1
EXHIBIT 10.9
ENGAGEMENT LETTERS AND PROJECT AGREEMENTS
P.O. PROJECT DATE AMOUNT TAB
---- ------- ---- ------ ---
[*]
[*] Confidential portions omitted and filed separately with the Securities and
Exchange Commission.
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May 4, 1999
PROFESSIONAL SERVICES AGREEMENT
This Professional Services Agreement (the "Agreement") is made and entered into
this 1st day of January, 1999, by and between CCN Managed Care, Inc. a Delaware
corporation, of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (for itself and its
parent, subsidiary and affiliated corporations) hereinafter referred to as
"CCN", and The TriZetto(SM) Group, a Delaware corporation, of ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ hereinafter referred to as
"TriZetto".
WHEREAS, CCN and TriZetto currently are parties to a Consulting
Services Contract dated May 5, 1998;
WHEREAS, TriZetto is in the business of providing professional services
and;
WHEREAS, CCN desires to have TriZetto continue to perform such
services, for the benefit of CCN;
NOW, THEREFORE, in consideration of the mutual promises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. PROFESSIONAL SERVICES
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1.1. Upon reasonable request from CCN from time to time, TriZetto shall
provide to CCN professional services, including but not limited to,
project planning, project management, systems integration, data
processing, software evaluation, software installation, computer
programming, management training and/or similar professional services,
under the terms, conditions and fees set forth in this Agreement, any
schedule or exhibit hereto, and any Project Agreement executed
hereunder (the "Services").
1.2. Definition of TriZetto's Services shall be submitted to CCN, in the
form of a proposed "Project Agreement", within a mutually agreed upon
time period from the initial verbal or written request for professional
services by CCN from TriZetto. Project Agreements
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shall be submitted to a person designated by CCN to be its project
leader (the "CCN Project Leader") and will specify, at a minimum,
anticipated Project Agreement background, scope, approach, staffing,
schedule, deliverables, and costs. Once a final Project Agreement is
agreed to by CCN and executed by both parties, it will be considered
addendum to and will be governed by this Agreement.
1.3. Services will commence upon TriZetto's receipt of a verbal or written
request by authorized CCN personnel and will be governed by the terms
herein until such time as a final Project Agreement pertaining to the
requested effort has been executed by both parties, but no later than
thirty (30) days following commencement of Services by TriZetto.
TriZetto will provide CCN written notice of verbal requests for
Services within two (2) business days from the commencement of Services
to fulfill such verbal requests.
1.4. In the event that TriZetto wishes to use the services of a
subcontractor to supplement its Services to be performed under this
Agreement, TriZetto must seek approval by CCN in advance of any
Services to be performed by such individual(s). Any approved
subcontractors must be covered by TriZetto's liability insurance or the
subcontractor must furnish proof of individual liability insurance with
coverage amounts equal to that of TriZetto.
2. SERVICE CHARGES AND PAYMENT.
-------------------------------
2.1. As compensation for Services provided by TriZetto pursuant to this
Agreement, CCN shall pay TriZetto on a monthly basis, in arrears, for
Services rendered and expenses incurred. The agreed upon hourly rates
are set forth in the Fee Schedule attached hereto as Exhibit A to this
Agreement. [*]. The fees shall remain firm through [*], thereafter,
fees may be subject to an [*] increase not to exceed [*]. The parties
also agree to discuss incentive payments and/or penalties for various
Project Agreements, the amount, timing and scope of which will be
determined on an individual Project Agreement basis as may be mutually
agreed by the parties.
[*] Confidential portions omitted and filed separately with the Securities and
Exchange Commission.
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2.2. At the beginning of each calendar month, TriZetto will provide CCN with
an invoice for Services provided in the prior month which shall specify
with sufficient detail the fees and expense amounts attributable to (i)
mutually agreed Project Agreements, and (ii) ▇▇▇▇▇▇▇▇ for such other
incremental services as are mutually agreed to by the parties in the
applicable Project Agreements. CCN shall pay the full amount of such
invoice within thirty (30) days of the date of receipt of such invoice.
On each invoice, TriZetto will (i) associate charges to CCN-defined
project codes or purchase orders, and (ii) estimate charges for the
subsequent month.
2.3. CCN shall also reimburse TriZetto for all reasonable travel and lodging
expenses incurred by TriZetto or any Contractor in the performance of
the Services. CCN shall also reimburse TriZetto for other reasonable
out-of-pocket expenses incurred by TriZetto in connection with the
performance of the Services. All such travel-related expenses will be
in accordance with CCN's current travel policy as provided to TriZetto.
2.4. TriZetto shall advise CNN in writing of any invoice remaining unpaid
for more than [*] from receipt of invoice upon which CNN shall have [*]
to remit payment to TriZetto. If CNN does not remit payment within said
[*] period, TriZetto shall have the right to charge CNN interest which
shall accrue at a rate of the lesser of [*] per month or the highest
rate allowed by law.
