EXHIBIT 10.20
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION I
NOTE: INFORMATION IN THIS DOCUMENT MARKED WITH AN "[*]" HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.
THIS FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT ("Agreement"), is
made effective as of this 31st day of July , 2002 ("The Effective Date"),
between Landacorp, Inc. ("Landacorp"), a Delaware corporation, having its
principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ and Lifeguard, Inc. and Lifeguard Life Insurance Company (collectively
"Customer") of ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, Landacorp and Customer entered into the original Services and
System Agreement (the "Original Agreement") as of November 21, 2001;
WHEREAS, Landacorp and Customer have previously made and initialed
certain changes throughout the Original Agreement; and
WHEREAS, Landacorp and Customer desire to enter into this First Amended
and Restated Services and System Agreement which further amends and modifies the
Original Agreement. THE PARTIES HERETO HEREBY AGREE to all provisions, as
amended herein, set forth in the following sections:
I. General Terms and Conditions
II. Services Terms
III. Product License and Support Terms
IV. Prerequisite Software and Data Sets
V. Prerequisite Equipment
VI. Non-Disclosure Agreement
This Agreement, together with the Sections indicated above as included and all
Exhibits, Attachments and Schedules thereto, constitute the entire Agreement and
understanding between Landacorp and Customer concerning the subject matter
hereof, and cancels, terminates and supersedes all prior written and oral
understandings, agreements, proposals, promises and representations of the
parties respecting any and all subject matter contained herein.
EXECUTED as of the day and date first above written.
Landacorp, Inc. Lifeguard Inc. and Lifeguard Life
Insurance Co.
Signature: Signature:
------------------------ ------------------------------
Name: Name:
----------------------------- -----------------------------------
I. Title: Title:
------------------------- -------------------------------
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION I
_________ GENERAL TERMS AND CONDITIONS
1. DEFINITIONS: The following terms, as used herein and in the exhibits
hereto, shall have the following meanings:
1.1 "Ad Hoc Members" means members meeting Selection Criteria other than
Landacorp's. They will be managed by Landacorp if they are randomly
assigned to the Intervention Group and will not be managed by Landacorp
or Customer if they are randomly assigned to the Control Group.
1.2 "Affiliates" means any entity controlling, controlled by or under common
control with Customer or Landacorp, as applicable.
1.3 "Quality Performance Targets" means those measures of clinical
performance or outcomes that Landacorp agrees to deliver to the
Customer.
1.4 "Control Group" means Members who are selected by the Selection Criteria
for Intervention, but who have been randomly assigned by Landacorp's
randomization process for exclusion from the Intervention Program. The
control group will receive usual care from their physicians.
1.5 "Covered Lives" or "Members" means a member, subscriber or eligible
dependent covered under a health plan.
1.6 "CPI" means Consumer Price Index, All Urban Consumers, West urban,
Medical Care items, published by the Bureau of Labor Statistics, United
States Department of Labor.
1.7 "Documentation" means user guides, operating manuals, and
specifications, whether in print or machine readable media, in effect as
of the date of shipment, supplied to Customer under this Agreement for,
including all additions, updates or modifications thereto.
1.8 "Enhancements" means those changes or additions to the Software,
Intervention Programs, and the related Documentation, that affect or
include updates, modifications or corrections, as distributed through
new Major and Minor Versions.
1.9 "Intervention Group" means Members who have been selected by the
Selection Criteria for Intervention who are not randomly assigned to the
Control Group and who will receive services from the Intervention
Program.
1.10 "Intervention Program" includes but is not limited to content,
interventions, scripts, algorithms, methodologies, kits and fulfillment
materials that are provided to members managed within the scope of these
services.
1.11 "Member months" means the number of members eligible and enrolled for
benefits and recorded in Landacorp's systems on the first day of each
applicable month for each Program Year.
1.12 "Minimum Gross Savings" is the minimum amount of savings in any Program
Period that Landacorp agrees will be achieved by the Program. Savings
will be calculated according to the methodology defined in Section II
Paragraph 2.3.1 of this Agreement.
1.13 "PMPM" means Per Member Per Month.
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION I
1.14 "Prerequisite Equipment" means the computer hardware listed in Section V
that is required for the Software to perform as specified.
1.15 "Prerequisite Software and/or Data Sets" means the third party Software
listed in Section IV and is governed by the terms and conditions set
forth in this Agreement and, if applicable, any additional terms set
forth in Section III of this Agreement and any Exhibits thereto.
1.16 "Prevailing Rates" means the applicable Landacorp standard rates in
effect, for Software License, Software Support or a given Service, on
the date that the Software License, Software Support or Service is
provided.
1.17 "Product(s)" means the Product(s) listed in Paragraph 4.1 of Section II
and/or as applicable.
1.18 "Program Gross Savings" means the gross amount of savings realized by
the program in any Program Period.
1.19 "Intentionally Omitted.
1.20 "Program Year" The first Program Year begins on February 1, 2002 and
ends on January 31, 2003, and the second Program Year begins on February
1, 2003 and ends on January 31, 2004 unless amended, in each case, by
mutual agreement of Landacorp and Customer.
1.21 Program Period: First Program Period begins February 1, 2002, and ends
July 31, 2002. Second Program Period begins August 1, 2002 and ends
January 31, 2003. Third Program Period begins February 1, 2003 and ends
January 31, 2004.
1.22 "Selection Criteria" are the methodologies for identifying Customer
members at risk for future high medical costs. The Selection Criteria
are identical for both the Intervention Group and the Control Group and
include both Landacorp's and Customer's criteria.
1.23 "Shared Savings Threshold: Landacorp and Customer agree to share in
Program Gross Savings above this amount, as defined in this Agreement.
1.24 "Software" means such computer programs listed in Paragraph 4.1 of
Section II.
1.25 "Software License" or "License" means the license granted to Customer
pursuant to this Agreement.
1.26 "Third Parties" means, but is not necessarily limited to, agents,
representatives, or consultants of the Customer who may become involved
in the Proprietary Information.
2. PAYMENTS:
2.1 SUMMARY OF PAYMENTS; PAYMENT DUE DATES: Customer agrees to pay Landacorp
the fees ("Fees"), charges ("Charges") and costs ("Costs") set forth in
this Agreement in accordance with the provisions set forth herein.
Unless otherwise stipulated herein, said Fees, Charges and Costs
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION I
shall be due and payable to Landacorp within thirty (30) days of date of
invoice. Failure by Customer to make payments to Landacorp which are
reasonably disputed in writing shall not constitute a material breach of
this Agreement. Landacorp reserves the right to suspend provision of
service and support for nonpayment of any sums owed to Landacorp which
are undisputed and thirty (30) days or more past due.
2.2 TAXES: Customer shall pay directly or, as appropriate, reimburse
Landacorp for all personal property, sales, use and other taxes
(excluding taxes based upon Landacorp's income) and license and
registration fees and other assessments or charges levied or imposed by
any governmental body or agency as a result of the execution or
performance of this Agreement. In the event Customer or the transactions
contemplated by this Agreement are (or, after execution of this
Agreement, become) exempt from the foregoing, Customer shall promptly
provide to Landacorp, as evidence of such tax exempt status, proper
exemption certificates or other Documentation acceptable to Landacorp.
2.3 [intentionally omitted]
2.4 TRAINING: Landacorp will provide one day of training in aspects of the
Intervention Program and use of Landacorp Software to Customer staff at
the Customer's premises. The charges for this training are included in
the fees for the services defined in Section II.
3. PROPRIETARY RIGHTS: Customer acknowledges that the Software and/or
Intervention Programs licensed hereunder are subject to copyright, and
constitutes proprietary trade secret information of Landacorp, and that
Customer has no interest in or right to use the Software except in
accordance with the terms of this Agreement.
