AMENDMENT TO SMS/HSD MARKETING AGREEMENT
This amendment (the "Amendment") is made as of the 19th day of December,
1997, between SHARED MEDICAL SYSTEMS CORPORATION, 00 Xxxxxx Xxxxxx Xxxxxxx,
Xxxxxxx, Xxxxxxxxxxxx 00000 ("SMS") and HEALTH SYSTEMS DESIGN CORP., 0000
Xxxxxxxx #0000, Xxxxxxx, Xxxxxxxxxx ("HSD"). For ease of reference SMS and/or
HSD may be referred to individually as a "Party" or collectively as the
"Parties".
SMS and HSD agree to amend the Marketing Agreement between them dated
January 31, 1994, as amended (the "Agreement") to address and clarify aspects
of the Parties' ongoing relationship and to expand the scope of the Agreement
to include previously untapped opportunities in European Payor Organization
markets. This Amendment shall serve to modify the Agreement only as specified
hereinbelow with the understanding that in the event of any conflict between
the provisions of this Amendment and the Agreement, this Amendment shall
control.
1. FLEXIBLE CREDIT POOL. Effective on the date of this Amendment, HSD shall
create a credit account in the amount of $4,000,000 for the benefit of SMS (the
"Flexible Credit Pool"). It is agreed by the Parties that ninety percent (90%)
of the amount of all correct invoices sent to SMS by HSD (or as otherwise
specified herein) may, at SMS' discretion, be charged against the Flexible
Credit Pool. The remaining ten percent (10%) of all such payments shall be
paid by SMS to HSD pursuant to the payment provisions of the Agreement.
Credits may be taken against the Flexible Credit Pool as determined by SMS,
including without limitation the support of the Parties' efforts to address the
European Payor Organization market.
2. PAYOR ORGANIZATIONS.
2.1. HSD grants to SMS the non-exclusive right to license its Diamond
950C/S Software (referred to in the Agreement as the "Oracle version of the
Diamond") to European Payor Organizations. For purposes of this Amendment the
definition of Europe shall include the European continent and countries
comprising the former Soviet Union. The first license granted by SMS to a
European Payor Organization shall entitle HSD to a one-time combined
distribution/license fee of [ * ]. For subsequent licenses, SMS shall
pay HSD [ * ] of the license fee charged by SMS to licensee Payor Organizations,
provided that the minimum license fee for each such license shall not be deemed
less than [ * ] for purposes of calculating fees due HSD.
2.2. Support fees for support of the Software licensed in the European
Payor market will be $125 per hour.
2.3. Fees for licenses granted in the European Payor Organization market
shall be due and payable at the time Diamond 950C/S is first used in the live
operation of the licensee European Payor Organization (and/or in an Outsourcing
arrangement in that territory). Support fees shall be due quarterly in
arrears. The provisions of subsection 1, above, shall apply to all such
payments due in connection with SMS licensing to European Payor Organizations.
SMS' right to license to European Payor Organizations shall also include the
local equivalent of a Third Party Administrator (TPA) performing outsourcing
services for payors.
* Confidential portions omitted and filed separately with the Commission.
1
2.4 HSD SUPPORT FOR DIAMOND 950C/S INTERNATIONALIZATION.
2.4.1 HSD will provide to SMS [ * ] the rights to use HSD's
internationalization software which enables Diamond 950C/S to utilize
multiple languages and multiple currencies and allow programmers to create
local country versions. This software shall be deemed a Deliverable
2.4.2 HSD will dedicate a minimum of the equivalent of two (2)
full time equivalent (FTE) employees for 18 months to create local country
versions of Diamond 950C/S according to SMS specifications. Tasks shall
include, without limitation, creating local versions for multi-lingual
support, multiple currency support, premium subsidy, and social program
support. Both FTEs will be experienced Diamond 950C/S technical resources.
HSD agrees to make these resources available to SMS upon 60 days prior
notice, and SMS shall have the right to preapprove such resources. Such
resources will be chargeable to SMS consistent with Section 7 of this
Amendment.