2.5. In the event of any dispute with regard to a portion of an invoice, (i)
the undisputed portion shall be paid as provided herein, and (ii) if
the dispute persists for more than sixty (60) days beyond the invoice
date of the disputed invoice and is resolved in favor of TriZetto, CCN
agrees to pay to TriZetto, in addition to the disputed amount, interest
on the disputed amount from the date of such invoice until the date
such disputed amount is actually paid at a rate equal to the lesser of
one (1.0%) percent per month or the highest rate allowed by law.
[*] Confidential portions omitted and filed separately with the Securities and
Exchange Commission.
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2.6. Fee Discounts For Time and Materials Projects
2.6.1 For time and materials projects performed and paid for during
calendar 1999 and subsequent years for which this Agreement will be in
effect, TriZetto will grant CCN the following discounts from TriZetto's
then-current published hourly rates set forth in the Fee Schedule
attached as Exhibit A.
A. [*] cumulatively paid to TriZetto to less than
B. [*] to less than
C. Over [*]
2.6.2 For the purposes of this Section, "Time and Materials" projects
shall be defined as those projects which are NOT (i) fixed fee projects
or (ii) projects the pricing of which are partially value-based,
benefits-based or results-contingent (i.e. level of payment based
partially on the extent to which targeted results, deliverables, or
benefits are achieved).
2.6.3 The cumulative calculation of fees paid to TriZetto for Time and
Materials projects for purposes of determining the applicable discount
level will be done based on gross fees beginning from the Effective
Date of this Agreement. An increased discount rate, once reached, will
apply to existing and future Professional Services arranged under this
Agreement, but not retroactively. In the event an increased discount
level is granted based on the parties' expectation that a particular
project will cause the cumulative payments to fall into a
higher-discount tier, but the project is later cancelled, then TriZetto
will recalculate the applicable rates and ▇▇▇▇ CCN accordingly.
2.6.4 Fees paid to TriZetto by CCN for the following products and
services will also be included in calculating the discount level
specified above: (i) TriZetto software products or Solution Enablement
Tools ("SET") (i.e., counted at gross license fees against the discount
levels specified above, notwithstanding any reduction in license fees
that may or may not be then applicable to such software or SET[s]),
(ii) projects performed under
[*] Confidential portions omitted and filed separately with the Securities and
Exchange Commission.
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a fixed fee or partially value-based, benefits-based or
results-contingent based, (iii) outsourcing services provided by
TriZetto, or (iv) gross maintenance fees paid for TriZetto software
products or SET's. However, none of such discount levels will be
applicable to any of the four types of products or services specified
above.
2.6.5 Reimbursed expenses, or expenses for third party hardware,
software and/or related products and services procured for CCN by
TriZetto will neither impact the applicable cumulative rates discount
nor have such discounts applied to them. Fees for projects other than
Time and Materials projects will be as specified in the parties'
Project Agreements for such projects.
3. OWNERSHIP OF WORK PRODUCT AND RELATED MATERIALS
3.1. WORK PRODUCT.
3.1.1 TriZetto agrees that CCN shall own all rights, title and
interest, including but not limited to copyright, patent, trademarks,
trade secrets, and all other intellectual property rights in any
Original Work Product including all documentation, reports, notes, work
papers, and other written material developed and delivered to CCN,
including any creative works, directly arising out of or resulting from
the performance of Services and specifically developed by TriZetto for
the benefit of CCN as expressly provided in a Project Agreement by
TriZetto under this Agreement (the "Original Work Product").
3.1.2 TriZetto hereby agrees that the Original Work Product, if any, is
being delivered as "work for hire". If, for any reason, TriZetto is
ever held or deemed to be the owner of any intellectual property rights
set forth herein in the Original Work Product, then TriZetto hereby
irrevocably assigns to CCN all such rights, title and interest and
agrees to execute all documents reasonably necessary to implement and
confirm the letter and intent of this Section.
3.1.3 The Original Work Product is deemed to be CCN's Confidential
Information hereunder, and except as permitted herein, shall not be
used or disclosed by TriZetto except as set forth below in Section
3.1.4.
3.1.4 [*]
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[*]
3.1.5 Subject to the foregoing, it is understood that TriZetto shall be
free to use its general knowledge, skills and experience and any ideas,
concepts, know-how, and techniques related to the scope of TriZetto's
consulting and used in the course of providing the Services.
3.1.6 Any of the foregoing can be modified by terms of a Project
Agreement for the purposes of that Project Agreement.
4. NON-TRANSFERRED CCN PROPERTY. Except for property to which title or the
exclusive right to use is transferred to TriZetto as evidenced by a
▇▇▇▇ of sale or comparable written instrument, no interest or
obligation (except the obligation to exercise reasonable care) is
conferred upon TriZetto regarding CCN's property beyond the limited
right to use such property in furtherance of this Agreement. All such
property remains in the care, custody and control of CCN.
