveness, etc.) as such Service was provided by or for PacifiCare
prior to the Cutover Date or at the appropriate Service Level as shall be
determined in accordance with the process set forth herein.
New Performance Categories, Critical Service Levels and Key Measurements
may be added or substituted by PacifiCare as specified in this Schedule
during the Term and while Supplier retains responsibility for maintaining
the PacifiCare Software during the Termination Assistance Period in order
to achieve a fair, accurate and consistent measurement of Supplier's
performance of the Services. For example, such additions or substitutions
may occur in conjunction with changes to the environment and the
introduction of New Equipment or means of service delivery; the Parties
agree that in the event such New Equipment or such means of service
delivery is a replacement or upgrade of existing technology, there shall
be a presumption of equivalent or improved performance.
Page 4 of 36 [LOGO] PACIFICARE(R)
*CONFIDENTIAL TREATMENT REQUESTED
B. ATTACHMENTS:
The following Service Level Attachments are attached hereto and are hereby
incorporated by reference:
SLA-1 Service Level Matrix
SLA-2 Service Level Outcome Examples
SLA-3 Balanced Scorecard
SLA-4 Pre-approved Measuring Tools and Methodologies for
Critical Service Level Measurements
SLA-5 Application Summaries
C. REPORTING:
Unless otherwise specified in this Service Level Schedule, Supplier shall
measure and report Supplier's performance with respect to each Critical
Service Level and Key Measurement on a monthly basis. On or before the
fifteenth (15th) of each month of the Term and the Termination Assistance
Period, Supplier shall provide to PacifiCare a Service Level Report of
Supplier's performance with respect to the applicable Service Levels for
the preceding month, including Supplier's actual performance, any Service
Level Defaults that occurred and Service Level Credits that accrued during
the month. Supplier shall provide the Service Level Reports in hard copy
and soft-copy formats; formats can include Microsoft Office Word, Excel
and any other format as reasonably requested by PacifiCare. Supplier shall
include in the Service Level Reports sufficient details of Supplier's
performance of the Services to allow verification of Supplier's
performance and compliance with the Critical Service Levels, Key
Measurements and Critical Deliverables, which such information shall be in
machine-readable form, as specified by PacifiCare, suitable for use on a
personal computer. All information supplied as part of and in connection
with the Service Level Reports shall be Confidential Information of
PacifiCare. Each Service Level Report shall include total invoice costs
(including Base Fees and Variable Fees), for the month to which the
Service Level Report applies, which may be in summary form. For example,
the Service Level Report for Supplier's performance in August shall
include a summary of the invoice for the Base Fees and Variable Fees
applicable to August. Each Service Level Report shall contain a summary
page that indicates the total amount of Service Level Credits incurred
during the previous month and a running total of all Service Level Credits
and Deliverable Credits accrued or incurred during the then-current
Contract Year.
Page 5 of 36 [LOGO] PACIFICARE(R)
D. DEFINITIONS:
Terms used herein with initial capital letters shall have the respective
meanings set forth in the Agreement, or, for those terms that are not
defined in the Agreement, the meanings set forth in this Schedule in
Section V and as follows:
a. ALLOCATION OF POOL PERCENTAGE shall have the meaning set forth
in Section I.F.1 of this Service Level Schedule. The total of
all Allocation of Pool Percentages shall not exceed the Pool
Percentage Available for Allocation.
b. APPLICATION means PacifiCare Software, Supplier Software or
any particular Component thereof, as applicable.
c. AT RISK AMOUNT shall mean, for any month during the Term and
Termination Assistance Period, [...***...] percENT
([...***...]%) of the monthly Fees, which is the amount that
Supplier shall have at risk for Service LeVEL Credits as set
forth in Service Level Attachment SLA-1.
d. CONTRACT YEAR is defined in the Agreement.
e. CRITICAL DELIVERABLES shall mean those deliverables performed
on a one-time basis, for which a Deliverable Credit is payable
in accordance with Section I.K of this Service Level Schedule
and described in Section III of the Service Level Schedule if
Supplier fails to deliver such deliverables. Critical
Deliverables are identified in Service Level Attachment SLA-1.
Critical Deliverables are not Critical Service Levels.
f. CRITICAL SERVICE LEVELS shall mean those Service Levels
established under this Service Level Schedule for which a
Service Level Credit may accrue as set forth in Section I.F,
subject to earn back provisions of Section I.G. Critical
Service Levels are identified in Service Level Attachment
SLA-1 and are described in Section II of this Service Level
Schedule. Each Critical Service Level has an Expected Service
Level and a Minimum Service Level associated with it unless
otherwise specified.
g. DELIVERABLE CREDITS shall have the meaning set forth in
Section I.K of this Service Level Schedule.
h. EXPECTED SERVICE LEVEL shall mean the desired level of
performance for a Critical Service Level or a Key Measurement,
as set forth in Service Level Attachment SLA-1.
i. EXPECTED SERVICE LEVEL DEFAULT shall mean Supplier's level of
performance for a particular Critical Service Level fails to
meet the applicable Expected Service Level (but does not fail
to meet the applicable Minimum Service
Page 6 of 36 [LOGO] PACIFICARE(R)
*CONFIDENTIAL TREATMENT REQUESTED
Level) as specified in this Service Level Schedule, and has
failed to meet such Expected Service Level [...***...]
j. KEY MEASUREMENTS shall mean those Service Levels for which no
Service Level Credit is payable, but which are meaningful to
PacifiCare Entities' business operations, and are described in
Section IV of this Service Level Schedule. Each Key
Measurement has an Expected Service Level and a Minimum
Service Level associated with it unless otherwise specified.
It is the intent of the Parties that all Key Measurements
shall be quantifiable, measurable and objective.
k. MEASUREMENT WINDOW shall mean the time during which
performance of a Service Level, Application, or other element
of the Services shall be measured, which such time shall
exclude approved Scheduled Downtime.
l. MINIMUM SERVICE LEVEL shall mean the minimum level of
performance set forth in Service Level Attachment SLA-1 with
respect to each Critical Service Level or Key Measurement.
m. MINIMUM SERVICE LEVEL DEFAULT shall mean Supplier's level of
performance for a particular Critical Service Level fails to
meet the applicable Minimum Service Level at any time.
n. MONTHLY FEES shall mean the Base Fees and Variable Fees for a
calendar month.
o. OTHER SUPPLIER(S) shall mean all third parties, excluding
Supplier, contracted by PacifiCare.
p. PERFORMANCE CATEGORY shall mean a grouping of Critical Service
Levels as set forth on Service Level Attachment SLA-1.
Critical Deliverables do not constitute a Performance
Category.
q. POOL PERCENTAGE AVAILABLE FOR ALLOCATION shall mean
[...***...] percent ([...***...]%) of the At Risk Amount.
r. SERVICE LEVEL CREDIT shall have the meaning set forth in
Section I.F.1 of this Schedule.
s. SERVICE LEVEL CREDIT ALLOCATION PERCENTAGE shall have the
meaning set forth in Section I.F.1 of this Service Level
Schedule. The sum of the Service Level Credits Allocation
Percentages shall not exceed [...***...] for each Performance
Category.
t. SERVICE LEVEL DEFAULT shall mean a Minimum Service Level
Default or an Expected Service Level Default.
Page 7 of 36 [LOGO] PACIFICARE(R)
*CONFIDENTIAL TREATMENT REQUESTED
u. SERVICE LEVEL REPORT shall mean the monthly report of
Supplier's performance with respect to the Service Levels set
forth in this Service Level Schedule and any Service Level
Defaults and Service Level Credits attributable to Supplier's
performance during the preceding month, as set forth in
Section I.C. of this Service Level Schedule.
v. SIX-MONTH MEASUREMENT PERIOD shall mean, if Section I.I.1 of
this Schedule is used to establish the Expected Service Level
and Minimum Service Level commitments, the six (6) consecutive
months of measurements immediately preceding the month in
which PacifiCare provided notice to Supplier.
w. UNRELIEVED SERVICE LEVEL CREDITS shall have the meaning set
forth in Section I.G.4 of this Service Level Schedule.
x. YEARLY PERFORMANCE AVERAGE shall have the meaning set forth in
Section I.G.1.b of this Service Level Schedule.
E. NOTICE REQUIREMENTS FOR ADDITIONS, DELETIONS AND MODIFICATIONS:
PacifiCare shall send notice to Supplier at least [...***...] prior to the
date that additions or deletions to Performance Categories, or additions
or deletions to Service Levels (which include Critical Service Levels and
Key Measurements), or modifications to Service Level Credit Allocation
Percentages for any Critical Service Levels are to be effective, provided
that PacifiCare may send only [...***...] such notice (which notice may
contain multiple changes) each calendar quarter.
F. SERVICE LEVEL CREDITS:
In the event of a Service Level Default, Supplier shall provide PacifiCare
credits as calculated below.
1. Service Level Attachment SLA-1 sets forth the information
required to calculate the credits that shall accrue to
PacifiCare (and that Supplier shall credit to PacifiCare as
set forth in Section I.G.4) in the event of a Service Level
Default ("SERVICE LEVEL CREDIT"). For each Service Level
Default, subject to Section I.G below, a Service Level Credit
that shall accrue to PacifiCare and shall be computed in
accordance with the following formula:
Service Level Credit = A x B x C
Where:
A = The Allocation of the Pool Percentage specified for the
Performance Category in which the Service Level Default
occurred as shown in Service Level Attachment SLA-1 (the
"ALLOCATION OF POOL PERCENTAGE").
Page 8 of 36 [LOGO] PACIFICARE(R)
* CONFIDENTIAL TREATMENT REQUESTED
B = The percentage of the Allocation of Pool Percentage
allocated to the Critical Service Level in which the Service
Level Default occurred as shown in Service Level Attachment
SLA-1 (the "SERVICE LEVEL CREDIT ALLOCATION PERCENTAGE")
C = At Risk Amount
For example, assume that Supplier fails to meet the Minimum
Service Level for a Critical Service Level, and that the
Supplier's total Monthly Fees for the month in which the
Service Level Default occurred were [...***...].