3. OUTSOURCING. HSD acknowledges SMS' continuing right to use Diamond 725
and the right to use Diamond 950C/S in SMS' Outsourcing Services Division
("OSD") operation at SMS remote processing centers. SMS' right to use Diamond
725 and/or 950C/S shall be non-exclusive, meaning that SMS may simultaneously
use and process any other managed care software solution in the provision of
services to end users via SMS remote processing facilities or any other
outsourcing or end user facility operated by SMS. SMS agrees to pay HSD the
following fees for the use of Diamond 725 at SMS remote processing facilities:
The following Diamond 725 fees are based on per-member per-month ("PMPM")
pricing. SMS shall pay HSD [ * ] of the rates listed below:
[ * ]
* Plan participant enrolled in the member file in Diamond.
The following Diamond 950C/S fees are based on per-member per-month
("PMPM") pricing. SMS shall pay HSD [ * ] of the rates listed below:
[ * ]
* Plan participant enrolled in the member file in Diamond.
* Confidential portions omitted and filed separately with the Commission.
2
For purposes of measuring SMS' performance against the 50 user license
requirement in Section 6(a) of the Agreement, SMS shall be credited with one
license toward the 50 licenses as described in Section 6(a) of the Agreement
for each OSD customer that (i) processes a minimum of at least [ * ] lives
per month through Diamond and (ii) has an SMS contract of at least 36 months.
It is also expressly understood and agreed that SMS' right to use the
725 and/or 950C/S Software to provide services through OSD shall survive
expiration or termination of this Agreement, for a period not to exceed the
unexpired term of any outsourcing agreements that SMS enters into with
customers prior to any such expiration and/or termination. In addition, SMS
shall have surviving rights including the right to add new end users for
existing outsourcing customers and the right to renew/extend the terms of any
such existing customers. The surviving rights specified in this paragraph
shall be conditional upon SMS'continued payment of the above-specified
OSD-specific license fees to HSD for as long as SMS services such end
users/customers.
4. DIAMOND 725 LICENSE FEES. The license fees due HSD in consideration of
SMS licensing Diamond 725 shall be calculated as follows:
(a) The minimum perpetual license fee due HSD shall be [ * ] for
each Diamond 725 perpetual license (1-32 concurrent users) granted by SMS
beyond the first 30 Software licenses granted by SMS (Diamond 725 and 950C/S
combined).
(b) The minimum term license pricing for Diamond 725 shall be
calculated as follows: As to each Diamond 725 term license granted by SMS
beyond the first 30 Software licenses granted by SMS (Diamond 725 and 950C/S
combined) , SMS shall pay to HSD [ * ] of the Diamond 725 license fee net of
support fees, plus [ * ] of the support fees charged to that End User; provided
the minimum term license fee charged by SMS shall not be less than the
following:
[ * ]
For illustration purposes, a 32 concurrent user license with a [ * ]
annual support fee shall result in fees due HSD in the amount of [ * ] per
month.
* Confidential portions omitted and filed separately with the Commission.
3
[ * ]
5. DIAMOND 950C/S LICENSE FEES. The license fees due HSD in consideration
of SMS licensing Diamond 950C/S shall be calculated as follows: The minimum
perpetual license fee due HSD shall be [ * ] for each Diamond 950C/S
perpetual license (1-32 concurrent users) granted by SMS. The parties' minimum
term pricing for Diamond 950C/S shall be calculated as follows: As to each
Diamond 950C/S term license granted by SMS, SMS shall pay to HSD [ * ] of the
Diamond 950C/S license fee net of support fees, plus [ * ] of the support fees
charged to that End User; provided the minimum gross license fee charged by SMS
shall not be less than the following:
[ * ]
6. BASIS LICENSES. HSD agrees to pay the BASIS International software
license fees for the following End Users to enable those End Users to use the
Diamond 725 Windows product without the payment of additional BASIS
International license fees; provided that the maximum payments by HSD under
this subsection shall not exceed [ * ]. These BASIS license payments will be
applied to the Flexible Credit Pool as and when HSD makes any such license fee
payments.
[ * ]
7. HSD PROFESSIONAL SERVICES. HSD agrees to perform the professional
services described below. HSD shall prioritize SMS' requests for all such
services consistent with the prioritization procedures of all other projects
undertaken by HSD, with the express understanding that SMS requests will not be
prejudiced by the fact that charges for such services may be credited against
the Flexible Credit Pool.
7.1 IMPLEMENTATION AND PROFESSIONAL SERVICES. Except for services
required to be provided by HSD under the terms of the Agreement for which no
additional compensation shall be paid by SMS to HSD (except as otherwise
provided in Section 9 of this Amendment), SMS agrees to pay HSD to perform
certain additional professional services as follows: HSD will perform
implementation and other professional services for End Users, under subcontract
to SMS, pursuant to the terms of the attached Engagement Program in Exhibit A,
in consideration of SMS paying HSD the professional service rate of [ * ] per
person per hour.
