SERVICE AGREEMENT
This service agreement is entered into this 29th day of April, 1998 between
Empower Health Corporation a Texas corporation ("Empower") and Superior
Consultant, Inc., a Michigan corporation, 4000 Town Center Drive, Suite 1100,
Southfield, Michigan 48075 as Seller, ("Superior")
RECITALS
--------
A. Empower develops and markets an integrated suite of Internet enabled,
consumer oriented software applications and services to its clients, including
consumers, hospitals, health plans, pharmaceutical companies, and other health
care organizations. Such products and services include but are not limited to
Dr. Koop's Personal Medical Record SystemTM (Electronic Medical Record, Medical
Expense Manager, Personal information Manager, integrated Disease Management
applets), Dr. Koop's CommunityTM, Internet media to which Empower has legal
rights, electronic commerce and electronic data interchange services, other
proprietary software, system training, and advertising and promotional services
(the "Empower Software and Related Services").
B. Superior provides management consulting, information technology
services and outsourcing services to healthcare constituents, including IDNs,
hospitals, health plans, employers, physician organizations, software and
hardware vendors, and other healthcare clients, Such consulting services
include, but are not limited to, information systems planning, information
systems audits, systems integration and interfaces, product design, development
and implementation, management consulting, process refinement and reengineering,
physician services, patient accounting and financial management consulting,
nursing management consulting and reengineering, nursing informatics and total
quality management (TQM/CQI) assistance (the "Superior Services").
C. To attain mutual goals of Empower and Superior, the parties believe it
will be beneficial to pursue a business relationship encompassing joint
marketing and services, whereby the products and services of both firms will
ultimately benefit the client (the "Joint Client"). Accordingly, to serve the
needs of clients of Empower and Superior, Empower and Superior agree to work
together with either Empower or Superior clients, in a Subcontract or Co-bid
Situation, under the terms and conditions as set forth below.
NOW THEREFORE, in consideration of the mutual obligations in this Agreement,
Empower and Superior agree as follows:
1. ROLES AND RELATIONS OF PARTIES
------------------------------
(a) Superior Services to Empower
----------------------------
Under the terms of this Agreement, Superior is appointed the exclusive
international consulting and information technology services provider to
Empower and its subsidiaries and affiliates, throughout the term of this
Agreement. These services include, without limitation, strategic planning,
reengineering, process improvement, installation, implementation, custom
programming, systems integration and related services incidental to
Empowers need to design, develop and maintain products and services and to
assist in the acquisition and implementation by clients or agents of
Empower such software and related services. In connection therewith,
Superior will provide its systems consultants,
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project managers, management consultants and technical personnel to furnish
services in accordance with the terms and conditions stated in this
Agreement. Except as expressly provided herein, all services shall be
provided pursuant to Supplemental Services Agreements ("SSAs") which are
agreed to between the parties. It is anticipated that personnel provided by
Superior will assist, as specified in a series of SSAs, in the development,
installation, implementation and customization, functional and technical-
specifications, project planning, feasibility analysis for delivery of
function, project monitoring and progress reporting, development of test
plans, testing, and other related activities as requested by Empower as
developed in project work plans.
(b) Superior Services to Clients and Customers of Empower
-----------------------------------------------------
Consulting services by Superior contemplated hereunder, may be provided
directly to Empower or Superior may, as a subcontractor;, where Empower is
the prime contractor, provide such services directly to clients and or
customers of Empower. Further, Superior may, through service agreements
negotiated and executed directly between Superior and clients and customers
of Empower, perform consulting services to such clients and customers of
Empower in connection with the installation, implementation or other
consulting needs associated with the acquisition of Empower software and
related services by such customer.
