1
EXHIBIT 10.19
MASTER AGREEMENT
THIS MASTER AGREEMENT (the "Agreement"), effective 24 Aug., 1998 the "Effective
Date"), between MPOWER SOLUTIONS INC., a Delaware corporation with its principal
place of business located at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇'▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("MPOWER") and QUEST DIAGNOSTICS INCORPORATED, a Delaware
corporation with its principal place of business located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Customer") sets forth the promises of the parties with
respect to the products and services of MPOWER which are described in this
Agreement.
WHEREAS, MPOWER is in the business of providing automated managed health care
information software and services to businesses providing managed health care
and insurance services, and desires to provide such services and software to
Customer, subject to the terms hereof; and
WHEREAS, Customer is in the business of providing laboratory services to its
customers, including managed health care providers, and desires to use the
software and services provided by MPOWER, subject to the terms hereof.
NOW THEREFORE, in consideration of the mutual promises made, the terms and
conditions hereunder described and other valuable consideration, the parties
agree as follows:
I. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
A. CPI
"CPI" shall mean the Consumer Price Index for All Urban Consumers, U.S.
City Average, for All Items (1982-1984= 100), as published by the Bureau
of Labor Statistics of the U.S. Department of Labor. If the Bureau of
Labor Statistics ceases to publish or substantially changes the content,
calculation or format of the CPI, the parties will substitute another
comparable index published by a mutually agreeable source; provided,
however, that if the change is merely to redefine the base period to some
other period, the parties will continue to use the affected index but will
convert either the current or prior level of such index to the same basis
as the other by using an appropriate conversion factor.
B. Documentation
"Documentation" shall mean the standard operational instructions, manuals
and
Page 1 of 43
2
related material regarding MPOWER Products (as defined below) which MPOWER
will deliver to Customer as set out in the Attachments to this Agreement.
C. MPOWER(R) Product(s)
"MPOWER(R) Product(s)" shall mean those product(s) which MPOWER will
deliver to Customer as set out in the Attachments to this Agreement.
D. Release
"Release" shall mean a set of computer programs and/or associated
Documentation regarding an MPOWER Product which MPOWER makes available for
use by its customers who are covered under warranty or a maintenance
agreement regarding such MPOWER Product. MPOWER reserves the right to
charge an additional license fee for any optional modules which MPOWER
reasonably determines contains significant additional functionality. Such
significant additional functionality shall mean (a) new modules or
subsystems that are not a mere enhancement nor extension of existing
functionality, which enhancements and extensions are covered under
maintenance agreements, or (b) different hardware, operating system
platforms or databases. The major modules and/or functionality initially
covered under a given MPOWER Product are listed in an Exhibit to the
applicable Attachment to this Agreement.
E. Site(s)
"Site(s)" shall mean the physical location(s) at which Customer conducts
its business.
F. Live Production Environment
A live production environment ("Live Production Environment') is defined
whereby MPOWER(TM) is managing on-line the enrollment and processing of
subscribers or members, and, at a minimum, one line of business.
G. Plan(s)
A "Plan" (" Plans") shall mean a health benefit in which Customer or a
Plan Sponsor is operating
H. Enrollee
"Enrollee" shall mean an individual who is currently enrolled with a Plan
entitled to receive Covered Services or who has been enrolled in such Plan
at some time during the then-previous twelve (12) months, whether or not
such covered member has presented a valid claim to such Plan.
Page 2 of 43
3
I. Covered Services
"Covered Services" shall mean those healthcare or related benefits that an
Enrollee is entitled to receive from a Participating Provider or other
Provider pursuant to the applicable Enrollee Group Benefits Agreement.
J. Participating Provider
"Participating Provider" means Provider that has entered into an Agreement
with Customer or Customer's customer to provide Covered Services to
Enrollees.
K. Group Benefits Agreement
"Group Benefits Agreement" means the document distributed by Plan to its
Enrollees describing all Covered Services in the Plan.
L. Work Order
"Work Order" shall mean a document that is separately executed by both
parties, that (a) describes a scope of services that Customer wishes
MPOWER to perform for Customer, (b) authorizes MPOWER to perform services
for Customer, (c) obligates MPOWER to perform such services and (d)
obligates Customer to pay for such services, all under the terms of that
separate document, and which document, when executed, is incorporated and
made part of this Agreement.
M. Derivative Work
"Derivative Work" shall mean any computer program, application, interface
or related documentation that is based on an M. POWER Product, or any
component part thereof, that is used or intended to be used as a
commercial software product or as a competitive product to MPOWER.
N. Source Code
"Source Code" shall mean the commonly accepted source code of a computer
program describing in a formal language certain logic functions, from
which source code a computer program is compiled or interpreted to perform
certain functions in a computer.
O. Object Code
"Object Code" shall mean the commonly accepted object code of a computer
program, which is that version of the computer program logic that has been
translated from the Source Code into instructions that can be run directly
within a
Page 3 of 43
4
computer in a predefined operating system environment.
P. Plan Sponsor
"Plan Sponsor" shall mean the health plan, organization or legal person
that offers a Plan either directly or through another organization or
legal entity to Enrollees.
Q. Provider
"Provider" shall mean a medical services provider, clinic, laboratory or
other institution or facility that customarily provides Covered Services
or other medical, surgical, laboratory, radiology, therapies, alternative
medical services or any other commonly accepted services of a medical or
medically related nature, whether licensed or unlicensed, to Enrollees of
Customer or Customer's customers.
R. Claim Transaction
"Claim Transaction" shall mean a medical, surgical, laboratory, radiology,
therapy or other service claim or encounter, whether for a Covered Service
or any other service or product, submitted to Customer by a Provider
detailing services or products provided by such Provider to an Enrollee.
S. Encounter File
"Encounter File" shall mean the codified output of one or more of the
aforementioned services performed by such Provider to an Enrollee,
resulting in claim transaction(s) to be processed.
T. "Life" ("Lives")
"Life" ("Lives") shall mean an Enrollee.
U. End User
"End User" shall mean all such authorized individuals deemed by Customer
to require access to the then current release of MPOWER Product in Object
Code form, based upon conformance to the terms and conditions set forth in
Paragraph II (Confidential and Proprietary Information) of this Agreement.
V. Customer
"Customer" means Quest Diagnostics Incorporated, its wholly owned
subsidiaries
Page 4 of 43
5
and affiliates, and any other entity in which Quest Diagnostics
Incorporated's ownership interest is no less than 45% of that entity.
II. CONFIDENTIAL AND PROPRIETARY INFORMATION
MPOWER, on behalf of itself, its employees, agents, vendors, successors,
and assigns, agrees to keep in confidence all data relating to Customer's
business to which MPOWER may have access as a result of performing its
obligations under this Agreement and the terms of this Agreement.
MPOWER asserts and Customer acknowledges that all MPOWER Products, the
Documentation and the Releases, and all information, data, designs, MPOWER
Product structure definitions of any system setups, benefit plans,
provider contracts, fee groups, adhoc reports, letter formats, sample
letter content, business process workflow diagrams, and any other
structural templates and other similar information provided by, developed
or reviewed by or in conjunction with MPOWER, and used by MPOWER in
assisting Customer in the installation, implementation or on-going use of
the MPOWER Product, and methodologies related thereto ("Proprietary
Information") are the exclusive property of MPOWER or MPOWER's suppliers
and that the Proprietary Information is confidential, has tangible value
and includes trade secret information of MPOWER and/or MPOWER's suppliers.
MPOWER and/or MPOWER's suppliers shall retain all rights to the
Proprietary Information, including all copyright rights therein, except to
the extent to which MPOWER grants rights to Customer to use the
Proprietary Information pursuant to this Agreement. Customer may not
create Derivative Works based upon the Proprietary Information in whole or
in part. All improvements, enhancements and modifications to the
Proprietary Information shall be owned exclusively by MPOWER or MPOWER's
suppliers. Without MPOWER's prior written consent, Customer shall not
decompile, disassemble or reverse engineer any Proprietary Information.
Customer agrees not to sell, lease, assign or otherwise transfer, disclose
or make available, in whole or in part, any portion of the Proprietary
Information or the terms of this Agreement and Customer shall prevent
disclosure of any pan of the Proprietary Information or the terms of this
Agreement to any third party for any reason (except for disclosure or
access to Customer's employees, contracted entities, or Customer's
customers which is necessary for Customer to be able to use the
Proprietary Information in accordance with this Agreement). Customer
agrees to notify those employees, contracted entities or customers to whom
Customer gives access to the Proprietary Information of the restrictions
contained in this Section II and to ensure their compliance with such
restrictions.