Customer agrees that it will hold the Software and/or Intervention
Programs in confidence, it will not disclose or otherwise make the
Software and/or Intervention Programs or any part thereof available to
any Third Party except to the extent permitted by this Agreement, and it
will take all reasonable steps and precautions to maintain the
confidentiality of the Software and/or Intervention Programs. Customer
further agrees as follows:
3.1 It will not use the Software or Intervention Programs at any other
Facility except during any period of time when Customer is temporarily
prevented, due to causes beyond Customer's control, from using the
computer hardware at Customer's Facility for daily processing
operations. During such periods, Customer may use the Software or
Intervention Programs at an alternate facility, and if such use shall
continue for a period of more than thirty (30) days, Customer shall
immediately notify Landacorp of the location of such Facility.
3.2 It will not remove or permit to be removed from any item included in the
Software or Intervention Programs, including any proprietary,
confidential or copyright notices, markings or legends placed thereon by
Landacorp.
3.3 It will not, without the prior written consent of Landacorp, copy or
duplicate by any means the Software, Intervention Programs,
Documentation or any item included therein except to the extent
reasonably necessary to maintain backup or historical Documentation or
the implementation or use of the Software or Intervention Programs.
Customer will cause all proprietary, confidential and copyright notices,
markings or legends which appear on any item included in the Software to
be placed upon each such copy or duplication.
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION I
3.4 It will not use any information in tangible or intangible form which has
been or may be delivered or disclosed to Customer or Customer's
employees or Third Parties by Landacorp for the purpose of reverse
engineering, decompiling, or disassembling the Software or Intervention
Programs or creating, attempting to create, or permitting others to
create derivative works.
3.5 It will limit access to the Software and/or Intervention Programs to
only (i) employees and agents of Customer, (ii) health care providers
participating in Customer's benefit plan networks and their staffs and
automatic processes, or (iii) subject to execution of a mutually
acceptable nondisclosure agreement, Third Parties sanctioned by Customer
who need access thereto in order to, as applicable, use, implement,
test, audit, or modify the Software or Intervention Programs for the
sole and exclusive benefit of Customer subject to the execution of a
Nondisclosure Agreement as included herein as Exhibit VI-A.
3.6 Upon the termination of this Agreement, Customer shall destroy or return
to Landacorp all tangible portions of the Software and/or Intervention
Programs delivered or disclosed to Customer by Landacorp, together with
all copies thereof at any time made by Customer.
3.7 All changes, modifications or improvements made or developed with regard
to the Software or Intervention Programs by Landacorp, whether or not
made or developed at Customer's request, shall remain the property of
Landacorp and, upon delivery or disclosure to Customer, shall be deemed
to have been part of the Software as of the date of this Agreement. All
changes, modifications or improvements made or developed with regard to
the Software or Intervention Programs by the Customer, or funded by the
Customer, shall also remain the property of Landacorp.
3.8 Information shall not be considered confidential under this Paragraph 3
that: (i) is publicly known prior to or after disclosure hereunder other
than through acts or omissions attributable to the recipient or its
employees or representatives; (ii) as demonstrated by prior written
records, is already known to the recipient at the time of disclosure
hereunder; (iii) is disclosed in good faith to the recipient by a third
party having a lawful right to do so; or (iv) is the subject of written
consent of the party which supplied such information authorizing
disclosure.
3.9 The provisions of this Paragraph 3, Proprietary Rights, shall survive
the termination of this Agreement.
4. CONFIDENTIALITY OF INFORMATION: Customer and Landacorp acknowledge that
in the course of installing, implementing and maintaining the Software
and/or Intervention Programs both parties will become familiar with
proprietary or trade secret information of the other concerning the
other's business affairs, property, methods of operation, processing
system or other information, including but not necessarily limited to
Customer's patient, financial, provider and/or member data
("Confidential Information"). Customer and Landacorp hereby agree to
maintain the confidentiality of this Agreement and of such information
using at least the degree of care and security as each uses to maintain
the confidentiality of its own Confidential Information. Customer and
Landacorp acknowledge that their disclosure of any of the other's
Confidential Information without the other's prior written consent,
which consent shall not be unreasonably withheld, may give rise to
continuing irreparable injury to the non-disclosing party, that,
therefore, will be inadequately compensable in damages at law.
Accordingly, the non-disclosing party shall be entitled to obtain
immediate injunctive relief against the breach or threatened breach by
the disclosing party of any of the foregoing undertakings, in addition
to any other legal remedies which may be available, and the disclosing
party hereby consents to the obtaining of such injunctive relief.
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION I
Both Landacorp and Customer shall be obligated to promptly report any
known breach to the other party.
4.1 The provisions of this Paragraph 4, Confidentiality of Information,
shall survive the termination of this Agreement.
5. GENERAL WARRANTIES AND EXCLUSION OF IMPLIED WARRANTIES:
5.1 AUTHORITY WARRANTY: Landacorp warrants that it is a corporation duly
organized, validly existing and in good standing under the laws of
Delaware, and has the full and unrestricted power and authority to
execute and deliver this Agreement and to carry out the transactions
contemplated hereby.
5.2 WARRANTY LIMITATIONS: CUSTOMER'S RIGHT TO ENFORCE THE FOREGOING WARRANTY
AND THE WARRANTIES CONTAINED ELSEWHERE IN THIS AGREEMENT MAY BE
SUSPENDED BY LANDACORP AT ITS SOLE DISCRETION, IF THE SOFTWARE AND/OR
INTERVENTION PROGRAMS ARE USED IN ANY MANNER IN VIOLATION OF THE
PROVISIONS OF THIS AGREEMENT. THE WARRANTIES HEREIN SET FORTH ARE MADE
TO AND FOR THE BENEFIT OF CUSTOMER ONLY. EXCEPT AS EXPRESSLY SET FORTH
IN THIS AGREEMENT, LANDACORP MAKES NO OTHER WARRANTY OF ANY KIND
WHATEVER, EXPRESS OR IMPLIED, AND ALL IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE ARE HEREBY
DISCLAIMED BY LANDACORP AND EXCLUDED FROM THIS AGREEMENT. NO ORAL OR
WRITTEN INFORMATION OR ADVICE PROVIDED BY LANDACORP, ITS AGENTS OR
EMPLOYEES WILL CREATE ANY WARRANTY OR IN ANY WAY INCREASE THE SCOPE OF
THE WARRANTIES EXPRESSLY PROVIDED IN THIS AGREEMENT.
6. LIABILITY LIMITATION: Except (i) with respect to Landacorp's obligations
under Paragraph 7 of this Section I, or (ii) in the event of personal
injury or property damage not a result of performance of the Software
and/or the Intervention Programs, or (iii) Landacorp's obligations under
Section II of this Agreement. LANDACORP'S CUMULATIVE LIABILITY TO
CUSTOMER FOR FAILURE TO CORRECT A NONCONFORMITY AND ANY OTHER BREACH OF
THIS AGREEMENT FOR ANY AND ALL CLAIMS, REGARDLESS OF THE FORM OF ACTION,
SHALL NOT EXCEED ONE MILLION DOLLARS ($1,000,000.00). UNDER NO
CIRCUMSTANCES SHALL LANDACORP HAVE ANY LIABILITY TO CUSTOMER FOR ANY
CONSEQUENTIAL, EXEMPLARY, INCIDENTAL, INDIRECT OR SPECIAL DAMAGES OR
COSTS, INCLUDING, BUT NOT LIMITED TO, LOST PROFITS OR LOSS OF GOODWILL,
RESULTING FROM ANY VIOLATION OF THIS AGREEMENT EVEN IF LANDACORP HAS
BEEN ADVISED, KNEW OR SHOULD HAVE KNOWN OF THE POSSIBILITY THEREOF.
Customer acknowledges that the foregoing limitations of liability and
remedies represent bargained-for allocations of risk, and that
Landacorp's Fees, Charges and Costs hereunder represent the allocations
of such risk.