5. LIMITATION OF LIABILITY.
5.1. Except as otherwise stipulated by a Project Agreement, the limit of
TriZetto's liability (whether in contract, tort, negligence, strict
liability in tort or by statute or otherwise) to CCN concerning
performance or non-performance by TriZetto, or in any manner related to
a Project Agreement, for any and all claims shall not exceed [*] the
aggregate amount of fees and expenses paid by CNN to TriZetto under the
Project Agreement to which the liability may be attributed, provided
however, such limitation shall not apply to gross negligence, willful
misconduct or a breach of TriZetto's intellectual property
representations herein. If requested by CCN, Project Agreements,
[*] Confidential portions omitted and filed separately with the Securities and
Exchange Commission.
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which arrange for TriZetto to assume "outsourcing" responsibilities,
shall specifically define additional terms regarding limitation of
liability.
5.2. Except as otherwise stipulated by a Project Agreement, in no event
shall either party be liable for consequential, incidental or punitive
loss, damage or expenses (including lost profit or saving) even if it
has been advised of their possible existence. Any action by either
party must be brought within [*] after the cause of action arose. The
allocations of liability in this Section 5 represent the agreed and
bargained-for understanding of the parties and TriZetto's compensation
for the Services reflects such allocations.
6. CONFIDENTIAL INFORMATION.
6.1. During the course of this Agreement, CCN may provide TriZetto with
certain information deemed confidential or proprietary to CCN.
Likewise, TriZetto may also provide to CCN such information that it
deems confidential or proprietary. Such "Confidential Information" is
defined to include the identity of patients, the content of medical
records, financial and tax information, information regarding Medicare
and Medicaid claims submission and reimbursements, the object and
source codes and documentation for proprietary software, and such other
information to be disclosed that is confidential or proprietary
business information and delivered or disclosed pursuant to this
Agreement.
6.2. The party receiving the Confidential Information (the "Receiving
Party") from the party who owns or holds in confidence such
Confidential Information (the "Owning Party") may use the Confidential
Information solely for the purpose of performing its obligations or
enforcing its rights under this Agreement.
6.3. Each party shall take appropriate action, by instruction to or
agreement with its employees, agents and subcontractors, to maintain
the confidentiality of the Confidential Information. CCN may disclose
any Confidential Information on an as needed basis to its non-employee
fiduciaries, including without limitation CCN's attorneys, accountants,
auditors, controlling persons, officers, directors or trustees, without
TriZetto's prior consent. The Receiving Party shall promptly notify the
Owning
[*] Confidential portions omitted and filed separately with the Securities and
Exchange Commission.
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Party in the event that the Receiving Party learns of unauthorized
release of Confidential Information.
6.4. Except as may be permitted by this Agreement, TriZetto shall not use or
include CCN Confidential Information, nor any extrapolations or
normative versions thereof, in any database or other application or
program that TriZetto publishes or makes available to a third party or
otherwise use Confidential Information received from any member of CCN
for the purpose of developing information or statistical compilations
for use by third parties or for any other commercial exploitation or
enterprise without first obtaining CCN's specific written consent,
which consent CCN may withhold in the exercise of its sole discretion.
6.5. Unless otherwise agreed, the Receiving Party shall have no obligation
with respect to:
6.5.1. Confidential Information made available to the general public
without restriction by the owning party or by an authorized
third party;
6.5.2. Confidential Information rightfully known to the Receiving
party independently of disclosures by the Owning party under
this Agreement;
6.5.3. Confidential Information independently developed by the
Receiving Party; or
6.5.4. Confidential Information that the Receiving Party may be
required to disclose pursuant to subpoena or other lawful
process; provided, however, that the Receiving party notifies
the Owning Party in a timely manner to allow the Owning Party
to appear and protect its interests.
6.6. Upon the termination of this Agreement, each party shall (i)
immediately cease to use the other party's Confidential Information,
(ii) return to the other party or confirm destruction of such
Confidential Information and all copies thereof within ten (10) days of
the termination, and (iii) upon request, certify in writing to the
other party that it has complied with in its obligations set forth in
this Section 6, unless otherwise provided in this Agreement.
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6.7. The parties acknowledge that monetary remedies may be inadequate to
protect their rights with respect to Confidential Information and that,
in addition to legal remedies otherwise available, injunctive relief is
an appropriate judicial remedy to protect such rights.
6.8. TriZetto shall not use Confidential Information received from CCN for
the purpose of developing information or statistical compilation for
use by third parties or for any other commercial exploitation or
enterprise.
6.9. Each party agrees to provide reasonable assistance and cooperation upon
the reasonable request of the other party in connection with any
litigation against third parties to protect the requesting party's
Confidential Information, provided that the party seeking such
assistance and cooperation shall reimburse the other party for its
reasonable out-of-pocket expenses.
6.10 Unless otherwise specified, the Owning Party is administratively and
financially responsible for obtaining any consents necessary, if any,
for the Receiving Party to use each item of the Confidential
Information and, if appropriate, for transferring rights to the
Receiving Party that are necessary for the Receiving Party to use such
Confidential Information.