The duties and obligations which are included in this Section II shall
survive any
Page 5 of 43
6
termination of this Agreement and/or Customer's right and license to use
any MPOWER Product.
If Customer desires to disclose any Proprietary Information to any third
party or to permit any third party to have access to any Proprietary
Information, such third party must have a legitimate need to have access
to such Proprietary Information (consistent with the purpose[s] for which
such disclosure was made to Customer) and, prior to any such disclosure or
access, Customer and such third party must enter into a nondisclosure
agreement with MPOWER in substantially the form set out in the Addendum
which is attached to this Master Agreement and made a part hereof. In no
event shall Customer disclose any Proprietary Information to any
competitor of MPOWER.
Customer and MPOWER specifically acknowledge that specific provider and
benefit contract rates, the names, demographic information, contractual
relationships, and medical information of any group, member, provider or
other entity with a contractual relationship with Customer shall be
considered Proprietary Information of Customer or of such other entity
contracted with Customer, unless such information is available through
public sources or through publicly available filings with any insurance or
health care regulatory agency or with any industry accreditation or
reporting body.
Further notwithstanding the above, Customer and MPOWER acknowledge that
Customer may create and distribute reports and data from its licensed use
of the MPOWER Products in the normal course of its business to its
customers, to health care providers, Enrollees, employers or Plan
Sponsors, government agencies and others with a legitimate purpose in the
conduct of the Customer's business and the data processed by the licensed
MPOWER Products, and that such reports and distributed data do not
constitute Derivative Works, unless they are used to create commercial
software products for reuse and / or license to other parties.
Customer and MPOWER agree that MPOWER has no rights in the data that is
input by Customer or its agents in the use of the MPOWER Products, and
agree that all of such data, and any subsequent information developed from
such data by Customer in its use of the MPOWER Products is confidential
information solely for the use of Customer. MPOWER shall not use the data
and subsequent information developed by Customer in any manner, and it is
agreed that such data and information is Proprietary Information of
Customer.
III. COPYING
Customer, for each licensed instance of the MPOWER Product being used in a
Live Production Environment, may make one (I) copy of each MPOWER Product
in machine-readable form in a test region for the purpose of testing new
releases or
Page 6 of 43
7
fixes and also one (1) copy of each MPOWER Product in machine-readable
form for backup purposes only. Customer agrees that upon copying any
MPOWER Product, Customer shall place a label on the outside of each copy
medium showing the program name, version number and any/all copyright and
proprietary notices in the same form as contained on the original copy.
In addition, Customer may make automated backup copies of its production
and testing regions for operational backup purposes without applying the
above labels, provided that such operational backup copies are maintained
with the acceptable industry standard security measures and not made
available to outside parties except for the case of disaster recovery
purposes, in which case the disaster recovery agent will be bound to all
the confidentiality and Proprietary Information restrictions to which
Customer is bound hereunder, and further that no such disaster recovery
agent may be a competitor of MPOWER.
IV. SOURCE CODE ESCROW
At the request of Customer, MPOWER and Customer will enter into an
agreement with MPOWER's escrow agent ("Custodian") for the depositing of
the MPOWER Products' Source Code ("Source Code Copy"). [The current
Custodian is NORWEST Bank.] MPOWER shall notify Customer at least ten (10)
business days prior to a change in the entity identified as the Custodian.
Subject to Customer's payment of all fees due under this Agreement in
accordance with the applicable payment terms and Customer's payment of all
fees related to' Custodian's administration of said escrow (the current
rate as of the date of this Agreement being One Thousand Five Hundred
($1,500.00) Dollars per annum), the Source Code Copy so deposited will be
maintained during the period Customer shall use and purchase, and MPOWER
shall provide, software maintenance services for the particular MPOWER
Product. The Source Code Copy will be updated by MPOWER within thirty (30)
days after each new Release of the particular MPOWER Product.
The parties agree that the Source Code Copy shall be held by the Custodian
for delivery to Customer under the conditions that this Agreement is
terminated as a result of a material breach of the terms of this Agreement
by MPOWER or MPOWER ▇▇▇▇▇ for bankruptcy under Chapter 7, and its business
is not continued by virtue of a merger, consolidation, the sale of all or
substantially all of its assets, or through some other transaction by
another fiscally sound and technically qualified corporation or entity,
and the Custodian of the Source Code has received from Customer or from
MPOWER, or from a court of competent jurisdiction: (i) written
notification of any such event or condition; (ii) demand that a copy of
the Source Code Copy be mailed to Customer; (iii) written undertaking from
Customer, which shall be legally binding, that the copy 'of the Source
Code Copy to be supplied to Customer will be used only for Customer's
maintenance of the
Page 7 of 43
8
MPOWER Products at a specified location and will be promptly returned to
the Custodian at the expiration of the period during which Customer, under
its agreement with MPOWER, has the right to use the MPOWER Products, and
that the copy of the Source Code and the information and material
contained therein shall be held confidentially by Customer, its employees
and agents who are involved in the use and technical maintenance of the
MPOWER Products, and shall not, under any circumstances, be disclosed or
made available to any other person or entity; and (iv) specific
instructions from Customer for the delivery of a copy of the Source Code
Copy, with a copy of such instructions to MPOWER. Customer will pay the
costs and expenses of the Custodian in carrying out the requirements of
this Section.
In addition, if Customer uses the MPOWER Product Source Code, it will only
be for the purposes for which the Object Code is licensed under this
Agreement and not for re-license, reverse engineering or to create a
derivative product. The Confidential and Proprietary Information
provisions of Section II apply also to the Source Code.
V. TERMINATION
Should Customer fail to pay any sum due and payable under this Agreement,
MPOWER shall notify Customer in writing of such failure to pay. Customer
shall then have thirty (30) days from the delivery of MPOWER's written
notice to pay such amount(s). The foregoing sentence in no way relieves
Customer from its obligation to pay any and all late charges which may
become due as set forth in Section VI below. If payment is not made within
such thirty (30) days, MPOWER shall have the immediate right to
discontinue any and all services under this Agreement. Furthermore, if
payment is not made within sixty (60) days from the delivery of MPOWER's
written notice, MPOWER shall have the immediate right to terminate this
Agreement, except that the License granted hereunder shall not be
terminated unless the sum due and unpaid is specifically for the License
granted hereunder.
Should either party commit a material breach of its obligations under this
Agreement, other than failing to pay money, the non-breaching party may
notify the breaching party in writing, setting out the breach, and the
breaching party shall have thirty (30) days to remedy such breach. If the
breaching party fails to remedy the breach during this thirty (30)-day
period, or, with respect to those breaches which cannot reasonably be
remedied within thirty (30) days, if the breaching party fails to proceed
promptly after being given such notice to commence remedying the breach
and thereafter to diligently proceed to remedy the same, the other party
shall have the right to terminate this Agreement, provided such party
gives the breaching party ten (10) days' prior written notice to that
effect. Notwithstanding the foregoing, either party shall have the right
to
Page 8 of 43
9
immediately terminate this Agreement upon any breach by the other of its
obligations under Section II above.
Termination of this Agreement shall be without prejudice to all accrued
rights and remedies either party may have and shall not affect any
continuing rights and obligations of the parties under this Agreement.
Upon the termination of this Agreement and/or any Attachment to this
Agreement, Customer shall return to MPOWER all Proprietary Information
regarding the MPOWER Product whose license is being terminated, within
thirty (30) days after such termination and MPOWER shall return to
Customer any proprietary information obtained in the performance of this
Agreement within thirty (30) days after such termination.
Notwithstanding anything to the contrary herein, the License granted
hereunder shall not be terminated due to any breaches that relate to
Software Maintenance services; Implementation services; Training services;
Conversion services and/or Other services as identified in this Agreement
or the Attachments hereto. In the instances of such breaches MPOWER'S
termination remedies shall be limited to termination of this Agreement as
it applies to such services.
VI. INVOICES AND CHARGES
Unless a specific payment date is set out in an Attachment to this
Agreement, Customer agrees to remit all payments under this Agreement so
that MPOWER shall receive such payments no later than thirty (30) days
from the date of Customer's receipt of MPOWER's invoice. Customer also
agrees that MPOWER shall have the right to charge interest of one percent
(1.0%) of the outstanding balance per month, and Customer agrees to pay
such charges if assessed. All prices mentioned in this Agreement are in
U.S. Dollars. The parties agree that the prices set out in this Agreement
do not include any sales, use or gross receipts taxes, any duties, any
similar assessments, or any other tax imposed on any party by virtue of
this Agreement, all of which, excluding only taxes based on MPOWER's
income, shall be the sole liability of, and shall be paid solely by,
Customer.