Additionally, assume that the Allocation of Pool Percentage
for the Performance Category of such Critical Service Level is
[...***...]% and that its Service Level Credit Allocation
Percentage is [...***...]%. The Service Level Credit due to
PacifiCare for such Service Level Default would be computed as
follows:
A = [...***...]% (the Allocation of Pool Percentage),
Multiplied by
B = [...***...]% (the Service Level Credit Allocation
Percentage),
Multiplied by
C = [...***...] percent [...***...]%) of [...***...],
Supplier's Fees for the month during which the Service LeveL
Default occurred).
[...***...] (the amount of the Service Level CredIT)
2. If [...***...] Or more than [...***...] Service Level Default
has occurred in a single month where the Supplier Has failed
to meet more than [...***...] Minimum Service Level, the sum
of the corresponding Service Level Credit(S) shall accrue to
PacifiCare. For clarity, a single Service Level Default shall
not be double-counted as both a Minimum Service Level failure
and an Expected Service Level failure.
3. In no event shall the amount of Service Level Credits that
accrue to PacifiCare with respect to all Service Level
Defaults occurring in a single month exceed, in total, the At
Risk Amount.
4. Supplier shall notify PacifiCare if PacifiCare accrues a
Service Level Credit, which notice shall be included in the
Service Level Reports described in Section I.C. The Service
Level Reports shall also describe any failure to meet Key
Measurements for the month.
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*CONFIDENTIAL TREATMENT REQUESTED
G. EARN BACK:
Supplier shall have earn back opportunities with respect to Service Level
Credits as follows:
1. Within [...***...] after the last day of each Contract Year,
Supplier shall provide a report to PacifiCare that shall
include, with respect to each Critical Service Level for which
there was a Service Level Default during the preceding
Contract Year, the following:
a. Statistics on Supplier's monthly performance during the
preceding Contract Year;
b. The average of Supplier's monthly performances in that
Critical Service Level during the preceding Contract
Year ("YEARLY PERFORMANCE AVERAGE"); and
c. The total amount of Service Level Credits accrued to
PacifiCare for Service Level Defaults.
2. If during the preceding Contract Year Supplier achieved a
Yearly Performance Average in a Critical Service Level that
was greater than or equal to the Expected Service Level in
effect for such Critical Service Level during the preceding
year, then Supplier shall be relieved from paying any Service
Level Credits that accrued during the preceding Contract Year
for such Critical Service Level.
3. If during the preceding Contract Year PacifiCare deletes a
Critical Service Level, then Supplier shall be relieved from
paying Service Level Credits assessed during the preceding
Contract Year for Service Level Defaults in that Critical
Service Level only for the portion of the Contract Year during
which the deletion was effective.
4. Supplier shall pay to PacifiCare the amounts of any Service
Level Credits accrued to PacifiCare for which Supplier is not
relieved pursuant to Section I.G.2 or I.G.3 above for each
Contract Year ("Unrelieved Service Level Credits") as a credit
to PacifiCare on the monthly invoice reflecting charges to
PacifiCare for the first month of the Contract Year
immediately following the Contract Year in which such Service
Level Credits accrued. In the case where there shall be no
further invoices, Supplier shall pay the accrued amount of the
Unrelieved Service Level Credits to PacifiCare within
[...***...] days after the end of the last month of the Term.
5. If the Agreement is terminated prior to the end of the Initial
Term, any Extension Period or any Renewal Term, the foregoing
process shall be undertaken with respect to the portion of the
Contract Year during which the Agreement was in effect.
Page 10 of 36 [LOGO] PACIFICARE(R)
H. ADDITIONS AND DELETIONS OF PERFORMANCE CATEGORIES:
PacifiCare may add or delete Performance Categories by sending notice as
described in Section I.E above. In no event may: (1) the sum of the
Allocations of Pool Percentage for all the Performance Categories exceed
the Pool Percentage Available for Allocation, or (2) the sum of the
Service Level Credit Allocation Percentages for all Critical Service
Levels within a Performance Category exceed [...***...].
I. ADDITIONS AND DELETIONS OF SERVICE LEVELS:
PacifiCare may add or delete Service Levels pursuant to the following
provisions. PacifiCare may require the addition of Services Levels,
including Service Levels required to address Supplier's performance with
respect to New Services, Services for which a Service Level does not exist
but for which PacifiCare requires a Service Level and for any changes in
Supplier's performance that can reasonably be expected due to the addition
or utilization of new, updated, upgraded or modified Equipment, Systems,
Applications or other technology.
1. ADDITIONS:
PacifiCare may add Service Levels in accordance with this Section
I.I.1 and by providing notice in accordance with Section I.E.
Expected Service Levels and Minimum Service Level commitments
associated with added Service Levels shall be computed as follows:
a. Where measurements exist for at least [...***...] for a
particular Service that is being provided by Supplier, the
Parties agree that the Expected Service Level shall be defined
as the average performance indicated by such measurements for
the [...***...] Measurement Period and that the Minimum
Service Level shall be defined as the lowest(1) months
measurement achieved during the [...***...] Measurement
Period, or
b. Where less than [...***...] consecutive [...***...] of
measurements (or no measurements) exist for a particular
Service that is being provided by Supplier, the Parties shall
attempt in good faith to agree on an Expected
----------
[...***...]
Page 11 of 36 [LOGO] PACIFICARE(R)
*CONFIDENTIAL TREATMENT REQUESTED
Service Level and a Minimum Service Level commitment using
industry standard measures or third party advisory services
[...***...], or
c. Where less than [...***...] consecutive [...***...] of
measurements (or no measurements) exist for a particular
Service that is being provided by Supplier, and the Parties
fail to agree on an Expected Service Level and a Minimum
Service Level commitment using Section I.I.1.b above, the
Parties shall do the following:
1) Supplier shall begin providing monthly measurements
within [...***...]
2) After [...***...] or more measurements have been taken
(or should have been taken per Section I.I.1.c(1) above
and if not so measured; constructed as described in
Section I.I.1.c(2)(a) below), PacifiCare may at any time
in writing request that Section I.I.1.a above be used to
establish the Expected Service Level and Minimum Service
Level commitments.
(a) If Supplier is responsible for measuring actual
service levels for [...***...] and fails to
provide one (1) or more measurements during the
[...***...] Measurement Period such that
[...***...] consecutive measurements are not
available, the missing measurement(s) shall be
constructed according to the following;
[...***...]
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*CONFIDENTIAL TREATMENT REQUESTED
(b) [...***...]
2. DELETIONS:
PacifiCare may delete Service Levels by sending notice to
Supplier in accordance with Section I.E.
3. IMPACT OF ADDITIONS AND DELETIONS OF CRITICAL SERVICE
LEVELS ON SERVICE LEVEL CREDIT ALLOCATION PERCENTAGES:
When adding or deleting a Critical Service Level, PacifiCare
shall modify the Service Level Credit Allocation Percentages
for the Critical Service Levels within the Performance
Category such that the total Service Level Credit Allocation
Percentages for all Critical Service Levels within the
Performance Category equals [...***...]. If PacifiCare adds a
Critical Service Level in accordance with Section I.I.1 above,
but does not modify the Service Level Credit Allocation
Percentages for the Critical Service Levels within the
applicable Performance Category under this Section I.I.3,
then, until such time as PacifiCare so modifies such Service
Level Credit Allocation Percentages, the Service Level Credit
Allocation Percentage for such added Critical Service Level
shall be zero (0).
J. MODIFICATIONS OF SERVICE LEVEL CREDIT ALLOCATION PERCENTAGES FOR CRITICAL
SERVICE LEVELS:
PacifiCare may modify the Service Level Credit Allocation Percentages for
any Critical Service Levels within the Performance Category by sending
notice in accordance with Section I.E. PacifiCare shall modify the Service
Level Credit Allocation Percentages for
Page 13 of 36 [LOGO] PACIFICARE(R)
*CONFIDENTIAL TREATMENT REQUESTED
[...***...] or more of the Critical Service Levels within the Performance
Category such that the sum of the Service Level Credit Allocation
Percentages for all Critical Service Levels within the Performance
Category equals [...***...].
K. CRITICAL DELIVERABLES:
Service Level Attachment SLA-1 sets forth the credits that shall be
payable by Supplier to PacifiCare in the event Supplier fails to deliver
any of the Critical Deliverable by the time specified for the delivery of
such Critical Deliverable in Service Level Attachment SLA-1 ("DELIVERABLE
CREDITS"). [...***...] The total amount of Deliverable Credits that
Supplier incurs each month shall be reflected on the first monthly invoice
after the month during which the Deliverable Credits accrued (e.g., the
amount of Deliverable Credits payable for failure to deliver any Critical
Deliverable(s) in August shall be credited against the September invoice
for Base Fees). Unlike Service Level Credits, Deliverable Credits shall be
shown in each monthly invoice as an actual credit to the charges
[...***...]
L. COMMENCEMENT OF OBLIGATIONS:
Except as provided in the Agreement, the obligations set forth in this
Service Level Schedule shall commence on the Cutover Date or as otherwise
specified in Service Level Attachment SLA-1 referencing the column
"cutover + mos**". The number used in the column "cutover +mos**" are in
the format X where "X" represents the number of months after Cutover Date
that the Supplier shall be responsible to provide measurement data in
support of the Critical Service Level and Supplier shall be responsible
for Service Level Credits for any failures to attain the Critical Service
Level. In the event any Service Levels are added pursuant to Section I.I.1
above, Supplier's obligations shall commence at the time that the Expected
Service Level or Minimum Service Level, as applicable, has been defined
for the added Service Level.
M. COOPERATION:
Without limiting or altering any of Supplier's obligations as set forth in
Section 13.2 of the Agreement, Supplier shall provide a single point of
contact for the prompt resolution of all Service Level Defaults and all
failures to provide high quality Services to PacifiCare, regardless of
whether the reason for such Service Level Defaults, or failure to provide
high quality outsourcing Services to PacifiCare, was caused by Supplier or
Other Suppliers.
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N. [...***...] - CRITICAL SERVICE LEVELS:
The Parties agree to the concept of [...***...] Critical Service Levels
shall be [...***...] at the end of each [...***...] month period following
the commencement of obligations dates specific to each Critical Service
Level as described in Section I.L and below:
1. [...***...]
2. [...***...]
3. [...***...]
4. [...***...]
5. In no event shall any adjustment of any Critical Service Level
result in any Expected Service Level or Minimum Service Level being
reset below the level of the applicable Expected Service Level or
Minimum Service Level prior to the adjustment.