7. INDEMNIFICATION: Landacorp agrees to indemnify and hold Customer
harmless from all loss or damages to Customer arising out of any legal
action based on any claim that the Product(s) infringes on a United
States copyright, patent, or trade secret, excluding, however, any claim
for Customer's consequential damages for lost earning, profit, or
goodwill. Landacorp shall defend, at its own expense, any action against
Customer to the extent that it is based on such an infringement
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION I
action, and shall pay all costs and damages finally awarded in any such
suit, provided that the following conditions are met:
A. Landacorp is notified in writing by Customer of any claim within
thirty (30) days of the date Customer receives actual notice of
such claim; and
B. Landacorp has sole control of the settlement, compromise,
negotiation, or defense of any such action or claim; however,
Landacorp will seek input from Customer with respect to all
aspects of defense of such action or claim, including
settlement, compromise, negotiation, and litigation strategy.
Landacorp agrees to indemnify, defend and hold harmless (collectively,
"Indemnify") Customer and Customer's officers, directors, employees or
agents (collectively, "Indemnified Parties") from and against any and
all claims, suits, costs and expenses, including without limitation,
costs of investigation and defense, incurred by such Indemnified Parties
as a result of any willful misconduct or any negligent act or omission
by the Indemnifying Party or its contracted vendors in connection with
this Agreement. This provision is not intended to obligate Landacorp to
Indemnify Customer for claims under the terms of Customer's health
insurance policies or HMO agreements which Customer would have been
obligated to pay regardless of the misconduct or act or omission of
Landacorp or its contracted vendors.
8. SPECIAL PROVISIONS FOR LANDACORP AND PREREQUISITE SOFTWARE AND DATA
SETS: Prerequisite Software sublicensed or distributed by Landacorp to
Customer, if any, is identified in Section IV. To the extent that the
terms or conditions under which Landacorp sublicenses or distributes any
such Software to Customer differ from the terms and conditions otherwise
stated in this Agreement, said differences are stated in Section IV or
in shrink-wrap agreements provided with such Software and such
differences shall control. In the event that Landacorp can reasonably
demonstrate the need to replace or substitute any Prerequisite Software,
the parties agree to negotiate in good faith as to the terms and
conditions for Customer to obtain reasonably comparable software or to
retain the Prerequisite Software initially licensed.
9. DISPUTE RESOLUTION: In the event that a dispute arises between Landacorp
and Customer with respect to any matter under this Agreement, either
party may escalate any such dispute as follows:
Time Period from
Notice of Dispute
Customer Landacorp For Resolution
-------- --------- -----------------
_________ Program Director 15 days
_________ Chief Operating Officer 30 days
9.1 ARBITRATION: Any and all disputes or claims arising out of this
Agreement shall be resolved and determined solely and exclusively by
arbitration in accordance with the Commercial Rules of the American
Arbitration Association in effect at the time arbitration is demanded.
The prevailing party to any arbitration shall be entitled to receive
reasonable costs and reasonable attorney's fees from the non-prevailing
party, as awarded by the arbitrator. The parties shall select one
mutually
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION I
agreeable arbitrator, and if the parties cannot agree to an arbitrator
after a reasonable time, the arbitrator-selection process of the
American Arbitration Association shall be utilized. The arbitrator shall
be skilled in the legal and business aspect of the subject matter of
this Agreement. Notice of the demand for arbitration shall be made in
writing to the other party to this Agreement and to the American
Arbitration Association. The demand shall be made within a reasonable
time after the claim or dispute has arisen. In no event shall the demand
for arbitration be made after the date when institution of legal or
equitable proceedings based on the claim or dispute would be barred by
the applicable statute of limitations. The arbitration award shall be
final and binding upon the parties. The arbitration award shall be
binding and may be entered in any court of competent jurisdiction.
Arbitration shall take place in the State in which the Customer is
located.
10. TERM AND TERMINATION:
10.1 This Agreement is effective as of November 21, 2001 and will remain in
force (except where otherwise indicated in this Agreement) until January
31, 2004, (the "Initial Term"). The Agreement will automatically renew
for subsequent additional one (1) year terms unless terminated by either
party by either party giving written notice given 120 days prior to the
end of the Initial Term or any subsequent additional one (1) year terms.
The first notice date for termination would be on or before November 1,
2003.
10.2 CONDITIONS FOR TERMINATION: If either party shall commit a material
breach of any term or condition of this Agreement, and if said party
shall fail to cure, or make substantial progress to cure, any such
breach within forty-five (45) days after written notice of such breach
is given by the non-breaching party, then the non-breaching party shall
be entitled, after giving notice hereunder, to terminate this Agreement.
11. NOTICES: Any notice required or permitted to be given under the terms of
this Agreement shall be deemed given when delivered to a party during
normal business hours via United States mail with first class postage or
overnight mail or when faxed (with receipt verified) to the appropriate
address indicated in the preamble to this Agreement. Each of the parties
may designate any other address by notifying in writing the other party
of the new address.
12. MISCELLANEOUS:
12.1 LAW: This Agreement shall be governed by and construed in accordance
with the laws in the state in which the Customer is located, exclusive
of its rules governing choice of law and conflict of laws. Any action of
any kind arising out of or in any way connected with this Agreement must
be commenced within one (1) year of the date upon which the cause of
action accrued or, if one (1) year is shorter than the minimum period
allowed by law, then the minimum period allowed by law.
12.2 HEADINGS: The headings of the several sections and paragraphs of this
Agreement are for convenience only and shall not be construed to be a
part of this Agreement.
12.3 ASSIGNMENT: Neither party shall assign this Agreement without the
express written consent of the other, which consent shall not be
unreasonably withheld. However, Landacorp may, upon notice to Customer,
assign this Agreement to any Affiliate or any entity resulting from the
sale, combination or transfer of all or substantially all of the assets
or capital stock, or from any other corporate form of reorganization by
or of Landacorp. Subject to all of the terms and conditions
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION I
hereof, this Agreement inures to the benefit of and is binding upon the
parties hereto and their successors and assigns.
12.4 FORBEARANCE: The exercise or non-exercise of any right granted to
Landacorp or to Customer under the terms of this Paragraph or under any
other provisions of this Agreement shall not operate as a waiver of any
right which may subsequently accrue to Landacorp or Customer under any
provision of this Agreement and shall not preclude the exercise by
Landacorp or Customer of any other rights or remedies which either
Landacorp or Customer may have in law or equity or under the terms of
this Agreement.
12.5 LATER AMENDMENTS CONTROL: To the extent that the terms and conditions of
the Exhibits, Attachments and Schedules hereto or Exhibits, Attachments
and/or Schedules to subsequent amendments ("Subsequent Terms") differ
from those herein, those Subsequent Terms shall control the
interpretation and any conflict resolution thereof. Pre-printed terms
and conditions on or attached to Customer purchase orders shall be of no
force or effect.
12.6 NO AMENDMENT UNLESS IN WRITING: No representation or promise hereafter
made by a party, nor any modification or amendment of this Agreement,
shall be binding upon either party unless in writing and signed by
Customer and accepted in writing by an authorized agent of Landacorp.
12.7 RELATIONSHIP BETWEEN PARTIES: Landacorp and Customer are independent
contractors in all relationships and actions under and contemplated by
this Agreement. This Agreement shall not be construed to create any
employment, partnership, joint venture, or agency relationship between
the parties or to authorize either Customer or Landacorp to enter into
any commitment or agreement binding the other, including, but not
limited to, the offering or extension by Customer or Landacorp of any
representation, warranty, guarantee, or other commitment on behalf of
the other.
12.8 FORCE MAJEURE: Neither party shall be held responsible for any act,
failure, event, or circumstance addressed herein if such act, failure,
event, or circumstance is caused by an act of God or other conditions
beyond such party's reasonable control.
12.9 SURVIVAL OF CERTAIN OBLIGATIONS: After expiration or termination of this
Agreement, all provisions relating to payment shall survive until
completion of required payments. In addition to those provisions which
specifically provide for survival beyond expiration or termination, all
provisions contained in this Section and all provisions, if any,
regarding indemnification, warranty, limitations of liability, and
confidentiality and/or protection of propriety rights and trade secrets
shall survive indefinitely or until the expiration of the time period
specified elsewhere in this Agreement with respect to the provision in
question. In addition, Customer shall provide Landacorp with such data
as is required by Landacorp to perform its measurement and reporting
functions under this Agreement, in such form and with such frequency as
is specified by Landacorp.