VII. FORCE MAJEURE
Neither party shall be liable to the other for failing to fulfill any
obligation under this Agreement if such failure is caused by an event
which is beyond such party's reasonable control and which is not caused by
such party's fault or negligence, including without limitation, acts of
God, acts of war, fires, strikes, lightning, floods, epidemics, civil
unrest, power shortages, a third party's equipment failure,
Page 9 of 43
10
delays in transportation, or either party's inability to obtain necessary
labor, material or components due to causes beyond such party's reasonable
control.
VIII. CUSTOMER RESPONSIBILITIES
A. Customer Responsibilities
Customer acknowledges that MPOWER(R) reflects certain interdependent
relationships, such as exist among the data variables, logic rules and
system functions of MPOWER(R). Customer further acknowledges that it is
required and has a responsibility to understand such data variables, logic
rules and system functions, and their interdependent relationships, and to
define for its own purposes such data variables, logic rules and system
functions to MPOWER(R) in such a way that MPOWER(R) will provide the
functionality desired by Customer. Customer acknowledges that it has or
will hire and will maintain on its staff personnel who are able to
understand and define such data variables, logic rules, system functions
and interdependent relationships. Customer further acknowledges that, even
though MPOWER may assist Customer personnel in performing these tasks, the
responsibility for the effective definition and maintenance of these data
variables, logic rules and system functions resides with Customer and not
with MPOWER, unless Customer specifically requests MPOWER to perform these
tasks at agreed upon rates specified in a Work Order.
B. Customer Data
Customer shall be responsible for inputting and ensuring the accuracy,
validity and completeness of all data variables, logic rules, system
functions and Customer data, including but not limited to group,
subscriber, member, provider, utilization, encounter, claims, capitation,
fund accounting, billing, collection, broker, benefits, product contract,
provider contract, provider fees, standard business measures, and other
similar or related data. Customer shall also be responsible for inputting
and ensuring, the accuracy, validity and completeness of all user-defined
report definitions, all report and batch production job specifications and
priority scheduling criteria. Customer shall also be responsible for
initiating, monitoring, operating, printing and ensuring the accuracy,
validity, and completeness of all print outputs and file downloads, such
as but not limited to all reports, premium bills, checks, and the like,
determining how many and on what print stock such outputs are to be
printed or into which files or programs on Customer-controlled computers
such files are to be downloaded and manipulated, at Customer's own
initiative, responsibility and risk. Customer hereby acknowledges
responsibility for generally controlling all aspects related to the
production, distribution and control of such outputs. Customer further
acknowledges that, notwithstanding the responsibility of MPOWER to have
used
Page 10 of 43
11
due care and diligence in the design, programming, documentation and
operation of the System, the accuracy of Customer's data base within
MPOWER(R) and the accuracy of the several outputs of the MPOWER(R),
including but not limited to, outputs that control the billing, receipt or
expenditure of monies, will be dependent on the accuracy and use of the
data variables, logic rules, system functions and Customer data input into
MPOWER(R) by Customer and verified by Customer.
C. Other Customer Obligations
In addition to its other obligations hereunder, Customer will on a timely
basis:
1. Establish appropriate priorities for Customer, on a regular
basis and no less frequently than every ninety (90) days, that
relate to MPOWER(R) and communicate the same to MPOWER.
Customer recognizes that changes in such priorities may result
in additional fees hereunder for additional staff, as
incremental support, or reordering of other priorities to
provide MPOWER services within the current fee structure.
2. Cooperate with MPOWER by, among other things, making
available, as reasonably requested by MPOWER, management
decisions, information, approvals, and acceptances in order
that MPOWER may properly accomplish its obligations and
responsibilities hereunder.
3. Carefully inspect and review all MPOWER generated reports and
other output and notify MPOWER of any incorrect reports or
output.
4. Personalize, maintain, reproduce and distribute (solely for
Customer's internal use) procedure manuals and documentation
used by Customer personnel in connection with the MPOWER
services hereunder.
5. Train applicable Customer personnel to properly prepare input
for and to effectively utilize output from the systems
operated by MPOWER hereunder.
6. Pay all costs of acquisition, installation, use and
maintenance of equipment at Customer's site, as required for
the performance of MPOWER services.
7. Such other responsibilities as set forth herein.
Customer agrees that to the extent its failure to meet its obligations set
forth in this Section VIII C affects the ability of MPOWER to perform
MPOWER's obligations under this Agreement, MPOWER shall be relieved of
such
Page 11 of 43
12
obligations, and Customer shall indemnify MPOWER against any claims or
liabilities arising, out of such failure by Customer, subject to the
liability limitations set forth elsewhere herein.
D. Reprocessing or Reconstructing of Data
During any period of use of MPOWER(R), to the extent that any Customer
data must be corrected, recreated, restored or reprocessed due to the
fault or negligence of Customer, its employees or agents, or by a breach
by Customer of any of its obligations hereunder, MPOWER will do so, and in
such event Customer shall pay MPOWER at the service fee rates outlined in
an applicable Work Order and reimburse MPOWER for any reasonable direct
costs incurred by MPOWER in correcting, recreating, restoring or
reprocessing such data or in providing assistance therewith.
IX. LIMITATION OF LIABILITY
CUSTOMER AGREES THAT MPOWER SHALL HAVE NO LIABILITY TO CUSTOMER FOR
INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, EVEN IF MPOWER IS ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES, OR FOR LOSS OF USE OR OTHER COMMERCIAL
LOSS (INCLUDING, BUT NOT LIMITED TO, LOSS OF REVENUES AND/OR PROFITS),
HOWEVER OCCASIONED AND WHATEVER THE FORM OF ACTION, FOR ACTUAL OR IMPUTED
NEGLIGENCE, BREACH OF CONTRACT, BREACH OF WARRANTY OR OTHERWISE.
FURTHERMORE, CUSTOMER AGREES THAT IN NO EVENT SHALL MPOWER BE LIABLE FOR
DIRECT DAMAGES IN EXCESS OF ALL FEES CUSTOMER SHALL HAVE PAID MPOWER UNDER
THIS AGREEMENT.
The parties agree that no action, regardless of form, which may arise out
of the transactions under this Agreement may be brought by either party
more than two (2) years after the cause of action is known, or ought
reasonably to have been known, to the party bringing the action.
MPOWER AGREES THAT CUSTOMER SHALL HAVE NO LIABILITY TO MPOWER FOR
INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, EVEN IF CUSTOMER IS ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES, OR FOR LOSS OF USE OR OTHER COMMERCIAL
LOSS (INCLUDING, BUT NOT LIMITED TO, LOSS OF REVENUES AND/OR PROFITS),
HOWEVER OCCASIONED AND WHATEVER THE FORM OF ACTION, FOR ACTUAL OR IMPUTED
NEGLIGENCE, BREACH OF CONTRACT, BREACH OF WARRANTY OR OTHERWISE.
Page 12 of 43
13
X. INFRINGEMENT
MPOWER agrees to defend, indemnify and hold Customer harmless against any
and all claims that any MPOWER Product infringes a U. S. Letter Patent,
copyright, trade secret or the proprietary fights of others, provided that
MPOWER, shall have received timely written notice of any such claim and
that MPOWER shall have sole control of the defense of such claim and all
negotiations for the settlement or compromise of such claim.
As of the date first written above, MPOWER warrants that it is not aware
of any infringement, and has not been notified by any third party that it
may be infringing, any U.S. Letter Patent, copyright, trade secret or the
proprietary fights of others.
If use of an MPOWER Product by Customer is enjoined, or becomes, or, in
MPOWER's sole opinion, is likely to become, the subject of a claim of
infringement, MPOWER will, at its option and expense, either:
1. procure for Customer the right to continue using the MPOWER Product
in question; or
2. replace or modify the same so that it is functionally equivalent
[i.e. the MPOWER Product will achieve the same or similar business
logic result] (or contains more functionality) and is
non-infringing.
