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Page 1: CONEXIS ADMINISTRATIVE SERVICES … · Web viewCONEXIS may use its employees or subcontractors to perform the Services, provided that if CONEXIS uses subcontractors (a) CONEXIS shall

CONEXIS DIRECT CLIENT ADMINISTRATIVE SERVICES AGREEMENT

Client’s Name (“Client”):      Sony Pictures Entertainment Inc. Client has requested that CONEXIS Benefits Administrators, L.P. (“CONEXIS”), its parent and affiliates shall provide administrative services as described in this Administrative Services Agreement (“Agreement”) for certain employee Benefit Plans (“Benefit Plans”) maintained by Client. In consideration of the mutual promises contained in this Agreement, the sufficiency of which is are hereby acknowledged, Client and CONEXIS (“each, a “Party” and collectively the “Parties”) agree as follows:

SECTION 1. Introduction1.1 Effective Date and Term: This Agreement is effective effective January 1, 20    13 (“Agreement Effective Date”) upon being signed (“Executed”) by CONEXIS and Client and remains effective for a period of [3] years (“Term”) or until terminated as set forth herein. 1.2 Fee Schedules and Service Appendices: Each attached Fee Schedule and accompanying Service Appendix (“Fee Schedule / Service Appendix”) that is specifically incorporated into and made a part of this Agreement constitutes part of this Agreement. Each Fee Schedule / Service Appendix will have a Service Fees Guarantee Period date and each Fee Schedule / Service Appendix can be terminated independently of the other appendices and the Agreement.1.3 Relationship of the Parties: Client and CONEXIS are independent contractors with respect to each other and nothing in this Agreement will be deemed to create an employee/employer relationship; a partnership; or joint venture between Client and CONEXIS. CONEXIS’ only obligation under this Agreement is to provide the Services set forth in the applicable Service Appendix to Client and nothing in this Agreement shall be deemed to confer responsibility on CONEXIS to any person covered under the Benefit Plans, the Covered Employees (“Participants”).

SECTION 2. Client Duties2.1 Benefit Plans: Client has sole responsibility and liability for: (i) establishment and operation of the Benefit Plans, (ii) construing and interpreting the provisions of the Benefit Plans and (iii) deciding all questions of fact arising under the Benefit Plans except as otherwise specifically delegated to CONEXIS in the Fee Schedule/Service Appendix. Client shall not represent to Participants or to any third party that CONEXIS is the “Plan Administrator” or “Named Fiduciary” as defined by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), whether or not ERISA is applicable. It is Client’s soleCONEXIS shall have no responsibility to ensure the that any of Client’s Benefit Plans complies with all applicable laws and regulations except as specifically provided otherwise in this Agreement, and CONEXIS’ provision of the services Services under this Agreement does not relieve Client of any of this its obligations or resulting liability related to the non-compliance of any Benefit Plan’s non-compliance. Client has the sole CONEXIS shall also have no responsibility to pay any fee or penalty arising from the Benefit Plans that is assessed by the Internal Revenue Service, the Department of Labor, and/or other federal, state, or local governmental agencies provided, however, that the Client may seek indemnity from CONEXIS for such fee or penalty as set forth in Section 3.7.2.2 Service Fees: As full and complete consideration for the Services to be performed by CONEXIS, Client agrees to pay Service Fees as set forth on the Fee Appendix attached hereto (“Service Fees”), which shall be inclusive of any and all taxes which are CONEXIS’s complete responsibility (but exclusive of taxes based on Client’s income). CONEXIS shall only be compensated for Services actually performed pursuant to this Agreement. Any work which is not so authorized and documented shall not be entitled to compensation under any legal theory and CONEXIS hereby waives any compensation for such additional and/or modified work. The Service Fees shall include all sums due and owing of every kind and description including but not limited to telephone calls, mileage, stationery, and special services such as typing, duplicating costs and mailing expenses. Unless these costs are specifically agreed to as a separate reimbursable expense item in writing, Client will not pay CONEXIS therefor. Service Fees as set forth on the Fee Appendix attached hereto (“Service Fees”) . Service Fees shall be assessed for each month during which services are performed, and the CONEXIS Service Fee Invoice will be distributed by the 7 th business day of the following month per the Client’s instructions, to the address of Client or other entity responsible or designated by Client for submitting payment to CONEXIS. Payment of the Service Fee Invoice is due upon receipt of the invoice and considered past due if payment is not received after 30 60 calendar days from date of Client’s receipt of the invoice or disputed by Client in good faith. Client retains the ultimate responsibility for payment of fees regardless of the entity submitting payment. Any unpaid past

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due Service Fees not reasonably disputed are subject to interest not to exceed 10.5% per month, (186% per annum). A $35.00 fee will be charged for all payments returned Not Sufficient Funds (“NSF”).If Client reasonably and in good faith disputes any charge or amount on any invoice and such dispute cannot be resolved within thirty (30) days (“Dispute Period”) through good faith discussions between the Parties, dispute must be settled by an independent 3rd party (e.g. mediator, arbitrator, or court). After resolution, Client shall pay the any amounts found to be due under this Agreement, within five (5) business days after the end of the Dispute Period. An amount will be considered disputed in good faith if (i) Client delivers a written statement to CONEXIS on or before the past due date of the invoice, describing in detail the basis of the dispute and the amount being withheld by Client, (ii) such written statement represents that the amount in dispute has been determined after investigation of the facts and that such disputed amount has been determined in good faith, and (iii) all undisputed amounts due from Client are paid in accordance with the terms of this Agreement.  Disputed amounts shall not be considered past due during the Dispute Period and the five (5) day period following the end of the Dispute Period. If any undisputed material amounts owed to CONEXIS under this Agreement become past due as set forth herein, Client acknowledges and agrees that CONEXIS may suspend its performance hereunder during any portion of the term that such amounts owed by Client hereunder are past due and/or terminate this Agreement for failure to make payments as required herein as set forth in Section 4.9 herein. CONEXIS may also change the service chargesService Fees and or services Services as of the date any change is made in postal rates or to law or regulations to the extent such change imposes additional duties or obligations on CONEXIS or requires CONEXIS to carry out its obligations in a manner not otherwise contemplated by this Agreement in force at the time of such change. But in any case, shall not exceed increases imposed on other CONEXIS clients.CONEXIS may, at its sole discretion, revise the applicable Service Fees at the expiration of any Service Guarantee Period, as indicated on the appropriate Fee Schedule by providing Client written notice of such changes, at least sixty (60) days prior to the expiration date of the Fee Schedule. Service Fee Guarantee Periods are only effective with fully Executed Services Agreements. In addition, Service Fees may be revised at any time, if Client makes changes to the Benefit Plans (regardless of reason) that materially revise the nature or volume of the services contemplated by this Agreement and/or the increase of pass through fees from third party service providers to CONEXIS. 2.3 Payments to CONEXIS: Notwithstanding any provision herein to the contrary, Client and CONEXIS agree that any funds submitted by Client or any other individual or entity to CONEXIS in accordance with this Agreement do not include participant’s salary reductions. Client further understands that CONEXIS does not hold any funds submitted to CONEXIS by Client in a trust as that term is contemplated by ERISA. Client warrants agrees that: (i) neither it nor any of its employees, directors, representatives, fiduciaries, Benefit Plans (or any entity performing services for Client or such Plans), any of its predecessors, successors or assigns have represented or shall represent to any Participant or beneficiary of the Benefit Plans that a separate account, fund, or trust is being held on behalf of the Benefit Plans that may be used to provide or secure benefits under the Benefit Plans; (ii) Client shall advise the Participants and beneficiaries of the Benefit Plans that the benefits under the Benefit Plans shall at all times be paid out of the general assets of Client. Nothing herein prevents CONEXIS from depositing any such amounts received from Client into a CONEXIS-owned interest bearing account and from retaining such interest.2.4 Furnish Information to CONEXIS: Client shall furnish to CONEXIS the information reasonably determined by CONEXIS to be necessary to fulfill its duties under this Agreement, including but not limited to, quarterly updates of employee/Participant headcount to the extent that such headcount is applicable for calculating Service Fees and such information shall be provided in a mutually agreeable format. Client shall furnish such headcount within 10 business days following of the beginning first business day of each calendar quarter with the corresponding increase/decrease applicable for that quarter. Client understands and acknowledges that CONEXIS will operate on the assumption that the information provided by Client or its authorized designee is accurate and complete and is not liable and will be indemnified and held harmless in accordance with Section 2.5 against errors Losses (as defined in Section 2.5 below) actually incurred by CONEXIS resulting from inaccurate and/or untimely information provided by Client or its authorized designee; provided, however, that if Client notifies CONEXIS that any information is inaccurate or incomplete and advises CONEXIS not to rely on such information or otherwise provides CONEXIS with additional information and CONEXIS fails to take any reasonable actions to mitigate Losses based on such notice or additional information, Client shall only be obligated to indemnify CONEXIS in accordance with Section 2.5 below to the extent such Losses could not have been reasonably prevented by CONEXIS. Client agrees that CONEXIS may assess a reasonable additional fee for costs, (e.g. postage and related labor costs) incurred by CONEXIS as reasonably necessary to take corrective action due to inaccurate and/or untimely information received from Client or its designee; provided, however, that CONEXIS obtains advanced written approval for costs in excess of $_100.00________ before incurring them.