7.2 INTERFACES AND ENHANCEMENTS/SOFTWARE DEVELOPMENT SERVICES. HSD
shall commit to perform software development services requested by SMS at the
rate of [ * ] per person per hour, which services shall be predominantly focused
on services required to enable and support the Parties efforts with respect to
the European Payor Market or as otherwise determined by SMS.
* Confidential portions omitted and filed separately with the Commission.
4
8. CONVERSIONS TO DIAMOND 950. HSD shall perform automated conversions from
Diamond 725 to Diamond 950C/S for the five End Users specified in Section 6 of
this Amendment, above for the fixed fee of [ * ] per End User for any such
conversion initiated within two (2) years from the date the conversion process
is first demonstrated to be operational at a customer site. It is mutually
understood and agreed that the fixed fee specified in the preceding sentence
shall apply to conversions from the base/unmodified version of the 725 Software
to a base/unmodified version of the 950C/S Software. In the event that the End
User requests other than a base/unmodified version of the 950C/S Software, HSD
will offer the additional required services at its then standard rates pursuant
to its applicable Software modification procedures. The [ * ] base
conversion fee referenced in the first sentence of this Section 8 shall be
credited against the Flexible Credit Pool at 100% (notwithstanding the 90% rule
in Section 1 above) for each such conversion that is completed by HSD. The
details and timeframes for each such conversion shall be agreed upon by SMS,
HSD and the subject End User. SMS shall also have the right at no charge to use
the conversion programs utilized by HSD and HSD shall provide conversion
program training to SMS at no charge; provided that SMS will be responsible for
the cost, if any, of any third party software components of the conversion
program.
9. DIAMOND 725 AND 950C/S ENHANCEMENTS.
9.1 HSD shall provide the Diamond 725 and 950C/S enhancements listed in
the attached Exhibit B. The enhancements listed in Exhibit B shall be free of
charge, except that as to any of the four enhancements listed directly below
that HSD objectively demonstrates are provided exclusively for SMS' benefit
(e.g., not for the benefit of any other HSD customer), SMS shall pay HSD at the
rate of [ * ] per hour which shall be credited at 100% (notwithstanding the
90% rule in Section 1 above) against the Flexible Credit Pool and HSD agrees to
design and implement such enhancements according to SMS' specifications.
[ * ]
A workplan for the implementation of Exhibit B enhancements is attached as
Exhibit C. It is understood that SMS' internal costs in support of the
development, testing and implementation of the Exhibit B enhancements will be
borne by SMS. For those Diamond 725 and 950C/S enhancements included in the
workplan, SMS shall have the authority to revise and approve the final
specifications of each such deliverable with the understanding that HSD shall
make the final decision--following discussions between HSD's CEO and SMS' Vice
President, Accounting Systems--on whether any such enhancements are added to
model software. SMS will review and provide feedback on all deliverables
within 10 days after receipt of the deliverable.
9.2 If HSD fails to deliver any of the above-described enhancements or
fails to achieve a milestone or phase of the detailed workplan on or before the
tenth (10th) day after the date scheduled in Exhibit C for general availability
or milestone/phase achievement of any such enhancement, then SMS shall be
entitled to withhold all payments due HSD under the Agreement until such
delivery occurs except to the extent that any such delay is attributable to a
force majeure event as described in Section 16 of the Agreement.
* Confidential portions omitted and filed separately with the Commission.
5
9.3 If HSD fails to deliver any of the above-described enhancements or
fails to achieve a milestone or phase of the detailed workplan on or before the
ninetieth (90th) day after the date scheduled in Exhibit C for general
availability or milestone/phase achievement of any such enhancement, as
appropriate, then SMS shall be entitled to liquidated damages in the amount of
$1,000 per day for each day after the initial 90 days that delivery is delayed,
which may be taken by SMS--at SMS' election--in cash or as a credit against
future invoices.
9.4 To the extent a delivery delay results from changes to the
implementation schedules or scope of work in Exhibit C requested by SMS, or due
to the failure of SMS to provide feedback to HSD and such failure causes HSD to
be late, the delivery dates shall be adjusted accordingly without penalty to
HSD.