O. ROOT-CAUSE ANALYSIS:
If a problem is defined as Severity Level 0 or 1 for any Service Level,
then Supplier shall perform root-cause analysis for such failure as
described in Section 8.4 of the Agreement.
Without limiting or altering any of the Supplier's obligations pursuant to
Section 8 of the Agreement, Supplier's root-cause analysis for each
Service Level Default shall determine a single root-cause for each such
Service Level Default. If a single root-cause incident results in more
than [...***...] Service Level Default, then PacifiCare shall select
[...***...] Service Level Default for which PacifiCare shall be entitled
to receive a Service Level Credit. PacifiCare shall not be entitled to a
Service Level Credit for each such Service
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Level Default attributable to each root-cause incident. [...***...]
With regards to root cause analysis and Service Level Defaults, the term
NICE refers to a group of Applications consisting of NICE Claims, NICE
Membership - Commercial, NICE Membership - Secure and NICE Provider
Contracts.
PacifiCare reserves the right to add, delete or change the Applications
within each grouping providing that the Application being substituted is
part of the existing suite and currently exists in Key Measurements.
P. MEASURING & MONITORING TOOLS:
As of the Cutover Date, the measuring tools and methodologies set forth in
Service Level Attachment SLA-4 to this Service Level Agreement represent
acceptable tools and methodologies for measuring the Critical Service
Levels. If there are any Critical Service Levels for which the measuring
tools and methodologies have not been agreed upon by PacifiCare and
Supplier and included in Attachment SLA-4 and Supplier fails to propose a
measuring tool or methodology for such Critical Service Level that is
acceptable to PacifiCare prior to the date upon which Supplier shall be
responsible for measuring such Service Level performance and Service Level
Credits due for applicable Service Level Defaults, then such failure to
provide an acceptable measuring tool and methodology shall be deemed a
Minimum Service Level Default for the applicable Critical Service Level
until Supplier proposes and implements an acceptable measuring tool.
Tools for new Critical Service Levels shall be implemented according to
the Change Management Procedures. If after the Cutover Date or the
implementation of measuring tools methodologies for new Critical Service
Levels Supplier desires to use different measuring and tools or
methodologies for a Critical Service Level, then Supplier shall provide
notice to PacifiCare, in which event the Parties shall reasonably adjust
the measurements as necessary to account for any increased or decreased
sensitivity in such new tools or methodologies. If the Parties cannot
agree on the required adjustment, Supplier shall continue to use the
measuring tools and methodologies that had been initially agreed to by the
Parties.
Q. EXCEPTIONS:
Supplier shall not be responsible for a failure to meet any Service Level
solely to the extent that such failure is directly attributable to any of
the following:
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1. PacifiCare's breach of this Agreement, or the failure of a
PacifiCare Agent to perform according to the terms of such
PacifiCare Agent's agreement with PacifiCare, or the acts of
PacifiCare or of a PacifiCare Agent that directly cause Supplier's
failure to perform, provided that, in each case, Supplier used all
reasonable efforts to meet the Service Levels as specified.
2. Service or resource reductions requested or approved by PacifiCare
and agreed to by the Parties through the Change Control Procedures;
provided that Supplier has previously notified PacifiCare in writing
prior to the execution of such Change Control Procedures that the
implementation of such request would result in such failure to meet
the Service Level.
R. EXCEPTIONS - MISSING SOURCE CODE
1. [...***...]
2. [...***...]
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S. EXCLUSIONS:
[...***...]
T. BALANCED SCORECARD:
[...***...]
U. VOLUME MEASUREMENT
[...***...]
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II. CRITICAL SERVICE LEVELS:
This section sets forth descriptions of the Critical Service Levels. The Minimum
Service Levels and the Expected Service Levels associated with the following
Critical Service Levels are set forth in Service Level Attachment SLA-1.
A. PERFORMANCE CATEGORY -CRITICAL APPLICATION AVAILABILITY:
Supplier shall measure and report the Availability of each Critical
Application identified in Service Level Attachment SLA-1 ("CRITICAL
APPLICATION AVAILABILITY"), which such Critical Application Availability
shall constitute a Critical Service Level.
B. PERFORMANCE CATEGORY- APPLICATION AVAILABILITY:
Supplier shall measure and report the Availability of each Application
identified in Service Level Attachment SLA-1 ("APPLICATION AVAILABILITY"),
which such Application Availability shall constitute a Critical Service
Level.
C. PERFORMANCE CATEGORY - CRITICAL APPLICATION RESPONSE TIME:
Supplier shall measure and report the Response Time of each Critical
Application identified in Service Level Attachment SLA-1 ("CRITICAL
APPLICATION RESPONSE TIME"), which such Critical Application Response Time
shall constitute a Critical Service Level.
D. PERFORMANCE CATEGORY - APPLICATION RESPONSE TIME:
Supplier shall measure and report the Response Time of each Application
identified in Service Level Attachment SLA-1 ("APPLICATION RESPONSE
TIME"), which such Application Response Time shall constitute a Critical
Service Level.
E. PERFORMANCE CATEGORY - CRITICAL PROCESSES:
1. The Batch Schedule Completion On-Time Rate
The Batch Schedule Completion On-Time Rate calculation
includes production of updated files and appropriate reports,
produced in a calendar month. The list of all Critical Batch
Jobs to be tracked in this performance category can be found
on the SLA-1 under the title Critical Batch Jobs and shall
herein be known as ("SCHEDULED BATCH JOBS").
Page 19 of 36 [LOGO] PACIFICARE(R)
[...***...]
With respect to ongoing Scheduled Batch Jobs scheduling
requirements, Supplier shall be responsible to make updates to
the job schedules as required and review such updates with
PacifiCare no less frequently than [...***...]
For the avoidance of doubt, if the total number of Scheduled
Batch Jobs per Application scheduled in [...***...] iS less
than [...***...], then:
The compliance calculation described in this Section shall be
calculated and reported, and a failure to meet the Expected
Service Level shall occur only if (a) the total number of
Scheduled Batch Jobs per Application scheduled in that
[...***...], minus (b) the total number of Scheduled Batch
Jobs successfully completed on-time per Application, is
greater than [...***...]. A failure to meet the Minimum
Service Level shall occur only if (y) the total number of
Scheduled Batch Jobs per Application scheduled in that
[...***...], minus (z) the total number of Scheduled Batch
Jobs per Application successfully completed on-time, produced
in [...***...] is greater than [...***...]
F. PERFORMANCE CATEGORY - PROJECTS:
General. Supplier shall manage all Projects with respect to Project
Deliverables so as to meet or be better than the Service Levels set forth
in Service Level Attachment SLA-1.
1. PERCENT OF MAJOR PROJECT SCHEDULE OVERRUNS
On a monthly basis, beginning one full month (1) after Cutover
Date, Supplier shall provide a report for each Major Project
promoted into production during the previous month that
summarizes actual attainment with respect to the agreed
scheduled implementation date, as modified to reflect changes
agreed to in writing by PacifiCare and amended through the
Change Management Procedures. With respect to Major Projects
with schedules estimated prior to the Cutover Date (i.e., not
by Supplier), Supplier shall review these Major Projects.
[...***...]
Percent of Major Project Schedule Overruns shall be calculated
[...***...]
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[...***...]
2. PROJECTS DELIVERED TO BUDGET WITHOUT MORE THAN
[...***...] PERCENT ([...***...]%) VARIANCE
Each month on a rolling, twelve-month basis, Supplier shall
provide a report for each Project (Projects with detailed
estimates completed prior to the Cutover Date shall be
validated during transition) completed during the previous
twelve-month period. The report shall detail the variance
between the actual cost and the approved detailed Project
estimate, including those Projects modified to reflect changes
agreed to in writing by Client and amended through the Change
Management Procedures. With respect to Projects with schedules
estimated prior to the Cutover Date (i.e., not by Supplier),
Supplier shall review these Projects. [...***...]
Projects Delivered to Budget shall be calculated as
[...***...]
G. OTHER APPLICATION SERVICE LEVELS:
1. NICE CLAIMS AVERAGE DAILY VOLUME
Supplier shall perform capacity planning and analysis for
applications supporting NICE claims. Based on these plans and
analysis, Supplier shall propose recommendations to improve
the optimization or software replacement of NICE claims
applications software. The implementation of any such
recommendations may be treated as a Project and shall be
subject to PacifiCare's prior approval and prioritization.
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III. CRITICAL DELIVERABLES:
If Supplier fails to deliver to PacifiCare any Critical Deliverables as
described below, in format and content acceptable to PacifiCare by the date
identified for such Critical Deliverable, Supplier shall provide PacifiCare,
each month, a credit as set forth in Service Level Attachment SLA-1 until such
Critical Deliverable is provided to PacifiCare.
A. POLICY AND PROCEDURE MANUAL DRAFT:
Supplier shall deliver to PacifiCare and Infrastructure Supplier the draft
of the portion of the Policy and Procedures Manual that pertains to the
Services and other functions and aspects of Supplier's performance, in
conformance with the requirements described in Schedule 13.3 (Policy and
Procedures Manual).
B. REPORT FORMAT DRAFT:
Supplier shall deliver to PacifiCare and Infrastructure Supplier the draft
of the portion of the Policy and Procedures Manual that pertains to the
Services and other functions and aspects of Supplier's performance, in
conformance with the requirements described in Schedule 3.8(b) Reports.
C. ANNUAL PLAN:
Supplier shall deliver the first annual plan as set forth in Section
3.8(a) of the Agreement.
D. PACIFICARE IS CUSTOMER SATISFACTION SURVEY DRAFT QUESTIONS:
Supplier shall provide a draft of customer satisfaction survey questions
with regards to the service the Supplier provides. This draft is due
[...***...] following the Effective Date. PacifiCare shall review the
draft and blend the questions into the annual IS Customer Satisfaction
Survey conducted by an independent third party.
E. PACIFICARE IS CUSTOMER SATISFACTION SURVEY KEY MEASUREMENTS PLAN:
[...***...] after the results of the first annual IS Customer Satisfaction
Survey are available the Supplier shall provide a Key Measurements plan to
measure the applicable improvement of Supplier provided service identified
in the IS Customer Satisfaction Survey as requiring improvement.
Identified Key Measurements shall be approved by PacifiCare and reported
on a monthly basis. Annually, these Key Measurements shall be adjusted
based on the latest IS Customer Satisfaction Survey results.