(c) Minimum Amount of Services to be Purchased by Empower
-----------------------------------------------------
Empower agrees to purchase herewith from Superior Services resulting in not
less than Three Million ($3,000,000) Dollars in recognized revenue to
Superior, excluding expenses, within the first twelve (12) months from the
date of this Agreement. Superior agrees to provide services to Empower and,
if as a subcontractor, to its agents or clients pursuant to SSAs that will
be negotiated between Empower and Superior. Revenue recognized by Superior
in connection with the performance of services directly for clients of
Empower (whether Superior is acting as a subcontractor to Empower or by
separate agreement with the client) and where such services are performed
in connection with the use, acquisition, or installation and implementation
of Empower products by such client, will be credited toward the above
stated minimum services requirement. Empower agrees to authorize SSAs
hereunder that, together with Superior Services performed under direct
agreements with clients in connection with the installation, implementation
and/or support of Empower Products and Services, comprise Three Million
($3,000,000) Dollars in professional fees to Superior, exclusive of
reimbursable expenses, in a timely manner so as to permit performance by
Superior within the twelve (12) month period following execution of this
Agreement. Superior agrees to use commercially reasonable efforts to
perform all SSAs in a timely manner, and in any event, Empower shall not in
any way be penalized by the failure of Superior to recognize $3 Million
Dollars in revenue during the first twelve months of this Agreement to the
extent that such failure is a result of Superior's failure to timely
perform such services, provided however, that Superior, in the performance
of services, shall in no event be required to perform more than 1000 person
hours of services in any given week.
(d) Joint Marketing Activities
--------------------------
The parties shall undertake a joint marketing effort as set forth in this
Agreement. Each party agrees to be responsible for its own marketing
expenses incurred during marketing activities hereunder, unless other
arrangements to in writing between, the parties. Either
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party may introduce the other party to a client or prospect who may have a
desire for the products or services of the party; or furnish the other
party information respecting such introduction or business opportunity
shall be deemed confidential and introducing party. Each party hereto
agrees that the receiving party's use of such information shall be limited
to the pursuit and development of business opportunities with such client
or prospect and shall not be disclosed to any third party and further, such
information shall be subject to the restrictions imposed in Section 6 of
this Agreement.
(e) Independent Contractors
-----------------------
The relationship between Empower and Superior shall be that of independent
contractors only. No agency relationship between Empower and Superior. is
created by this Agreement. Neither party shall have the right or authority
to act on behalf of the other or represent that it has such right or
authority. Each party shall be responsible for its own tax obligations
arising in connection with the performance of this Agreement.
(f) Revenue sharing -- Empower Software and Related Services.
---------------------------------------------------------
Unless otherwise specified in an SSA executed by authorized representatives
of both Superior and Empower, Superior will be entitled to one-hundred
percent of service related revenues derived from clients for the services
it renders and Empower will be entitled to one-hundred percent of Empower
software license revenues derived from Clients for its software licenses.
(g) Revenue sharing -- Other Services.
----------------------------------
Superior and Empower intend to share revenues derived from other services
to be provided, such as electronic commerce transaction related fees,
advertising revenues, etc. Recognizing that the precise nature of work and
consequently the fee sharing arrangements are difficult to accurately
predict, Superior and Empower will specify the fee sharing arrangements
either in SSAs or by a written amendment to this Agreement, signed by
authorized representatives of both parties.
(h) Empower Software Development Services
-------------------------------------
To the extent Empower determines it advantageous to utilize contractors or
consultants instead of its employees for product strategy and planning,
software development, training, or any other related services not otherwise
covered by this Agreement, the parties agree that Superior will be
exclusive supplier of such services to Empower or its affiliates, unless
Superior cannot provide such services, either because of a lack of know how
or resources, or Superior refuses to provide such services, or because a
client does not want Superior to perform such services. In particular, it
is understood that Empower may seek internet content provider services from
contractors other than Superior.
2. Term of Service Agreement
-------------------------
(a) The term of this Service Agreement will commence on May 1, 1998 and
terminate on May 1, 2003. This Agreement can be extended upon written
agreement between Empower and Superior.
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(b) This Agreement may only be terminated for reason of material breach. In
the event of material breach by a party, the other shall provide written
notice of such material breach which shall specify in detail the acts or
omissions claimed to constitute the breach. The party claimed to be in breach
shall then have sixty (60) days within which to cure the claimed breach. In
the event such party shall fail, within the sixty (60) day period to cure the
breach or to provide a reasonable program to accomplish such cure, the party
claiming breach shall thereupon be entitled to payment for all fees and
expense reimbursement incurred prior to the effective date of termination.