10. EXCLUSIVITY.
10.1 Notwithstanding anything to the contrary in the Agreement SMS may
license a managed care product that competes with, or replaces Diamond 725
and/or 950, provided that if SMS commences licensing any such competing or
replacement product (other than a relationship between SMS and CPU, Inc.
and/or for use at any SMS outsourcing center), HSD is relieved of its
exclusivity obligations under Section 6(d) of the Agreement. Also, if SMS
commences licensing a competing or replacement product in the standalone
Payor Organization market (other than outside the United States as provided
in Section 2 of this Amendment), then HSD may market and license Diamond to
SMS Core Application licensees notwithstanding the provisions of Section 6(a)
of the Agreement.
10.2 Prior to HSD commencing any marketing or licensing activities as
currently prohibited under Section 6(a) of the Agreement, HSD shall provide at
least 30 days advance written notice to SMS of such intention for purposes of
enabling the parties to decide, if a challenge exists, whether or not SMS has
licensed Diamond to a Payor Organization.
11. CREDIT FOR ENHANCEMENTS. Separate and apart from the $4,000,000 in the
Flexible Credit Account, HSD grants to SMS a credit equal to [ * ]
([ * ] for Diamond 950C/S enhancements paid-for, but not delivered by
HSD, less [ * ] already withheld in good faith by SMS), which credit shall be
applied to any correct invoice received by SMS from HSD.
12. STAFF FUNDING BY HSD. HSD will fund the cost, not to exceed [ * ]
each, for two (2) SMS employees to perform, for one year, SMS-specific
functions in support of SMS' licensing of the 725 and/or 950C/S Software and/or
as otherwise benefits the SMS/HSD undertakings described in this Amendment
including without limitation support of the opening of the European Payor
Organization xxxxxx.Xxx employee shall perform the responsibilities of a
Program Manager in the HSD Product Management organization. The other employee
will work on technical projects as directed by SMS.Their activities will be
directed by SMS and administered with the cooperation of HSD. SMS will
invoice HSD quarterly in advance for such payments. HSD commits that these
individuals will commence the above-described work no later than March 31,
1998. HSD shall at no charge also provide office space, equipment, and support
consistent with the space, equipment, and support HSD provides to its own
employees performing programming and development functions.
13. TERM. Notwithstanding anything to the contrary in Section 2 of the
Agreement, the Agreement may not be terminated by HSD prior to the retirement
of the Flexible Credit Pool. The Flexible Credit
* Confidential portions omitted and filed separately with the Commission.
6
Pool may be retired by means of applying credits as described in this
Amendment and/or cash payments by HSD to SMS in the discretion of the Parties.
14. ADDITIONAL ITEMS.
14.1 Processing by Affiliated and Unaffiliated Physicians and Entities.
The parties agree that the letter attached as Exhibit F is the agreed upon
method for determining whether SMS' right to relicense Diamond includes the
right for End Users to use Diamond to process the data of affiliated and
unaffiliated physicians and entities.
14.2 DEFINITIONS. The definition of "Deliverables" shall be amended to
also include that third party software specified in Exhibit C, as amended, as a
component of the Software.
14.3 CLARIFICATION OF BILLING. The chart attached as Exhibit D shall
be used to determine whether or not services provided by HSD to SMS are
billable in the future.
15. RELEASE. Contingent on HSD performing all of its material contractual
obligations to SMS in a timely and correct manner, SMS agrees to refrain from
initiating litigation against HSD for claims arising prior to the date of
this AmendmentSMS waives no other rights or remedies available to SMS under
the Agreement, at law, or in equity. In the event HSD fails to perform its
material contractual obligations in a timely and correct manner and SMS
initiates litigation against HSD for claims arising prior to the date of this
Amendment, any potential recovery by SMS shall be reduced by amounts
correctly credited against the Flexible Credit Pool, plus amounts paid by HSD
to SMS pursuant to Section 12 of this Amendment.
16. ENTIRE UNDERSTANDING. This Amendment contains the entire understanding of
the Parties and superseds and prior understandings written or oral, respecting
the subjects discussed herein. Modifications may be made to this Amendment
only if in writing and when signed by both Parties.
17. GENERAL. This Amendment supersedes any contrary or inconsistent
provisions of the Agreement and any prior amendments. No provisions of any HSD
purchase order shall apply. As amended, the Agreement shall remain in full
force and effect.
IN WITNESS WHEREOF, intending to be legally bound hereby, SMS and HSD have
executed this Amendment as of the date and year first above mentioned.