12.10 PARTIAL INVALIDITY: In the event any provision of this Agreement is held
illegal, void or unenforceable, to any extent, in whole or in part, as
to any situation or person, the balance shall remain in effect and the
provision in question shall remain in effect as to all other persons or
situations, as the case may be.
12.11 PUBLICATION PERMISSION: Execution of this Agreement shall signify
approval for Landacorp or Customer to release non-confidential
information about the other including name, location and
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION I
business relationship in standard news releases, Landacorp or Customer
publications and the Landacorp or Customer Website. Customer shall have
the right to consent to the copy that will be published by Landacorp
prior to Landacorp's use of such copy.
12.12 NO SUBSTITUTE FOR MEDICAL JUDGMENT: Neither the execution of this
Agreement nor the performance of any of its obligations constitutes an
undertaking by Landacorp to guarantee the results of health care
provider services or that such services will be rendered in accordance
with generally accepted medical standards or procedures. The parties
agree that Landacorp or its Intervention Partner (CareAdvantage, Inc.)
are not and shall not be deemed a health care provider as a result of
the Services provided pursuant to this Agreement, and that all decisions
concerning the rendering of health care services are determined by the
patient's physician, hospital or other health care provider and the
patient.
12.13 SUBCONTRACTORS. Neither party shall employ the services of
sub-contractors without express prior approval of the other party.
Landacorp will sub-contract with CareAdvantage Inc. for case Management
services. Each party will, at all times, be responsible for the actions
of its sub-contractors relative to the terms and conditions of this
Agreement. Customer shall have the right to review terms and conditions
of the sub-contract between Landacorp and CareAdvantage, excluding
proprietary information.
12.15 RIGHT OF AUDIT: Landacorp is responsible for performing reporting and
savings calculations. Customer will have the right to audit Landacorp's
calculations, including the right to data, calculations and
methodologies used by Landacorp in the performance of its reporting.
Customer may retain the services of an outside auditor to perform its
audit.
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION I
EXHIBIT I-A
CUSTOMER'S FACILITIES:
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COVERED
LIVES OR
FACILITY ADDRESS CITY, STATE ZIP MEMBERS
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Lifeguard, Inc. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ [*]
95134
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Lifeguard Life Insurance Co. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ [*]
95134
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[*] Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION II
SERVICES TERMS
1.0 Assumptions
The Customer average member population over a calendar year is [*] lives
+ or [*]% and is assumed to be constant for the Term of the Agreement.
For any calendar year in which the average member population falls below
[*] or rises above [*], Landacorp and Customer may agree to re-negotiate
the financial terms and conditions of this Agreement.
- A Control Group will be established for the purpose of measuring
the effectiveness of program outcomes. Members (25% of those
meeting the Selection Criteria for the program, including those
Ad Hoc Members identified and referred to the program by
Customer or any other source) will be randomly assigned to the
Control Group by Landacorp. Landacorp's assignment methodology
will be reviewed and agreed to by Customer prior to
implementation. Deviation from a totally-randomized member
assignment will require Customer and Landacorp to re-negotiate
the financial terms and conditions of this Agreement.
- An Intervention Group will be established for the purposes of
measuring the effectiveness of program outcomes. Members (75% of
those meeting the Selection Criteria for the program, including
those Ad Hoc Members identified and referred to the program by
Customer or any other source) will be randomly assigned to the
Intervention Group by Landacorp. Landacorp's assignment
methodology will be reviewed and agreed to by Customer prior to
implementation. Deviation from a totally-randomized member
assignment will require Customer and Landacorp to re-negotiate
the financial terms and conditions of this Agreement.
- Landacorp will license to Customer DSManager(R) on an ASP basis
to view, query, and analyze the patient information.
- Ad-hoc members, expected to be approximately [*] new members per
month, will be managed under this Agreement.
- Sick neonates and Premature infants (managed by Paradigm
Healthcare (or any subsequent manager of sick neonates for
Customer)), End-Stage Renal Disease (ESRD) patients (managed by
Golden State Nephrology (or any subsequent manager of ESRD
patients for Customer)), in-patient and out-patient
psychological disorder patients (managed by Merit-Magellen (or
any subsequent manager of Mental Health services for Customer))
are excluded from the terms of this Agreement (targeting,
measurement and management). Customer and Landacorp will
negotiate in good faith to agree on additional exclusions per
the original definitions submitted in the May 15, 2001 proposal.
2.0 Detailed Scope of Services
Landacorp will provide to Customer a comprehensive High-Risk Targeting
and Population Health Management program with the objective of reducing
the overall medical cost of the identified members resulting in
financial savings to Customer. Landacorp and Customer have agreed to
jointly operate this program under a shared savings model, wherein both
Landacorp and Customer realize additional financial gain over the
financial savings of the overall medical cost of the identified members.
Financial savings will be calculated using a Control Group methodology
as defined in this Agreement wherein members targeted for management are
randomly assigned to either an Intervention Group or a Control Group.
[*] Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION II
2.1 Data Management and Targeting Services (Case Identification):
Landacorp will perform the data management, data analysis, and member
targeting services at Landacorp's facilities. Landacorp will perform the
targeting by reviewing and utilizing historical data from Customer.
Customer will supply Landacorp medical claims, pre-authorization,
laboratory, and pharmaceutical claims data, where available to Customer,
on a monthly basis in a format and medium defined by Landacorp.
Landacorp will analyze Customer data using Landacorp's proprietary
DSBuilder(R) software and apply Landacorp's proprietary DSMiner software
to the data to obtain rank-ordered lists of the high-risk members.
On a monthly basis, Landacorp will identify approximately [*]% to [*]%
of members who are at high risk of high-cost medical events occurring
within the following 6 to 12 months. These members will be selected from
different cohorts, including but not limited to High Cost members (those
whose consumption exceeded [*] in the pre-program period), Low Cost
members (those whose consumption was less than [*] in the pre-program
period) and members who are diagnosed with a specific medical condition.
A Control Group will be established for the purpose of measuring the
effectiveness of program outcomes. Twenty-five percent (25%) of the
total Customer membership will be assigned to the Control Group; the
remaining seventy-five percent (75%) are eligible for the Intervention
Group and Intervention Programs. Members will be randomly assigned from
Customer's total eligible membership files at the time of implementation
and then updated on a monthly basis as new member enrollments are
provided to Landacorp by Customer. This random assignment will determine
the deployment of every member identified as high-risk by Landacorp. Any
deviation from this random assignment methodology will require that
Landacorp and Customer re-negotiate the financial terms and conditions
of this Agreement.
2.2 Intervention programs:
Landacorp will apply management programs to the Intervention Group using
the following structured methodology.
All members will be assigned to a case- or disease management program
provided by Landacorp's Intervention Partner (CareAdvantage). Landacorp
will contact, or attempt to make contact, with all the target members
identified for intervention by Landacorp who are not assigned to the
Control Group. The number of contacts with a patient and their timing
will be the responsibility of Landacorp. Each contacted member will
initially be screened through Landacorp's proprietary Managing for
Tomorrow survey instrument to determine disease self-management skills
and establish a base-line. The survey will be conducted directly with
the member, via telephone. Member risk status will be further determined
by the survey and professional judgment of the nurse-interventionist.