Notwithstanding the foregoing, if MPOWER determines that neither of the
alternatives set forth above is reasonably available, MPOWER will refund
to Customer any unamortized portion of the infringing MPOWER Product's
license fee which has then been paid by Customer. Amortization shall be
based upon a seven (7)-year life of the infringing MPOWER Product,
beginning on the date the infringing MPOWER Product was licensed by
Customer from MPOWER. Should such refund occur, Customer agrees to return
the infringing MPOWER Product to MPOWER.
Should any refund described above occur, the license for the infringing
MPOWER Product shall be terminated and MPOWER, its affiliates,
subsidiaries, assigns and successor corporations shall be released from
any and all liability arising from any and all claims, losses,
liabilities, damages, costs or deficiencies which are then-existing or
which may arise in the future with regard to such infringing MPOWER
Product(s) for which MPOWER has refunded fees pursuant to this Section X.
Notwithstanding anything contained herein to the contrary, MPOWER shall
have no liability for any loss, cost, claim or expense caused by:
Page 13 of 43
14
1. alteration of any MPOWER Product provided hereunder by any party
other than MPOWER;
2. any loss, expense or liability resulting from any infringement which
is a consequence of MPOWER's compliance with designs or code
submitted to MPOWER by Customer;
3. the use of any MPOWER Product in combination with products not
licensed to customer by MPOWER;
4. continuation of the allegedly infringing activity by Customer after
Customer is notified in writing thereof and after the conclusion of
a reasonable grace period afforded Customer in the notice to migrate
from the infringing activity to an alternate solution; or
5. Customer's use of an MPOWER Product other than in compliance with
the terms and conditions of this Agreement.
Notwithstanding the foregoing, MPOWER shall not be obligated to defend,
indemnify or hold Customer harmless from and against any claim, suit
proceeding or allegation asserted by a parent, subsidiary or affiliate of
Customer.
The foregoing remedy set forth in this Section X represents the exclusive
remedy of Customer and MPOWER's sole liability with regard to any claim
that an MPOWER Product infringes the rights of others.
XI. RESOLUTION OF DISPUTES
If any dispute shall arise between the parties under this Agreement, the
parties shall make every effort to amicably resolve the dispute by
providing written notice of the dispute, setting forth the nature of the
dispute in sufficient detail for the other party to evaluate the matter
and respond to the claims of the other party. The other party will provide
a written response in reasonable detail (to the extent allowable based on
the sufficiency of details provided by the notifying party), within a
reasonable time, but no greater than 30 business days after receipt of
such notice, to the allegations of the notifying party. If the parties are
unable to resolve the dispute within 30 business days of the receiving
party's response to the notifying party, then the parties may seek to
invoke the arbitration provision set forth below.
If the matter has not been resolved pursuant to the aforesaid dispute
resolution procedures (which may be extended by mutual agreement) the
controversy shall be settled by arbitration in accordance with the
American Arbitration Association.
Page 14 of 43
15
(the "Association) under the Commercial Arbitration Rules of the
Association then in effect, by an arbitrator knowledgeable in the computer
area. The arbitrator shall be selected by mutual agreement of MPOWER and
Customer. If MPOWER and Customer can not agree upon an arbitrator, an
arbitrator shall be appointed by the Court with jurisdiction over the
dispute. The arbitration shall be governed by the United States
Arbitration Act, 9 U.S.C. Sec. 1-16, and judgment upon the award by the
arbitrator may be entered by any court having jurisdiction thereof. The
place of arbitration shall be in Bergen County, New Jersey. Each party
shall pay its own costs and expenses.
XII. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and shall inure to the benefit of the
parties and their respective successors and (to the extent specified in
any assignments) assigns. Customer shall not assign or otherwise transfer
this Agreement without the prior written consent of MPOWER. Customer,
however, may assign this Agreement to any subsidiary or affiliate of
Customer in which Customer owns an equity position of 51% or more, or to
any successor company to Customer in the event that Customer conveys
substantially all of its assets (or stock) to, or merges with, another
Company, by giving notice to MPOWER within 30 days of any such conveyance.
XIII. OMNIBUS RECONCILIATION ACT COMPLIANCE
As applicable under the Omnibus Reconciliation Act of 1980, until the
expiration of four (4) years after the furnishing of services under this
Agreement, MPOWER shall, upon receipt of written request, and if then
required to make such information available under the then-existing law,
make available to the Secretary of the United States Department of Health
and Human Services ("Secretary"), the Comptroller General, or any of their
duly authorized representatives, this Agreement, books, documents, and/or
records of MPOWER that are necessary to certify the nature and extent of
products and services delivered under this Agreement and costs associated
therewith. Furthermore, if MPOWER carries out any of the duties of this
Agreement through a subcontract with a value or cost of Ten Thousand
Dollars ($10,000.00) or more over a twelve (12)-month period, such
subcontract will contain a clause to the effect that, until the expiration
of four (4) years after the furnishing of such services under such
subcontract, the subcontractor shall, upon receipt of written request and
if then required to make such information available under the
then-existing law, make available to the Secretary, Comptroller General,
or any of their duly authorized representatives, the subcontract, books,
documents, and/or records of such subcontractor that are necessary to
verify the nature and extent of such costs.
Page 15 of 43
16
XIV. RELATIONSHIP MANAGEMENT
A. Meetings. MPOWER and Customer agree to discuss business and
relationship strategies affecting both parties, as is required to
effectively manage the relationship between the parties. MPOWER and
Customer further agree to have regularly scheduled communications to
summarize current activities, performance results, error corrections
and work efforts, as well as the future planned activities.
B. Release Discussions. MPOWER agrees to discuss with Customer its
planned future Releases and share with Customer at least sixty (60)
to ninety (90) days in advance of a projected future Release its
then current Release priorities, release notes and expectations
regarding new or expanded functionality to be included in such
future Release.
C. Liaison. During the term of this Agreement, each party will provide
a liaison who (i) will have overall management responsibility for
the performance by the party hereunder, (ii) will have primary
operational responsibility, and (iii) will serve as the party's
primary liaison with the other party with respect to performance
under this Agreement.
XV. MISCELLANEOUS
A. Invalidity. If any of the provisions, or portions thereof, of this
Agreement are deemed to be invalid under any applicable statute or
rule of law, they are to that extent to be deemed omitted, and the
parties agree to negotiate in good faith to bring such provisions,
or portions thereof, into compliance.
B. Headings. The headings of Sections in this Agreement and in the
Attachments are included for convenience only and shall not be
considered by either parry in construing the meaning of this
Agreement or any Attachment.
C. Notices. Any notice given under this Agreement shall be in writing,
sent by Certified Mail, Return Receipt Requested or overnight
courier such as FedEx or equivalent, and shall be deemed to be
delivered upon receipt by the receiving party.
All notices remitted to MPOWER shall be remitted to the attention
of: Chief Executive Officer. All notices remitted to Customer shall
be remitted to the attention of Vice President, General Manager of
Quest Informatics, with a cc: Deputy General Counsel.
Page 16 of 43
17
D. Waiver. Neither party shall be deemed to have waived any term or
provision of this Agreement, nor consented to any breach of this
Agreement, unless such party shall waive such term or provision, or
shall consent to such breach, in writing. Any such written waiver
and/or consent must be signed by the party which is waiving such
term or provision or is consenting to a breach. Either party's
consenting to a waiver, or a breach, by the other, whether express
or implied, shall not constitute consent or waiver of any other
different or subsequent breach by the other.
E. Governing Law. This Agreement and all Attachments hereto shall be
governed by and construed according to the laws of the State of New
Jersey.
The parties have each read this Agreement and agree to be bound by all of its
provisions, and further agree that it constitutes the complete and exclusive
statement of the agreement between them with regard to the subject matter
referenced herein, and supersedes any and all prior agreements and
understandings between them pertaining to the subject matter of this Agreement
and takes precedence over the provisions of any purchase orders submitted to
MPOWER by Customer. This Agreement may be amended only in writing signed by
authorized representatives of both of the parties.
QUEST DIAGNOSTICS INCORPORATED MPOWER SOLUTIONS INC.