7. PROPRIETARY MATERIALS.
-------------------------
7.1 SETS. In the course of performance of Services hereunder, TriZetto may
use (and will authorize CCN personnel to use in the performance of
CCN's responsibilities as may be mutually agreed upon in writing by the
parties in any Project Agreement) [*] are TriZetto Confidential
Information for purposes of Section 6. If TriZetto authorizes CCN to
retain any [*], CCN and such third parties as are engaged by CCN to
provide services in connection with its services and equipment may use
[*] such only for internal business purposes and may not use them for
the benefit of others. CCN will be responsible for maintaining
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and supporting the [*], which are made available solely as an
accommodation, at no charge and with no obligation to update or
maintain them. [*]
7.2 OTHER TRIZETTO PROPRIETARY INFORMATION. In the course of
performance hereunder, TriZetto may use products proprietary to it.
Such proprietary products are TriZetto Confidential Information as
defined in Section 6 and will be identified by TriZetto in writing. CCN
shall not have and shall not obtain any rights in such proprietary
products other than to use them or permit third parties engaged by CCN
to use them as authorized by TriZetto from time to time solely for
purposes set forth in any Project Agreement or pursuant to TriZetto's
standard license for such product(s) as may be entered into by CCN and
TriZetto.
7.3 CCN PROVIDED MATERIALS. In order to carry out its responsibilities
under this Agreement, TriZetto, may need to use certain software,
databases and data that are owned by or licensed to CCN ("CCN Provided
Materials"). CCN is responsible for obtaining any consents necessary
for TriZetto to use such CCN Provided Materials, and transfer rights to
TriZetto if appropriate. TriZetto will comply with any restriction on
its use of the CCN Provided Materials as set forth in any Project
Agreement.
8. WARRANTIES.
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8.1 TriZetto warrants to CCN that Services will be performed in a good and
workmanlike manner by personnel possessing competency which (a)
consistent with applicable industry standards, and (b) sufficient to
perform the Services properly.
8.2. YEAR 2000. Unless otherwise stated in a Project Agreement, TriZetto
warrants that all equipment and systems used to furnish Services
pursuant to this Agreement are Year 2000 Compliant or do not contain
components which process date information. TriZetto also warrants that
any software [*] provided under the terms of any Project Agreement will
be Year 2000 Compliant. "Year 2000 Compliant" is defined to mean the
product/systems accurately and unambiguously processes (including, but
not limited to, compares, calculates, manipulates, sequences, displays,
and exchanges data with other
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systems) data containing time and/or dates prior to, at, and after the
year 2000 without error or interruption, and the product operates
properly and in conformance with applicable specifications, without any
detrimental effect on patient care or otherwise, continuously, before,
at, and after the year 2000.
8.3 WARRANTY OF TITLE. TriZetto warrants TriZetto's absolute right to sell
or license any software [*] under the terms and conditions of any
Project Agreement, and, as long as CCN is not in default, warrants and
represents that CCN shall quietly and peacefully possess any software
or [*] provided hereunder subject to and in accordance with the
provisions of this Agreement and the applicable Project Agreement.
8.4 INTELLECTUAL PROPERTY WARRANTY. Licensor warrants that any software or
[*] licensed under any Project Agreement and CCN's use thereof in
accordance with appropriate documentation, shall not infringe or
violate the patent, trademark, copyright, trade secret or any other
intellectual property right of any entity not a party to this
Agreement.
8.5. VIRUS PROTECTION. TriZetto warrants and represents that it will use its
best efforts to ensure that, at the time any software or [*] are
delivered to CCN, no portion of the software or [*] or the media upon
which it is stored has any type of software routines or other element
which is designed to or capable of permitting any of the following: (1)
unauthorized access to or intrusion upon; (2) disabling of; (3) erasure
of; or (4) interference with any hardware, software, data or peripheral
equipment. In the event of a breach of this representation and
warranty, TriZetto shall compensate CCN for any and all harm, injury,
damages, costs, and expenses incurred by CCN by reason of the breach.
8.5 THE WARRANTIES HEREIN IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES,
WHETHER EXPRESS OF IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
[*] Confidential portions omitted and filed separately with the Securities and
Exchange Commission.
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9. CCN'S RESPONSIBILITIES.
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9.1 CCN shall be responsible for its compliance with any laws and
regulations associated with any deliverables supplied by TriZetto
hereunder, any decision to act, or refrain from acting, upon said
deliverables, and ensuring that its instructions to TriZetto satisfy
CCN's policies and business requirements. TriZetto shall be entitled to
rely on all decisions and approvals of CCN related to this Agreement.
9.2 CCN agrees that TriZetto's performance is dependent on CCN's timely and
effective satisfaction of CCN Responsibilities and on CCN's timely
decisions and approvals. Accordingly, CCN acknowledges that any
material delay by CCN may result in TriZetto being released from an
obligation or scheduled deadline or in CCN having to pay extra fees for
TriZetto's agreement to meet a specific obligation or deadline despite
the delay.