SHARED MEDICAL SYSTEMS HEALTH SYSTEMS DESIGN
CORPORATION CORPORATION
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------- ------------------------------
Xxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxxx
---------------------------------- ---------------------------------
Typed or Printed Name and Title Typed or Printed Name and Title
Vice President President & CEO
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EXHIBIT A
ENGAGEMENT PROGRAM
ATTACHED IS SMS STANDARD ENGAGEMENT AGREEMENT USED BY SMS TO ENGAGE
SUBCONTRACTORS. THE PARTIES AGREE THAT NOTWITHSTANDING PROVISIONS IN THE
AMENDMENT THAT REQUIRE HSD TO PERFORM ACCORDING TO THE ATTACHED PROVISIONS, THE
PARTIES WILL NEGOTIATE IN GOOD FAITH ENGAGEMENT PROVISIONS USING THE ATTACHED
PROVISIONS AS A GUIDELINE.
1. GENERALLY. From time to time, SMS may wish to engage HSD to perform
implementation, support, and other services (an "Engagement"). This Exhibit
shall generally govern the relationship between SMS and HSD regarding such
Engagements. The particulars of such Engagements, such as the identity of
the SMS customer for whom the services are to be performed, the location of
the Engagement, the description of the precise nature of the services to be
performed, scheduling matters, the identification of project leaders, etc.,
shall be set forth in a written Engagement Letter which specifically refers
to this Exhibit and which is signed by both parties. The Engagement can be
extended by SMS within 20 days prior to its termination. If any provision in
an Engagement Letter is inconsistent with any provision in this Exhibit, the
former shall govern. SMS grants to HSD a non-transferable, non-exclusive
limited license to use Confidential Information (as hereinafter defined)
certain SMS' software licensed to the SMS customer, Documentation and other
Deliverables solely for the purpose of assisting an SMS customer identified
in an Engagement Letter and solely for the purpose and duration of such
engagement as set forth in the Engagement Letter and for no other purpose.
SMS shall offer HSD access to training in certain courses, if such training
is necessary for HSD to perform its obligations hereunder, at the current SMS
rates , to install SMS applications software/systems in SMS' customer
facilities according to SMS' policies, reporting guidelines and SMS'
proprietary methodologies and protocols. SMS shall be responsible for
implementation project management which includes, but is not limited to,
implementation workplan task definition, task assignment and scheduling,
staff utilization, and the development, implementation and enforcement of all
policies and procedures necessary to accomplish the implementation tasks in a
timely and efficient manner. SMS shall be solely responsible for the billing
of SMS' customer for all implementation tasks in accordance with the
application software/system agreement between SMS and SMS' customer. All
services provided by HSD employees under this Exhibit shall be performed in a
competent and workmanlike manner.
2. AMOUNTS PAYABLE BY SMS TO HSD. HSD shall submit to SMS, on a monthly
basis, one invoice detailing: the hours and reasonably incurred expenses
spent each week by each of its employees performing services described in
Section 1 of this Exhibit and in an Engagement Letter. Such invoice must be
submitted within thirty days from the end of the month in which the services
were rendered and will include a copy of the SMS Expense Report. HSD shall
also submit on a weekly basis, a SMS expense report detailing all
Professional Service time provided and reasonable expenses incurred. Such
report must be submitted within seven days from the end of the week in which
such services were rendered. SMS shall pay $00.00 per hour for services
performed by HSD employees, and shall pay the reasonably incurred expenses of
such HSD employees in accordance with the travel and living reimbursement
policy, as described in Exhibit A. The rate set forth in the preceding
sentence shall be effective for all new Engagements commencing after the
effective date hereof. SMS shall pay the amount invoiced by HSD within
thirty (30) days from the date of receipt of an invoice, subject to its right
to withhold payment of any portion of an invoice that is the subject of a
good faith dispute.
3. RELATION OF THE PARTIES. HSD is an independent consulting firm and all
HSD employees performing work pursuant to this Exhibit shall remain employees
solely of HSD and shall not be considered employees of
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SMS for any purpose. HSD acknowledges that its employees will be performing
work for the benefit of SMS' customers and that HSD is responsible for the
performance of the work performed by its employees. HSD shall remain
responsible for payment of all wages and/or salaries and benefits due such
employees, and for all applicable federal, state and local tax liabilities
arising from its employees' work performed pursuant to this Exhibit. HSD
shall provide SMS with certificates of insurance evidencing that its
employees are covered by: (i) General Liability insurance with a minimum
limit of $1 million combined single limit bodily injury and property damage;
(ii) Worker's Compensation insurance in the state in which each HSD employee
is employed; and (iii) errors and omissions coverage with a minimum limit of
$500,000 per claim.