(c) Should Empower terminate this Agreement prior to utilizing at least Three
Million ($3,000,000) Dollars of Superior Services under this Agreement,
Empower hereby agrees to remit to Superior within 30 days of termination, the
difference between $3 Million Dollars and the actual revenues recognized by
Superior in connection with services provided to Empower, and for Empower
clients, as provided in Section J (c), above, pursuant to this Agreement.
3. SUPPLEMENTAL SERVICE AGREEMENTS
-------------------------------
Superior and Empower shall prepare SSAs to define and authorize various segments
of work, To the extent of any conflict or inconsistency between the terms and
conditions of an SSA and the terms and conditions of this Agreement, the terms
and conditions of the SSA will control. Each SSA shall:
(a) Be in writing and signed by both parties.
(b) Refer specifically to this Agreement
(c) Designate the date as of which the provisions of the SSA will be
effective and, if applicable, the term or period of time during which
Superior will perform, services, provide resources or otherwise
discharge its obligations as specified in the SSA.
(d) Describe the assistance to be rendered and/or the services to be
performed, and/or resources to be provided, and/or applicable
deliverables and/or obligations to be discharged by Superior pursuant to
the SSA.
(e) Describe any additional obligations of Empower and Superior related to
the SSA, including any facilities, equipment, personnel and tasks or
other support to be provided or performed.
(f) Specify any other terms and conditions appropriate to the services to be
performed and the obligations of the parties.
(g) Specify the testing procedures and/or acceptance criteria to be applied
to any deliverable that may be called for under the SSA.
(h) The basis and procedure for computation billing and payment of
professional fees and expenses (e.g., hourly rate or fixed fee).
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(i) SSAs for work performed on an hourly basis should include, in addition
to the information described above, the Superior personnel
classifications who will render the services, their respective hourly
rates, and the starting and closing dates for performance.
(j) SSAs for work performed on a fixed-fee basis should include, in addition
to the information set forth above, a list of tasks to be completed, a
set of milestones specifying the date by which, each portion of the work
specified in the SSA will be completed, payment schedule and acceptance
criteria.
(k) For assignments involving computer program development, a functional
specification, an operational narrative and a matrix of conditions to be
tested may also be included.
SSAs may be amended by mutual agreement of the parties, in writing and signed by
both parties.
4. PROJECT ORGANIZATION
--------------------
Each Project shall be organized and staffed by Superior as set forth in the
mutually agreed upon SSA.
Superior shall assign an Engagement Manager, who shall be a senior executive or
manager of Superior and who, acting on behalf of Superior, shall have
responsibility for ensuring that Superior performs its obligations under this
Agreement and the SSAs.
Empower shall designate an employee of sufficient management rank as Empower's
Project Liaison, who shall represent Empower and have responsibility for
ensuring that Empower performs its obligations under this Service Agreement and
the SSAs.
The Engagement Manager and Empower's Project Liaison will hold joint
responsibility for planning status meetings and will discuss issues as they
arise. Formal telephone or personal meetings between the Engagement Manager and
Empower's Project Liaison will be scheduled as deemed appropriate.
Both parties recognize that certain SSAs may require periodic adjustments to
either party's staffing and/or fees. If such adjustments are necessary, both
parties will use their best efforts to accommodate such adjustments as they
arise. Any adjustments must be agreed to by both parties.
5. EMPOWER SUPPORT
---------------
Empower will provide support to Superior as follows:
(a) Empower will provide access to its staff for interviews as reasonably
required by any project plan. Empower's data processing department will
provide orientation to shop standards, technical support, reasonable
training on system and program development software required to provide
services, appropriate technical manuals, computer terminals and other
support normally associated with computer program development and necessary
for performance of services as set forth in this Agreement and associated
SSAs. Empower will
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also provide to Superior, documentation which Empower has-in its possession
of procedures, system instruction manuals internal documentation.
(b) When service is performed at Empower, Empower will provide a reasonable
work environment and secretarial assistance to the extent reasonably
necessary for Superior's personnel to render service under this Agreement.
(c) Empower will provide Superior's personnel access to computer facilities
reasonably required to provide service under this Agreement on a 24-hour
per day, seven day per week basis, with the exception of normal system
downtime for system maintenance and file backup. Access may be physical
entry to the facility or via telecommunications, as dictated by the needs
of the Project.