10. INDEMNITY.
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10.1 Each party shall indemnify and hold harmless the other party and its
affiliates, directors, officers, employees and agents (collectively,
the "indemnitee") against any and all losses, liabilities, judgments,
awards and costs (including legal fees and expenses) arising out of or
related to any third-party claim for personal injury or property
damage, including any damages finally awarded attributable to such
claim and any reasonable expense incurred by indemnitee in assisting
indemnitor in defending against such claim, that arises out of any
action or inaction by the indemnitor or its employees or agents;
provided, however, that indemnitee gives indemnitor: (i) written notice
within a reasonable time after indemnitee is served with legal process
in an action asserting such claims, provided that the failure or delay
to notify indemnitor shall not relieve indemnitor from any liability
that it may have to indemnitee hereunder so long as the failure or
delay shall not have prejudiced the defense of such claim; (ii)
reasonable assistance in defending the claim; and (iii) sole authority
to defend or settle such claim. In the event indemnitor elects not to
defend any such claim, the indemnitee shall have the option but not the
duty to reasonably defend or settle the claim and indemnitor shall
indemnify indemnitee for such settlement or any damages finally awarded
against indemnitee attributable to such claim, reasonable costs and
expenses (including attorneys' fees), and interest on such recoverable
funds advanced.
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10.2 Either party shall indemnify and hold the other party harmless from and
against any and all liability, losses, damages, causes of actions, and
expenses, including reasonable attorney's fees, associated with any
action or omission of the other party or the personnel under its
supervision which action or omission is not in compliance with such
party's obligations under this Agreement.
11. INTELLECTUAL PROPERTY INDEMNIFICATION.
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11.1 TriZetto shall defend, indemnify and hold CCN, and the Enterprise
harmless from any loss, liability, damage, cost, or expense (including
reasonable attorney's fees and litigation costs), arising out of any
claims or suits that may be made or brought against CCN by reason of
the breach or alleged breach by TriZetto of the warranties or
representations contained herein, or by reason of any infringement or
alleged infringement of any patent, trademark, copyright or trade
secret right resulting from the Work Product and CCN's use thereof.
TriZetto shall have the sole right to conduct the defense of any such
claim or action and all negotiations for its settlement or compromise,
unless otherwise mutually agreed to in writing, or unless TriZetto
fails to assume its obligation to defend and CCN is required to do so
to protect its interests
11.2 If such infringement claim or action occurs, or in TriZetto's judgment
is likely to occur, TriZetto shall, at its option and expense, either:
(a) Procure for CCN the right to continue using the Work Product;
(b) Modify such Work Product to become non-infringing (provided
that such modifications does not adversely affect CCN's
intended use of Work Product) such that the modified Work
Product is not infringing and is equally suitable, compatible,
and functionally equivalent to the original Work Product at no
additional charge to CCN;
(c) If none of the foregoing alternatives is reasonably available
to TriZetto, upon prior written consent of CCN, CCN shall
return the Work Product to TriZetto and TriZetto shall refund
all moneys paid by CCN in respect of such Work Product.
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12. INSURANCE.
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12.1 TriZetto shall maintain liability coverage for errors and omissions with
coverage of at least [*] per incident and [*] in the aggregate. CCN shall be
provided a copy of the certificate of insurance upon request. CCN shall be
promptly notified at least thirty (30) days prior to any cancellation of policy
or reduction of coverage below the required amounts specified in this section.
12.2 During the term of this Agreement, TriZetto shall also maintain at its own
expense, commercial liability insurance for bodily injury, death and property
loss and damage (including coverages for product liability, completed
operations, contractual liability and personal injury liability) covering
TriZetto for damages arising out of its performance under this Agreement, and
any negligent or otherwise wrongful acts or omissions by TriZetto or any
employee or agent of TriZetto, arising out of its performance under this
Agreement, with CCN listed as named additional insured. All policies of
insurance shall provide for coverage on an [*] basis in the minimum amount of
[*] with an annual aggregate of [*]. If coverage is provided on a claims made
basis, TriZetto shall maintain, through the purchase of an [*] reporting
endorsement, or a [*] policy coverage for any occurrence taking place relating
to TriZetto's products and/or Services. Upon CCN's request, TriZetto shall
provide CCN with a copy of all such policies and certificates of insurance
satisfactory to CCN, evidencing TriZetto's insurance coverage.
13. INDEPENDENT CONTRACTOR STATUS.
----------------------------------
TriZetto agrees that it shall perform its duties under this Agreement as an
independent contractor. Contractors who perform Services on behalf of TriZetto
shall remain under the supervision, management and control of TriZetto and all
compensation of Contractors shall be the responsibility of TriZetto, including
any and all benefits which are required by law, including but not limited to the
provision of workers' compensation insurance, and federal and state payroll
taxes. This Agreement is not and shall not be considered to create an
employer/employee relationship, joint venture, or partnership of any kind, and
neither party shall represent to any third persons that any such relationship
exists. Each party to this Agreement is and shall remain professionally and
economically independent of the other, and neither party
[*] Confidential portions omitted and filed separately with the Securities and
Exchange Commission.
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will have any authority to bind or commit the other party. Nothing in this
Agreement will be deemed or construed to create a joint venture, partnership or
agency relationship between the parties for any purpose. With respect to its own
personnel, each party is, accordingly, independently responsible for all
obligations incumbent upon an employer.