Upon completion of the survey, those members who are assessed as being
at continued risk will receive a tailored booklet detailing the results
of the survey, and educational materials to help the member improve
disease self-management skills. In addition, the contacted member may
also receive additional disease-specific fulfillment kits (i.e. home
laboratory tests for HbA1C analysis and microalbumin analysis, or
one-time samples of low-dose aspirin, or medical devices such as peak
flow meters, depending on diagnosis). The specific contents of the
fulfillment kits will be subject to mutual agreement between Landacorp
and Customer. The Intervention Partner will provide case-management
services to those members who, in the judgment of the
[*] Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION II
Intervention Partner, are eligible for and will benefit from these
services. The Intervention Partner will assess the ability of the member
to manage their disease-burden and will set progress goals for the
member to work toward in the management of their disease(s). The risk
status of members who are receiving interventions from the Intervention
Partner will be changed from time-to-time based on continued evaluation
of the member status, at the sole discretion of the Intervention
Partner. The Intervention Partner will also routinely assess the
member's progress against the goals, using interventions that include
(but not limited to) Landacorp's proprietary series of interventions,
Looking Ahead, and CareAdvantage's proprietary interventions,
RightPath(TM), and will work with the member to arrange appropriate
medical / social service assistance in achieving the set goals.
2.3 Program evaluation, reporting and outcomes measurement:
Landacorp will provide Customer with access to its proprietary
DSManager(R) application via an Application Service Provider (ASP)
delivery model. The DSManager(R) application will reside at Landacorp's
facilities and customer access will be provided via a secure Internet
connection. Customer will have authority to view, query, and analyze
member information (including claims, membership and intervention
history) contained in DSManager(R) for those member identified and
targeted by Landacorp. Customer will also be able to access standard
reports contained within DSManager(R).
Landacorp and Customer agree that a primary purpose of the program is
the generation of cost savings in excess of program cost and enhancing
the health outcomes for the members in the Intervention Group. To this
end, Landacorp and Customer agree to measure outcomes as follows:
2.3.1 Program Gross Savings for any Program Period will be calculated
as follows: Program Gross Savings = (Per Case Per Month Incurred
Claims Utilization Experience of the Control Group as determined
by claims paid as of 5 months after the Program Period ends and
having occurred during the Program Period in the months that the
members were members of the Control Group) less the Per Case Per
Month Incurred Claims Utilization Experience of the Intervention
Group as determined by claims paid as of 5 months after the
Program Period ends and having occurred during the Program
Period in the months that the members were members of the
Intervention Group) multiplied by the total Intervention Group
Member Months for the Program Period.
Program Gross Savings Per Member Per Month is defined as Program
Gross Savings divided by the total number of Member Months for
the applicable Program Period.
2.3.2 Savings Calculation: six (6) months following the end of any
Program Period, Landacorp will provide Customer with a
calculation of the Program Gross Savings and Reimbursement
Liability as set forth in this Section II Paragraph 3.4 obtained
through the programs for the Intervention Group members compared
to the Control Group members for the Program Period as
determined by all claims paid for the services in the Program
Period by Customer and adjusted to exclude outlier claims.
Claims amounts in excess of [*] in incurred claims per member in
any month will be excluded as outliers (or any other outlier
methodology mutually agreed to between Landacorp and Customer).
[*] Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION II
2.3.3 DELETED
2.3.4 For the purpose of performing calculations under this Section II
Paragraph 2.3 of this Agreement, claim amounts will be included
in the calculation of Program Gross Savings beginning the first
day of the month following identification of the member as a
candidate for Intervention, either through the Data Management
and Targeting services performed by Landacorp, or as an Ad Hoc
member identified by the plan. Claims will be assigned to the
Intervention Group or the Control Group according to the
assignment of the member performed by Landacorp, and described
in this Section II Paragraph 2.1 above.
2.4 Other Services:
Landacorp and Customer may, from time to time, agree on the provision of
services outside of this Agreement. In the event that both parties agree
on the provision of additional services, a Service Change Order, (as
attached as Exhibit III-B) will be completed. Charges for such services
will be at Landacorp's Prevailing Rates, or at rates agreed between
Landacorp and Customer. Charges for services outside of the Intervention
Program will not form part of the calculation of savings or guarantees.
3. PERFORMANCE AND MINIMUM GROSS SAVINGS GUARANTEES
3.1 Quality Performance and Minimum Gross Savings: Landacorp agrees with
Customer to achieve certain minimum Quality Performance and Minimum
Gross Savings results, as described in this Section. In the event that
Landacorp does not meet the minimum Quality Performance and Minimum
Gross Savings standards, Landacorp will reimburse Customer the amount
defined below.
3.2 Quality Performance
Landacorp and Customer will negotiate in good faith to develop [*]
measures of quality outcomes or performance that Landacorp will agree to
deliver to Customer. Landacorp will refund to Customer [*] percent
([*]%) of its PMPM Subscription Fees for each of the clinical or
outcomes performance measures that Landacorp fails to deliver, to an
aggregate maximum of [*] percent ([*]%) of PMPM Subscription Fees.
Measurement of performance in terms of this sub-paragraph of this
agreement will be performed annually by Landacorp and reported to
Customer together with the savings calculation (Paragraph 2.3.2 above).
3.3 Reimbursement Liability
Landacorp will calculate Program Gross Savings according to the
methodology defined in Section II Paragraph 2.3.1 of this Agreement.
Landacorp will reimburse Customer, and Customer will reimburse
Landacorp, as set forth in Section II Paragraph 3.4 below.
3.4 Limitation of Reimbursement Liability
Landacorp's and Customer's reimbursement liability in terms of this
Section 2 is limited as is described in the following table. Examples of
the calculations of the reimbursement liability and payments to Customer
and/or Landacorp are shown in Exhibit II-A.
[*] Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION II
------------------------------------------------------------------------------------------------------------
Program Gross Savings Amount Payment to Customer Payment to Landacorp
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Less than Minimum Program Gross Difference between Program Gross $[*]
Savings per member per month Savings and Minimum Gross
multiplied by the total number Savings per member per month
of Member Months in the Program multiplied by the total number
Period of Member Months.
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Greater than Minimum Gross [*]%) of PMPM Subscription Fees $[*]
Savings per member per month for each of the clinical or
multiplied by the total number outcomes performance measures
of Member Months in the Program that Landacorp fails to deliver,
Period, but less than the Shared to an aggregate maximum of [*]%)
Savings Threshold per member per of PMPM Subscription Fees
month multiplied by the total
number of Member Months in the
Program Period
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Greater than Shared Savings [*]%) of PMPM Subscription Fees Difference between Program Gross
Threshold multiplied by the for each of the clinical or Savings and Shared Savings
total number of Member Months in outcomes performance measures Threshold multiplied by the
the Program Period that Landacorp fails to deliver, total number of Member Months
to an aggregate maximum of [*]%) multiplied by [*]%) percent.
of PMPM Subscription Fees.
------------------------------------------------------------------------------------------------------------
Liability amounts will be increased in the second and subsequent Program
Years by increasing the PMPM amounts by the increase in the CPI for
calendar year 2002.
4. FEES AND CHARGES:
4.1 Per Member Per Month ("PMPM") Subscription Fees: The PMPM Subscription
Fees are [*] multiplied by the total number of Member Months recorded
for each month of the First Program Period. For the Second Program
Period, the PMPM Subscription Fees are [*] multiplied by the total
number of Member Months recorded for each month of the Second Program
Period. For the Third Program Period, the PMPM Subscription Fees are
[*] increased by the increase in the CPI for calendar year 2002,
multiplied by the total number of Member Months recorded for each month
of the Third Program Period. The following table shows an example of the
PMPM Subscription Fees assuming an enrollment of [*] Covered Lives.
[*] Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION II
# OF COVERED MONTHLY PRICE
LIVES OR PER COVERED MONTHLY PMPM
PERIOD MEMBERS LIFE OR MEMBER SUBSCRIPTION FEES
-----------------------------------------------------------------------------------------------
1. First Program Period [*] $[*] $ [*]
* [*] $[*] $[*]
2. Second Program Period
4.2 PMPM Subscription Term: The PMPM Subscription Term ("Term") shall be for
a period of twenty-four (24) months, beginning on February 1, 2002. On
February 1, 2003, Landacorp will increase the PMPM Subscription Fees by
the increase in CPI for calendar year 2002. Prior to the second and
subsequent anniversaries, Landacorp and Customer will negotiate in good
faith to agree on applicable Fees and Charges to apply during successive
Program Years.