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F. ACHIEVEMENT OF CMM LEVEL 3 FOR SUPPLIER SOFTWARE DEVELOPMENT
ORGANIZATIONS:
A Carnegie Melon Software Engineering Institute's Capability Maturity
Model certified independent assessor shall certify that the Services have
achieved ("CMM") Level 3. This Critical Deliverable is due [...***...]
after the completion of the Supplier's Transition Period.
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IV. KEY MEASUREMENTS:
This section sets forth qualitative descriptions of the Key Measurements. The
Minimum Service Level and Expected Service Level targets associated with such
Key Measurements are set forth in Service Level Attachment SLA-1. The column
"Track and Report by Region" on the Key Measurement tab of Service Level
Attachment SLA-1 indicates the region(s) in which these Key Measurements apply.
As indicated, the monthly performance reports should contain the results for
these Key Measurements by region.
A. PERFORMANCE CATEGORY- APPLICATION AVAILABILITY:
Application Availability is the Availability tracked during Online Hours
for each identified Application within the associated PacifiCare Service
Location in the Key Measurement Section.
B. PERFORMANCE CATEGORY APPLICATION RESPONSE TIME:
Application Response Time is the response time tracked during Online
Hours. It is measured using the [...***...]th percentile generated by
Infrastructure Supplier's monitoring tools to collect and summarize
end-to-end response time for Application during Online Hours. The targets
for response time are identified in Service Level Attachment SLA-1.
C. PERFORMANCE CATEGORY - APPLICATION PERFORMANCE DEGRADATION:
Supplier shall track and record Application performance degradation (slow
response) using information as reported by the End-Users through the
Infrastructure Supplier via the Infrastructure Supplier's problem
management tools ("APPLICATION PERFORMANCE DEGRADATION"). [...***...]
D. PERFORMANCE CATEGORY CRITICAL PROCESSES:
The Batch Schedule Completion On-Time Rate calculation includes production
of updated files and appropriate reports, produced in a calendar month.
The list of all Critical Batch Jobs (the Scheduled Batch Jobs) to be
tracked in this performance category can be found on the SLA-1 under the
title Critical Batch Jobs.
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[...***...]
With respect to ongoing Scheduled Batch Jobs scheduling requirements,
Supplier shall be responsible to make updates to the job schedules as
required and review such updates with PacifiCare no less frequently than
[...***...].
For the avoidance of doubt, if the total number of Scheduled Batch Jobs
per Application scheduled in a [...***...] is less than [...***...], then:
The compliance calculation described in this Section shall be calculated
and reported, and a failure to meet the Expected Service Level shall occur
only if (a) the total number of Scheduled Batch Jobs per Application
scheduled in that [...***...], minus (b) the total number of Scheduled
Batch Jobs successfully completed on-time per Application, is greater than
[...***...]. A failure to meet the Minimum Service Level shall occur only
if (y) the total number of Scheduled Batch Jobs PEr Application scheduled
in that [...***...], minus (z) the total number of Scheduled Batch Jobs
per Application successfully completed on-time, produced in a calendar
month is greater than [...***...].
E. OTHER APPLICATION SERVICE LEVELS:
1. NICE CLAIMS AVERAGE DAILY VOLUME
[...***...]
F. PERFORMANCE CATEGORY - PROBLEM RESPONSE AND RESOLUTION:
[...***...]
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[...***...]
2. INITIAL RESPONSE TIME FOR SEVERITY 0 OR 1 HELP DESK CALLS
(REFERRED TO SUPPLIER):
a. INITIAL RESPONSE TIME FOR SEVERITY 0 OR 1 HELP DESK
CALLS (REFERRED TO SUPPLIER) [...***...]
b. [...***...]
[...***...]
3. FINAL RESOLUTION OF SUPPLIER ASSIGNED CRITICAL SEVERITY HELP
DESK CALLS:
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[...***...]
G. PERFORMANCE CATEGORY - APPLICATION MANAGEMENT:
[...***...]
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[...***...]
H. PERFORMANCE CATEGORY - APPLICATIONS PERFORMANCE:
General. Supplier shall manage Applications performance as to meet or be
better than the Service Levels set forth in Service Level Attachment
SLA-1.
[...***...]
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[...***...]
I. PERFORMANCE CATEGORY - DISASTER RECOVERY:
1. CONDUCT SUCCESSFUL DISASTER RECOVERY TEST - APPLICATIONS AND
DATABASES.
In addition to the annual test of the DRP as set forth in Section 16.1 of
the Agreement, Supplier may conduct tests of any Disaster Recovery
Milestones prior to the scheduled delivery date for that Disaster Recovery
Milestone [...***...]
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[...***...]
2. DISASTER RECOVERY RE-TEST--[...***...].
Should Supplier fail to achieve any Disaster Recovery Milestone(s)
required to demonstrate recoverability as defined in the Conduct
Successful Disaster Recovery Test Key Measurement, Supplier shall be
obligated to re-test the failed Disaster Recovery Milestone(s) ("RETEST")
within [...***...] of the failure(s) until the Supplier successfully
demonstrates such recoverability.
[...***...]
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V. DEFINITION OF TERMS USED IN SERVICE LEVELS
The following terms when used in the Service Level Schedule (including any
exhibits thereto) with initial capital letters shall have the respective
meanings set forth herein. Terms used with initial capital letters that are not
defined herein shall have the meaning set forth in the Agreement.
1. [...***...]
2. APPLICATIONS MAINTENANCE is any effort where modifications to
Existing Systems are made to correct/fix code or processes that are
either no longer operational or will cease to function properly
without the correction. Maintenance activities include handling Help
Desk tickets related to resolving production issues or coding bugs;
production monitoring and trouble-shooting; routine capacity
assessment and tuning SQM (Service Quality Metrics).
3. APPLICATIONS REPRESENTATIVE shall mean those Supplier personnel that
have been designated to interface with End-Users on resolution of
Help Desk calls, who have the appropriate authority and capability
to resolve such problems, and have been so identified to the
End-Users.
4. [...***...]
5. [...***...]
6. BACKUP shall mean to copy a file or files and place them in an
appropriate alternate location so that a safe, usable copy remains
if the original is destroyed.
7. [...***...]
8. BUSINESS DAY shall mean Monday through Friday excluding national
holidays and official PacifiCare holidays unless otherwise specified
by PacifiCare Supplier Relationship Manager (or his / her designee).
9. CALL shall mean a call to a Help Desk from an End-User requesting
assistance that is related to the Services.
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10. COMPONENT shall mean any constituent part of a Product or Services,
whether provided by Supplier or any other source.
11. CRITICAL APPLICATIONS are those Applications that support critical
business objectives within a specific reporting entity (region) and
are tracked and measured using Online Hour Measurement Windows under
the Critical Service Level Section of SLA-1.
12. [...***...]
13. DOWNTIME shall mean the time that a particular System, Application,
Product, Software, Equipment or any other part of the Services is
not available during the Measurement Window as specified in this
Schedule, for normal business use by the End-User.
14. FINAL RESOLUTION is defined as meeting the business requirements in
place prior to the error that resulted in the Call to the Help Desk,
and the End-User that reported the problem has been contacted by the
Help Desk representative and agrees that it has been resolved. For
clarity, Final Resolution may include workarounds.
15. INFRASTRUCTURE HELP DESK shall mean the help desk maintained by the
Infrastructure Supplier.
16. IS CUSTOMER SATISFACTION SURVEY shall mean a survey of End-Users'
opinions regarding the services provided.
17. MAJOR PROJECT is defined in the Statement of Work.
18. MINOR PROJECT is defined in the Statement of Work.
19. NEW DEVELOPMENT is defined in the Statement of Work.
20. ONLINE HOURS shall means all hours within a daily 24-hour period
minus the Batch Window and Scheduled Downtime. Online hours shall
mean that period of time (days of the week and hours per day) during
which a particular System, Application, Software, Equipment or any
other part of the Services is expected to be available to PacifiCare
Entities for normal business use.
21. PRODUCT shall mean any Equipment, Software or supply item provided
by Supplier or PacifiCare pursuant to the Agreement.
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22. RESPOND shall mean notification may be via telephone or in person to
the End-User when the End-User reports a problem to Help Desk.
23. RESPONSE TIME shall be the value at the [...***...] of a series of
end-to-end measurements using the Infrastructure Supplier's
agreed-to tools, which are used to assess the processing speed of an
Application's operation within the environment.
24. SCHEDULED BATCH JOB shall mean a sequence of computer programs that
are assigned/sent to a computer to run without further user
interaction and are scheduled, in connection with the Services, by
an End-User or Supplier to run automatically at a certain time, as
further described in Sections II.E and IV.D of this Schedule.
25. SCHEDULED DOWNTIME of a particular System, Application, element of
hardware, network or any other part of the Services shall mean the
amount of time that a particular System, Application, element of
hardware, network or any other part of the Services is not available
for normal business use by the End-User that has been agreed to in
advance by PacifiCare (e.g. planned schedule maintenance
activities). The Parties intend to schedule such time so as to
minimize the impact to PacifiCare Entities' business operations.
Supplier shall maintain Availability during such periods to the
extent reasonably practicable.
26. SERVICE REQUEST shall mean a PacifiCare-approved request that
Supplier is responsible for logging and tracking, including via a
service management tool (including Tivoli Service Desk and Help
Now!).
27. SEVERITY LEVEL shall mean the value 0, 1, 2, 3 or 4 assigned to a
particular problem, as determined by the Infrastructure Supplier
Help Desk technician when a problem occurs by referring to the
following table:
-------------------------------------------------------------------------------------------
LEVEL DESCRIPTION STATUS UPDATE/ TARGET RESPONSIBLE GROUP
RESOLUTION STATUS REPORTING
-------------------------------------------------------------------------------------------
Severity 0 COMPANY AND OR ENTERPRISE [...***...] [...***...]
[...***...] -WIDE
STATUS UPDATE
[...***...]
[...***...]
TARGET RESOLUTION
[...***...]
-------------------------------------------------------------------------------------------
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-------------------------------------------------------------------------------------------
LEVEL DESCRIPTION STATUS UPDATE/ TARGET RESPONSIBLE GROUP
RESOLUTION STATUS REPORTING
-------------------------------------------------------------------------------------------
[...***...]