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2.5 Indemnify CONEXIS: Client agrees to defend, indemnify and hold harmless CONEXIS, its officers, directors and employees from and against all losses, liabilities, damages, expenses including reasonable attorneys’ fees (that are awarded from a court of competent jurisdiction) (“Losses”), resulting from any third party demand, judgment, settlement agreement or lawsuit arising from CONEXIS’ performance under this Agreement, including without limitation, claims arising from actions taken by CONEXIS in good faith pursuant to Client’s express written instructions except to the extent of CONEXIS’ negligence, or or criminal or willful misconduct. Notwithstanding the foregoing, Client will not be liable to CONEXIS in a breach of contract claim for other than monetary, compensatory damages that are reasonably foreseeable and ascertainable, regardless of whether or not Client was informed of the possibility of such damages. The foregoing indemnification right is contingent upon CONEXIS satisfying Section 4.17 herein.

SECTION 3. CONEXIS’ DUTIES3.1 Recordkeeping: Each Party shall maintain the usual and customary records related to its obligations under this Agreement as required under applicable law. CONEXIS will deliver records held by CONEXIS that relate to administration of the Benefit Plans to Client or its authorized designee within thirty (30) days of receiving Client’s written request for the records. Client shall be required to pay CONEXIS’ reasonable charges for transportation, for preparation of such data in formats other than CONEXIS’ standard format, and for duplication of such records. CONEXIS will conduct appropriate internal audits supporting SOX, ERISA, or administrative activities for the Services at no additional charge to Client. Additionally, CONEXIS will provide a SSAE 16 Type 2 report to Client on each anniversary of the Effective Date of this Agreement at no additional charge to Client.3.2 Audit by Client: Client may perform one audit per year (except as required to comply with government mandated audits)of the records specifically related to CONEXIS’ duties under this Agreement after providing thirty (30) days prior written notice to CONEXIS. No such Audit audit shall last more than five (5) business days except in the event that Client or Client’s auditor discovers a systemic or material error that reasonably requires additional business days, in which case Client and its auditors shall use reasonable efforts to conclude the audit in a timely manner. Additionally, For for reasonable cause in unusual circumstances, Client may perform additional further audits as needed with the understanding that Client will bear the full cost of such audits (unless such further audits are reasonably required due to CONEXIS’s gross negligence or criminal or willful misconduct). Client’s auditor may perform audits provided such auditor signs a confidentiality agreement reasonably acceptable to CONEXIS and is not a direct competitor of CONEXIS’. Audits must be performed during CONEXIS’ standard business hours. CONEXIS will provide reasonable assistance and information to the auditors and Client shall reimburse CONEXIS for CONEXIS’ reasonable expenses, including, but not limited to, copying and labor costs associated with the audit. Client will provide CONEXIS with a summary of the findings from each report prepared in connection with any such audit and provide CONEXIS with a reasonable period of time following receipt of such report to provide written comments to the findings. Such reports will be considered confidential information that may not be further disclosed for any purpose except as required by applicable law . Under no circumstances is Client permitted to audit CONEXIS’ records that relate to other Clients.3.3 Audit by CONEXIS. Client will promptly furnish its financial statements as prepared by or for Client in the ordinary course of its business for the purpose of determining Client’s ability to satisfy its financial obligations hereunder. To the extent such financial statements are not otherwise publicly available, such statements will be deemed to be Confidential Information and shall be used by CONEXIS solely for the purpose of determining Client’s ability to perform its duties hereunder. If CONEXIS’ review of financial statements causes CONEXIS to question Client’s ability to perform its duties hereunder, CONEXIS may request, and Client shall provide to CONEXIS, reasonable assurances of Client’s ability to perform its duties hereunder. Failure by Client to provide such reasonable assurances to CONEXIS shall be deemed a material breach of this Agreement. Furthermore, Client shall notify CONEXIS immediately in the event there is a change of control or material adverse change in Client’s business or financial condition since the Effective Date.3.4 Standard of Care: In performing its duties and obligations under this Agreement, CONEXIS and its subcontractors shall exercise a standard of care that includes the following: (i) exercising the level of care in the performance of its duties hereunder generally exercised by reasonable and prudent service providers performing similar services and (ii) exercising commercially reasonable efforts, in accordance with this Agreement, to assist the Client with ensuring that the Benefit Plans comply with all applicable federal laws and regulations.3.5 Nature of Duties: The services to be performed by CONEXIS under this Agreement shall be ministerial in nature and shall generally be performed in accordance with CONEXIS’ standard operating procedures. It shall not be considered a breach of this Agreement if CONEXIS reasonably refuses to perform services generally required under this Agreement if the manner in which Client desires such services to be performed requires material changes to CONEXIS’ operating procedures that were not contemplated at the time the Parties entered into the Agreement; provided, however, that

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Sony Pictures Entertainment, 01/25/13,
Conexis should be indemnifying us? We should have ONE indemnity section with SPE’s indemnity language that should include security breaches and any loss of corporate confidential and personal identifiable data by Conexis. SEE MY RELATED NOTES BELOW IN SEC 3.7 & Sec 4.17
Backman, Jordan, 01/25/13,
We may want to have risk management review to determine whether we need to include insurance provisions in the contract. YES, SEE SPE RISK MANAGEMENT’S INSURANCE REQUIREMENTS IN SECTION 4.19 BELOW.
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CONEXIS first advises Client that such request would require material changes to CONEXIS’s operating procedures. Additionally, in the event of the foregoing, CONEXIS and Client agree to use good faith efforts to decide upon reasonable alternatives that are mutually agreeable to CONEXIS and Client. CONEXIS, at its discretion, shall act in accordance with Client’s written instructions subject to Section 2.5 herein. Client acknowledges that CONEXIS is not an accounting or law firm and no services provided by CONEXIS in accordance with this Agreement should be construed as legal, accounting, or tax advice in providing administrative services under this Agreement.3.6 Customer Service and Electronic Administrative Services: Except during times of scheduled maintenance and company scheduled closures, CONEXIS shall provide telephonic or Web-based electronic access to:

i) Client Services personnel for Client Representative(s) during CONEXIS’ standard business hours (8:00 AM – 5:00 PM Central Time) Monday through Friday (telephonic support);

ii) Participant Services personnel for Client’s Qualified Beneficiaries (“Continuants”) and Participants (7:00 AM to 7:00 PM Central Time) Monday through Friday (telephonic support);

iii) Administrative Services support twenty-four (24) hours per day, seven (7) days per week for Client’s Representatives, Participants and Continuants (Web-based electronic access).