("CUSTOMER") ("MPOWER")
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇. RENGELL
-------------------------------- -----------------------------------
SIGNATURE SIGNATURE
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇. RENGELL
-------------------------------- -----------------------------------
NAME PRINTED NAME PRINTED
SENIOR VICE PRESIDENT SENIOR VICE PRESIDENT
-------------------------------- -----------------------------------
TITLE TITLE
Page 17 of 43
18
ADDENDUM TO MASTER AGREEMENT
NONDISCLOSURE AGREEMENT FOR PROPRIETARY INFORMATION
In consideration of _____________________________________ ("Customer")
disclosing certain confidential and proprietary information relating to the
MPOWER(R) Managed Care Information System (and / or other MPOWER Product
involved) and information, data, designs, documentation and methodologies
related thereto (collectively, "Proprietary Information") to __________________,
located at _____________________________________,("Third Party") for the sole
purpose of allowing Third Party to facilitate Customer's use of the Proprietary
Information, Third Party agrees to the following:
Third Party acknowledges that the Proprietary Information is the exclusive
property of MPOWER SOLUTIONS INC., a Delaware corporation, located at ▇▇▇▇ ▇.
▇▇▇▇▇▇▇'▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ 80111("MPOWER") and that such
Proprietary Information is confidential, has tangible value and includes trade
secret information of MPOWER. MPOWER shall retain all rights to the Proprietary
Information, including all copyright rights therein, except to the extent to
which Third Party is allowed to use the Proprietary Information pursuant to this
Nondisclosure Agreement. All improvements, enhancements and modifications to the
Proprietary Information shall be owned exclusively by MPOWER.
Third Party agrees not to sell, lease, assign or otherwise transfer, disclose or
make available, in whole or in part, any portion of the Proprietary Information
and Third Party shall prevent disclosure of any part of the Proprietary
Information to any other third party for any reason (except for disclosure or
access to Third Party's and Customer's employees which is necessary for Third
Party to be able to use the Proprietary Information in accordance with this
Nondisclosure Agreement). Third Party agrees to notify its employees to whom
Third Party gives access to the Proprietary Information of the restrictions
contained in this Nondisclosure Agreement and to ensure their compliance with
such restrictions.
Third Party agrees to return all Proprietary Information promptly to Customer or
MPOWER upon the earlier of (i) MPOWER's or Customer's request or (ii) completion
of Third Party's assignment for Customer. Third Party agrees that it shall not
use, and it shall not permit the use of, the Proprietary Information for any
purpose other than as expressly authorized in this Nondisclosure Agreement.
Page 18 of 43
19
This Nondisclosure Agreement shall be governed by the laws of the State of New
Jersey. If any provision of this Nondisclosure Agreement is invalid under any
applicable statute, it is to be deemed omitted. If any action is instituted to
enforce or interpret the terms of this Nondisclosure Agreement, the prevailing
party shall be entitled to reasonable attorney's fees and expenses in addition
to any other entitled relief. This Nondisclosure Agreement shall be effective as
of the date the Proprietary Information is first disclosed to Third Party.
--------------------------------------
("Third Party")
--------------------------------------
Signature of Authorized Signatory
--------------------------------------
Name Printed
--------------------------------------
Title
--------------------------------------
Date
In consideration of MPOWER's approval of the disclosure of Proprietary
Information to Third Party, Customer agrees to use its best efforts to ensure
the adherence by Third Party of all the terms of this Nondisclosure Agreement,
and shall support MPOWER in pursuing its remedies in the event of any breach by
Third Party of this Nondisclosure Agreement.
--------------------------------------
Customer
--------------------------------------
Signature of Authorized Signatory
--------------------------------------
Name Printed
--------------------------------------
Title
--------------------------------------
Date
Page 19 of 43
20
ATTACHMENT 1
I. DEFINITIONS
Except as set forth in this Section I of this Attachment, all capitalized
terms used in this Attachment shall have the same meaning as set forth in
the Master Agreement.
A. Master Agreement
"Master Agreement" shall mean the agreement to which this Attachment 1 is
attached.
B. Agreement
"Agreement" shall mean the Master Agreement and all Addenda, Exhibits and
Attachments thereto.
C. MPOWER(R)
"MPOWER(R)" shall mean the software product marketed by MPOWER which is
being licensed by Customer under this Attachment and the Master Agreement.
The high level modules that are included in' MPOWER(R) as of the date of
this Attachment are listed in Exhibit F hereto.
II. GRANT OF LICENSE
In consideration of Customer's paying the Initial License Fee (as
hereinafter defined) MPOWER grants Customer a non-exclusive,
nontransferable (except as allowed in Section XI of the Master Agreement)
and perpetual license to operate an Object Code instance version of
MPOWER(TM) on a Windows NT platform for a Live Production Environment for
claims processing of encounter files up to an aggregate of [*] per
month ("Initial License"), with additional volume of up to [*]% due to
reprocessing of denials, associated with the first client of Customer's
laboratory network business initiative. The License granted hereunder is
an enterprise wide License, subject to the claims processing volume
adjustments referenced herein, which will allow Customer to operate MPOWER
on as many platforms, and at as many of Customer's sites as Customer deems
necessary to service its needs.
Customer may extend the license for such single, Object Code instance of
MPOWER(R) ("License Extension(s)") for additional encounter file
transaction processing per month by paying MPOWER the fees for such
additional transactions per month defined in Section VIII below, and
abiding by the terms
* Confidential Treatment Requested
Page 20 of 43
21
therein stipulated, and by providing the number of such additional
encounter file transactions per month in writing to MPOWER within sixty
(60) days of Customer's determination that the monthly encounter file
transaction per month exceeds the total of [*] referenced above.
Customer may copy MPOWER(R) and/or the Documentation as allowed under
Section III of the Master Agreement. Furthermore, Customer may copy the
Documentation in order to supply a copy of the Documentation to each End
User of MPOWER at each Site. Customer agrees that any and all copies of
MPOWER and/or the Documentation made by Customer shall include any/all
copyright and proprietary notices in the same form as contained on the
original copy. Except as allowed in Section III of the Master Agreement
and this paragraph, Customer may not otherwise make copies of MPOWER(R) or
the Documentation or any part thereof without the prior written consent of
MPOWER. Customer agrees there shall be no other use of MPOWER(R) or the
Documentation without the prior written consent of MPOWER except as
allowed in Section II of the Master Agreement.
In order to ensure that MPOWER(R) is being used in conformity with the
license being granted under this Attachment, MPOWER shall have the right
to conduct audits (either on-site or remotely, at MPOWER's option) of
Customer's use of MPOWER(R) at periodic intervals, no more frequently than
semi-annually. MPOWER agrees that any such on-site audit shall be
scheduled in advance and at a time so as not to unduly interfere with
Customer's business operations. Customer agrees that any audit revealing
unauthorized use of MPOWER(R) will result in Customer's being liable for
the payment of additional fees to MPOWER equal to MPOWER's fees as stated
in Section VIII A of this Attachment.
III. DELIVERY AND MEDIA
Promptly after the full execution of this Attachment, MPOWER will deliver
to Customer:
A. one (1) copy of the then-current Release of MPOWER(R) in Object Code
form; and
B. one (1) set of the then-current version of the Documentation in
electronic form in conformance with the hardware and software
requirements identified in Exhibit H.
MPOWER and Customer agree that time is of the essence in performance of
this Agreement, and the following Milestones constitute material
performance dates under this Agreement:
* Confidential Treatment Requested
Page 21 of 43
22
1. [*] after signing of the Agreement, the ,Implementation Workplan
Schedule (Exhibit K) will be completed.
2. No later than [*] the MPOWER Products provided hereunder will be ready
to test for operational performance with sample transactions as specified
in lines 347 through 355 of Exhibit K.
3. The MPOWER Products provided hereunder will be capable of full on-line
business operation no later than [*].
IV. WARRANTY
A. General Terms
M-POWER represents and warrants to Customer that MPOWER(R) will function
in accordance with the Documentation in all ways which materially affect
the performance of MPOWER(R) Products. Tiffs warranty is contingent upon
Customer's using: 1) certain prerequisite hardware and software, a list of
which has been provided to Customer by MPOWER (Exhibit H) for the Windows
NT Release; and 2) the most recent Release of MPOWER(R), provided such
Release has been available for Customer's use for thirty (30) days, or
more. If Customer wishes to use certain third party software that is
similar to but not the MPOWER defined "prerequisite software" to perform
the functions required by such "prerequisite software", MPOWER and
Customer agree to negotiate in good faith under an appropriate Work Order
for MPOWER to certify whether such third party software will qualify as
"prerequisite software" which is a contingency to the warranties herein.
MPOWER further represents and warrants that MPOWER owns the MPOWER
Products, that it has the right to grant the licenses granted hereunder
without violating the rights of any third parties, and that the licenses
are free and clear of all liens and encumbrances, other than security
interests related to financial instruments between MPOWER and lending
institutions.