4. PROPRIETARY RIGHTS. HSD hereby assigns to SMS, without further
consideration, sole right, title and interest in and to all programming code,
documentation, documentation and other written product, methodologies,
processes, training materials, inventions, software, ideas and other
information and work product (collectively, "Work") developed or generated by
or on behalf of HSD during the performance of its obligations as a
subcontractor under this Exhibit, including any and all patents, copyrights,
trade secrets and other proprietary rights related thereto. All Work shall
be deemed " Work for Hire" within the meaning of the Copyright Act of 1976,
as amended. HSD agrees to execute and deliver, or cause to be executed and
delivered, all documents and instruments requested by SMS to evidence the
foregoing assignment. HSD represents and warrants that its performance under
this Exhibit and ownership or use of the Work by SMS will not constitute an
infringement of any third party proprietary right. Any trade secrets conveyed
to SMS by HSD shall be treated as "Confidential Information" as defined in
Section 6 hereof. HSD may offer usage of HSD's work product developed
outside the scope of this Exhibit which is not derivative of SMS intellectual
property without impairment of HSD's right of sole ownership of such work
product, so long as HSD makes no improper use of Confidential Information
5. TERM. The term of this Exhibit shall be coterminous with the term of the
Agreement; provided that SMS shall be entitled to terminate any Engagement
immediately upon any breach by HSD of Sections 1, 4 or 6 of this Exhibit.
Both parties shall make all reasonable efforts to cooperate in the timely
completion of any Engagements that remain pending at the termination of the
Agreement.
SMS shall be entitled to replace the HSD consultant or terminate an
Engagement if in SMS and/or its customer's reasonable opinion, the
consultant's work is unsatisfactory or his or her conduct is inappropriate.
The parties shall make all reasonable efforts to resolve any staffing issues
in such a way as to avoid adverse customer impact. Sections 4, 6, 7 and 8
shall survive any termination of the Agreement.
6. CONFIDENTIALITY.
(a) CONFIDENTIAL INFORMATION. HSD acknowledges that in order to perform
under this Exhibit, SMS must provide to HSD or HSD will become exposed to
certain confidential, proprietary information, including, but not limited to
existing SMS systems, programs, training, training materials, documentation,
methodologies and materials and those in development; SMS' prices, the
identity of SMS' customers or prospective customers; the terms, conditions
and prices of any contract, existing or proposed, between SMS and its
customers and prospective customers; confidential information of SMS'
customer facilities and all patient information; and any other information
identified by SMS as confidential or such as the reasonable person would
understand to be confidential under the circumstances including, without
limitation, this Exhibit ("Confidential Information"). This Exhibit imposes
no obligation upon a party who receives Confidential Information where such
Confidential Information (i) is in such party's (the "Recipient") possession
before receipt from the other party (the "Discloser"); (ii) is or becomes a
matter of public knowledge through no fault of the Recipient; (iii) is
rightfully received by the Recipient from a third party without a duty of
confidentiality; (iv) is independently developed by the Recipient; (v) is
disclosed by the
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CONFIDENTIAL
Recipient under operation of law, provided the Recipient gives the Discloser
prompt notice of the requirement to disclose and the opportunity to contest
such disclosure; or (vi) is disclosed by the Recipient with the Discloser's
prior written approval.
(b) NON DISCLOSURE. HSD agrees that: (i) it will hold the Confidential
Information in confidence, and will not, without SMS' written consent,
disclose any portion thereof to any third party; (ii) it will restrict
dissemination of the Confidential Information within HSD to those persons who
have a need to know such information in order to perform under this Exhibit;
(iii) it will take such actions as are necessary, including appropriate
agreements with or instructions to its employees, to enable HSD to perform
its obligations hereunder; and (iv) it will use the Confidential Information
for the purpose of performing its duties hereunder, and for no other purpose
and (v) any Confidential Information disclosed by SMS to HSD or its employees
prior to the date of the Agreement shall be subject to this Exhibit. HSD
will cause its members and/or employees participating in an Engagement to
acknowledge and comply with their obligations hereunder. At the expiration
or termination of the Agreement, all Confidential Information will be
returned to SMS.