3.7 Indemnify Client: CONEXIS agrees to indemnify, defend, and hold harmless Client, its officers, directors and employees from and against all lossesLosses (as defined in Section 2.5 above), liabilities, damages, expenses including reasonable attorneys’ fees (that are awarded from a court of competent jurisdiction) (“Losses”) arising out of CONEXIS’ material breach of the standard of care set forth in this Agreement or out its criminal or willful misconduct. Notwithstanding the foregoing, CONEXIS will not be liable to Client in a breach of contract claim for other than monetary, compensatory damages that are reasonably foreseeable and ascertainable, regardless of whether or not CONEXIS was informed of the possibility of such damages. CONEXIS further agrees to indemnify and hold harmless Client, its officers, directors and employees from any Losses claim, demand, or expense arising from the negligent any act or omission or willful misconduct of a subcontractor of CONEXIS who assists CONEXIS with the performance of its duties under this Agreement. The foregoing indemnification right is contingent upon Client satisfying Section 4.17 herein.3.8 Personnel. CONEXIS represents that all individuals performing the Services (the “Personnel”) are qualified to perform the Services and have been assigned by CONEXIS to work Client Company pursuant to this Agreement. Client has the right to request removal of any Personnel, which request shall be promptly reviewed. CONEXIS has conducted or will conduct, subject to and in accordance with applicable Federal, state and local law, reference and background checks on all Personnel prior to performing Services. CONEXIS shall not permit any Personnel to perform Services unless such Personnel have consented to and satisfied the required reference and background checks. CONEXIS shall be responsible for all costs associated with the foregoing reference and background checks. The reference and background checks shall include the following:

(i) verification of references and employment history; employment eligibility verficiation via the E-Verify system, address and address history;

(ii) verification of social security number and that each individual is a U.S. citizen or properly documented person legally able to perform the Services;

(iii) verification of criminal history and that each individual has satisfactorily passed a criminal background check; and(iv) verification that the individual is not on the Specially Designated Nationals (“SDN”) list maintained by the Office of

Foreign Assets Control of the U.S. Treasury Department.CONEXIS may use its employees or subcontractors to perform the Services, provided that if CONEXIS uses subcontractors (a) CONEXIS shall remain solely responsible for the proper performance of the Services and this Agreement and (b) CONEXIS shall be solely responsible for engaging and paying such subcontractors. CONEXIS hereby agrees to pay its subcontractors, laborers and suppliers in full on a timely basis.

SECTION 4. GENERAL PROVISIONS4.1 Entire Agreement: This Agreement embodies the entire understanding between CONEXIS and Client regarding the subject matter hereof and supersedes all prior and contemporaneous oral or written agreements relating to the same subject matter. Client further agrees that this Agreement supersedes any prior service agreement(s) between the Parties (or their predecessors) and acknowledges that the execution of this Agreement will serve as written notice of termination of such prior written agreement(s). 4.2 Severability: The provisions of this Agreement shall be severable and the invalidity or unenforceability of any provision(s) hereof shall not affect the validity or enforceability of the remaining provisions provided the basic purpose of this Agreement can still be achieved through the execution of the remaining valid provisions.4.3 Titles/Heading/Numbering: The titles/headings/numbering of the sections herein are for convenience of reference only and are not to be considered in construing this Agreement. CONEXIS Initials Client Initials

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Sony Pictures Entertainment, 01/25/13,
Per my note above in sec 2.5, we should have an Indemnity section outside the Client’s and Conexis’ duties. Usually, there is a stand-alone indemnity section and then the insurance requirements are underneath. I really think to delete both indemnity sections, put in our indemnity language as I stated in the comment in 2.5 above. .
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4.4 Waiver; Modification; Amendment: No waiver, modification or amendment of this Agreement shall be valid or binding unless the same is in writing and duly Executed by both Parties, except as otherwise set forth herein. 4.5 Assignment: Notwithstanding any acquisition or merger of either Party, neither Client nor CONEXIS may assign this Agreement without the other Party’s prior written consent, which such consent shall not be unreasonably withheld, conditioned, or delayed. Any attempt or purported assignment in violation of the foregoing shall be void. This Agreement shall be binding upon, and inure to the benefit of, the Parties and their respective successors and permitted assigns. 4.6 Confidential Information: In addition to the HIPAA BUSINESS ASSOCIATE ADDENDUM, Client and CONEXIS each acknowledge that in performance of this Agreement, each Party has and will continue to disclose to the other, proprietary and confidential information (“Confidential Information”). The term “Confidential Information” shall mean this Agreement and all data, trade secrets, and other information of any kind whatsoever that a Party (“Discloser”) discloses, in writing, orally, visually or in any other medium, to the other Party (“Recipient”) or to which Recipient obtains access and that relates to Discloser’s business or, in the case of CONEXIS, its customers or is otherwise identified by the Discloser as confidential or proprietary. A “writing” shall include an electronic transfer of information by e-mail, over the Internet or otherwise. Each of the Parties, as Recipient, hereby agrees that it will not, and will cause its employees, agents and subcontractors not to, disclose Confidential Information of the other Party, during or after the term of this Agreement, other than on a “need to know” basis and then only to: (a) affiliate employers (defined as a business entity now or hereafter controlled by, controlling or under common control with a Party); (b) employees; (c) officers; (d) agents and/or (e) subcontractors provided that any third parties who receive Discloser’s Confidential Information from Recipient or on behalf of Recipient are subject to a written confidentiality agreement that shall be no less restrictive than the provisions of this Section; and (f) as required by law or as otherwise expressly permitted by this Agreement. If Recipient is required by law to disclose Discloser’s Confidential Information, Recipient will promptly notify Discloser and reasonably cooperate with Discloser if Discloser takes action to prevent any such disclosure. Client further agrees that CONEXIS may communicate confidential, protected, privileged or otherwise sensitive information to Client through a named contact designated by Client (“Named Contact”) and specifically agrees to indemnify and hold harmless CONEXIS for any such communications directed to Client through the Named Contact attempted via facsimile, mail, telephone, email or any other media, acknowledging the possibility that such communications may be inadvertently misrouted or intercepted once CONEXIS has sent such to Client. The obligations of confidentiality in this Section shall not apply to any information that (i) Recipient rightfully has in its possession when disclosed to it, free of obligation to Discloser to maintain its confidentiality; (ii) Recipient independently develops without access to Discloser’s Confidential Information; (iii) is or becomes known to the public other than by breach of this Section or (iv) is rightfully received by Recipient from a third party without the obligation of confidentiality. Any combination of Confidential Information disclosed with information not so classified shall not be deemed to be within one of the foregoing exclusions merely because individual portions of such combination are free of any confidentiality obligation or are separately known in the public domain. Each Party hereby agrees that it will not disclose Confidential Information of the other Party during or after the Term of this Agreement, other than as necessary to satisfy its obligations herein or as otherwise permitted herein, and then only to, the Party’s affiliates, the Party’s employees, agents, officers, independent contractors, or subcontractor provided that subcontractor agrees to terms of confidentiality; and as required by law or as otherwise expressly permitted by this Agreement. 4.7 Disclosure of Individually Identifiable Health Information: Client and CONEXIS agree to protect the confidentiality of and to only use and disclose protected health information (as that term is defined in 45 C.F.R. 164.300) as set forth in the HIPAA BUSINESS ASSOCIATE ADDENDUM attached hereto and incorporated into and made a part of this Agreement. If there is a conflict between this Agreement and the HIPAA BUSINESS ASSOCIATE ADDENDUM, the HIPAA BUSINESS ASSOCIATE ADDENDUM will control with respect to its subject matter.4.8 Notices and Communications: All notices between Client and CONEXIS provided for herein shall be sent by confirmed facsimile; by guaranteed overnight mail, with tracing capability; by first class United States mail, with postage prepaid; or by email addressed to the other party at their respective addresses as set forth below for CONEXIS and on the signature page for the Client.