14. TRIZETTO PERSONNEL.
-----------------------
TriZetto reserves the right to determine which of its personnel or
subcontractors shall be assigned to perform Services, and to replace or reassign
such personnel during the term hereof, provided, however, that it will, subject
to scheduling and staffing considerations, attempt to honor CCN's request for
specific individuals. CCN shall have the right to request that individual
TriZetto personnel cease the provision of Professional Services for any reason.
In such instances, TriZetto and CCN will exert best efforts to mutually agree to
a corrective course of action.
15. NON-SOLICITATION OF EMPLOYEES.
----------------------------------
Each party agrees that it shall not, during the term of any Project Agreement,
solicit, hire or retain as an independent contractor any of the other party's
employees or personnel of any job classification or rank who are assigned to the
project on either a full-time or part-time basis. However, this obligation shall
not apply if either (a) the particular individual has already terminated
employment with the other party prior to any solicitation by a party or (b) the
other party delivers its prior written express approval (i.e., after the
initiating party request such approval from the other party, before any
solicitation by the initiating party to the particular individual). For the
purposes of this Agreement, Employment shall mean any arrangement between two
parties which promises reimbursement to one party for provision of services on
behalf of the other.
16. WORK ENVIRONMENT.
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Except as otherwise stipulated by a Project Agreement, when TriZetto's
employees are physically assigned to work on CCN's premises, CCN shall provide
to TriZetto's employees a work environment consistent with the work environment
provided to CCN's employees, including reasonable work space, furniture,
supplies and equipment, to enable TriZetto to
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perform its obligations under this and any Project Agreement executed hereunder.
In the event that CCN is unable to provide such a work environment, TriZetto
will provide the required space, furniture, supplies, equipment and
communications linkages (including but not limited to high-speed data lines and
video conferencing equipment), and shall be reimbursed by CCN under section 2.3
of this agreement based upon CCN's prior approval.
17. PUBLICITY.
--------------
Neither party shall refer to the existence of this Agreement or disclose its
terms or use the name of the other party in any press release, advertising or
materials distributed to prospective or existing customers, without the prior
written consent of the other party. TriZetto shall have the right to disclose to
prospective customers the fact of this Agreement's existence and the general
scope of the Services to be provided hereunder. CCN agrees to serve as a
business reference for TriZetto provided that TriZetto remains in compliance
with its obligations under this Agreement.
18. ASSIGNMENT.
---------------
Unless otherwise expressly provided in this Agreement, neither party may assign
its rights or delegate its duties and obligations under this Agreement without
the prior written consent of the other party, which will not be unreasonably
withheld or delayed. Notwithstanding the foregoing, consent will not be required
if either party assigns its rights or delegates its duties and obligations under
this Agreement to a parent, to a subsidiary or affiliate in which either party
directly or indirectly has more than a fifty percent (50%) controlling interest,
or to an entity into which either party is merged or with which either party is
consolidated, or to the purchaser of all or substantially all the assets of
either party, unless such assignment or delegation would have a material impact
on the Services to be provided under this Agreement.
19. GOVERNING LAW.
------------------
This Agreement shall be construed according to, and the rights of the parties
shall be governed by, the laws of the State of California.
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May 4, 1999
20. SEVERABILITY.
-----------------
If any of the provisions of this Agreement shall be held to be illegal, invalid
or unenforceable, the validity, legality or enforceability of the remaining
provisions shall not in any way be affected or impaired thereby; provided,
however, that in the event such remaining provisions are inadequate to permit
each party to realize the material benefits for which it has bargained, the
parties shall in good faith negotiate mutually acceptable substitute provisions
which are valid, legal and enforceable and which most nearly provide for the
material benefits sought to be accomplished by the provision(s) held to be
illegal, invalid or unenforceable. IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT
EACH AND EVERY PROVISION OF THIS AGREEMENT THAT PROVIDES FOR A LIMITATION OF
LIABILITY, DISCLAIMER OR WARRANTIES OR EXCLUSION OF DAMAGES IS INTENDED BY THE
PARTIES TO BE SEVERABLE AND INDEPENDENT OF ANY OTHER PROVISION AND TO BE
ENFORCED AS SUCH. FURTHER, IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT IN THE
EVENT THAT ANY REMEDY HEREUNDER IS DETERMINED TO HAVE FAILED ITS ESSENTIAL
PURPOSE, ALL LIMITATIONS OF LIABILITY AND EXCLUSIONS OF DAMAGES SET FORTH HEREIN
SHALL REMAIN IN EFFECT.
21. WAIVER OF BREACH.
---------------------
The waiver of either party of any one or more breach or defect in performance by
either party and its Contractors under this Agreement shall not be construed as
a waiver of any other or future breach or defect, and shall not stop either
party from requiring the specific performance of any obligations arising under
this Agreement.
22. AMENDMENT.
--------------
This agreement may be amended, modified or supplemented only by a writing signed
by the parties to this Agreement. Such amendments, modifications or supplements
shall be deemed as much a part of this Agreement as if so incorporated herein
(e.g., Project Agreements).