(d) Empower's system will provide computer operations and system software
staffing reasonably necessary for the work contemplated.
(e) Empower shall be responsible for protection of electronically stored data
in its electronic data processing systems, by means of data backup no less
than once each day, security devices and procedures designed to prevent
unauthorized access or damage to databases.
Where Superior performs services hereunder to Empower clients as subcontractor
to Empower, Empower shall use its best efforts to ensure that Empower client, as
necessary and appropriate, provides the above described support to Superior in
the performance of its services.
6. NON-DISCLOSURE
--------------
(a) Superior shall treat as confidential and proprietary and not disclose
directly or indirectly to anyone, or use for Superior's personal benefit or
the benefit of any client of Superior, except as expressly provided herein,
any Proprietary information of Empower except as authorized in writing by
an executive officer of Empower. Further, Superior covenants, warrants and
agrees that it will not, except as contemplated in the preceding sentence,
remove from premises of Empower, its affiliates or the sites of Licensees
of Empower, any Proprietary information of Empower, and will not copy in
any form, either magnetically or by facsimile, any Proprietary information.
(b) For purposes hereof, Proprietary Information of Empower shall mean and
include all software programs belonging to Empower, its affiliates and
Licensors and Licensees, whether in written or on magnetic media, and all
design documentation, procedures manuals, program listings, source codes,
working papers and other documentation, methodologies reduced to writing
and information related to the foregoing that has been reduced to writing.
Proprietary Information shall also include personal, financial and/or
medical information regarding Empower's patients and staff.
(c) Empower agrees that it will, prior to disclosure to Superior, identify each
item of Proprietary Information as such, in writing. In the event that any
material so identified to Superior is not, in Superior's view, legitimate
Proprietary information belonging to Empower, Superior shall so advise
Empower and may decline to accept possession of such material.
(d) From time to time in the performance of Superior Services, Superior may
disclose Superior Confidential Information to Empower. Superior will
identify all Superior Confidential
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Information as such in writing at the time of disclosure. Empower shall
treat as confidential and proprietary and not disclose directly or
indirectly to anyone, or use for Empower's personal benefit or the benefit
or the benefit of and client of Empower, except as provided herein, and
Superior Confidential Information, except as authorized in writing by an
Executive Officer of Superior. Empower shall employ reasonable measures to
protect the confidentiality of Superior Confidential Information, such
measures being not less than equal to those employed by Empower to protect
its own proprietary information.
7. OWNERSHIP
---------
(a) All work product, documentation, computer programs, source code, or
software products ("Work Products") that are developed, discovered,
conceived or introduced by either party, either independently or in
conjunction with personnel of a Joint Client or of each other, in the
course of providing services under this Agreement, shall be the property of
both parties unless expressly otherwise provided by the terms of the
applicable EL, or contract with the Joint Client.
(b). All designs, procedures, methods, and innovations ("Innovations") that are
developed, discovered, conceived, or introduced by either party, either
independently or in conjunction with personnel of a Joint Client or of each
other, in the course of providing services under this Agreement, shall be
the property of Superior, unless expressly otherwise provided by the terms
of the applicable EL, or contract with the Joint Client.
This Section shall survive termination or expiration of this Agreement. Empower
shall be responsible for compliance by its Subsidiaries and affiliates, with the
provisions of Section 6 and 7 of this Agreement.
8. PROFESSIONAL FEES
-----------------
Professional fees for some SSAs will be paid on an hourly rate basis, and for
other SSAs will be paid at predetermined fixed fees for such assignments, all as
set forth in each SSA.
8.1 HOURLY RATE FEES
----------------
Work that requires investigation, research and analysis may be paid on an hourly
rate basis, as provided in an SSA. Examples include specification work, project
coordination, project management, analysis and estimation of software
development tasks and some design work.
Hourly rate fees will be computed based upon actual time devoted to servicing
Empower, including travel time. Travel time is measured from the time Superior's
personnel leave Superior's office or their home until arrival at the work site
or hotel, and vice versa.