-------------------------------------------------------------------------------------------
Severity 1 MAJOR OPERATIONAL IMPACT [...***...] [...***...]
WITH NO WORKAROUND
AVAILABLE
STATUS UPDATE
[...***...]
[...***...]
TARGET RESOLUTION
[...***...]
-------------------------------------------------------------------------------------------
Severity 2 MAJOR OPERATIONAL IMPACT- TARGET STATUS [...***...]
PRE-EXISTING WORKAROUND
IN PLACE.
[...***...]
[...***...]
TARGET RESOLUTION
[...***...]
-------------------------------------------------------------------------------------------
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-------------------------------------------------------------------------------------------
LEVEL DESCRIPTION STATUS UPDATE/ TARGET RESPONSIBLE GROUP
RESOLUTION STATUS REPORTING
-------------------------------------------------------------------------------------------
[...***...]
-------------------------------------------------------------------------------------------
Severity 3 - Individual is Down and
there is no work around TARGET STATUS [...***...]
- One individual [...***...]
customer is unable
to work within an
Application. TARGET RESOLUTION
[...***...] [...***...]
-------------------------------------------------------------------------------------------
Severity 4 - Individual is TARGET STATUS [...***...]
experiencing a problem
and a workaround does
exist [...***...]
- Individual has a TARGET RESOLUTION:
non-urgent question
regarding Application,
report or other IS
related assistance. [...***...]
[...***...]
-------------------------------------------------------------------------------------------
28. SYSTEM CRITICAL SCHEDULED UPTIME shall mean the amount of minutes
within the applicable Measurement Window for the System as set forth
in Service Level Attachment SLA-1.
29. SYSTEM DOWNTIME shall mean the total time per calendar month out of
the System Critical Scheduled Uptime, as measured in minutes, that
the System for which Availability is being computed is not available
for Use.
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30. SYSTEM shall mean any collection or aggregation of two (2) or more
Products that are designed to perform, or are represented by
Supplier as performing or being capable of performing, as a
functional entity.
31. TIME TO RESOLVE shall mean the elapsed time between registration of
the problem to Supplier's Help Desk and the successful resolution
(i.e., repair or bypass, not escalation) of the problem as accepted
by the End-User.
32. UNSCHEDULED DOWNTIME shall mean the time that a particular System,
Application, element of hardware or any other part of the Services
is not available for normal business use during the Batch Window or
Online Hours. If the duration of unavailability for Scheduled
Downtime event exceeds the agreed-to time interval for the event and
extends into the Online Hours, the time unavailable which extends
into the Online Hours shall be considered Unscheduled Downtime in
the Application Availability calculation.
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SCHEDULE 8
SERVICE LEVEL AGREEMENT ATTACHMENT 1
SERVICELAND MATRIX
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 8
SERVICE LEVEL AGREEMENT ATTACHMENT 2
SERVICE LEVEL OUTCOME EXAMPLES
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 8
SERVICE LEVEL AGREEMENT ATTACHMENT 3
BALANCED SCORECARD
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 8
SERVICE LEVEL AGREEMENT ATTACHMENT 4
PRE-APPROVED MEASURING TOOLS AND METHODOLOGIES FOR
CRITICAL SERVICE LEVEL MEASUREMENTS
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 8
SERVICE LEVEL AGREEMENT ATTACHMENT 5
APPLICATION SUMMARIES
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 9.2 (a)
APPROVED BENCHMARK PROVIDERS
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 10.1
SERVICE LOCATIONS
PACIFICARE LOCATIONS
1. Hope Street Building
00000 Xxxx Xx
Xxxxxxx, XX 00000
2. SoHo Building
0000 Xxxxxxx Xxx
Xxxxxxx, XX 00000
SUPPLIER LOCATIONS
1. Rochester ADC
0000 00xx Xx XX
Xxxxx 000
Xxxxxxxxx, XX 00000
2. Nova Scotia ADC
Xxxxxxxx Tower
2000 Barrington St
Suite 300
Halifax, Nova Scotia X0X 0X0
Xxxxxx
SCHEDULE 10.2
SAFETY AND SECURITY PROCEDURES
The PacifiCare Safety and Security Procedures can be found via pull-down menus
at the following URL on PacifiCare's intranet:
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 11
HUMAN RESOURCES
For purposes of this Human Resources Schedule, the date on which the
Information Technology Services Agreement ("Agreement") between Xxxxx, Inc.
("Supplier") and PacifiCare ("PacifiCare") enter into the Agreement will be
referred to herein as the "Effective Date."
_.01 Employment Offers. Supplier shall extend offers of employment according
to the terms of this Schedule and in accordance with the procedures
described in this Schedule to those PacifiCare employees set forth
in Exhibit A hereto (collectively, the "Affected Employees"; each,
an "Affected Employee"). [...***...]
_.02 Hiring Requirements. Supplier shall hire those Affected Employees who:
(1) are listed in Exhibit A hereto; and
(2) [...***...]
[...***...]
..03 Terms of Employment. Supplier's offer of employment to each Affected
Employee shall include the following:
(1) Base Salary. [...***...]
(2) Positions. [...***...]
(3) Work Hours. [...***...]
1.
*CONFIDENTIAL TREATMENT REQUESTED
[...***...]
(4) Health Care Benefits and Employee Benefit Plans. [...***...]
(5) Vacation. [...***...]
(6) 401(k) Plans. [...***...]
(7) Length of Service Credit. [...***...]
(8) Adjustments Related to Benefit Plans. [...***...]
2.
*CONFIDENTIAL TREATMENT REQUESTED
(9) Tuition Aid. [...***...]
(10) Location. [...***...]
(11) Bonuses/Compensation Programs.
(a) [...***...]
(b) [...***...]
(12) [...***...]
_.04 Severance Benefits.
(1) [...***...]
3.
*CONFIDENTIAL TREATMENT REQUESTED
(2) [...***...]
_.05 Financial and Administrative Responsibilities.
(1) [...***...]
_.06 Human Resources Representative. [...***...]
_.07 Conditions for Working on PacifiCare Accounts.
(1) Supplier agrees to [...***...]
(2) Supplier shall be responsible for [...***...]
(3) Supplier will implement an employee training program that will
complement, further develop and maintain the requisite skills
and technical knowledge of Transitioned Personnel assigned to
the PacifiCare account in anticipation of PacifiCare's needs
for the products and services in its business units.
[...***...]
4.
*CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT A
AFFECTED EMPLOYEES
NAME
POSITION
BASE SALARY
SHIFT
AMOUNT OF SIGN ON BONUS
AUTOMOBILE ALLOWANCE
FLEX PLAN ALLOWANCE
RELOCATION PACKAGE
EXHIBIT B
RELEASE AND WAIVER OF CLAIMS
[TO BE EXECUTED UPON TERMINATION OF EMPLOYMENT WITH SUPPLIER]
I understand that my last day of employment with ________________
("Supplier") will be ______________. In exchange for and in consideration of the
promises and covenants stated in this Release and Waiver ("Release and Waiver")
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
[...***...]
This Release and Waiver [...***...] constitute the complete, final and
exclusive embodiment of the entire agreement between PacifiCare and me and the
Supplier and me with regard to the subject matter hereof. I am not relying on
any promise or representation by PacifiCare or the Supplier that is not
expressly stated herein or in the First Release and Wavier. This Release and
Waiver may only be modified by a writing signed by both me and a duly authorized
officer of PacifiCare and the Supplier.
Date: __________________ By: ____________________________________
[EMPLOYEE]
________________________________________
[PACIFICARE REPRESENTATIVE]
________________________________________
[XXXXX REPRESENTATIVE]
*CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT B-1
DISCLOSURE UNDER TITLE 29 U.S. CODE SECTION 626(f)(1)(H)
CONFIDENTIALITY PROVISION: The information contained in this document is
private and confidential. You may not disclose
this information to anyone except your
professional advisors.
1. The following departments have been selected for the severance package
program:
a. ____________________________
b. ____________________________
[ADD MORE IF NECESSARY]
2. In the [two] departments listed above, employees whose job positions will
be eliminated on [DATE OF TERMINATION] are eligible to participate in the
severance package program.
3. An eligible employee will have up to forty-five (45) days to review the
terms and conditions of the severance package.
================================================================================
EMPLOYEES ELIGIBLE FOR THE SEVERANCE PACKAGE PROGRAM
--------------------------------------------------------------------------------
JOB TITLE AGE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
================================================================================
EMPLOYEES NOT ELIGIBLE FOR THE SEVERANCE PACKAGE PROGRAM
--------------------------------------------------------------------------------
JOB CLASSIFICATION/ORGANIZATION UNIT AGE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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================================================================================
SCHEDULE 12.2
SCHEDULE 12.2
KEY PERSONNEL
For confidentiality purposes, the information in this schedule will only be
accessible to the PacifiCare Supplier Relationship Vice President, the Xxxxx
Account Executive, and other personnel (e.g., Human Resources, Legal, etc.) as
deemed necessary.
[...***...]
1.
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 12.4(e)
SCHEDULE 12.4 (e)
APPROVED SUBCONTRACTORS
1.0 INTRODUCTION
This Schedule defines the Supplier Subcontractors that are approved by
PacifiCare for use in performing the Services. Approved Subcontractors shall
also include those subcontractors performing work for PacifiCare as of the
Effective Date.
2.0 APPROVED SUBCONTRACTORS
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 12.6(a)
SCHEDULE 12.6(a)
PACIFICARE COMPETITORS
The following persons or entities (collectively "Companies") are competitors of
PacifiCare Entities:
(A) Companies that offer managed care and other health plan products for
employer groups, other purchasers of commercial health care products
(including individuals) and Medicare beneficiaries in the States of
[...***...]
(B) Companies that offer specialty products and services [...***...]
(C) Companies that provide [...***...]
(D) Companies that offer any of the following products or services:
[...***...]
A representative sample of the PacifiCare Competitors includes but are not
limited to, [...***...]
This Schedule 12.6(a) is subject to quarterly review and revision by the
Steering Committee.
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 12.6(b)
SUPPLIER COMPETITORS
"Supplier Competitors" are defined to be information technology (IT) application
development, support, maintenance and management providers which [...***...] A
representative sample of Supplier Competitors include but are not limited to the
following: [...***...]
This Schedule 12.6(b) is subject to quarterly review and revision by the
Steering Committee.