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May 4, 1999
23. ENTIRE AGREEMENT.
---------------------
This Agreement and its exhibits set forth the entire agreement between parties
hereto with regard to the subject matter hereof. No other agreements,
representations, or warranties have been made by either party to the other with
respect to the subject matter of this Agreement. The parties have, however,
previously entered into certain agreements and other binding documents with
respect to services and products and such agreements and documents remain in
full force and effect as separate contracts with respect to the subject
matter(s) thereof. This Agreement is not intended to modify or amend any such
other agreements or documents in any way. Notwithstanding anything to the
contrary provided herein, contrary or inconsistent terms in any specific Project
Agreement shall supersede and control the terms set forth herein.
24. FORCE MAJEURE.
------------------
Neither party hereto shall be liable for any failure or delay in performance of
its obligations hereunder by reason of any event or circumstance beyond its
reasonable control, including without limitation acts of God, war, riot, strike,
labor disturbance, fire, explosion, flood, or shortage or failure of suppliers;
provided, however, that a delay or failure in performance due to lack of
financial resources, or availability of skilled personnel not caused by acts of
God, war, riot, strike, labor disturbance, fire, explosion, flood, or shortage
or failure of suppliers shall not be considered a circumstance beyond the
reasonable control of the delaying or failing party.
25. TAXES.
----------
There shall be added to any charges payable by CCN under this Agreement amounts
equal to any and all applicable taxes, however designated, incurred as a result
of or otherwise in connection with this Agreement or the Services, including
without limitation state and local privilege, excise, sales, and use taxes and
any taxes or amounts in lieu thereof paid or payable by TriZetto, but excluding
taxes based upon the net income, personnel costs, or net worth of TriZetto.
Page 18 of 23
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May 4, 1999
26. TERM AND TERMINATION.
-------------------------
26.1 The term of this Agreement commences on the Effective Date and shall
continue for a period of [*] thereafter.
26.2 This Agreement may be terminated by either party upon the other party's
failure to cure a material breach of this Agreement or a Project Agreement
issued under the terms of this Agreement. In the event either party defaults in
any obligation in this Agreement or Project Agreement, the other party shall
give written notice of such default, and, if the party in default has not cured
the default within thirty (30) days of the notice, the other party shall have
the right to terminate this Agreement.
26.3 Unless otherwise stated in a Project Agreement, this Agreement or any
particular Project Agreement may be terminated by CCN without cause with thirty
(30) days advance written notice to TriZetto.
26.4 Notwithstanding the foregoing or any provision of a Project Agreement to
the contrary, in the event that TriZetto, or TriZetto's parent company, if
applicable, is directly or indirectly acquired by or merged with, or assigns all
or substantially all of its assets to another entity without CCN's prior written
consent pursuant to Section 18 hereof, CCN shall have the option to immediately
terminate this Agreement and any or all Project Agreements executed hereunder
that are then effective subject to the wind-down provisions, if any, contained
in any such Project Agreements.
26.5 In the event of termination of this Agreement for any reason, CCN shall pay
TriZetto all accrued fees payable for Time and Materials Projects to TriZetto in
accordance for any Services rendered, and all approved expenses up to the
effective date of termination.
26.6 Unless otherwise stated in any Project Agreement, Project Agreements which
are deliverables based (i.e. any project which is NOT a Time and Materials
Project), which are uncompleted at the time the Agreement is terminated, shall
be partially paid based upon the amount of partial deliveries that have been
completed and are determined to be of value to and accepted by CCN.
[*] Confidential portions omitted and filed separately with the Securities and
Exchange Commission.
Page 19 of 23
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May 4, 1999
26.7 Cancellation of a service requested by a Project Agreement to be performed
by TriZetto does not constitute termination of this Agreement.
26.8 Regardless of the reason for expiration or termination of this Agreement,
TriZetto will return to CCN all CCN Confidential Information in TriZetto's
possession promptly after notification of termination or upon CCN's request.
27. SURVIVAL.
Notwithstanding the provisions of Section 26 relating to Termination, Section 2
(Service Charges and Payment), Section 3 (Ownership of Work Product and Related
Materials), Section 5 (Limitation of Liability), Section 6 (Confidential
Information), Section 10 (Indemnity), Section 11 (Intellectual Property
Indemnity) Section 15 (Non-Solicitation of Employees), Section 17 (Publicity),
Section 18 (Warranties), Section 19 (Governing Law), Section 25 (Taxes), and
Section 28 (Dispute Resolution and Attorneys' Fees) survive the expiration or
termination of this Agreement (or any Schedule) for any reason.