B. Year 2000 Compliance
MPOWER represents and warrants that the MPOWER Product(s) subject to the
Agreement shall be Year 2000 Compliant. Year 2000 Compliant means that
performance and functionality is not affected by dates prior to, during,
and after January 1, 2000. Specifically: no value for current dates will
cause any interruption in operation; date-based functionality must behave
consistently for dates prior to, during and after January 1, 2000; in all
interfaces and data storage, the century in any date should be specified
explicitly (CCYY); the Year 2000
* Confidential Treatment Requested
Page 22 of 43
23
must be recognized as a leap year.
In the event the MPOWER Product(s) require(s) modification to prevent
MPOWER from being in breach of the foregoing warranty, MPOWER represents
and warrants to Quest Diagnostics that it will immediately assign Senior
engineering staff to work continuously until such software program is
returned to the same level of functionality as warranted herein at no
charge to Quest Diagnostics, time being of the essence.
In the event MPOWER breaches the foregoing warranty, MPOWER shall defend,
indemnify and hold harmless (including reasonable attorney's fees) Quest
Diagnostics, its employees, officers, and directors against all costs,
expenses, and liability arising from or in connection with such breach,
however such indemnification is limited to the sum equal to two (2) times
the sum of all payments made to MPOWER under this agreement.
MPOWER shall also provide Quest Diagnostics, free of charge, with any new
versions, upgrades, etc. of all software which prevents or corrects a
breach of warranty.
The obligations of this section shall survive the termination of the
Agreement.
MPOWER hereby grants to Quest Diagnostics a limited use source code
license for MPOWER Products to be used by Quest Diagnostics or a third
party vendor for the sole purpose of testing for Year 2000 compliance.
The foregoing is Customer's sole and exclusive remedy for breach of
warranty. The warranty set forth above is made to and for Customer's
benefit only. The warranty will apply only if no modification, alteration
or addition has been made to MPOWER(R) by persons other than MPOWER or
MPOWER's authorized representative.
THE WARRANTY SET FORTH IN THIS SECTION IV CONSTITUTES THE ONLY WARRANTY
PROVIDED BY MPOWER REGARDING MPOWER AND SUCH WARRANTY IS IN LIEU OF ALL
OTHER WARRANTIES, WRITTEN OR ORAL, STATUTORY, EXPRESS, OR IMPLIED. MPOWER
HEREBY SPECIFICALLY DISCLAIMS THE IMPLIED WARRANTY OF MERCHANTABILITY AND
THE WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE.
V. SOFTWARE MAINTENANCE SERVICES
In consideration of payment of the annual Maintenance Fee(s) set forth in
Section
Page 23 of 43
24
VIII B of this Attachment, Customers agrees to purchase for a minimum of
(3) three years, but only if Customer is using the MPOWER Product, and
MPOWER agrees to provide customer on an annually renewable basis with
software maintenance services for MPOWER(R) as follows (provided Customer
allows MPOWER, at MPOWER's request, dial-up access to MPOWER(R)):
A. any and all Releases regarding MPOWER(R) issued by MPOWER;
B. any and all updates to the Documentation issued by MPOWER; and
C. remote diagnostic support (including dial-up capabilities) regarding
MPOWER(R)to include error analysis and, where possible, correction
services, twenty-four (24) hours per day, seven (7) days per week.
Any on-site assistance which Customer may request and which is
provided by MPOWER, which, in MPOWER's and Customer's reasonable
opinions, is not necessary to determine the nature and resolution of
any problems Customer may have with MPOWER(R)shall be provided by
MPOWER at its then-current rates. If Customer notifies MPOWER that
it suspects a material error in the program logic of MPOWER(R)or in
the Documentation, MPOWER shall make all reasonable efforts to
confirm the existence of the error and correct it. If the parties
mutually determine that no such error exists, Customer agrees to pay
MPOWER for its services at MPOWER's hourly rates then in effect and
to reimburse MPOWER for any and all reasonable travel and living
expenses incurred by MPOWER in rendering such services. MPOWER will
use its Severity Designations in effect from time to time to provide
remote diagnostic support. The current Severity Designations and
attendant response times are given in Exhibit G to this Attachment.
D. Extended Support Services:
MPOWER will provide Extended Support Services for Customer's
technical environment through a dedicated dial-up line. As defined
below, Extended Support Services will include:
- Database maintenance (table and file space);
- IBM Transaction Server maintenance;
- System utilities; and
- Application maintenance and patches.
To help facilitate MPOWER's provision of Extended Support Services,
Customer will provide onsite system administration resources with
access to the system console to handle such activities as
coordination of hardware troubleshooting, network/security
administration and backups/loading of tapes.
Page 24 of 43
25
Notwithstanding the foregoing, should Customer be utilizing any Release of
MPOWER(R) other than the then-most-recent Release, or the Release prior to
the then-most-current Release, provided such Release has been available
for Customer's use for a period of six (6) months or longer, MPOWER
reserves the right, at its sole option, to terminate its obligations to
provide maintenance services under this Section V at any time upon giving
thirty (30) days' prior written notice to Customer. If such a condition
exists, MPOWER and Customer agree to negotiate in good faith to define
reasonable terms, conditions and fees for MPOWER to provide Customer with
maintenance services for such then non-current Release.
MPOWER's providing Customer with maintenance services as described in this
Section V shall automatically continue, on an annual basis, unless either
party shall give written notice to the other that it desires not to renew
such maintenance services. The parties agree that such written notice
shall be remitted for receipt by the other no less than ninety (90) days
prior to the end of the then-current annual maintenance period.
VI. IMPLEMENTATION AND CONVERSION SERVICES
MPOWER agrees to provide implementation services ("Implementation
Services") to assist Customer in implementing MPOWER(R) at the Site(s).
These implementation services shall comprise: 1) analysis of the
Site's(s') business requirements; 2) assistance in the user set up
definitions and build; 3) testing of MPOWER(R); 4) pre/post activation
support for end users; 5) up to forty (40) hours of initial training
services and 6) project management.
MPOWER shall charge Customer as set out in Section VIII C below for all
such Implementation Services requested by Customer. Additionally, to help
accommodate Customer's stated functional requirements that may not be
currently operational or in sufficient compliance with Customer needs
within the existing system, MPOWER shall provide up to forty (40) hours of
programming modifications, as defined in Work Order(s) to be submitted,
within the scope of Implementation Services, at no additional charge.
Beyond the scope of the aforementioned forty (40) hours, programming
modifications requested by Customer will be billed at rates set forth in
Section VIII E below.
Upon request, MPOWER agrees to provide conversion services ("Conversion
Services") to Customer to convert its current data files from its existing
software system to the MPOWER(R) database. MPOWER shall charge Customer as
set out in Section VIII E below for all such Conversion Services requested
by Customer.
Page 25 of 43
26
MPOWER reserves the right to subcontract any Implementation Services
responsibilities it may accept under this Agreement. Customer shall have
the right to approve MPOWER's subcontractors, which approval shall not be
unreasonably withheld. If Customer objects to certain subcontractors for a
stated good cause, MPOWER and Customer agree to seek a mutually agreeable
resolution to Customer's objection. MPOWER's agreements with
Subcontractors shall require subcontractors to agree to confidentiality
terms set forth in this Agreement.
VII. TRAINING SERVICES
MPOWER will provide up to forty (40) hours of initial End User training
within the scope of payment of initial Implementation Fees, as indicated
in Section VIII.C of this Attachment. Initial training will focus on
Customer's education of functionality contained within key subsystems of
MPOWER(R) and will be inclusive of the following:
- Mapping of business rules to benefit plan templates;
- Establishment of workflow procedures and user-defined variables;
- Use of standard and ad-hoc reporting systems; and
- Methods for maintenance of key information being stored in the
system.
MPOWER will provide Customer under an appropriate Work Order, at MPOWER's
then-current fees, with additional training sessions regarding MPOWER(R)
to a reasonable number of Customer's personnel. All such training,
including initial End User training, shall be conducted at location(s)
elected by Customer at time(s) which are mutually acceptable to both
parties. Current fees for additional training sessions are provided in
Section VIII F.
VIII. FEES
A. MPOWER(R) License Fees.
1. Fee for the Initial License.
Customer agrees to pay MPOWER a license fee ("Initial License Fee")
equal to [*] Dollars [$[*]] for the master license granted in
Section II of this Attachment for claims processing of encounter
files up to an aggregate of [*] per month ("Initial License"),
with additional volume of up to [*]% due to reprocessing of denials,
associated with Customer's laboratory network business initiative.