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 13.2
OVERSIGHT AND MANAGEMENT PROCESS
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 13.3
POLICY AND PROCEDURES MANUAL TABLE OF CONTENTS
1.0 INTRODUCTION
This Schedule defines the table of contents that will evolve into the Policy and
Procedures Manual to be developed during Transition.
2.0 POLICY AND PROCEDURES MANUAL TABLE OF CONTENTS
*Document Control (How to execute changes to policies and procedures guide)
*Document Overview (High level overview of manual 's content)
*Services Overview (High level contract overview)
Process Specifications
*Change Management
*Control Backup and Recovery
Control Batch Operations
Control Capacity
Control Inventory
*Control IT Security
*Control Service Levels
Control Tape Operations
Coordinate IMACs
*Application Delivery
Application Management and Support Operations
AM Support Services
*Handle Customer Satisfaction
Handle Entitlement Failure
Handle Inventory Logistics
Handle Procurement
*Handle User Requests
Network Services
*Perform Escalation
Perform User Administration
*Perform Asset Inventory
*Problem Management
*Provide Request Status
*Reassign Request
*Situation Management
Support Desktop
Page 1 of 2
Support Hardware Facilities
*Support Performance
*Support Software
*Track Inventory
*Update Configuration Information
*Acronyms
INDEX
Note:
- This table of contents is representative of the topics that need to be
included in the Policies and Procedures Manual. PacifiCare and IBM/Xxxxx
will agree on the final version of the document. These Policies and
Procedures will address where the client and supplier need to interface.
- This Policy and Procedures Manual will be a comprehensive document and
refer to other relevant policies and procedures by name or location of the
living document as they are updated over time.
- It is not necessary to modify this Schedule via a contract amendment if
the Table of Contents change in the draft or final document.
- The sections where Xxxxx will provide information are indicated with an
"*". The Application Delivery Section is provided solely by Xxxxx while
the remaining sections are IBM's responsibility with Xxxxx contributing to
reviewing content. This will be true for the version of Schedule 13.3 that
will be attached to the Xxxxx and PacifiCare Agreement.
Page 2 of 2
SCHEDULE 14.2(a)
PACIFICARE PROPRIETARY SOFTWARE
1.0 INTRODUCTION
This Schedule lists the PacifiCare Proprietary Software as defined in Exhibit A
of the Agreement.
2.0 PACIFICARE PROPRIETARY SOFTWARE
PROPRIETARY SOFTWARE NAME
[...***...]
1.
*CONFIDENTIAL TREATMENT REQUESTED
PROPRIETARY SOFTWARE NAME
[...***...]
2.
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 14.2(b)
PACIFICARE THIRD PARTY SOFTWARE
----------------------------------------------------------------------------------------------------------------------
NO. SUPPLIER: DESCRIPTION:
----------------------------------------------------------------------------------------------------------------------
[...***...] [...***...] [...***...]
----------------------------------------------------------------------------------------------------------------------
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 14.3
SUPPLIER SOFTWARE
[...***...]
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 16.1
CRITICAL SERVICES
APPLICATION: RECOVERY
TIME-FRAME
[...***...]
CUSTOMER SUPPORT SYSTEMS: APPLICATION RUNNING IN REGION
[...***...]
Page 1 of 1
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 17
CHARGES SCHEDULE
This Schedule describes the methodology for calculating the Fees. In the event
of any conflict, confusion or ambiguity between this Schedule and the Agreement,
the Agreement shall control.
ATTACHMENTS
The following Attachments are attached hereto and are hereby incorporated by
reference:
Attachment 17.1 Summary of Base Fees
Attachment 17.2 Resource Baselines
Attachment 17.3 Resource Unit Rates
Attachment 17.4 Systems Maintenance and Enhancements Hourly Rates
Attachment 17.5 Termination Fees
Attachment 17.6 Managed-Agreement Contractors
1. DEFINITIONS
Terms used herein with initial capital letters shall have the respective
meanings set forth in the Agreement, or, for those terms that are not defined in
the Agreement, the meanings set forth in this Schedule.
1.1 "ACTUAL RESOURCE UNITS" has the meaning set forth in Section 4.1(a)
(Calculation of ARCs for Resource Units) of this Schedule.
1.2 "ARC(S)" or "ADDITIONAL RESOURCE CHARGE(S)" is defined in the
Agreement.
1.3 "ARC RATE" means the per Resource Unit rate at which PacifiCare is
charged for use of Resource Units above the Baseline.
1.4 "BASELINE" means the quantity of a particular Resource Unit that
constitutes the volume of that Resource Unit included in the Base Fees. The
Parties have established the initial Baselines for each Resource Unit as of the
Effective Date, which are enumerated in Attachment 17.2 to this Schedule.
Baselines may be adjusted during the Term pursuant to the processes established
in the Agreement.
1.5 "BILLABLE FTE" or "BILLABLE FULL TIME EQUIVALENT" means [...***...]
1.6 "BILLABLE HOURS" means productive hours expended by Supplier in
performing the Services, including application software development; technology
services; customer support; maintenance; operations; and other Project-related
activities, but excluding non-productive time, including the following:
administrative time (including management time), non-Project related meetings;
formal training not directly related to Projects; other training, including
1.
*CONFIDENTIAL TREATMENT REQUESTED
CMM and internal training, not directly related to Projects; vacation time, PTO,
STO, bereavement and jury duty.
1.7 "CUSTOMER-FACING PERSONNEL" means Project Staff who directly interact
with End-Users on a face to face basis. Customer-Facing Personnel include
Project Staff who:
(a) are expected to pick up specifications for Projects;
(b) work with End-Users for End-User acceptance testing;
(c) provide in-depth Customer Support to End-Users; and
(d) other Project Staff whose primary responsibilities involve
interfacing directly with End-Users or other PacifiCare personnel.
1.8 "ECONOMIC CHANGE ADJUSTMENT" or "ECA" has the meaning set forth in
Section 6.1 below.
1.9 "FULL TIME PERSON" or "FTP" means the basis for measuring the work
effort associated with a properly trained person providing Services on a
full-time basis. No individual FTP may account for greater than [...***...].
Actual Billable Hours shall be tracked and reported on a monthly basis, and the
Parties shall discuss progress toward meeting the monthly target. All
Customer-Facing Personnel FTPs will be based on-site at PacifiCare Service
Locations.
1.10 "INTEREST" means interest payable by PacifiCare on undisputed amounts
not timely paid in accordance with Section 17 of the Agreement.
1.11 "INTEREST RATE" means the rate of interest from time to time
announced by Citigroup, Inc. at its principal office in the United States as its
prime commercial lending rate plus [...***...] ([...***...]%), but in no event
to exceed the highest lawful rate of interest.
1.12 "RESOURCE UNIT" means the applicable unit of measurement for usage of
a specified resource.
1.13 "RRC(S)" or "REDUCED RESOURCE CHARGE(S)" is defined in the Agreement.
1.14 "RRC RATE" means the Resource Unit rate at which PacifiCare is
credited for its use of Resource Units below the Baseline.
1.15 "START UP FEES" mean all one-time costs associated with the
transition of Services from PacifiCare to Supplier.
2.
*CONFIDENTIAL TREATMENT REQUESTED
1.16 "SYSTEMS MAINTENANCE AND ENHANCEMENTS" or "SME" is defined in Section
3.1(a).
2. BASE FEES
Base Fees include the Operational Fees for SME (as defined in Section
3.1(a) below) set forth on Attachment 17.1 to this Schedule, which include Start
Up-Fees (including [...***...]), all as enumerated on Attachment 17.1 to this
Schedule.
3. BASELINES
3.1 INITIAL BASELINES. The quantity of each Resource Unit that shall be
utilized in providing Services to PacifiCare under the Agreement as of the
Effective Date in consideration for the Base Fees shall be specified in
Attachment 17.2 to this Schedule as a Baseline.
(a) BILLABLE FTES. The Resource Units for Systems Maintenance and
Enhancements ("SME") shall be Billable FTEs, and the Baseline for these Resource
Units are set forth in Attachment 17.2 to this Schedule. The ARCs and RRCs
described in the Agreement and calculated according to this Schedule apply only
in relation to the Billable FTE Baseline. For clarity, as the Billable FTE
Baseline decreases over the course of the Term, Supplier shall generate the same
amount of work. This is made possible by Supplier's productivity increases, as
measured by the Balanced Scorecard.
(b) BILLABLE HOURS. SME shall also be measured in Billable Hours,
and reported to PacifiCare.
3.2 BASELINE ADJUSTMENTS. Baselines for a Resource Unit are adjustable in
accordance with the Agreement. In accordance with the Policy and Procedures
Manual, the Parties shall implement a planning process to facilitate additions
or reductions to the Baselines.
4. VARIABLE FEES
4.1 ARCS. Subject to the Agreement, including Section 17.8 and Section 4.3
below, Supplier shall provide additional Resource Units to the extent requested
and pre-approved by PacifiCare. PacifiCare's increased usage of a Resource Unit
(when compared with the Baseline for that Resource Unit) shall result in an ARC
payable by PacifiCare as set forth in Section 11.3 below.
(a) CALCULATION OF ARCS FOR RESOURCE UNITS. For each Resource Unit,
Supplier shall compare the quantity of Resource Units used during the applicable
measurement period ("ACTUAL RESOURCE UNITS") with the Baseline for that Resource
Unit. If the Actual Resource Units exceed the applicable Baseline for such
period, PacifiCare shall pay Supplier an
3.
*CONFIDENTIAL TREATMENT REQUESTED
ARC in accordance with Section 17 of the Agreement and this Schedule with the
current or future charges (or, if no future charges shall be due, make payment
to Supplier) equal to the product of the ARC Rate for the applicable Resource
Unit, as set forth in Attachment 17.3 to this Schedule, multiplied by the
difference between the Actual Resource Units for that Resource Unit and the
applicable Baseline.
(b) EXAMPLE. Assuming the following variables, the ARC calculation
would be as follows below:
[...***...]
--------------------------------------------------------------------------------
ARC CALCULATION
--------------------------------------------------------------------------------
ARC = [...***...]
--------------------------------------------------------------------------------
ARC = [...***...]
--------------------------------------------------------------------------------
ARC = [...***...]
--------------------------------------------------------------------------------
In this example, the ARCs for FTPs for the month would be [...***...].