Rates for hourly professional fees will adhere to the schedule below during the
first twelve months of this Agreement. Rates thereafter may be adjusted subject
to a maximum 10% annual increase, or the annual rise in the national consumer
price index, whichever is greater.
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FEE SCHEDULE FOR HOURLY RATES BASIS PAYMENTS
--------------------------------------------
Work or Personnel Classification Hourly Rate Fees
Advisory Board Members $450
Corporate Officers and Senior Group Directors $375
Executive Management Consultant $325
Engagement Manager $190 / $325
Y2K Engagement Manager $230
Project Manager $185 / $275
Y2K Project Management $200
Senior Management Consultant $185 / $275
Management Consultant $175 / $195
Senior Technical Advisor $160
Technical Advisor $145
Senior Systems Consultant $145
Systems Consultant $130
Management Analyst $125
Each biweekly billing for hourly rate assignments shall include a list of each
hourly rate SSA worked on and, for each such SSA, a list of the personnel
performing services, the job classifications and hourly rate charged for each.
Superior shall maintain time records for all Superior personnel assigned to the
Project which shall indicate the name of the individual, job title, date, number
of hours worked, and the task worked on. Such records shall be made available to
Empower upon Empower's request.
8.2 FIXED-FEE ASSIGNMENTS
---------------------
Technically-oriented work for which a specific result can be defined may be paid
on predetermined fixed-fee basis as set forth in each SSA. Examples include
coding and testing of computer programs.
9. REIMBURSABLE EXPENSES
---------------------
In addition to, and distinct from, professional fees as described above, Empower
will also reimburse Superior for all reasonable travel and Project expenses
according to the guidelines set forth below.
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(a) Travel by personal automobile, reimbursable at a rate no greater
than the allowable mileage, deduction as specified by the IRS.
(b) Travel by commercial carrier.
(c) Hotel/motel accommodations.
(d) Automobile rental and fuel expense, or use of Empower vehicles in
lieu of reimbursement.
(e) Miscellaneous required travel expense such as parking, taxis, etc.
(f) Telephone charges, Cog., remote program development work, phone
conferences, fax transmissions, etc.
(g) Copying, postage and shipping.
(h) Meals (or $___ per day meal allowance for each full day in Empower's
Metropolitan area. $___ for arrival and departure days).
(i) All other expenses incurred by Superior and/or Superior's personnel
solely and directly as a result of performing services for Empower
under this Agreement.
(j) Administrative time and materials.
Items (b), (c), (d), (e), (f), (g), (h) and (i)are reimbursable on an
"incurred cost" basis.
Superior will use its best efforts to ensure that costs are reasonably
consistent with industry custom for consulting personnel, e.g., coach rate for
commercial carriers when available, standard size rental automobile when
available, etc.
10. INVOICING AND PAYMENT SCHEDULE
------------------------------
Invoices for hourly fee assignments will be rendered biweekly for services
rendered in each biweekly period. Billing periods begin on Sundays and end on
the second Saturday following.
Invoices for fixed fee assignments will be rendered in accordance with the terms
of this Agreement and the payment and milestone schedule set forth in the
applicable SSA. No more than 90% of the fixed fee will be invoiced prior to
acceptance of the assignment by Empower, with an invoice for the remaining
portion rendered when the assignment is accepted by Empower.
In the event that, after execution of an SSA and prior to commencement of work
by Superior on the assignment, Empower decides, for any reason, not to proceed
with the assignment then Superior shall credit Empower with any amounts received
by Superior in connection with that SSA.
Invoices for reimbursable expenses will be rendered biweekly for expenses
incurred in each biweekly period. Billing periods begin on Sundays and end on
the second Saturday following.
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Invoices for hourly compensation for terminated fixed fee SSAs will be rendered
within two (2) weeks following termination, and will include documentation.
Payment is due in full upon rendering of invoice. If payment is not received by
Superior within thirty (30) days after payment is due, interest on the amount
owing will accrue at the rate of 1-12% per month, or the maximum interest rate
allowed by law, whichever is less, until the-amount owing is paid in full. In
the event that collection efforts are required, Empower agrees to pay Superior
the reasonable cost and expenses of collection, including attorneys' fees.