CONEXIS Benefits Administrators, LP Email: [email protected] North State Highway 161, Suite 400 FAX: 1.800.806.9112Irving, TX 75038

Notices shall be deemed provided when sent except as otherwise set forth in this Agreement. Emails sent to CONEXIS should be sent to the appropriate CONEXIS Service Representative or Contract Administration. Both Parties agree to

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Backman, Jordan, 01/25/13,
SPE Privacy Counsel to review.
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promptly notify the other of any changes in addresses and/or email addresses that neither party shall be responsible under this Agreement for notices sent prior to notification of a change in the address.4.9 Termination: If there is more than one Fee Schedule / Service Appendix attached hereto, termination of one Fee Schedule / Service Appendix will not terminate the entire Agreement, but termination of the Agreement will terminate all Fee Schedules / Service Appendixes.

a. Agreement -- Either Party may terminate this Agreement or a Fee Schedule/Service Appendix without a showing of cause by providing sixty (60) days prior written notice to the other Party. Termination without cause will be effective on the last day of the month following the 60-day period the notice was provided by terminating Party or the end of such longer period set forth in the notice of termination. Client acknowledges that termination of a Fee Schedule / Service Appendix without cause prior to the expiration of a Service Fee Guarantee Period will result a financial penalty defined in Section 4.9b.

b.Fee Schedule / Service Appendix – Client understands and acknowledges that CONEXIS is entitled to reimbursement of implementation costs and expenses (“Implementation Expenses”) not otherwise passed on to Client if this Agreement or the Fee Schedule/Service Appendix is terminated by Client without show of cause within the Service Fees Guarantee Period of any Fee Schedule / Service Appendix. In the event CONEXIS is entitled to reimbursement of Implementation Expenses herein, Client agrees to pay the implementation fee to CONEXIS within thirty (30) days of the termination effective date.

Notwithstanding anything to the contrary, CONEXIS may terminate this Agreement with thirty (30) days prior written notice if Client is past due on any undisputed material amounts that it owes hereunder and fails to cure within that thirty (30) day period. If CONEXIS agrees to reinstate services following notice of termination, Client acknowledges that CONEXIS may charge a reasonable reinstatement fee. Either party may terminate this Agreement immediately, by providing written notice to the other if: (i) such other party becomes insolvent, makes a general assignment for the benefit of creditors, suffers, or permits the appointment of a receiver for its business or assets or (ii) becomes subject to any proceedings under Bankruptcy or insolvency law of which does not result in a reorganization (ii) fails to cure a material breach within thirty (30) days following written notice from the non-breaching party of the breach. Termination of this Agreement will not terminate the rights or obligations of either party arising prior to the effective date of such termination. Upon termination of this Agreement, or earlier upon Client’s request, CONEXIS shall deliver to Client all items requested by Client containing any Confidential Information as described herein or make such other disposition thereof as Client may direct in writing; provided, however, CONEXIS may retain an archival copy required to be retained under its record retention management policy or applicable law. 4.10 Interpretations: Client and CONEXIS agree that this Agreement’s terms will be construed fairly and not in favor of or against a party based solely on which party drafted the Agreement’s terms. 4.11 Governing Law: This Agreement will be governed by and construed in accordance with the laws of the state of Texas California without regard for conflicts of law principles. Any proceeding initiated by CONEXIS to enforce this Agreement or enjoin its breach shall be initiated and prosecuted in a federal or state court of general jurisdiction sitting in the county and state in which Client’s headquarters are located. Any such proceeding initiated by Client shall be initiated and prosecuted in a federal or state court of general jurisdiction sitting in Dallas County, Texas.All actions or proceedings arising in connection with, touching upon or relating to this Agreement, the breach thereof and/or the scope of the provisions of this Section 4.11 (a “Proceeding”) shall be submitted to JAMS (“JAMS”) for binding arbitration under its Comprehensive Arbitration Rules and Procedures if the matter in dispute is over $250,000 or under its Streamlined Arbitration Rules and Procedures if the matter in dispute is $250,000 or less (as applicable, the “Rules”) to be held solely in Los Angeles, California, U.S.A., in the English language in accordance with the provisions below.

4.11.1 Each arbitration shall be conducted by an arbitral tribunal (the “Arbitral Board”) consisting of a single arbitrator who shall be mutually agreed upon by the parties. If the Parties are unable to agree on an arbitrator, the arbitrator shall be appointed by JAMS. The arbitrator shall be a retired judge with at least ten (10) years’ experience in commercial matters. The Arbitral Board shall assess the cost, fees and expenses of the arbitration against the losing Party, and the prevailing Party in any arbitration or legal proceeding relating to this Agreement shall be entitled to all reasonable expenses (including, without limitation, reasonable attorney’s fees). Notwithstanding the foregoing, the Arbitral Board may require that such fees be borne in such other manner as the Arbitral Board determines is required in order for this arbitration clause to be enforceable under applicable law. The Parties shall be entitled to conduct discovery in accordance with Section 1283.05 of the California Code of Civil Procedure, provided that (a) the Arbitral Board must authorize all such discovery in advance based on findings that the material sought is relevant to the issues in dispute and that the nature and scope of such discovery is reasonable under the circumstances, and (b) discovery shall be limited to

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Backman, Jordan, 01/25/13,
The implementation fee needs to be stated in the contract and any requirement to pay these fees should scale down over initial term of the contract.
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depositions and production of documents unless the Arbitral Board finds that another method of discovery (e.g., interrogatories) is the most reasonable and cost efficient method of obtaining the information sought.

4.11.2 There shall be a record of the proceedings at the arbitration hearing and the Arbitral Board shall issue a Statement of Decision setting forth the factual and legal basis for the Arbitral Board's decision. If neither party gives written notice requesting an appeal within ten (10) business days after the issuance of the Statement of Decision, the Arbitral Board's decision shall be final and binding as to all matters of substance and procedure, and may be enforced by a petition to the Los Angeles County Superior Court or, in the case of Supplier, such other court having jurisdiction over Supplier, which may be made ex parte, for confirmation and enforcement of the award. If either Party gives written notice requesting an appeal within ten (10) business days after the issuance of the Statement of Decision, the award of the Arbitral Board shall be appealed to three (3) neutral arbitrators (the "Appellate Arbitrators"), each of whom shall have the same qualifications and be selected through the same procedure as the Arbitral Board. The appealing Party shall file its appellate brief within thirty (30) days after its written notice requesting the appeal and the other Party shall file its brief within thirty (30) days thereafter. The Appellate Arbitrators shall thereupon review the decision of the Arbitral Board applying the same standards of review (and all of the same presumptions) as if the Appellate Arbitrators were a California Court of Appeal reviewing a judgment of the Los Angeles County Superior Court, except that the Appellate Arbitrators shall in all cases issue a final award and shall not remand the matter to the Arbitral Board. The decision of the Appellate Arbitrators shall be final and binding as to all matters of substance and procedure, and may be enforced by a petition to the Los Angeles County Superior Court or, in the case of Supplier, such other court having jurisdiction over Supplier, which may be made ex parte, for confirmation and enforcement of the award. The party appealing the decision of the Arbitral Board shall pay all costs and expenses of the appeal, including the fees of the Appellate Arbitrators and the reasonable outside attorneys' fees of the opposing party, unless the decision of the Arbitral Board is reversed, in which event the costs, fees and expenses of the appeal shall be borne as determined by the Appellate Arbitrators.

4.11.3 Subject to a Party's right to appeal pursuant to the above, neither Party shall challenge or resist any enforcement action taken by the Party in whose favor the Arbitral Board, or if appealed, the Appellate Arbitrators, decided. Each Party acknowledges that it is giving up the right to a trial by jury or court. The Arbitral Board shall have the power to enter temporary restraining orders and preliminary and permanent injunctions. Neither Party shall be entitled or permitted to commence or maintain any action in a court of law with respect to any matter in dispute until such matter shall have been submitted to arbitration as herein provided and then only for the enforcement of the Arbitral Board’s award; provided, however, that prior to the appointment of the Arbitral Board or for remedies beyond the jurisdiction of an arbitrator, at any time, either Party may seek pendente lite relief in a court of competent jurisdiction in Los Angeles County, California or, if sought by Company, such other court that may have jurisdiction over Supplier, without thereby waiving its right to arbitration of the dispute or controversy under this section. Notwithstanding anything to the contrary herein, CONEXIS hereby irrevocably waives any right or remedy to seek and/or obtain injunctive or other equitable relief or any order with respect to, and/or to enjoin or restrain or otherwise impair in any manner, the production, distribution, exhibition or other exploitation of any motion picture, production or project related to Client, its parents, subsidiaries and affiliates, or the use, publication or dissemination of any advertising in connection with such motion picture, production or project. All arbitration proceedings (including proceedings before the Appellate Arbitrators) shall be closed to the public and confidential and all records relating thereto shall be permanently sealed, except as necessary to obtain court confirmation of the arbitration award. The provisions of this Section 4.11 shall supersede any inconsistent provisions of any prior agreement between the Parties.