4.2 RRCS. Subject to the Agreement, including Section 17.8 and Section 4.3
below, Supplier shall reduce Resource Units to the extent requested and
pre-approved by PacifiCare. PacifiCare's decreased usage of a Resource Unit
(when compared with the Baseline for that Resource Unit) shall result in a RRC
creditable to PacifiCare as set forth in Section 11.3 below.
(a) CALCULATION OF RRCS FOR RESOURCE UNITS. For each Resource Unit,
Supplier shall compare the quantity of Actual Resource Units used during the
applicable measurement period with the Baseline for that Resource Unit. If the
Actual Resource Units fall below the applicable Baseline for such period,
PacifiCare shall be credited a RRC in accordance with Section 17 of the
Agreement and this Schedule with the current or future charges (or, if no future
charges shall be due, Supplier shall make payment to PacifiCare) equal to the
product of the RRC Rate for the applicable Resource Unit, as set forth in
Attachment 17.3 to this Schedule, multiplied by the difference between the
applicable Baseline and the Actual Resource Units.
(b) EXAMPLE 1. Assuming the following variables, the RRC calculation
would be as follows below:
[...***...]
4.
*CONFIDENTIAL TREATMENT REQUESTED
--------------------------------------------------------------------------------
RRC CALCULATION
--------------------------------------------------------------------------------
RRC = [...***...]
--------------------------------------------------------------------------------
RRC = [...***...]
--------------------------------------------------------------------------------
RRC = [...***...]
--------------------------------------------------------------------------------
In this example, the RRCs for FTPs for the month would be [...***...]
(c) EXAMPLE 2. Assuming the following variables, the RRC calculation
would be as follows below:
[...***...]
--------------------------------------------------------------------------------
RRC CALCULATION
--------------------------------------------------------------------------------
RRC = [...***...]
--------------------------------------------------------------------------------
RRC = [...***...]
--------------------------------------------------------------------------------
RRC = [...***...]
--------------------------------------------------------------------------------
In this example, the RRCs for FTPs for the month would be [...***...].
4.3 NOTICE PERIOD FOR ARCS AND RRCS. PacifiCare shall provide Supplier
with at least [...***...] notice of a request for an ARC, and [...***...] notice
of a request for an RRC, [...***...]
5. SERVICE LEVEL CREDITS
PacifiCare shall be entitled to receive Service Level Credits in
accordance with Section 8.7 of the Agreement and Schedule 8 to the Agreement.
6. INFLATION ADJUSTMENT
6.1 Supplier shall calculate and apply an adjustment to the Base Fees
annually based upon economic changes in cost of living (an "ECONOMIC CHANGE
ADJUSTMENT" or "ECA") as described below, beginning on the anniversary of the
Effective Date. The ECA shall be payable
5.
*CONFIDENTIAL TREATMENT REQUESTED
on a prospective basis1 (for example, the actual inflation for 2002 shall
determine the ECA for the year 2003) on the Base Fees, ARCs, and hourly fees
relating to New Services payable by PacifiCare, minus the RRCs creditable to
PacifiCare. The ECA shall be determined as soon as practicable after the end of
each calendar year using the formula below.
6.2 Supplier shall invoice PacifiCare for the ECA, if any, along with the
Base Fees, beginning in January 2003 and monthly thereafter. [...***...]
6.3 ACTUAL INFLATION. Supplier shall calculate the [...***...] by
comparing the change in the year-to-year [...***...] with the [...***...] for
the year before the Effective Date (the "BASE YEAR INDEX"). For each calendar
year of the Term, the actual [...***...] for the year before the year for which
the [...***...] is being calculated ("ACTUAL INFLATION") shall be compared to
the Base Year Index (for example, the [...***...] for 2002 shall be used to
determine the [...***...] for the year 2003). If Actual Inflation is equal to or
less than the Base Year Index, then no [...***...] is due to Supplier. If,
however, Actual Inflation is greater than the Base Year Index, then Supplier
shall apply the [...***...] to the Base Fees and ARCs due Supplier, less RRCs,
for the year for which Supplier is calculating the [...***...].
6.4 ECA CALCULATION. The ECA is equal to [...***...]
(a) EXAMPLE. Assuming the following variables, the ECA calculation
would be as follows below:
[...***...]
--------------------------------------------------------------------------------
ECA CALCULATION
--------------------------------------------------------------------------------
ECA = [...***...]
--------------------------------------------------------------------------------
ECA = [...***...]
--------------------------------------------------------------------------------
ECA = [...***...]
--------------------------------------------------------------------------------
------------
[...***...]
6.
*CONFIDENTIAL TREATMENT REQUESTED
--------------------------------------------------------------------------------
ECA CALCULATION
--------------------------------------------------------------------------------
ECA = [...***...]
--------------------------------------------------------------------------------
7. ADDITIONAL SERVICE FEES
If Supplier provides Services to additional PacifiCare Included Affiliates
in accordance with Section 3.1 of the Agreement, then PacifiCare shall pay and
fees or expenses related to the provision of such Services as negotiated by the
Parties in accordance with that section.
8. NEW SERVICES
Any requests for New Services are subject to the terms of the Agreement,
including the terms of Section 3.9 (Right to Use Third Parties). In the event
that PacifiCare requests that Supplier perform a New Service as described in
Section 5.1 of the Agreement, then at the time the New Service is requested, and
pursuant to Section 5.1 of the Agreement (New Services), Supplier shall
calculate Supplier's prospective fee for such New Service using Supplier's
standard fee, as described in Attachment 17.4 to this Schedule (unless otherwise
mutually negotiated in good faith between the Parties), and subject to Section
17.14 of the Agreement [...***...].
9. TERMINATION FEES
9.1 EARLY TERMINATION FEE. In the event PacifiCare terminates the
Agreement and triggers payment of the Early Termination Fees as set forth in
Section 25.1 of the Agreement, PacifiCare shall pay the applicable Early
Termination Fees as set forth in Attachment 17.5 to this Schedule. [...***...]
9.2 TERMINATION ASSISTANCE SERVICES FEE. In the event any Termination
Assistance Services provided by Supplier cannot be provided through resources
included in the Fees, PacifiCare shall pay the Termination Assistance Services
Fee as provided in Section 26.2 of the Agreement.
10. PASS-THROUGH EXPENSES.
Pass-through expenses include (a) the actual costs payable by PacifiCare
in accordance with Section 17 of the Agreement, (b) [...***...] (c) travel in
accordance with Section 12.6 below. Supplier shall invoice such pass-through
expenses monthly in arrears and PacifiCare shall pay such invoices as set forth
in Section 17 of the Agreement. Approval processes for these expenses shall be
set forth in the
7.
*CONFIDENTIAL TREATMENT REQUESTED
Policy and Procedures Manual. If and as applicable, taxes shall be paid as set
forth in Section 18 of the Agreement.
11. REPORTING AND INVOICING; CHARGEBACKS AND TIME ACCOUNTING
11.1 REPORTING. After the completion of each month during the Term,
following the first month after the Cutover Date, Supplier shall (1) measure,
track and report PacifiCare's usage of Resource Units using a
PacifiCare-approved time accounting system that can be audited and verified; and
(2) calculate, track and report ARCs and RRCs as set forth in Section 4 above
(Variable Fees); and provide PacifiCare with a Variable Fee Report detailing
Resource Unit usage and the ARC/RRC calculations made by Supplier pursuant to
Section 4 above for each Resource Unit. Supplier shall provide the information
required by PacifiCare directly into PacifiCare's time accounting system.
11.2 INVOICES. All Fees shall be invoiced to PacifiCare as specified in
Section 17.5 of the Agreement. The invoice details shall be agreed to by the
parties within thirty (30) days after the Effective Date. Supplier shall submit
its first invoice to PacifiCare at the Cutover Date and thereafter as provided
in the Agreement and this Schedule. In accordance with Section 17.12 of the
Agreement, this first invoice will be prorated for the period of time from the
Cutover Date through the end of the month in which the Cutover Date occurs.
11.3 PAYMENT. All Base Fees shall be reported and billed on monthly basis
by taking the annual fees specified in Attachment 17.1 and dividing by twelve
(12). Based upon the Variable Fee Report, and in accordance with Section 17.4 of
the Agreement (Variable Fee Report), the Parties shall reconcile payment of any
Variable Fees with other amounts paid or payable every month. PacifiCare shall
pay amounts due to Supplier in accordance with Section 17 of the Agreement
(Payments and Invoicing). All periodic charges shall be computed on a
calendar-month basis and shall be prorated for any partial month, unless
expressly stated otherwise.
11.4 INTEREST. Interest on overdue amounts that are not the subject of a
dispute in accordance with Section 17.7 of the Agreement shall be calculated as
[...***...]
(a) EXAMPLE. Assuming the following variables, the Interest
calculation would be as follows below:
(i) The undisputed amount overdue is [...***...]; and
(ii) The Interest Rate is [...***...] percent ([...***...]%);
and
(iii) Payment of the undisputed amount is [...***...] late;
and
8.
*CONFIDENTIAL TREATMENT REQUESTED
(iv) There are thirty (30) days in the month in which the
undisputed amount is due.
--------------------------------------------------------------------------------
INTEREST CALCULATION
--------------------------------------------------------------------------------
Interest = [...***...]
--------------------------------------------------------------------------------
Interest = [...***...]
--------------------------------------------------------------------------------
Interest = [...***...]
--------------------------------------------------------------------------------
12. ASSUMPTIONS. Supplier's charges for Resource Units under this Schedule are
subject to the following assumptions:
12.1 [...***...]
12.2 [...***...]
12.3 [...***...]
12.4 [...***...]
12.5 [...***...]
12.6 [...***...]
9.
*CONFIDENTIAL TREATMENT REQUESTED
13. MANAGED-AGREEMENT CONTRACTORS.
Within fifteen (15) days of the Effective Date, PacifiCare shall include
as Attachment 17.6 a list of up to [...***...] contractors whose services
PacifiCare believes it is required to retain under its existing agreements. For
so long as Supplier retains the services of these contractors, PacifiCare shall
be responsible for compensation to them under the existing agreements. Supplier
shall credit against invoiced amounts the actual costs of PacifiCare associated
with compensating these contractors. When completed, Attachment 17.6 shall be
integrated with and become a part of this Schedule.