4.3 Monthly Fees are due and payable on the first day of each month.
Landacorp shall calculate the Monthly Fees for each month based on the
in-force membership as recorded in Landacorp's database on the last day
of the prior month. Landacorp and Customer agree to quarterly reconcile
the in-force membership recorded in Landacorp's database with the
Customer's own records and to apply any necessary adjustments to the
following month's PMPM Subscription Fee.
4.4 Discontinuance of the Subscription: Landacorp reserves the right to (i)
suspend provision of service and support for nonpayment of any sums owed
to Landacorp which are undisputed and thirty (30) days or more past due
and (ii) subsequent to the expiration of the PMPM Subscription Term,
discontinue Subscription by written notice given to Customer not less
than sixty (60) days prior to the date the next annual renewal would
otherwise be due.
4.5 Reimbursement Liability: Landacorp will refund to Customer a portion of
the Customer's Total Monthly PMPM Subscription fees paid during each
Program Period, for each Program Period in which Landacorp's Program
Gross Savings for the Program Period is less than the Minimum Gross
Savings. Minimum Gross Savings for each Program Period is defined as
follows:
First Program Period: $[*] PMPM, multiplied by the number of Member
Months recorded in the First Program Period.
Second Program Period: $[*] PMPM, multiplied by the number of Member
Months recorded in the Second Program Period.
Third Program Period: $[*] PMPM multiplied by the number of Member
Months recorded in the Third Program Period, multiplied by the increase
in the CPI for the First Program Year.
In the event that Program Gross Savings is less than Minimum Gross
Savings, Landacorp will pay to Customer the difference between Minimum
Gross Savings and Program Gross Savings (as calculated by Landacorp
according to paragraphs 2.3.1 and 2.3.2 above) within 30 days of
notification to Landacorp by Customer to invoke this Guaranteed Savings
Provision of this Agreement. Examples of the Guaranteed Savings
calculations are shown in Exhibit II-A of this Agreement.
4.6 Shared Savings: Landacorp and Customer agree to a Shared Savings
Threshold of [*] multiplied by the total Member Months recorded in the
First Program Year. The Shared Savings Threshold will
[*] Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION II
be increased for the Second Program Year to [*] multiplied by the CPI
inflator multiplied by the total Member Months recorded in the second
Program Year. Examples of the Shared Savings calculation are shown in
Exhibit II-A of this Agreement.
Because Program Gross Savings in excess of the Shared Savings Threshold
will already have been realized by Customer, no savings payment will be
due or payable by Landacorp to Customer. The savings payment due to
Landacorp will be [*] of Program Gross Savings in excess of the Shared
Savings Threshold for the Program Period. This amount will be due and
payable to Landacorp within 30 days of the provision of the final
savings calculation for the Program Period to Customer by Landacorp.
[*] Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION II
EXHIBIT II-A
EXAMPLES:
If Program Gross Savings = $[*] PMPM
The amount of Program Gross Savings exceeds the Minimum Gross Savings in the
First and Second Program Periods. No Refund is payable to Customer by Landacorp,
except any amounts due Customer by Landacorp for not achieving Quality
Performance goals. In the Third Program Period, the reimbursement calculation
will depend on the increase in the CPI in the First Program Year. If Program
Gross Savings exceeds the Minimum Gross Savings for the Third Program Period,
then no refund is payable to Customer by Landacorp, except any amounts due
Customer by Landacorp for not achieving Quality Performance goals
The amount of Program Gross Savings is below the Shared Savings Threshold;
therefore no additional payment is due to Landacorp by Customer.
IF PROGRAM GROSS SAVINGS = $[*] PMPM
Landacorp will refund to the Customer as follows:
First Program Period: No reimbursement is payable. ($[*] PMPM exceeds $[*]
PMPM), except any amount due Customer by Landacorp for not achieving Quality
Performance goals.
Second Program Period: $[*]. Landacorp will refund to Customer $[*] PMPM
multiplied by the number of Member Months in the Program Period.
Third Program Period: $[*] PMPM (increased by CPI) - $[*] PMPM. Landacorp will
refund to Customer the difference in PMPMs multiplied by Member Months in the
Program Period.
In all periods, Program Gross Savings do not exceed the Shared Savings Threshold
so no payment is due to Landacorp by Customer.
IF PROGRAM GROSS SAVINGS = $[*] PMPM
In all Program Periods, the amount of Program Gross Savings exceeds the Minimum
Gross Savings, and no amount is due by Landacorp to Customer, except any amounts
due Customer by Landacorp for not achieving Quality Performance goals.
- Shared Savings Threshold = $[*] PMPM
- Program Gross Savings -- Shared Savings Threshold = $[*] - $[*]
= $[*]PMPM
[*] Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION II
- Amount of Program Gross Savings exceeds the Shared Savings
Threshold in all Three Periods.
- Shared Savings Calculation:
- [*]% of $[*].PMPM = $[*] PMPM paid to Landacorp by
Customer
- [*]% of $[*] plus[*]% of $[*] PMPM = $[*] PMPM retained
by Customer, plus any amounts due Customer by Landacorp
for not achieving Quality Performance goals.
[*] Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION III
III. PRODUCT(S) LICENSE AND SUPPORT TERMS
1. SOFTWARE LICENSE AND AUDIT:
1.1 Software License:
1.1.1 Landacorp hereby grants to Customer a, non-exclusive, non-transferable
license to use the object code version of the Software solely on the
Prerequisite Equipment (i) solely for the benefit of persons and
entities located at Customer's Facility, (ii) solely within the United
States of America and (iii) if applicable, for the benefit of the number
of Covered Lives or Members identified in Exhibit I-A herein provided
that such access and use of the Software is relevant to the business
relationship with Customer, and in a manner consistent with Customer's
own internal business purposes.
1.1.2 Customer shall not rent, lease or provide remote computer services or
distribute the Software to any third party without the prior written
consent of Landacorp.
1.1.3 Customer shall not permit the use of the Software by an outsourcing or
facility management service without Landacorp's prior written consent,
which shall not be unreasonably withheld.
2. SOURCE CODE ESCROW:
2.1 Escrowed Items
To protect Customer's interest, Landacorp has placed in escrow a copy of
the Software source code and relevant Documentation associated with the
current major version of the Software.
2.2 Updates
To ensure the escrowed items are current with the version in use by
Customer, Landacorp agrees to update the source code and relevant
Documentation kept in escrow within fifteen (15) days of a general
release of any new major version of the Software.
2.3 Conditions of Receipt
Customer is entitled to a copy of the escrowed items if and when
Landacorp ceases business operations whether pursuant to a Chapter 7,
Liquidations, of the Federal Bankruptcy Laws or otherwise. However,
Landacorp's rights shall not terminate under a financial reorganization
or restructuring under Chapter 11 and/or 13, Reorganization, of the
Federal Bankruptcy Laws or other applicable bankruptcy laws.
2.4 Escrow Agent
The escrow agent for the source code and relevant Documentation is:
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Accountancy Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. In the event Landacorp experiences an action as
described in Paragraph 2.3 above, Customer may request from
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ one (1) copy of the source code in magnetic form and one
(1) copy of the relevant Documentation. Customer agrees to remit any
copy cost directly to ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ prior to receipt of escrowed
items. In the event that ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ ceases to act as Escrow Agent
on behalf of Landacorp, Landacorp agrees to secure a new Escrow Agent
and notify Customer.
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION III
3. SOFTWARE DOCUMENTATION:
One (1) copy of all Documentation for all generally available Software
listed in Section II Paragraph 4.1 shall be delivered to Customer in
electronic format with the Software.
4. SOFTWARE SUPPORT:
4.1 Support Services
Landacorp provides technical support for DSManager(R). Support policies
and procedures are described in Exhibit III-A.
4.2 Software Updates
4.2.1 Landacorp shall periodically notify Customer of the availability of new
major version of the Software. Upon Customers request, Landacorp shall
supply Customer with such new major version of the Software. The
materials shall be provided to Customer in the same form and quantity as
originally delivered. Landacorp agrees to provide Customer with
documented procedures for installation of any such new major version.