11. ACCEPTANCE TESTING
------------------
11.1 This section applies to Fixed-fee assignments. Superior will notify
Empower when an assignment is complete. Empower will then have a number of days,
specified in the SSA, to perform acceptance testing and either accept the
assignment as complete or describe in good faith to Superior the reasons for
rejection. In the event the assignment fails acceptance testing as defined in
the SSA, Superior shall thereafter have a number of days, specified in the SSA,
within which to modify, correct or replace the assignment. Superior shall then
resubmit the assignment to Empower for further acceptance testing (for a number
of days specified in the SSA). Assignments will be deemed to have passed the
acceptance test if, (a) Empower signs off on the SSA assignment as accepted, or
(b) by the end of the acceptance period Empower has not met its testing
obligations, or (c) if Empower, at any time, places the assignment function into
production.
11.2 Following written notification by Superior that an assignment is complete
and ready for acceptance testing, Empower shall, within the schedule provided in
the SSA, fully complete all acceptance tests set forth in SSA. Upon completion
of acceptance testing, Empower shall notify Superior, in writing, that (1) the
assignment has passed acceptance testing, or (2) identify all areas in which
Empower claims the assignment has failed acceptance testing. Further, as to each
testing step or criterion identified in each SSA, Empower shall state that (1)
the assignment has passed, or (2) it has failed, or (3) it could not be tested
due to the failure of a dependent component, in instances where Empower has
notified Superior of failures in acceptance testing, and Superior agrees that
the assignment has failed acceptance testing, Superior shall use its best
efforts to remedy all deficiencies identified by Empower and shall continue to
do so until the assignment passes Acceptance Testing. in instances where Empower
has notified Superior of failures in acceptance testing, but Superior does not
agree that acceptance tests have been failed, then Superior shall not be
obligated to continue working on the assignment.
12. SUPERIOR'S PERSONNEL
--------------------
It is expressly understood that personnel provided by Superior for the purpose
of performing services under this Agreement are the employees or subcontractors
of Superior, and under no circumstances will be considered employees of Empower.
Superior will be responsible for any and all applicable payroll and employment
taxes and employee insurance, and Empower will have no liability therefore.
Upon the request of Empower and for good cause, Superior shall immediately
remove from the project any Superior personnel. Superior shall thereafter have a
reasonable time to replace such person so removed.
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Services performed under (the terms of this Agreement will be performed at
Empower's offices, Superiors offices or at other locations
13. BILATERAL NO-HIRE AGREEMENT
---------------------------
Without the written consent of the other party, Empower and Superior each agree
to refrain from conducting employment discussions with the other party's
employees, agents and subcontractors from the time an agent, employee or
subcontractor is introduced, until twelve (12) months after the date the agent,
employee or subcontractor of the other party was last involved n any activity
related to this Agreement.
Should either party wish to engage in employment discussions with an agent,
employee or subcontractor of the other party, prior written approval must be
obtained from the other party's employees the event that these employment
discussions result in the hiring or retention of services of an agent, employee
or subcontractor of a party to this Agreement by the other party, either
directly or through a third party, the party hiring or retaining the other's
agent, employee or subcontractor will pay a fee to the other party, in
consideration for the other party's expense in replacing its personnel, as well
as for lost revenue opportunities. In the event either party hires or retains
the services of an agent, employee or subcontractor of the other party, the fee
to be paid will be one third (1i3) the amount of the annual salary of the
individual hired, due and payable on the first day of employment or of
performing services.
14. LIMITATION OF LIABILITY
-----------------------
(a) ALL SERVICES PERFORMED UNDER THIS AGREEMENT ARE PROVIDED WITHOUT WARRANTY,
AND THERE IS NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. IN THE EVENT OF SUPERIOR'S MATERIAL BREACH OF THIS SERVICE
AGREEMENT, EMPOWER MAY CANCEL THE AGREEMENT WHICH SHALL BE EMPOWER'S SOLE
AND EXCLUSIVE REMEDY. SUPERIOR WILL NOT BE LIABLE FOR ANY GENERAL, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES FOR LOSS, DAMAGE OR EXPENSE INCLUDING
BUT NOT LIMITED TO LOST PROFITS OR GOODWILL, AND COSTS OF RECOVERING,
REPROGRAMMING OR REPRODUCING ANY PROGRAM OR DATA.