(c) HSD ACTIVITIES OUTSIDE THIS EXHIBIT. The parties recognize that HSD
has been, and is, in the business of providing services to its healthcare
industry customers, which services include the installation and
implementation of software systems of various competitors of SMS. Except as
expressly provided herein, it is understood and agreed that: (i) services
provided by HSD to SMS are provided on a non-exclusive basis and that HSD
retains the right to continue to provide the same type of services, and any
other services, to any other of its customers, including competitors of SMS;
(ii) HSD retains the right to carry on and expand its business including
without limitation, that part of its business involved with the installation
and implementation of software systems that are similar to or in competition
with those of SMS, for HSD's present and future customers: (iii) during the
term of an Engagement and for a period of one year after phase 1 of an
implementation (as defined below), HSD will not provide or solicit to provide
to a SMS customer when HSD has been placed in an Engagement any direct
services that HSD could provide under this Exhibit, nor will HSD respond to
or solicit an SMS customer once SMS has identified that customer to HSD as
having requested services from SMS and customer has not previously contacted
HSD for this particular resource request prior to such customer being
identified by SMS to HSD. For purposes of this Section 6(c), "phase 1 of an
implementation" shall mean the date of first productive use of the particular
set of SMS software applications, as defined in the Workplan. Nothing in
this Exhibit shall be deemed in any way to prevent, restrict or limit HSD in
providing installation and implementation of software systems that are
similar to or in competition with those of SMS provided that Confidential
Information is not used in connection with such activities.
(d) HSD PRODUCT OFFERINGS. For the term of the Agreement and for a
period of 2 years from the date of termination of the last Engagement, HSD
will not compete with SMS by offering to a SMS customer or to SMS' customer
base any product that competes with a current SMS product or a SMS product
under development. If HSD desires to offer a product to a SMS customer or to
SMS' customer base, HSD will first notify SMS so that SMS can determine if
such product will compete with a SMS product. If SMS determines that the HSD
product will compete with a SMS product, and HSD decides that it still wishes
to offer the product to a SMS customer or to SMS' customer base, HSD will so
notify SMS in writing and at SMS' option, this Engagement Exhibit and any
current Engagements may be terminated. SMS' right to terminate this Exhibit
shall be in addition to any other rights and remedies available to SMS, in
law or at equity, for any breach of this Exhibit including, without
limitation a breach of Section 6 hereof.
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EXHIBIT B
LIST OF DIAMOND 725 ENHANCEMENTS
PROJ ID PROJECT DESCRIPTION
20 Authorization - adjudication
60 Authorization - redesign of data flow
6 Authorization API
504 Benefits off of lesser of billed or allowed. Restrict copay/
coinsurance to 50% of allowed
24 Cascading Capitation
500/500b Eligibility API
510 Institutional Claims - add 2 char modifier
514 Med Defs expand field in BRULE
M3 MEEDI -- need separate report or file for MEEDI error messages
M1 MEEDI -- preprocessor errors report, with more useful sort
87 MEEDI performance improvements, allow for retro active changes for
multiple periods of eligibility and table driven member search logic.
138 Procedure code - expand field in professional claims to 12 characters
to allow NDC codes
40 Provider -- covering provider logic
177 Provider Par flag - expand to allow multiple levels of participation.
66 Provider reimbursement by location.
TBD Year 2000 compliance
TBD MS Windows compliant user interface with Release 4.3.
TBD Large file sizes of 4GB -- HSD will test and release large file
sizes available from BASIS within 30 days after the general
availability of the BASIS Kilauea release
TBD NT Server for Diamond 725 -- HSD will document and benchmark the
availability of running Diamond 725 using NT Server technology.
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CONFIDENTIAL
LIST OF DIAMOND 950C/S ENHANCEMENTS (ALL PROJECT IDS TO BE DETERMINED)
PROJECT DESCRIPTION
Eligibility API
Authorization API
Auth/Claim link
Capitation Adjustments
MEEDI performance improvements, allow for retro active changes for multiple
periods of eligibility
Add ability to define provider reimbursement by location.
Expand Par flag to allow multiple levels of participation.