4.2.2 Prior to the loading of a new major version of the Software into
Customer's operational environment, Landacorp will load the new major
version into the Customer's test and training environment.
4.3 Support Exclusions
Any applicable support services shall not be provided to Customer under
the terms of this Agreement if the rendering of such Support is required
due to: (i) Customer, its employees or agents making changes to the
computer or workstations, including the hardware, operating systems
Software, communications Software, interface Software, and/or any
applicable third-party software used in conjunction with the Software
such as to render the Software incapable of proper operation; (ii)
changes to Software which have not been authorized by Landacorp; and/or
(iii) hardware failure.
Any applicable support services shall not be provided to Customer under
the terms of this Agreement if the Customer has not received Training on
the module for which support is requested. If Customer wishes to pursue
support services related to modules for which no Training has been
received, Customer will be referred to an Account Executive or Client
Services Project Manager who will discuss the procedure for obtaining
Additional Professional Services, as defined in Section V, paragraph
2.1.
Any applicable support services and/or program support required as a
result of any or all of the foregoing will be provided by Landacorp at
its then Prevailing Rate, plus any applicable shipping, travel, lodging,
meal and miscellaneous expenses incurred by Landacorp to provide such
support. There will be a minimum fee of one-half (1/2) Day for any such
support exclusions to the extent that the provision of such Support
requires more than one hour to investigate, evaluate, correct and
resolve.
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION III
5. SOFTWARE WARRANTIES:
5.1 Warranty to Documentation: Landacorp warrants from the Effective Date of
this Agreement, so long as all Fees, Charges and Costs, for the
Product(s) have been paid in full when due, that the Software (excluding
any programming changes made by Customer), when operating on the
Prerequisite Equipment, will perform in accordance with the
Documentation provided to Customer as part of the Software.
5.2 Virus Warranty: Landacorp warrants that to the best of its knowledge as
of delivery to Customer, the Software does not contain any virus, worm,
trap door, back door, timer or clock that would erase data or
programming or otherwise cause the Software or Equipment to become
inoperable or incapable of being used in accordance with its
Documentation.
5.3 Year 2000 Warranty: Landacorp warrants that Software delivered under
this Agreement shall be able to accurately process date data (including,
but not limited to, calculating, comparing, and sequencing) from, into,
and between the twentieth and twenty-first centuries, including leap
year calculations, when used in accordance with the Documentation,
provided that all listed or unlisted programs used in combination with
the Software properly exchange date data with the Software.
5.4 HIPAA Warranty:
5.4.1 Regulatory Compliance. Landacorp represents and warrants, to the best of
it's knowledge that as of the Effective Date of this Agreement,
Customer's use of the Software is consistent with the requirements of
all federal and state law and regulation pertaining to the privacy of
individually identifiable health information. In the event such federal
laws or regulations change after the Effective Date hereof, Landacorp
agrees it will make best efforts to keep the products and software
compliant at no cost to Customer and that any required updates shall be
made available to Customer before the effective date of such regulatory
changes. In the event Landacorp declines to make such changes to the
Products as may be necessitated by regulation, Landacorp agrees to
provide Customer with written notice to that effect no later than
forty-five (45) days following the publication of any final regulation
or statute requiring change to the Software. Landacorp further agrees to
provide source code for the Software and terminate the Software Support
agreement if its Software shall fail to be compliant within one year of
the Effective Date of this Agreement.
5.4.2 Security and Electronic Signature Standards. The "Security and
Electronic Signature Standards," was published as a proposed rule August
12, 1998. Landacorp agrees to provide a schedule for compliance with the
"Security and Electronic Signature Standards" and future revisions as
required for Customer compliance to the standard within ninety (90) days
from the final rule or updates for this standard. Landacorp agrees to
demonstrate they are meeting this standard or updates to the standard at
least ten (10) months prior to the standard's implementation date
5.4.3 No Use of Data. Landacorp acknowledges and agrees that Customer's data,
including patient data, is both confidential and valuable to Customer,
whether in individually identifiable, de-identified, aggregated or
processed form. Landacorp agrees that it shall not use any information
or data to which it is exposed in the course of performing this
Agreement except for the purposes of fulfilling its obligations under
this Agreement, except that Landacorp reserves the right to use the data
for the purposes of analysis, development of methodologies and
algorithms, testing of outcomes and interventions and other research.
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION III
5.4.4 Health Insurance Portability and Accountability Act Business
Relationship Contract. Landacorp acknowledges that Customer is a covered
entity under the "Standards for Privacy of Individually Identifiable
Health Information" final rule published in the Federal register on
December 28, 2000. Because Landacorp will have access to individually
identifiable health information, Landacorp and Customer agree to,
negotiate in good faith, towards the signing of an appropriate business
relationship not later than one year prior to the implementation date
for the rule.
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION III
EXHIBIT III-A
Landacorp Support for DSManager(R)
Support Program
- Landacorp will provide DSManager(R) training and scripts
(Frequently Asked Questions and resolutions) to individual(s)
designated by the Customer as ▇▇▇▇▇ ▇ ▇▇▇/▇▇ ▇▇▇▇▇ ▇ support
staff. Customer Level 1 staff is defined as a supervisor or
trainer internal to the Customer department utilizing
DSManager(R). Customer Level 2 staff is defined as a person in
the Customer's Information Technology department or Information
Technology Help Desk department.
- Landacorp provides telephonic support (973-780-2025) during from
9AM until 8PM Eastern Time, or via email to
▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇.
- Landacorp logs all incoming issues and monitors the progress to
resolution of all issues. Customer may request copies of the
issue logs relevant to Customer's reported issues.
Customer Level 1 Procedures:
- Users should consult the Level 1 support person who will either
resolve the issue or make a referral determination. Referral may
be to the Level 2 support person or directly to Landacorp.
- For issue referred directly to Landacorp, the Level 1 support
person fills out the Issue Form and faxes it to Landacorp
(973-783-7597) together with a screen capture, where
appropriate.
- The Level 1 support person may call the Landacorp help desk
(973-780-2025) to discuss the issue.
Customer Level 2 Procedures:
- Procedures are similar to Customer Level 1 support procedures.
System availability:
- Where Landacorp is providing system access via a Application
Service Provider contract, Landacorp will provide access to
customer data via its servers during the following hours of
operation:
- Monday to Friday: 6.00 a.m. to Midnight, Eastern Time.
- Saturday: 6.00 a.m. to 6.00 p.m.
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION III
- Sunday: not available
- During Landacorp's standard hours of operation, occasional
interruptions of service may occur. Landacorp will document
these down times and report on them to the Customer. When the
interruption is due to action on the part of Landacorp, such as
the need for unscheduled maintenance, Landacorp will provide at
least 15 minutes warning to the Customer's internal support
function (Level 1 support, above). It will be the responsibility
of the Customer's Level 1 support function to notify all users
at the Customer site of the impending down time. When the system
interruption is over, Landacorp will again notify the Customer's
Level 1 representative who will be responsible for re-activating
users at the Customer site.
Training:
Landacorp will provide training to the customer's ▇▇▇▇▇ ▇ and Level 2 staff. In
addition, as part of the CSR training program, staff will be trained on
the appropriate use of internal support.
Supporting Documentation (available to users and local support staff, where
appropriate):
- DSManager(R) User Manual.
- Installation / Troubleshooting Guide
- Scripts (Frequently Asked Questions and resolutions)
- Issue Form.