Customer agrees the Initial License Fee is due to MPOWER and payable
according to the schedule shown in Exhibit C hereto.
* Confidential Treatment Requested
Page 26 of 43
27
2. Fees for License Extensions.
Customer may, during the term of this Agreement, provided Customer
is current with all Maintenance Fees, exercise an incremental
license or incremental licenses for claims processing of additional
[*] encounter files per month ["License Extension(s)"] by paying to
MPOWER an additional license fee ("License Extension Fee") as shown
on Exhibit C hereto for each such License Extension.
The Initial License Fee and the License Extension Fee(s) may be
referred to as the License Fee(s).
The License Extension Fees will be billed and paid in accordance
with the terms and conditions outlined in this Agreement.
B. Annual Maintenance Fees.
Customer agrees to pay to MPOWER for the software maintenance
services described above a software maintenance fee ("Maintenance
Fee") equal to [*] percent ([*]%) of the aggregate of the Initial
License Fee and all License Fee Extensions paid or payable by
Customer to MPOWER.
Extended Support Services described in Section V.D above will be
provided by MPOWER to Customer at no additional charge to the
aforementioned Maintenance Fee during the first year of maintenance.
Subsequent to the first year of maintenance, the fee for Extended
Support Services will be [*] ($[*]) Dollars per month. Any such
annual increases in Extended Support Service fees shall not exceed
the CPI. Customer may elect not to renew Extended Support Services
pursuant to the notification procedure outlined in Section V above.
The annual Maintenance Fee is due and payable as follows: the first
annual Maintenance Fee shall be due and payable upon the occurrence
of Final Acceptance as indicated in Exhibit A hereto.
Each subsequent annual Maintenance Fee shall be billed and due
annually, based on the anniversary date of the first annual
Maintenance Fee due date. MPOWER will invoice Customer on an annual
basis for the maintenance fee. Customer agrees to pay such invoices
within thirty (30) days after Customer's receipt of the invoice.
* Confidential Treatment Requested
Page 27 of 43
28
Maintenance Fees Payment Schedule is outlined in Exhibit D to this
Attachment.
C. Implementation Fees.
As outlined in Section VI above, MPOWER will provide set-up,
implementation, interface development, programming modifications,
training and installation services based upon the functional
requirements forwarded by Customer on [*], as seen in Exhibit I, and
furthermore defined on [*], as seen in Exhibit J, in anticipation of
meeting a target operational live date of [*]. A sample New Account
Implementation Workplan Schedule is provided in Exhibit K. The
activities and sequence of events depicted in this template may be
modified as necessary according to the requirements of the project.
The Implementation Fee of [*] Dollars ($[*]) will be payable as
outlined in the schedule provided in Exhibit E.
D. Travel and out of pocket expenses.
The fees set out above do not include travel and other out-of-pocket
expenses which may be incurred by MPOWER in the course of delivering
the products and services described in this Attachment. MPOWER shall
use all its reasonable efforts to keep these travel and other
out-of-pocket expenses to a minimum. MPOWER will invoice Customer
for MPOWER's actual travel and out of pocket expenses on a monthly
basis, as they are incurred, and Customer agrees to pay such
invoices within thirty (30) days after receipt of the invoice, which
shall provide reasonably sufficient detail, as required by Customer.
E. Other Services
Customer may request and MPOWER may perform other services ("Other
Services") for Customer, which services shall be described in a Work
Order, which shall be considered an addendum to this Agreement and
covered under the terms of this Agreement, unless stated otherwise
in the applicable Work Order. The Service Fee rate in effect through
calendar year 1999 is [*] ($[*]) dollars per hour. Any such
increases in Service Fee rates beyond 1999 shall not exceed the CPI.
F. Additional Training Sessions
Customer may request and MPOWER may perform additional training
sessions beyond the scope of the aforementioned initial End User
training,
* Confidential Treatment Requested
Page 28 of 43
29
as described in Section VII of this Attachment. Additional training
services shall be described in a Work Order, which shall be
considered an addendum to this Agreement and covered under the terms
of this Agreement, unless stated otherwise in the applicable Work
Order. The rate in effect for additional training services through
calendar year 1999 is [*] ($[*]) dollars per day. Customer may
include as many of its personnel in such sessions as may reasonably
be accommodated within a classroom environment. Any such increases
in additional training session rates beyond 1999 shall not exceed
the CPI.
IX. THIRD PARTY PRODUCTS
Customer has the option to utilize Third Party Products with MPOWER(R) as
outlined in Exhibit B.
X. ACCEPTANCE
As soon as practicable after completion of preliminary testing, Customer
shall begin using MPOWER(R) in a simulated processing environment using
Customer's data. MPOWER(R) shall be deemed fully accepted ("Final
Acceptance") upon the conclusion of any consecutive five (5) day period in
which the MPOWER(R) functions in simulated processing mode without any
Severity 1 program errors, as described in Exhibit G hereto. Customer
shall execute a Certificate of Acceptance (Exhibit A), which shall be
attached hereto and made a part of this Agreement. The date shown on the
Certificate of Acceptance will be the beginning date of any warranty or
maintenance periods provided for in this Agreement or any Exhibit hereto.
Notwithstanding the above, MPOWER(R) shall be deemed fully accepted upon
the earlier to occur of the date of the Certificate of Acceptance or the
placement of MPOWER(R) in a Live Production Environment.
XI. ADDITIONAL TERMS AND CONDITIONS
In addition to the terms and conditions of this Attachment, the parties
agree that all the terms and conditions of the Master Agreement shall also
apply to Customer's use of MPOWER(R). Should any terms or conditions of
this Attachment and the Master Agreement conflict, the terms and
conditions of this Attachment shall take precedence. Should any terms or
conditions of an applicable Work Order and this Attachment or the Master
Agreement conflict, the terms and conditions of the applicable Work Order
shall take precedence.
* Confidential Treatment Requested
Page 29 of 43
30
The parties have each read this Attachment and agree to be bound by all of
its provisions. The parties further agree that this Attachment (including
its Exhibits) and the Master Agreement constitute the complete and
exclusive statement of the agreement between the parties regarding
MPOWER(R) and supersedes any and all prior agreements and understandings
between them pertaining to MPOWER(R) and takes precedence over the
provisions of any purchase orders submitted to MPOWER by Customer. This
Attachment may be amended only in writing signed by both parties.
QUEST DIAGNOSTICS INCORPORATED MPOWER SOLUTIONS INC.
("CUSTOMER") ("MPOWER")
BY: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------- -------------------------------
SIGNATURE OF AUTHORIZED SIGNATURE OF AUTHORIZED
SIGNATORY SIGNATORY
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------- -----------------------------------
NAME PRINTED NAME PRINTED
SENIOR VICE PRESIDENT SENIOR VICE PRESIDENT
-------------------------------- -----------------------------------
TITLE TITLE
8/24/98 8/12/98
-------------------------------- -----------------------------------
DATE DATE
Page 30 of 43
31
EXHIBIT A
FINAL ACCEPTANCE CERTIFICATE
Customer hereby acknowledges and MPOWER Solutions Inc. hereby accepts that
MPOWER(R) has been accepted by Customer per the date noted below. This will be
the basis for the beginning of any warranty or maintenance periods provided for
in this Agreement or any Exhibit hereto.
Date of Final Acceptance
------------
Accepted by Customer: Accepted by MPOWER:
QUEST DIAGNOSTICS INCORPORATED MPOWER SOLUTIONS INC.
By: By:
----------------------------- ---------------------------------
Name (Printed): Name (Printed):
----------------- ----------------------
Title: Title:
-------------------------- ------------------------------
Date: Date:
-------------------------- ------------------------------
Page 31 of 43
32
EXHIBIT B
NOT CURRENTLY APPLICABLE.
Page 32 of 43
33
EXHIBIT C
MPOWER(R) LICENSE FEE PAYMENT SCHEDULE FOR THE LICENSE FEES
Refer to Section VII A for MPOWER(R) License terms and conditions.
License Fees will become due and payable as set forth below.