Compute coinsurance on lessor of allowed or billed amount
Dental Claims
Standard Utilization Reports (comparable to Feedback function)
Integrated Letters
Mass Eligibility Update Utility
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CONFIDENTIAL
EXHIBIT C
ENHANCEMENTS -- IMPLEMENTATION WORKPLAN
DIAMOND 725 ENHANCEMENTS
PROJECT DESCRIPTION GENERAL AVAILABILITY
Year 2000 compliance March 1998
MS Windows compliant user interface with Release 4.3 March 1998
Large file sizes of 4GB -- HSD will test and release Within 30 days after
"large file sizes" available from BASIS. the general
availability of BASIS
Kilauea release.
NT Server for Diamond 725 -- HSD will document and benchmark
the availability of running Diamond 725 using NT Server technology. March 1998
DIAMOND 950C/S ENHANCEMENTS
PROJECT DESCRIPTION GENERAL AVAILABILITY
DATE
Dental Claims Diamond 950C/S
Release 5.1
Standard Utilization Reports (comparable to Diamond 950C/S
Feedback function) Release 5.1
Integrated Letters Diamond 950C/S
Release 5.1
Mass Eligibility Update Utility Diamond 950C/S
Release 5.1
MEEDI performance improvements, allow for
retroactive changes for multiple periods of eligibility Feb. 1999
Add ability to define provider reimbursement by location. April 1998
Expand Par flag to allow multiple levels of participation. April 1998
Compute coinsurance on lessor of allowed or billed amount. April 1998
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CONFIDENTIAL
EXHIBIT D
RIGHT TO PROCESS THE DATA OF AFFILIATED AND NON-AFFILIATED PHYSICIANS
AND ENTITIES
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CONFIDENTIAL
EXHIBIT E
HSD BILLABLE AND NON-BILLABLE SERVICES
BY TOPIC, CALLER, AND PURPOSE
BILLABLE?
CALLER TECHNICAL APPLICATION RELEASE MODIFICATION DIAMOND SALES AND CONF. ENHANCEMENT JOINT PRODUCT
SUPPORT SUPPORT INSTALL RELEASE PORTION OF MARKETING CALLS TRAINING DEVELOPMENT PLANNING / MANAGEMENT
SUPPORT SUPPORT SMS CALLS / SMS
INTEGRATION PROGRAMMING
-----------------------------------------------------------------------------------------------------------------------------------
SMS N N N N N N N N N
CORPORATE
FOR SMS
CORPORATE
-----------------------------------------------------------------------------------------------------------------------------------
Onsite Y
for
Prospect
demos and
presentations
-----------------------------------------------------------------------------------------------------------------------------------
Onsite or N
conference
calls with
customers
for product
issues
resolution
-----------------------------------------------------------------------------------------------------------------------------------
SMS N N N N N N N N
CORPORATE
FOR SMS
SUPPORT
CLIENTS
-----------------------------------------------------------------------------------------------------------------------------------
SMS N N N N N N N N
CORPORATE
FOR SMS
INSTALL
CLIENTS
-----------------------------------------------------------------------------------------------------------------------------------
SMS X/X X/X X/X X/X X/X X/X X/X X/X
SUPPORT
CLIENTS
-----------------------------------------------------------------------------------------------------------------------------------
SMS X/X X/X X/X X/X X/X X/X X/X X/X
INSTALL
CLIENTS
-----------------------------------------------------------------------------------------------------------------------------------
SMS FIELD X/X X/X X/X X X X/X X/X
-----------------------------------------------------------------------------------------------------------------------------------
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CONFIDENTIAL
-----------------------------------------------------------------------------------------------------------------------------------
STAFF OR
THIRD
PARTY
CONSULTANTS
CONTRACTED
BY SMS
-----------------------------------------------------------------------------------------------------------------------------------
Related to N N
bugs,
clarifica
tion of
documenta
tion, or
review of
GSD's and
custom
development
-----------------------------------------------------------------------------------------------------------------------------------
"HOW TO" Y Y
QUESTIONS
-----------------------------------------------------------------------------------------------------------------------------------
- N/A is indicated for conditions requiring support that will be routed
through an existing SMS organization or communication structure. For
example, Support and Install Clients experiencing problems should first
contact the appropriate internal support staff at SMS who will then resolve
the issue. Members of the Field Staff or Third-Party Consultants under
contract to SMS would likewise contact internal SMS resources first for the
client/issue combinations marked N/A in the above matrix. HSD will refer
those calls back to SMS.
- Joint Development/SMS Programming does not include customer GSD's which
would be incorporated in the cost of the bid for the development.
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