(b) Superior shall not be liable for any loss, claims or damages arising out of
the failure or degraded performance of any hardware, software or computer,
or other system, or microprocessor, on or about January 1, 2000, or at any
other time, in connection with any so called Year 2000 problem. In no event
shall Superior be liable for any loss, claims or damages of any nature,
whether arising out of claimed breach of contract, tort, strict liability,
breach of warranty or any other cause of. action or theory of recovery
whatsoever, for any amounts in excess of $200,000.
15. INDEMNIFICATION
---------------
(a) Superior and Empower shall each indemnify, defend and hold harmless the
other from and against any third party claims for loss, damage, expense
(Including attorneys fees) liability and claims for death or personal
injury or physical damage to property caused by the negligent acts or
omissions of the other party, its employees, agents or subcontractors.
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provided however that any loss or destruction of electronically or
magnetically stored information shall not be deemed an injury to any person
or physical damage property.
(b) No portion of any software written and developed by Superior and delivered
infringe upon any patent, copyright, trade secret or other proprietary
right of a third-party, and Superior agrees to indemnify, defend and hold
Empower harmless from and against any third party liabilities, suits,
causes'-of action, claims or expense (including attorneys' fees) arising
from any breach or claimed breach of this warranty.
In the event that any order of a Court of competent jurisdiction shall
prevent Empower from using all or any part of such software, Superior, at
Superior's sole option, shall either (a) obtain for Empower, at Superior's
expense, the right for Empower to continue using all of such software,
including the alleged infringing portion, or (b) replace such infringing
portion of such software with a non-infringing portion or modify such
software to make it non-infringing, provided that after such replacement or
modification by Superior such software continues to perform its specified
functions, or (c) refund to Empower all amounts paid under the SSA pursuant
to which such software was supplied and under all other SSAs the use of
which are adversely affected by Empower's inability to use such software.
(c) Each party shall promptly, and in writing, notify the other party of any
such claim made against it by any third party, and shall take action as may
be necessary to avoid default or other adverse consequences until such time
as the other party has a reasonable opportunity to assume the defense of
the claim.
In any claim wherein Superior shall have an obligation to defend under this
Section, Superior shall have the right to select counsel and to control
such defense. Empower shall provide cooperation and participation of its
personnel as required for such defense.
(d) The warranties and remedies set forth above am exclusive and in lieu of all
others, oral or written, express or implied.
This Section 15 shall survive termination or expiration of this Service
Agreement.
16. SUPERIOR'S BUSINESS
-------------------
As a further condition of this Agreement, Empower expressly recognizes that
Superior has been, and is, in the business of providing services to its
healthcare industry clients, which services include, but are not limited to, the
strategic and operational consulting, design, development, installation,
implementation, enhancement, maintenance, training and support of information
management systems and services of various clients and vendors, including
Superior itself. It is further understood that Empower's information management
systems can, are and will be directly competitive with the business, services
and information systems of other clients and vendors for whom Superior provides
services Except as expressly provided herein, it is understood and agreed that:
1) Superior retains the right to continue to provide the same type of services,
and any other services, to any other client, including competitors of Empower
and customers of Empower; 2) Superior retains the right to carry on and expand
its business including without limitation, that part of its business involved
with the strategic and operational consulting and design, development,
installation, implementation, enhancement, maintenance, training and support of
information management systems and services that are similar to or in
competition with those of Empower, for
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Superior's present and future clients. Nothing in this Agreement shall be deemed
in any way to prevent, restrict, or limit Superior in providing strategic and
operational consulting and design, development, installation, implementation,
enhancement, maintenance, training and support of information management systems
or services that are similar: to or in competition with those of Empower, nor to
restrict or limit Superior's use of its expertise and technical skills,
including enhancements of such expertise and skills that may result from its
engagement by Empower provided Superior maintains its obligations of
nondisclosure of Proprietary Information under Paragraph 6.
Empower acknowledges that Superior retains the right to exercise its skills and
expertise and to form and express opinions to its clients that may be based upon
experience gained under this Agreement, including exposure to Proprietary
Information.