4.11.4 Attorneys’ Fees. In the event of any litigation between the Parties hereto with respect to this Agreement, the prevailing Party (the Party entitled to recover the costs of suit, at such time as all appeals have been exhausted or the time for taking such appeals has expired) shall be entitled to recover reasonable attorneys' fees in addition to such other relief as the court may award.

4.12 No Third Party Beneficiaries: Nothing express or implied in this Agreement is intended to confer upon any person other than Client and CONEXIS and their respective successors or assigns, any rights, remedies or obligations whatsoever. 4.13 Force Majeure: Neither CONEXIS and nor Client will not be deemed in default of this Agreement, nor held responsible for, any cessation, interruption or delay in the performance of its their respective obligations to provide such services hereunder due to causes beyond its the non-performing Party’s reasonable control, including, but not limited to, natural disaster, act of God, labor controversy, civil disturbance, disruption of the public markets, terrorism, war or armed

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conflict, or the inability to obtain sufficient materials or services required in the conduct of its business from CONEXIS’ vendors or other parties, including Intranet or Internet access, or any change in or the adoption of any law, judgment or decree. This clause shall not apply to Client’s obligations to pay CONEXIS’ fees related to this Agreement nor shall it apply to CONEXIS’s obligations to provide the Services to the extent CONEXIS failed to take commercially reasonable precautions to mitigate the risk of loss to Client as a result of such force majeure event..4.14 Warranties and Representations: Each of CONEXIS and Client represents and warrants the following: (i) The Parties it will comply with applicable law in carrying out their its respective obligations hereunder; (ii) Its agreement to it agrees that each provision contained in this Agreement is a duly authorized, legal, valid, binding and enforceable Agreement. and (iii) The its signature appearing for the Client on this Agreement is the true signature of a person authorized to execute the Agreement on its behalf of the Client with respect to the Services, (iv) The Client will not instruct CONEXIS to perform any service or perform a service in any manner that it knows or reasonably should know will violate applicable law.4.15 Intellectual Properties: CONEXIS retains all rights, title, and interest in and to all software, web pages, web services, documents, processes and any other information, equipment, and materials (including with no limitation the intellectual property rights) used in connection with the providing of services identified in this Agreement, including those developed by CONEXIS for use by Client and their employees. 4.16 Survival: In the event of expiration or termination of this Agreement, the Indemnity Sections 2.5, and 3.7 and 4.17; Confidentiality and Privacy Provisions Section 4.6, the HIPAA Section 4.7; and the Recordkeeping Section 3.1, the Governing Law Section 4.11, the Limitation of Liability Section 4.18, the Severability Section 4.2 and the Waiver Section 4.4 of this Agreement shall survive its termination.

4.17 INDEMNIFICATION: SPE’s indemnity language should go here.4.17 4.18 Indemnification Notice: If any civil, criminal, administrative or investigative action or proceeding (each, a “Claim”) is commenced against any Party entitled to indemnifications hereunder (an “ Indemnified Party”), written notice thereof shall be given to the party that is obligated to provide indemnification (the “Indemnifying Party”) as promptly as practicable but in any event within thirty (30) days. After such notice, if the Indemnifying Party shall acknowledge in writing to such Indemnified Party that this Agreement applies with respect to such Claim, then the Indemnifying Party shall be entitled, if it so elects, in a written notice delivered to the Indemnified Party not less than 10 days prior to the date on which a response to such Claim is due, to take control of the defense and investigation of such Claim and to employ and engage attorneys of its choice to handle and defend the same, at the Indemnifying Party’s sole cost and expense. The Indemnified Party shall cooperate in all reasonable respects with the Indemnifying Party and its attorneys in the investigation, trial and defense of such Claim and any appeal arising there from; provided, however, that the Indemnified Party may, at its own cost and expense, participate, through its attorneys or otherwise, in such investigation, trial and defense of such Claim and any appeal arising there from. No settlement of a Claim that involves a remedy other than the payment of money by the Indemnifying Party shall be entered into without the consent of the Indemnified Party. After written notice by the Indemnifying Party to the Indemnified Party of its election to assume full control of the defense of any such Claim, the Indemnifying Party shall not be liable to the Indemnified Party for any legal expenses incurred thereafter by such Indemnified Party in connection with the defense of that Claim. If the Indemnifying Party does not assume full control over the defense of a Claim subject to such defense as provided hereunder, the Indemnifying Party may participate in such defense, at its sole cost and expense, and the Indemnified Party shall have the right to defend the Claim in such manner as it may deem appropriate, at the cost and expense of the Indemnifying Party.

4.1 9 INSURANCE: Prior to the performance of any service hereunder by Conexis, Conexis shall, at its own expense, procure and maintain the following insurance coverage in full force and effect throughout the term of this Agreement unless otherwise stated below:

a) A Commercial General Liability Insurance Policy with a limit of not less than $3 million per occurrence and $3 million in the aggregate, including Contractual Liability, and a Business Automobile Liability Policy (including owned, non-owned, and hired vehicles) with a combined single limit of not less than $1 million.

b) Professional Liability Insurance to include but not be limited to Intellectual Property Infringements; Networks Security Liability and Data Privacy Liability with limits of not less than $10 million for each occurrence and $10 million in the aggregate. If this policy or policies in this section 4.18

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Sony Pictures Entertainment, 01/25/13,
Insurance reqs 14.9
Sony Pictures Entertainment, 01/25/13,
This section should be changed to 4.18
Sony Pictures Entertainment, 01/25/13,
Have ONE indemnity section here with SPE’s language. Section would be 4.17
Backman, Jordan, 01/25/13,
IP Counsel needs to review.
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b) is/are written on a claims-made basis, it/they shall be in full force and effect throughout the term of this Agreement and three (3) years after the expiration and termination of this Agreement.

(An Umbrella or Following Form Excess Liability Insurance Policy will be acceptable to achieve the liability limits required in clauses 1.1 and 1.2 above)

c) Workers’ Compensation Insurance with statutory limits to include Employer’s Liability with a limit of not less than $1 million.

d) Crime Policy or Fidelity Bond for employee theft and dishonesty including third party property coverage in limits of not less than $250,000, which shall be included on the Certificate of Insurance with all other insurance requirements.

e) The policies referenced in the foregoing clauses 4.18 a) and b) shall be endorsed to include Sony Pictures Entertainment Inc., et al, its parent(s), subsidiaries, licensees, successors, related and affiliated companies, and its officers, directors, employees, agents, representatives and assigns (collectively, including Company, the “Affiliated Companies”) as an additional insured by endorsementand shall contain a Severability of Interest Clause. The policy referenced in the foregoing clause 4.18 c) shall provide a Waiver of Subrogation endorsement in favor of the Affiliated Companies, and all of the above referenced liability policies shall be primary insurance in place and stead of any insurance maintained by Client. No insurance of Conexis shall be co-insurance, contributing insurance or primary insurance with Client’s insurance. Conexis’ insurance companies shall be licensed to do business in the state(s) and/or country(ies) where services are to be performed for Client and will have an A.M. Best Guide Rating of at least A:VII or better. Any insurance company of the Conexis with a rating of less than A:VII will not be acceptable to the Client. Conexis is solely responsible for all deductibles and/or self insured retentions under their policies.

f) Conexis agrees to deliver to Client upon execution of this Agreement Certificates of Insurance and endorsements evidencing the insurance coverage herein required. Each such Certificate of Insurance and endorsement shall be signed by an authorized representative or underwriter of the applicable insurance company, shall provide a written notice of cancellation per the policy provisions of Conexis’ insurance policies and are primary and non-contributing to any insurance maintained by Client. Renewal certificates and endorsements will be provided by the Conexis to the Client at least seven (7) days prior to the expiration of Conexis’ insurance policies. Failure of Conexis to maintain the Insurances required under this section or to provide Certificates of Insurance, endorsements or other proof of such Insurances reasonably requested by Client shall be a breach of this Agreement and, in such event, Client shall have the right at its option to terminate this Agreement without penalty. Client shall have the right to designate its own legal counsel to defend its interests under said insurance coverage at the usual rates for said insurance companies in the community in which any litigation is brought.