14. ADJUSTMENTS RELATED TO SCHEDULES 7.1 (ASSIGNED AGREEMENTS) AND 7.2 (MANAGED
AGREEMENTS).
14.1 BACKGROUND. As described in Section 7 of the Agreement (Third Party
Agreements), Supplier shall be responsible for payments pursuant to the Assigned
Agreements, and PacifiCare shall remain responsible for payments pursuant to the
Managed Agreements. [...***...]
[...***...]
14.2 ADJUSTMENT TO SCHEDULES 7.1 AND 7.2. The Parties agree that on a
mutually agreeable date [...***...] after the date on which the latter of
Schedule 7.1 or 7.2 is provided to Supplier (the "ADJUSTMENT DATE"), the Parties
shall revise Schedules 7.1 and 7.2 to:
[...***...]
10.
*CONFIDENTIAL TREATMENT REQUESTED
[...***...]
14.3 ADJUSTMENTS TO PRICING. Concurrent with the adjustment to Schedules
7.1 and 7.2 described above, and in accordance with those procedures:
[...***...]
15. POST-CLOSING ADJUSTMENTS.
15.1 ASSUMPTIONS MADE. The Parties acknowledge that each has made certain
financial and operational assumptions which are necessary as of the Effective
Date, but which may prove to be inaccurate, resulting in financial implications
such that it may be desirable to reconcile certain of the financial terms under
the Agreement with the Parties' actual respective financial obligations. The
Parties therefore agree that within thirty (30) days of the Cutover Date
11.
*CONFIDENTIAL TREATMENT REQUESTED
("TRUE-UP DATE"), the parties shall meet to discuss the assumptions made in the
following areas:
(a) Actual Average Salary [...***...]
(b) Actual Contractor Count and Rates/Costs [...***...]
(c) PacifiCare retention bonus payouts and tax impact [...***...]
(d) Costs related to Assigned Agreements [...***...]
15.2 TRUE-UP. In the event that the Parties mutually agree that in the
above-listed areas there exists a variance at the True-Up Date between the
actual amounts, and the assumptions memorialized in the Agreement at the
Effective Date, then:
(a) With respect to the assumption described in Section 15.1(a):
(i) If the actual average salary is higher than the assumed
average salary, then Base Fees will be increased in an amount equal to
[...***...]
(ii) If the actual average salary is lower than the assumed
average salary, then Base Fees will be reduced in an amount equal to [...***...]
(1) CALCULATION EXAMPLE: VARIANCE GREATER THAN [...***...]
[...***...]
(2) CALCULATION EXAMPLE: VARIANCE LESS THAN [...***...]
[...***...]
(3) CALCULATION EXAMPLE: VARIANCE GREATER THAN [...***...]
12.
*CONFIDENTIAL TREATMENT REQUESTED
[...***...]
(b) With respect to the assumption described in Section 15.1(b), the
Parties shall determine methodology to perform a true-up within [...***...] of
the Effective Date. In event of a variance, the Parties shall work together to
develop options for an accelerated transition of the applicable
Managed-Agreement Contractors. The financial impact shall be resolved in
accordance with the process described in Section 13.
(c) [...***...]
(d) With respect to the assumption described in Section 15.1(d), if
actual costs related to the Assigned Agreements set forth in Schedule 7.1
differs from the assumed costs, the Base Fee will be adjusted accordingly.
15.3 ADDITIONAL TRUE-UP FOR ACTUAL CONTRACTOR COUNT AND RATES/COSTS. In
addition to the provisions of Section 15.2(b), the Parties agree to repeat the
procedures set forth in Section 15.2(b) above, upon the earlier of [...***...]
15.4 FURTHER ACTIONS. The Parties agree to make any revisions to the
Agreement (including any Schedule or Attachment thereto) necessary to
memorialize revisions to the assumptions or financial terms accordingly.
13.
*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 17.1
ATTACHMENT 17.1
SUMMARY OF BASE FEES ( X $1000)
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Category of Services Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Total
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OPERATIONAL FEES
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DATA CENTER
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NETWORK
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DISTRIBUTED COMPUTING
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SYSTEMS MAINTENANCE
AND ENHANCEMENTS [...***...]
TOTAL
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DESKTOP
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DESKTOP TOTAL [...***...]
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HELP DESK TOTAL
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INFORMATION DISTRIBUTION
CENTER
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INFORMATION DISTRIBUTION
CENTER TOTAL [...***...]
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TOTAL OPERATIONAL FEES [...***...]
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START-UP FEES
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0
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TOTAL START-UP FEES [...***...]
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GRAND TOTAL FEES [...***...]
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PRODUCTIVITY
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*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 17.2
RESOURCE BASELINES
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*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 17.3
RESOURCE UNIT RATES
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*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 17.4
SYSTEMS MAINTENANCE AND ENHANCEMENTS HOURLY RATE
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*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 17.5
TERMINATION FEES
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*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 17.6
MANAGED-AGREEMENT CONTRACTORS
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*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 19.1
SCHEDULE 19.1
FORM NON-DISCLOSURE AGREEMENT
Agreement between [PacifiCare or Supplier, as the case may be] having a
place of business at ______________________________ hereinafter ("Disclosing
Party") and [Third party requesting access to PacifiCare and/or Xxxxx
Confidential Information] having a place of business at
______________________________ hereinafter ("Recipient").
WHEREAS, PacifiCare Health Systems, Inc. ("PacifiCare") and Xxxxx, Inc.
("Supplier") have entered into an agreement (the "PacifiCare Agreement") whereby
Supplier will provide certain information technology application systems
maintenance and enhancement services ("Services") to PacifiCare; and
WHEREAS, PacifiCare and Supplier have provided each other with information
which PacifiCare and Supplier deem confidential or proprietary ("Confidential
Information") and which is necessary for PacifiCare to acquire and Supplier to
render the Services; and
WHEREAS, PacifiCare and Supplier are authorized to provide access to the
Confidential Information to others in accordance with the PacifiCare Agreement
in connection with the Services; and
WHEREAS, the Disclosing Party intends to disclose to Recipient, and
Recipient wishes to receive certain Confidential Information relating to the
Services:
In consideration for Recipient's agreements hereunder and knowing that the
Disclosing Party is relying thereon, the parties agree as follows:
1. The Confidential Information shall remain the property of PacifiCare or
Supplier. No license rights are granted to the Recipient, directly or
indirectly, to use the Confidential Information disclosed under this
Agreement for any purpose other than for the purpose stated on the face
hereof. All copies of such Confidential Information shall be returned to
PacifiCare or Supplier upon request.
2. Recipient will protect the Confidential Information to prevent
unauthorized use, dissemination or publication. Except as stated herein,
the Recipient shall not reproduce the Confidential Information provided
under this Agreement in any manner or for any purpose without the prior
written authorization of the Disclosing Party. The Recipient shall
immediately notify the Disclosing Party of any disclosure, inquiry, or
demand made by any third party regarding the Confidential Information.
3. The Recipient shall protect the Confidential Information provided under
this Agreement by taking all necessary and reasonable precautions to
prevent unauthorized disclosure.
1.
4. Recipient shall hold the Confidential Information in strictest confidence,
and shall use the Confidential Information only for the purposes of this
Agreement and disclose the Confidential Information only to employees of
the Recipient who have a need to know and who have agreed in writing to
abide by the terms and conditions of this Agreement prior to disclosure.
5. Exceptions to Obligations. The Recipient shall not be liable under this
Agreement for disclosure of Confidential Information under the following
circumstances:
(a) The Confidential Information is required to be disclosed by judicial
action after all available legal remedies to maintain the
confidentiality of the Confidential Information have been exhausted;
(b) The Confidential Information is made public without breach of this
Agreement by the Recipient;
(c) The Confidential Information was known to the Recipient prior to
disclosure by the Disclosing Party and the Recipient provides
written notice to the Disclosing party to that effect at the time of
disclosure;
(d) The Confidential Information is independently developed by the
Recipient subsequent to disclosure by the Disclosing Party.
6. Neither this Agreement, nor any rights hereunder in whole or in part shall
be assignable or otherwise transferable by either party and the
obligations contained in this Agreement shall survive and continue after
termination of this Agreement.
7. Notwithstanding any other provisions of this Agreement, Recipient agrees
not to export directly or indirectly, any U.S. source technical data
acquired from the Disclosing Party or any products utilizing such data
unless such export is in compliance with the United States Export Laws and
Regulations.
8. Injunctive Relief.
(a) The Recipient acknowledges that (1) PacifiCare and/or Supplier will
be irreparably harmed if the Recipient's obligations under this
Agreement are not specifically enforced; and (2) that PacifiCare
and/or Supplier would not have an adequate remedy at law in the
event of an actual or threatened violation of the Recipient of its
obligations.
(b) The Recipient agrees that PacifiCare and/or Supplier shall be
entitled to an appropriate decree of specific performance for any
violations or breaches by the Recipient, its employees, agents and
representatives without the necessity of demonstrating actual
damages or that monetary damages would not afford an adequate
remedy.
2.
9. Should any provision of this Agreement be held by a court of competent
jurisdiction to be illegal, invalid, or unenforceable, the remaining
provisions of this Agreement shall not be affected or impaired thereby.
10. The failure of either party to enforce any term or condition of this
Agreement shall not constitute a waiver of either party's right to enforce
each and every term and condition of this Agreement.
11. This Agreement shall be binding upon and inure to the benefit of the
parties' successors, legal representatives, and authorized assigns.
12. This Agreement constitutes the entire agreement of the parties with
respect to its subject matter and supersedes all prior or contemporaneous
oral or written agreements or understandings between the parties on such
subject matter. This Agreement may be modified only in writing signed by a
duly authorized representative of the parties.
13. This Agreement shall be governed by and construed in accordance with the
laws of the State of California. Any actions arising under this Agreement
shall be brought only in the state or federal courts of California.
RECIPIENT: __________________ DISCLOSING PARTY:______________
______________________________ ______________________________
Signature Signature
______________________________ ______________________________
(Print Name) (Print Name)
______________________________ ______________________________
(Title) (Title)
______________________________ ______________________________
(Date) (Date)
3.
SCHEDULE 19.4
RECORDS RETENTION SCHEDULE
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*CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 24.4
FAILURE TO PROVIDE CRITICAL SERVICES
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CRITICAL SERVICE CURE PERIOD
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*CONFIDENTIAL TREATMENT REQUESTED