17. FORCE MAJEURE
-------------
Neither party shall be responsible for any delay or failure in performance at
any time during the term of this Agreement, caused by flood, riot, insurrection,
fire, earthquake, strike, explosion, war, act of God, Year 2000 failures, the
death of, or incapacitating illness or injury to, identified personnel of
Superior or any other force or cause beyond the control of the party claiming
the protection of this paragraph. of any force majeure condition occurs, the
party whose performance fails or is substantially delayed (the "Delaying Party")
because of such force majeure condition shall give immediate notice to the other
party (the "Non-Delaying Party"), and the protection of this paragraph shall
only begin upon receipt of such notice.
18. TAXES
-----
Empower, shall be responsible for the payment of, or reimbursement to, Superior
or any other entity of any charges or taxes with the exception of income and
payroll taxes, which may hereinafter be imposed or levied with respect to
products or services delivered by Superior-under this Agreement.
19. ASSIGNMENT
----------
Superior shall not assign its obligation to perform services under this
Agreement, except to its subsidiaries and affiliates, without Empower's prior
written consent. Empower shall not assign its obligations under this Agreement,
except to its subsidiaries and affiliates, without Superior's prior written
consent. Any such purported assignment without prior consent shall be void.
Requests for such assignment may not be unreasonably withheld.
20. COMPLIANCE WITH LAW
-------------------
In compliance with Medicare Regulation 42 C.F.R. Section 420.302 and Section
1861(V)(1)(I) of the Social Security Act, Superior agrees to grant access to the
Controller General of the United States, the Department of Health and Human
Services and their duly authorized representatives, to the contractor's and its
subcontractor's and related organization's contracts, books, documents and
records until the expiration of four (4) years after the services are furnished
under this Agreement or subcontract, or such longer period as required by
Empower.
Page 13
Notwithstanding any other provision, Empower remains responsible for ensuring
that any services provided under this Agreement comply with all Federal, state,
and local statutes, rules and regulations. This statement is inclined for
purposes of compliance with regulations and does not in any manner relieve
Superior of obligations or duties set forth in this Agreement and as provided by
law.
21. NOTICES
-------
Any notices to be given under this Agreement shall be given in writing, either
by hand delivery, personally, to Superior's Engagement Manager or Empowers
Project Liaison, respectively, or by certified mail, return receipt requested as
follows:
If to Superior: Superior Consultant Company, Inc.
4000 Town Center Drive, Suite 1100
Southfield, Michigan 48075
Attn: Richard D. Helppie
With copies to Joel French and Richard Saslow at the
above address
If to Empower: Empower Health Corporation
4008 River Place Blvd.
Austin, TX 78730
Attn: Donald W. Hackett
Notice by either party of a change in its address for purposes of this section
shall be in writing.
22. CHOICE OF LAW AND FORUM
-----------------------
This Agreement will be governed by and interpreted in accordance with the haws
of the
State of Michigan.
23. COMPLETE AGREEMENT
------------------
This Agreement sets forth the full and complete agreement of the parties, and
both parties warrant that there have been no promises, obligations or
undertakings, oral or written, other than those herein set forth. No
modification of the terms of this Agreement shall be effective unless in writing
and signed by both parties.
24. CAPTIONS AND HEADINGS
---------------------
The Captions and Headings throughout this Agreement are for convenience and
reference only, and the words contained therein shall in no way be held or
deemed to define, limit, describe, explain, modify, amplify, or add to the
interpretation, construction, or meaning of any provision of or the scope or
intent of this Agreement, nor in any way affect the agreement.
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25. SAVING CLAUSE
-------------
In the event that any section or clause contained in, this Agreement is found to
be invalid by a court of competent jurisdiction, the remaining sections and
clauses shall remain in full force and effect.
26. AUTHORIZED SIGNATURES
---------------------
Acknowledged and accepted, for Donald W. Hackett (Empower)
-----------------
By /s/ Donald W. Hackett President/CEO 4/30/98
--------------------- ----------------- -----------
Signature Title Date
Acknowledged and accepted, for Superior Consultant Company, Inc.
By James T. House CFO 4/30/98
-------------------- -------------------- -----------
Signature Title Date
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Service Agreement - Empower Health Corp. and Superior Consultant Inc.
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