License Fees will become due and payable as set forth below. Notwithstanding
anything to the contrary in the Agreement, the obligation of Customer to License
the Software, and pay full License Fees, may be cancelled by Customer's
providing notice to MPOWER no later than [*] of Customer's intent to cancel this
Agreement. In the event that such notice is provided, Customer shall have no
further liability to MPOWER under this Agreement, unless Customer exercises the
option to renew its rights under this Agreement by providing notice of its
intent to do so no later than [*]. In the event that Customer provides notice of
cancellation, Customer will forfeit any and all fees paid to MPOWER prior to
notice of cancellation, as well as pay any outstanding fees identified in
Section VIII of the Attachment I of the Agreement for services already performed
prior to MPOWER's receipt of notice of cancellation, in addition to $[*] which
is half of the First Year Annual Maintenance Fee (per Exh D). The $[*] will be
applied to the First Year Annual Maintenance Fee in the event that Customer
renews its rights under the Agreement by December 31, 1998.
EXPECTED PERCENTAGE AMOUNT
PAYMENT TRIGGERING EVENT TIMEFRAME DUE DUE
------------------------------ -------------- ---------- -------------
Contract Execution [*] [*] [*]
Customer Installation [*] [*] [*]
Completion of Acceptance Test [*] [*] [*]
Optional License Extension Indeterminate [*]% Per
Future (if and (Optional) Schedule
when business (Optional)
need dictates)
License Extension Fee(s):
- Increments of clams processing
for up to [*] encounter
files/month $ [*]
In the event that Customer provides notice of its intent to cancel this
Agreement,
* Confidential Treatment Requested
Page 33 of 43
34
Customer shall have the option to renew its rights hereunder by providing notice
of same to MPOWER by December 31, 1998. If Customer renews its rights hereunder
the fees previously paid and forfeited shall be applied to the Agreement as if
there had been no temporary cancellation of this Agreement.
Page 34 of 43
35
EXHIBIT D
MPOWER ANNUAL MAINTENANCE FEE PAYMENT SCHEDULE
MPOWER billing and Customer paying of Annual Maintenance Fees is outlined in
Section VIII B. Refer to Section VIII B for on-going and MPOWER Annual
Maintenance Fee terms and conditions.
PAYMENT ESTIMATED ESTIMATED
TRIGGERING TIMEFRAME PERCENTAGE DUE AMOUNT DUE
---------- --------- -------------- ----------
Final Acceptance [*] [*]% of First Year Annual $[*]
Maintenance Fee
First and Annually [*]% of Annual Maintenance [*]% of Total
Subsequent Thereafter Fee License Fee
Anniversaries of
Acceptance
Extended Support Annually n/a $[*] per month
Services Thereafter (Optional)
* Confidential Treatment Requested
Page 35 of 43
36
EXHIBIT E
MPOWER INITIAL IMPLEMENTATION FEE PAYMENT SCHEDULE
MPOWER billing and Customer payment of Implementation Fees are outlined in
Section VIII C. Refer to Section VIII C. for Terms and Conditions.
PAYMENT ESTIMATED PERCENTAGE ESTIMATED
TRIGGERING EVENT TIMEFRAME DUE AMOUNT DUE
------------------- -------------- ---------- ----------
Contract Execution [*] [*]% $ [*]
Customer
Installation [*] [*]% $ [*]
Completion of
Acceptance Test [*] [*]% $ [*]
* Confidential Treatment Requested
Page 36 of 43
37
EXHIBIT F
MODULES INCLUDED IN MPOWER(R)
All modules are included by MPOWER and comprise MPOWER(R) as of the date of this
Attachment:
- Set-ups
- Group Enrollment & Contracting
- Premium Billing & Accounts Receivable
- Member / Subscriber Enrollment
- Provider Contracting
- Capitation
- Claims Adjudication for UB92 / HCFA 1500 Claims
- Certifications / Authorizations
- Customer Service
- Letter Generation
- Medicare Risk
- Medicaid Processing
- Ad Hoc Reporting
Page 37 of 43
38
EXHIBIT G
SEVERITY DEFINITIONS AND RESOLUTION PROCESS
- SEVERITY 1.
The problem causes complete loss of service in the production and
staging environment and work cannot reasonably continue. The problem or
defect has one or more of the following characteristics:
> Data corruption. Physical or logical data is unavailable or
incorrect.
Examples: Block format corruption, invalid indices, corruption of
meta-data, incorrect results.
> Critical functionality is not available.
> System hangs. The process hangs indefinitely or there is severe
performance degradation, causing unreasonable waits for resources or
response, as if the system is hanging,
> The entire MPOWER application crashes repeatedly.
> Database process or background processes fail and continue to fail
after restart attempts.
> Potential for above occurrences is defined imminent.
RESOLUTION OF SEVERITY 1: Until the issue is resolved MPOWER Solutions
will work on Severity 1 around the clock (7x24). As a result of the
severity, the customer must provide MPOWER with a point of contact during
the 7x24 period. The customer's point of contact will assist the MPOWER
customer support and development staff in gathering data, testing fixes in
the customer's testing legion, and applying fixes to the customer
production environment.
- SEVERITY 2:
Problem or product defect causes a severe impact on the customer's
business regardless of customer environment. No workaround is available,
however operations can continue in a restricted fashion. The problem or
defect has one or more of the following characteristics:
> Business Impact Examples: The customer can handle current volume,
but will not be able to handle quarter close; At close, customer
finds totals wrong, but close is not for a few weeks.
> Internal software error, causing the application to fail to run to
completion, or return wrong results, or software error severely
degrades performance.
> Some important functionality is unavailable, yet the system can
continue to operate in a restricted fashion.
> Potential for above occurrences is defined imminent.
RESOLUTION OF SEVERITY 2: MPOWER Solutions will work on Severity 2 bug
based on customer assigned priority. Severity 2 fixes will be added in the
next scheduled maintenance or patch release.
Page 38 of 43
39
- SEVERITY 3.
Problem or product defect causes minimal impact on the Customer's
business. The impact of the problem or defect is minor or an
inconvenience, such as a manual bypass to restore product functionality.
The problem or defect has one or more of the following characteristics:
> A software error for which there is an acceptable workaround.
> Software error minimally degrades performance.
> Software error or incorrect behavior has minor impact the operation
of the system.
RESOLUTION OF SEVERITY 3: Fixes for severity 3 bugs will be added to the
priority list for the next major scheduled release of the product. The
order of priority for resolving severity 3 issues will be assigned jointly
by the Customer and MPOWER.
- SEVERITY 4.
The problem or product defect causes NO impact on the Customer's business.
The problem or defect is a minor error, incorrect behavior, or a
documentation error that in no way impedes the operation of a system.
RESOLUTION OF SEVERITY 4: Fixes for severity 4 bugs will be added to the
priority list for the next major scheduled release of the product. The
order of priority for resolving severity 4 issues will be assigned jointly
by the Customer and MPOWER.
Page 39 of 43
40
EXHIBIT H
PRE-REQUISITE HARDWARE AND SOFTWARE
FOR THE RELEASE OF MPOWER(R) ON AN NT SERVER
Products required:
For the NT Server are
1.) IBM'S TRANSACTION SERVER FOR WINDOWS NT VERSION 4.02
2.) MICROFOCUS'S COBOL VERSION 4.0.32.
3.) IBM'S UDB UNIVERSAL DEVELOPERS EDITION FOR NT VERSION 5.0
For an NT Client (PC running either Win95 or NT - 32bit OS):
1.) MULTISOFT'S WCL TOOLKIT VERSION 5.0 32BIT - WCL is the communication
interface product that passes data from a 3270 emulator to VB.
2.) WALL DATA'S RUMBA FOR THE MAINFRAME WIN95/NT CLIENT VERSION 5.2 -
Rumba provides 3270-comparable connectivity to a host computer.
3.) IBM'S UDB CLIENT SETUP VERSION 5.0 - Allows for ODBC connectivity to
back end databases.
For the client to communicate with the server:
Communication protocol is via TCP/IP, so the clients need to networked, 32
bit OS, PCs. The server machine should have at least the hardware
recommended by Microsoft for running the NT 4.0 Server operating system
attached to the network.
Page 40 of 43
41
EXHIBIT I
CUSTOMER FUNCTIONAL REQUIREMENTS
(AS COMMUNICATED ON MAY 5, 1998)
[Two page "Requirements" document to follow]
Page 41 of 43
42
EXHIBIT J
CUSTOMER FUNCTIONAL REQUIREMENTS
(AS COMMUNICATED ON JULY 24, 1998)
[Three Page "Functional Analysis Grid" to follow]
Page 42 of 43
43
EXHIBIT K
NEW ACCOUNT IMPLEMENTATION WORKPLAN SCHEDULE (SAMPLE)
[Twenty Page "Client Implementation Schedule.xls" to follow]
Page 43 of 43