4.18 4. 20 Limitation of Liability. IN NO EVENT OR UNDER ANY CIRCUMSTANCE SHALL ANY PARTY BE LIABLE TO ANOTHER PARTY FOR ANY LOSS OF PROFITS OR INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY KIND WHATSOEVER EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED, HOWEVER, THAT THE FOREGOING SHALL NOT BE INTERPRETED TO LIMIT INDEMNIFICATION FOR ANY DAMAGES ASSESSED IN FAVOR OF A THIRD PARTY IN CONNECTION WITH A CLAIM AGAINST AN INDEMNIFIED PARTY TO THE EXTENT THE INDEMNIFIED PARTY IS OTHERWISE ENTITLED TO INDEMNIFICATION HEREUNDER.

4.19. COMPLIANCE WITH THE FCPA

4.19.1 It is the policy of Client to comply fully with the U.S. Foreign Corrupt Practices Act, 15 U.S.C. Section 78dd-1 and 78dd-2 (“FCPA”), and any other applicable anti-corruption laws (“Anti-Corruption Laws”). CONEXIS hereby represents and warrants that it is aware of the FCPA, which prohibits the bribery of public officials of any nation. CONEXIS Initials Client Initials

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Sony Pictures Entertainment, 01/25/13,
Not sure I know what this means. What about damages we suffer due to Conexis’ negligence? That’s not capped is it?
Sony Pictures Entertainment, 01/25/13,
Change section #s. starting here. Change to 4.20 and re-number rest of the Agreement
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4.19.2 CONEXIS agrees strictly to comply with Anti-Corruption Laws. Any violation of Anti-Corruption Laws by CONEXIS will entitle Client immediately to terminate this Agreement.

4.19.3 CONEXIS understands that offering or giving a bribe or anything of value to a public official of any nation is a criminal offense. CONEXIS hereby explicitly represents and warrants that neither CONEXIS, nor, to the knowledge of CONEXIS, anyone acting on behalf of CONEXIS (including, but not limited to, the Personnel), has taken any action, directly or indirectly, in violation of Anti-Corruption Laws. CONEXIS further represents and warrants that it will take no action, and has not in the last 5 years been accused of taking any action, in violation of Anti-Corruption Laws. CONEXIS further represents and warrants that it will not knowingly cause any party to be in violation of Anti-Corruption Laws. CONEXIS also agrees to advise all those persons and/or parties supervised by it (including, but not limited to, the Personnel) of the requirements of the FCPA. This representation includes, without limitation, making an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as that term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office in contravention of the FCPA.

4.19.4 CONEXIS further represents and warrants that, should it learn of or have reason to know of any request for payment that is inconsistent with clause 13.2 or 13.3 herein or Anti-Corruption Laws, CONEXIS shall promptly notify Client of the request.

4.19.5 CONEXIS further represents and warrants that CONEXIS is not a foreign official, as defined under the FCPA, does not represent a foreign official, and that CONEXIS will not share any fees or other benefits of this contract with a foreign official in contravention of the FCPA.

4.19.6 In the event Client has reasonable grounds to suspect CONEXIS has violated this Agreement or the provisions of Anti-Corruption Laws, Client shall be entitled partially or totally to suspend the performance hereof, without thereby incurring any liability, whether in contract or tort or otherwise, to CONEXIS or any third party. Such suspension shall become effective forthwith upon notice of suspension by Client to CONEXIS, and shall remain in full force and effect until an inquiry reveals, to the reasonable satisfaction of Client, that CONEXIS has not violated this Agreement or any of the provisions of Anti-Corruption Laws.

4.20 DATA PRIVACY AND INFORMATION SECURITY

4.20.1 To the extent that Client or Client’s Affiliates provides to Conexis, or Conexis otherwise accesses Personal Data (as defined below) about Client’s employees, customers, or other individuals in connection with this Agreement, Conexis represents and warrants that: (i) Conexis will only use Personal Data for the purposes of fulfilling its obligations under the Agreement, and Conexis will not disclose or otherwise process such Personal Data except upon Client’s instructions in writing; (ii) Conexis will notify Client in writing and obtain Client’s consent before sharing any Personal Data with any government authorities or other third parties; and (iii) Conexis agrees to adhere to additional contractual terms and conditions related to Personal Data as Client may instruct in writing that Client deems necessary, in its sole discretion, to address applicable data protection, privacy, or information security laws or requirements.

4.20.2 In the event that (i) any Confidential Information or Personal Data is disclosed by Conexis (including its agents or subcontractors), in violation of this Agreement or applicable laws pertaining to privacy or data security, or (ii) Conexis (including its agents or Subcontractors) discovers, is notified of, or suspects that unauthorized access, acquisition, disclosure or use of Confidential Information or Personal Data has occurred (“Security Incident”), Conexis shall notify Client in writing without unreasonable delay, but not longer than forty eight (48) hours following its discovery of any incident that, in Conexis’s reasonable determination, constitutes any such Security Incident. Conexis shall cooperate fully in the investigation of the Security Incident, indemnify and hold Client harmless for any and all damages, losses, fees or costs (whether direct, indirect, special or consequential) incurred as a result of such Security Incident, and remedy any harm or potential harm caused by such Security Incident.

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4.20.3 To the extent that a Security Incident gives rise to a need, in Client’s sole judgment, to provide (A) notification to public authorities, individuals, or other persons, or (B) undertake other remedial measures (including, without limitation, notice, credit monitoring services and the establishment of a call center to respond to inquiries (each of the foregoing a "Remedial Action")), at Client’s request, Conexis shall, at Conexis’s cost, undertake such Remedial Actions. The timing, content and manner of effectuating any notices shall be mutually agreed upon by the parties.

4.20.4 To the extent that Client provides to Conexis, or Conexis otherwise accesses Confidential Information or Personal Data about Client’s employees, customers, or other individuals in connection with this Agreement, Conexis shall implement a written information security program (“Information Security Program”) that includes administrative, technical, and physical safeguards that ensure the confidentiality, integrity, and availability of Confidential Information and Personal Data, protect against any reasonably anticipated threats or hazards to the confidentiality, integrity, and availability of the Confidential Information and Personal Data, and protect against unauthorized access, use, disclosure, alteration, or destruction of the Confidential Information and Personal Data. In particular, the Conexis’s Information Security Program shall include, but not be limited, to the following safeguards where appropriate or necessary to ensure the protection of Confidential Information and Personal Data:

4.20.5 Access Controls – policies, procedures, and physical and technical controls: (i) to limit physical access to its information systems and the facility or facilities in which they are housed to properly authorized persons; (ii) to ensure that all members of its workforce who require access to Confidential Information or Personal Data have appropriately controlled access, and to prevent those workforce members and others who should not have access from obtaining access; (iii) to authenticate and permit access only to authorized individuals and to prevent members of its workforce from providing Confidential Information or Personal Data or information relating thereto to unauthorized individuals; and (iv) to encrypt and decrypt Confidential Information and Personal Data where appropriate.

4.20.6 Security Awareness and Training – a security awareness and training program for all members of Conexis’s workforce (including management), which includes training on how to implement and comply with its Information Security Program.

4.20.7 Security Incident Procedures – policies and procedures to detect, respond to, and otherwise address security incidents, including procedures to monitor systems and to detect actual and attempted attacks on or intrusions into Confidential Information or Personal Data or information systems relating thereto, and procedures to identify and respond to suspected or known security incidents, mitigate harmful effects of security incidents, and document security incidents and their outcomes.

4.20.8 Contingency Planning – policies and procedures for responding to an emergency or other occurrence (for example, fire, vandalism, system failure, and natural disaster) that damages Confidential Information or Personal Data or systems that contain Confidential Information or Personal Data, including a data backup plan and a disaster recovery plan.