28. DISPUTE RESOLUTION AND ATTORNEYS' FEES.
In the event of a dispute between the parties that cannot be resolved between
them, the parties shall submit their dispute to non-binding mediation prior to
initiating litigation. Selection of the mediator shall be by mutual agreement of
both parties. Each party shall bear their own costs and expenses of
participating in the mediation (including without limitation, attorneys' fees)
and each party shall bear one-half (1/2) of the costs and expenses of the
mediator. The matters discussed or revealed in the mediation session shall not
be revealed in any subsequent litigation, except as expressly provided in this
section. In the event the matter is not resolved in the mediation, suit may be
brought. In addition to recovering any damages or other relief awarded by the
court, the prevailing party may recover attorneys' fees, provided, however, any
award of attorneys' fees shall be limited as follows: (a) the award shall not
exceed the amount of monetary damages awarded to the prevailing party by the
court, and (b) no award shall be made if, prior to the initiation of the suit
(i.e., service of process upon the party-defendant), the party made an offer to
settle the dispute and the amount of monetary damages awarded in the court
proceeding was less than or equal to the settlement offer. Nothing in this
Section 23 shall be deemed to limit a party's access to the court system to
pursue a remedy which is limited to
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May 4, 1999
injunctive relief.
29. BOOKS, RECORDS, AND COMPLIANCE.
29.1 Pursuant to the requirements of 42 CFR 420.300 et seq., TriZetto
agrees to make available to the Secretary of Health and Human Services ("HHS"),
the Comptroller General of the Government Accounting Office ("GAO") or their
authorized representatives, all contracts, books, documents and records relating
to the nature and extent of costs hereunder for a period of four (4) years after
the furnishing of Services hereunder for any and all Services furnished under
this Agreement. In addition, TriZetto hereby agrees to require by contract that
each subcontractor makes available to the HHS and GAO, or their authorized
representative, all contracts, books, documents and records relating to the
nature and extent of the costs thereunder for a period of four (4) years after
the furnishing of Services thereunder.
29.2 Unless this Agreement is exempted by the rules and regulations of
the Secretary of Labor issued pursuant to Section 204 of Executive Order 11246,
there is incorporated herein by reference paragraphs 1 through 7 of the contract
clause set forth in sections 202 of Executive Order 11246.
29.3 TriZetto shall, to the extent applicable, comply with the
provisions of the Immigration Reform and Control Act of 1996. Unless this
Agreement is exempted by the rules and regulation of the Secretary of Labor,
pursuant to Title 41 chapter 60 part 60-250 of the Code of Federal Regulations,
the affirmative action clause relating to an affirmative action for veterans
contained in 60-250.4(a) - (m) is incorporated by reference.
29.4 TriZetto agrees to comply at all times with the regulations issued
by the Department of Health and Human Services, published at 42 CFR 1001, and
which relate to TriZetto's obligation to report and disclose discounts, rebates
and other reductions to CCN for products purchased by CCN under this Agreement.
29.5 CCN shall have the right, at its expense, during normal business
hours and with reasonable advance notice, to review and photocopy TriZetto's
books and records that pertain
Page 21 of 23
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May 4, 1999
directly to the accounts of CCN, the fees payable to TriZetto under this
Agreement, or the goods and Services provided by TriZetto hereunder.
29.6 If TriZetto carries out the duties of this Agreement through a
subcontract worth $10,000 or more over a twelve month period with a related
organization, the subcontract will also contain a clause substantially identical
to the Sections 29.1, 29.2, 29.3, 29.4, and 29.5 to permit access by CCN, the
Secretary, the United States Comptroller General and their representatives to
the related organization's books and records.
29.7 CCN's rights under this Section shall survive for a period of four
(4) years after termination or expiration of this Agreement.
29.8 TriZetto represents and warrants that it has not been excluded
from participation in any Federal healthcare program as defined in 42 U.S.C.
Section 1320a-7b(f).
30. NOTICES.
Any notice or other communication given pursuant to this Agreement shall be in
writing and shall be effective or made (i) when delivered personally to the
party for whom intended, (ii) five (5) days following deposit of the same into
the United States mail (certified mail, return receipt requested, or first class
postage prepaid) to the address specified below, or (iii) two (2) business days
after delivery to an established national overnight delivery service (such as
Federal Express) when sent prepaid to the address specified below:
To CCN: CCN Managed Care, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇
Columbia/HCA Healthcare Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
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May 4, 1999
To TriZetto: The TriZetto Group, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
Either party may designate a different address by notice to the other
given in accordance herewith.
31. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same document. In making proof of this Agreement, it shall not be necessary to
produce or account for more than one such counterpart executed by the party
against whom enforcement of this Agreement is sought.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their authorized representatives as of the date first set
forth above.
THE TRIZETTO GROUP CCN MANAGED CARE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. Spirel By: /s/ ▇▇ ▇▇▇▇
-------------------------------- -------------------------------
Name: ▇▇▇▇▇▇ ▇. Spirel Name: ▇▇▇ ▇▇▇▇
------------------------------ -----------------------------
Title: Vice President Title: Senior Vice President
---------------------------- Chief Information Officer
Date: 5/4/99 Date: 5/4/99
------------------------------ ------------------------------
Page 23 of 23
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The TriZetto Group
Exhibit A
1999 SMS Professional Services Rate Schedule
[*]
[*]
[*]
Private and Confidential All Rates Subject to Change
The TriZetto Group, January 1999
[*] Confidential portions omitted and filed separately with the Securities and
Exchange Commission.