- Call Log Sheet
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION III
EXHIBIT III-B
SERVICES CHANGE ORDER NUMBER: _________
This Services Change Order, hereinafter referred to as the "Change Order" to the
Services and System Agreement number 00141220, hereinafter referred to as the
"Agreement," is made by and between Landacorp, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, hereinafter referred to as "Landacorp" and Lifeguard, Inc.
and Lifeguard Life Insurance Company (collectively "Customer") ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Landacorp and Customer hereby agree as
follows:
WHEREAS, the Customer has requested Additional Professional Services; and
WHEREAS, Landacorp has agreed to provide these requested Additional Professional
Services;
NOW, THEREFORE, for good and valuable consideration, Landacorp and the Customer
agree to change the Agreement as follows:
Description of Additional Professional Services to be provided:
Estimated Days for Additional Professional Services described above:
Estimated Fees for Additional Professional Services described above:
In addition to the additional fees associated with the increase in the estimated
days, the Customer hereby agrees to reimburse Landacorp for any increased travel
expenses necessitated by this Change Order.
All other terms and conditions of the Agreement shall remain in full force and
effect.
EXECUTED THIS _________ DAY OF _________________, ______.
LIFEGUARD, INC. AND LIFEGUARD
INSURANCE CO. LANDACORP, INC.
Signature: Signature:
-------------------------- ------------------------------
Name: Name:
------------------------------- -----------------------------------
Title: Title:
------------------------------ ----------------------------------
Date: Date:
------------------------------- -----------------------------------
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION IV
IV. PREREQUISITE SOFTWARE AND DATA SETS
Description of Software or Data Set Agreement Type
Software
NONE
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
NUMBER 01071003
SECTION V
V. PREREQUISITE EQUIPMENT
PRODUCTS:
Customer will license and/or contract for the Products as provided in Section II
Paragraph 4.1.
PROJECTED USERS:
As provided in Exhibit I-A.
LANDACORP'S MINIMUM RECOMMENDATIONS ARE:
Windows 95 with Internet Explorer 4.1 with 128 bit encryption
Pentium ▇▇▇ ▇▇▇
▇▇ ▇▇ of ram
10 MB free disk space on client machine
56K BPS Internet connection
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
SECTION VI
EXHIBIT VI-A
NONDISCLOSURE AGREEMENT
This Nondisclosure Agreement (Agreement) is made on the ________ day of
_________. ______, by and between Landacorp, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to individually as a "Party"
or as "Landacorp") and [THIRD PARTY NAME AND ADDRESS] (hereinafter referred to
individually as a "Party" or as the "Customer") (hereinafter both Parties are
referred to collectively as the "Parties") regarding a proposed transaction (the
"Proposed Transaction"). As part of the negotiations between the Parties over
the Proposed Transaction, said Parties may receive from time to time hereafter
Confidential Information (as defined below) from each other pertaining to one or
both of the Parties.
1. a) For purposes hereof, "Confidential Information" shall mean any and
all materials and information that either Party makes available to the
other Party or that has or may come into possession of either Party in
connection with the Proposed Transaction, including without limitation,
the following:
software programs and enhancements, upgrades and modifications
thereof; user and other manuals; flow charts; source and object
code; documents; specifications; financial reports, client
lists, marketing material, data and other information; and all
copies, summaries, outlines and other representations thereof.
b) The Confidential Information will be used solely for the purpose of
evaluating the Proposed Transaction between the Parties.
c) Each Party hereby acknowledges that the Confidential Information
obtained by it is valuable and proprietary trade secret information of
the other Party, the disclosure of which would be harmful to such other
Party. Each Party agrees to hold such Confidential Information in the
strictest confidence and not to disclose same or release it to any other
Party except as related to the performance of this Agreement and as
permitted hereunder. It is further agreed that each Party shall take
reasonable measures to ensure that all third parties (including but not
necessarily limited to its agents, representatives, or consultants)
comply fully with the terms of this Agreement, and that each such third
party provided access to the other Party's Confidential Information be
required to execute a nondisclosure agreement acceptable to the other
Party.
d) Neither Party will reverse engineer, disassemble, decompile or copy
the Confidential Information except as permitted hereunder. No Party
shall, directly or indirectly (including in the conduct of its business)
use, or permit to be used, the Confidential Information obtained from
the other Party to that other Party's detriment, whether or not the
former Party benefits from such detrimental use.
2. The term "Confidential Information" does not include any Confidential
Information disclosed by a Party which (i) at the time of disclosure or
thereafter is generally available to and known by the public (other than
as a result of a disclosure in violation of this Agreement), (ii) was
available to such Party on a nonconfidential basis from a source other
than a Party, provided that such a source is not and was not bound by a
confidentiality agreement with such Party, or (iii) has been
independently acquired or developed by such Party without violating any
of the obligations under this Agreement.
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
SECTION VI
3. In the event that any Party becomes legally compelled (by deposition,
interrogatory, request for documents, order, subpoena, civil
investigative demand or similar process issued by a court of competent
jurisdiction or by a government body) to disclose any of the
Confidential Information, prompt prior written notice of any such
requirement shall be provided to each Party so that any Party may seek a
protective order or other appropriate remedy and/or waive compliance
with the terms of this Agreement. In the event that such protective
order or other remedy is not obtained, and irrespective of whether or
not compliance with the provisions hereof is waived, then it is agreed
that only that portion of the Confidential Information which the Party
subject to such legal compulsion is advised in writing by its counsel is
legally required to be disclosed shall be disclosed and reasonable
efforts shall be made to obtain assurance that confidential treatment
will be accorded such Information.
4. Each Party will keep a record of the Confidential Information furnished
to the other and of the location of such Confidential Information
received. If the Proposed Transaction is not consummated, or if so
requested by a Party, all Confidential Information provided by each
Party shall be returned to the originating Party, each Party shall
destroy all remaining copies of the other Party's Information in its
possession and all copies of any analyses, compilation, studies or other
documents prepared, used or created containing or reflecting any
Confidential Information.
5. Each Party hereby acknowledges that, although each Party has endeavored
to include in the Confidential Information all information known to it
which it believes to be relevant for the purpose of the other Party's
investigation, each Party understands that, unless otherwise stated in
writing, none of the Parties have made or make any representation or
warranty as to the accuracy or completeness of Confidential Information.
6. Each Party agrees that a Party shall be entitled to equitable relief,
including, without limitation, injunctive relief and specific
performance, in the event of any breach of the provisions of this
Agreement by the other Party, in addition to all other remedies
available at law or in equity, and shall not be required to post bond or
prove actual damages, which may in any event be difficult to liquidate,
specify or establish.
7. This Agreement may be modified or waived only by a separate writing
signed by all of the Parties hereto. It is further understood and agreed
that no failure or delay by any Party in exercising any right, power or
privileges hereunder will operate as a waiver thereof, nor will any
single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any right, power of privilege
hereunder.
8. Each Party agrees that all of the provisions of this Agreement will
apply to all affiliates of the Parties, as such term may be broadly
interpreted, to the same extent as if they were signatories to this
Agreement.
9. This Agreement is for the benefit of all Parties and their successors in
interest and will be governed by and construed in accordance with the
laws in the state in which the Customer is located, exclusive of its
rules governing choice of law and conflict of laws. Any action of any
kind arising out of or in any way connected with this Agreement must be
commenced within one (1) year of the date upon which the cause of action
accrued or, if one (1) year is shorter than the minimum period allowed
by law, then the minimum period allowed by law.
10. This Agreement may be executed in two or more counterparts, with each
counterpart constituting a single original.
LANDACORP, INC.
FIRST AMENDED AND RESTATED SERVICES AND SYSTEM AGREEMENT
SECTION VI
11. The Parties agree that their obligations under this Agreement shall
continue until the Confidential Information is or later becomes general
public knowledge through no fault of the other Party, or is or becomes
available to a Party from any other source not having a duty of
nondisclosure to the other Party.
12. If any portion of this Agreement is determined to be or becomes
unenforceable or illegal, such portion shall be deemed eliminated and
the remainder of this Agreement shall remain in effect in accordance
with its terms and modified by such deletion.
IN WITNESS WHEREOF, the undersigned Parties have made and entered into this
Agreement on the date first above written.
[THIRD PARTY NAME] LANDACORP, INC.
Signature: Signature:
-------------------------- ------------------------------
Name: Name:
------------------------------- -----------------------------------
Title: Title:
------------------------------ ----------------------------------
Date: Date:
------------------------------- -----------------------------------