4.20.9 Device and Media Controls – policies and procedures that govern the receipt and removal of hardware and electronic media that contain Confidential Information or Personal Data into and out of a Conexis facility, and the movement of these items within a Conexis facility, including policies and procedures to address the final disposition of Confidential Information and Personal Data, and/or the hardware or electronic media on which it is stored, and procedures for removal of Confidential Information and Personal Data from electronic media before the media are made available for re-use.

4.20.10 Audit controls – hardware, software, and/or procedural mechanisms that record and examine activity in information systems that contain or use electronic information, including appropriate logs and reports concerning these security requirements and compliance therewith.

4.20.11 Data Integrity – policies and procedures to ensure the confidentiality, integrity, and availability of Confidential Information and Personal Data and protect it from disclosure, improper alteration, or destruction.

4.20.12 Storage and Transmission Security – technical security measures to guard against unauthorized access to Confidential Information or Personal Data that is being transmitted over an electronic communications network, including a mechanism to encrypt electronic information whenever appropriate, such as while in transit or in storage on networks or systems to which unauthorized individuals may have access.

4.20.13 Secure Disposal – policies and procedures regarding the disposal of Confidential Information and Personal Data, and tangible property containing Confidential Information or Personal Data, taking into

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account available technology so that Confidential Information and Personal Data cannot be practicably read or reconstructed.

4.20.14 Assigned Security Responsibility – Conexis shall designate a security official responsible for the development, implementation, and maintenance of its Information Security Program. Conexis shall inform Client as to the person responsible for security.

4.20.15 Testing – Conexis shall regularly test the key controls, systems and procedures of its Information Security Program to ensure that they are properly implemented and effective in addressing the threats and risks identified. Tests should be conducted or reviewed by independent third parties or staff independent of those that develop or maintain the security programs.

4.20.16 Adjust the Program – Conexis shall monitor, evaluate, and adjust, as appropriate, the Information Security Program in light of any relevant changes in technology or industry security standards, the sensitivity of the Confidential Information and/or Personal Data, internal or external threats to Conexis or the Confidential Information or Personal Data, requirements of applicable work orders, and Conexis’s own changing business arrangements, such as mergers and acquisitions, alliances and joint ventures, outsourcing arrangements, and changes to information systems.

4.20.17 Data Retention – Appropriate retention and disposition of Confidential Information or Personal Data as required by applicable data protection laws. In the event that a time period is not specified by the law, then the following retention periods shall be adhered to: Inactivity: for each account that has experienced twelve (12) months of inactivity (i.e. no successful logins), within 30 days after the 12th month of inactivity, the account shall be terminated and the Confidential Information or Personal Data permanently purged. Terminated: When an account is terminated, the Confidential Information or Personal Data associated with the account shall be retained for no longer than ninety (90) days (Post-Termination Window). [ Immediately upon an Inactivity termination or expiration of a Post-Termination Window, all Confidential Information or Personal Data related to applicable account, shall be permanently purged.

4.20.18 Client may request upon ten days written notice to Conexis access to facilities, systems, records and supporting documentation in order to audit Conexis’s compliance with its obligations under or related to the Information Security Program. Audits shall be subject to all applicable confidentiality obligations agreed to by Client and Conexis, and shall be conducted in a manner that minimizes any disruption of Conexis’s performance of services and other normal operations.

4.20.19 Personal Data means individually identifiable information from or about an individual including, but not limited to (i) social security number; (ii) credit or debit card information, including card number, expiration date, and data stored on the magnetic strip of a credit or debit card; (iii) financial account information, including the ABA routing number, bank account number, retirement account number; (iv) driver’s license, passport, taxpayer, military, or state identification number; (v) medical, health or disability information, including insurance policy numbers, (vi) passwords, fingerprints, biometric data, or (vii) other data about an individual, including first and last name; home or other physical address, including street name and name of city or town; email address or other online contact information, such as an instant messaging user identifier or a screen name, that reveals an individual’s email address; and telephone number.

Section 5.0 Performance Standards and Guarantee

Performance Standards and Guarantees are only available to those Clients who have a fully Executed Services Agreement on file with CONEXIS.

5.1 In consideration of the mutual promises set forth below and for the fees set forth in the Fee Schedule, Client and CONEXIS agree as follows:

5.1.1 “Calendar Quarter” will mean each quarter of a calendar year (e.g., Jan. 1 – Mar. 31; Apr 1 – Jun 30; Jul 1 – Sep. 30; Oct. 1 – Dec. 31).

5.1.2 “Percentage at Risk for Service Fee Reduction” will mean the percentage of the monthly fee that may be reduced as a result of failing to meet the particular Performance Standard in a Calendar Quarter.

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5.1.3 “Performance Standard” will mean specific standards, described in the Exhibit, which is part of the attached Services Appendix for each described service to which CONEXIS has committed to meet or exceed for all similarly situated Clients in each Calendar Quarter.

5.1.4 “Quarterly Performance Report” will mean the specific report, delivered to Client for each Calendar Quarter, which contains CONEXIS’ actual performance against each Performance Standard for Client. The Quarterly Performance Report will be formatted as CONEXIS deems appropriate.

5.1.5 “Performance Standards Effective Date” will be the first Calendar Quarter following the execution of the Services Agreement.

5.1.6 “Service Fee Reduction” will mean the total amount of reduction of monthly Service Fees, as defined in the Agreement, based on CONEXIS failing to meet one or more Performance Standards, in accordance with the Exhibit attached to the appropriate Service Appendix describing the three services offered with performance standards. The Service Fee Reduction is calculated by adding the percentages associated with each Performance Standard not met by CONEXIS. Then multiplying that percentage by the total of monthly Service Fees invoiced by CONEXIS to the Client for that particular Calendar Quarter for that particular service CONEXIS is performing for Client. In no case shall the percentage available for Service Fee Reduction exceed 10% as indicated in the Performance Standards Exhibit for any given Calendar Quarter.

5.2 CONEXIS’ Responsibilities. CONEXIS will measure its performance against all of the Performance Standards in each Calendar Quarter. CONEXIS will adopt standard processes and procedures for measuring timeliness, resolution of inquiries, call abandonment, and accuracy and all other Performance Standards described in the Exhibit. CONEXIS retains final authority for determining whether one or more Performance Standards have been met but will consider any reasonable objections made by Client within ten (10) business days of the issuance of the Quarterly Performance Report, in accordance with the Performance Standards Exhibit. In no event will CONEXIS be in breach of the Agreement into which this Exhibit is incorporated or of any standard of care solely by reason of failing to meet a Performance Standard set forth herein.

On or about forty-five (45) calendar days after the end of each Calendar Quarter, CONEXIS will distribute the Quarterly Performance Report to the Client.

CONEXIS will refund the Service Fee Reduction to Client for any missed Performance Standard(s) in accordance with this Performance Standards Exhibit, by applying such Service Fee Reduction as a one-time credit against future Services Fees in the following Calendar Quarter. For example, a Service Fee Reduction in the 1st Calendar Quarter of a given year would be applied to Service Fees in the 2nd Calendar Quarter. If CONEXIS is not able to perform services under this Agreement due to a force majeure event as defined in Section 4.13 or other serious event beyond its reasonable control (such as but not limited to, severe weather conditions that delay the opening or cause the closing of a CONEXIS facility), then at CONEXIS sole discretion, the standards set forth in this Exhibit shall not apply during the period that CONEXIS is unable to perform.

5.3 Client Responsibilities. Client is responsible for reviewing the Quarterly Performance Report and addressing any definitions, concerns, or objections to the contents of the Quarterly Performance Report with the appropriate CONEXIS Client Services Manager within tenthirty (1030) business days of following the issuance of the Quarterly Performance Report.Client’s right to any Service Fee Reduction is conditioned upon Client paying all undisputed Service Fees in that particular Calendar Quarter in full and when due, in accordance with the Agreement. In the event that a Service Fee Reduction was otherwise due but the Agreement was subsequently terminated due to failure of Client to pay all undisputed Service Fees, the Service Fee Reduction shall not be applied and CONEXIS shall be eligible to recover all undisputed Service Fees and applicable penalties and interest due without regard to the Service Fee Reduction.

Client’s right to any Service Fee Reduction is also conditioned on remaining an active Client on the date that CONEXIS distributes the Quarterly Performance Report to Client.

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This is not agreeable because this will incentivize Conexis not to perform following any notice by Client that we intend to terminate the contract.
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5.4 Performance Standards. These Performance Standards apply to the Services Agreement, only to the extent that CONEXIS is providing such Services to the Client, and the Client is paying CONEXIS directly for this service as indicated in the Fee Schedule – Schedule of Service Fees. CONEXIS reserves the right to modify or eliminate one or more Performance Standards or Service Fee Reductions, as long as such modifications or elimination does not impact the quality of service or performance of the standards, upon 30 day written notice to Client prior to the next Calendar Quarter.

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Any change in the performance standards or fee reductions should be accompanied by a price decrease since this is a material term of the agreement and the pricing.
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Client and CONEXIS have caused this Agreement to be Executed in their names by their undersigned officers or authorized representatives, the same being duly authorized to do so.

Client/Company FAX: Client/Contact Email:

Client/Company Name: Client/Company Address:

CONEXIS Benefits Administrators, LP

Eva Boucher, CCEP Client Authorized SignatureSr. VP, Chief Compliance Officer

Printed Name and Title

Date: Date:

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HIPAA BUSINESS ASSOCIATE ADDENDUMDirect Client

Client Name (“Employer”):      Sony Pictures Entertainment

Date (“Effective Date”):       January 1, 20    13 This HIPAA BUSINESS ASSOCIATE ADDENDUM (the “Addendum”) is entered into by and between Employer in its individual capacity and on behalf of its group health plan(s) (“Plan”) administered pursuant to this Agreement and CONEXIS Benefit Administrators, L.P., (“CONEXIS”) in its capacity as both the Plan’s and Employer’s service provider as of the Effective Date. This Addendum is incorporated into and made a part of the Services Agreement between CONEXIS and Employer (“Agreement”). This Agreement is intended to comply with the privacy and administrative simplification requirements set forth in 45 CFR Parts 160, 162, and 164, issued pursuant to the Health Insurance Portability and Accountability Act of 1996, Public Law 104-191 (“HIPAA”).

Both Employer and CONEXIS acknowledge that the Plan and Employer are separate and distinct entities and that CONEXIS may perform services both on behalf of the Plan and also on behalf of Employer in its capacity as Plan sponsor. CONEXIS is considered a “Business Associate” with respect to services it performs on behalf of the Plan, if any, and an “Agent of Employer” with respect to services it performs on behalf of Employer, if any. This Addendum sets forth the responsibilities of CONEXIS in its capacity as a Business Associate, as required by 45 CFR § 164.504(e)(1) and in its capacity as Agent of Employer, as required by 45 CFR § 164.504(f)(2)(ii)(B).

CONEXIS recognizes that in the course of performing some of the services, it will have access to, create, and/or receive from the Plan Protected Health Information (“PHI”). For purposes herein, PHI shall be limited to the information created or received from the Plan or on the Plan’s behalf by CONEXIS. Whenever used in this Addendum, other capitalized terms shall have the respective meaning set forth below, unless a different meaning shall be clearly required by the context. In addition, other capitalized terms used in this Addendum, but not defined herein, shall have the same meaning, as those terms are defined in HIPAA.

If there is a conflict between the Agreement and this Addendum with regard to the subject matter herein, this Addendum controls.

I. Definitions

For purposes of this Agreement:

“Designated Record Set” will have the same meaning given to the term “designated record set” in 45 CFR §164.501.

“Electronic Data Interchange Rule” shall mean the rules regarding standard transactions and code sets set forth in 45 C.F.R. Parts 160, 162 and 164, as may thereafter be amended.

“Group Health Plan” will have the same meaning as the term “group health plan” in 45 CFR § 160.103.

“Individual” will have the same meaning as the term “individual” in 45 CFR §160.103 and will include a person who qualifies as a personal representative in accordance with 45 CFR §164.502(g).

“Privacy Breach” will have the same meaning as “Breach” set forth in 45 CFR §164.402.

“Privacy Rule” will mean the Standards for Privacy of Individually Identifiable Health Information in 45 CFR Part 160 and Part 164, Subparts A and E.

“Protected Health Information” or “PHI” will have the same meaning as the term “protected health information” in 45 CFR §160.103, limited to the information created or received by CONEXIS from or on behalf of the Plan.

“Required by Law” will have the same meaning as the term “required by law” in 45 CFR § 164.103.

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“Secretary” will mean the Secretary of the Department of Health and Human Services or his designee.

“Security Incident” will have the same meaning as the term “security incident” in 45 CFR § 164.304.

“Security Rule” will mean the Security Standards for the Protection of Electronic Protected Health Information in 45 CFR § 164.302 et seq.

“Unsecured Protected Health Information” or “Unsecured PHI” will have the same meaning as the term “Unsecured Protected Health Information” in 45 C.F.R. 164.402.

II. Confidentiality

At all times, both during and after the termination of its relationship with the Employer for any reason, CONEXIS will not use or disclose PHI in any manner whatsoever, except as otherwise permitted by this Addendum.

III. Permitted Uses and Disclosures of Business Associate.

(a) Except as otherwise limited in this Addendum, CONEXIS may use or disclose PHI, provided that such use or disclosure of PHI would not violate the Privacy Rule, as follows: (a) as permitted or required in this Addendum and in the Agreement; (b) as otherwise permitted by the Privacy Rule; (c) as Required by Law; (d) for the proper management and administration of CONEXIS; (e) to fulfill any present or future legal responsibilities of CONEXIS; (f) for Data Aggregation services to the Plan (as defined in 45 CFR § 164.501); or (g) any use and disclosure of PHI that has been de-identified in accordance with 45 CFR § 164.514.

(b) CONEXIS agrees to document any disclosures of PHI and the information related to such disclosures to respond to an accounting of disclosures of PHI if requested by the Plan in accordance with 45 CFR §164.528, and to provide such documentation to the Plan as it may request from time to time.

(c) In the event that CONEXIS maintains PHI in a Designated Record Set, CONEXIS agrees to provide access to such PHI that it maintains in a Designated Record Set to the Individual to whom the PHI relates in accordance with 45 CFR § 164.524. Furthermore, at the reasonable request of the Plan, CONEXIS agrees to make amendments to PHI that it maintains in a Designated Record Set as directed by the Plan and to reasonably incorporate any amendments to PHI in accordance with 45 CFR § 164.526.

(d) CONEXIS may disclose PHI to its agents or subcontractors with a bona fide need to know such PHI, but only if, prior to such disclosure, such agents or subcontractors provide reasonable assurances that they will agree to substantially the same restrictions and conditions that apply to CONEXIS with respect to such PHI, including electronic PHI.(e) CONEXIS may disclose the PHI revealed to it by the Plan if and to the extent that such disclosure is required by law or court order or as otherwise permitted by law. Further, CONEXIS agrees to make its internal practices, books, and records, including policies and procedures, relating to the use and disclosure of PHI received from, or created or received by CONEXIS on behalf of the Plan available to the Secretary, as requested by the Plan or designated by the Secretary, for purposes of the Secretary determining the Plan’s compliance with the Privacy Rule.

(f) In accordance with 45 CFR §164.520, and to the extent that such a limitation may affect the Business Associate’s use or disclosure of PHI, Employer, acting on behalf of the Plan, agrees to notify CONEXIS of any limitation(s) in the notice of privacy practices required by the Privacy Rules, including, without limitation, any changes in or revocation of permission by an Individual to use or disclose PHI. Employer, acting on behalf of the Plan, also agrees to notify CONEXIS of any restriction to the use or disclosure of PHI that Employer has agreed to in accordance with 45 CFR § 164.522, to the extent that such restriction may affect CONEXIS’ use or disclosure of PHI. Employer acknowledges and agrees that CONEXIS is not bound by any such restrictions that impact CONEXIS’ use or disclosure of PHI to the extent such restrictions are not otherwise required by the HIPAA Privacy Rules and CONEXIS has not consented to such restrictions in advance. CONEXIS agrees not to unreasonably withhold consent.

(g) CONEXIS agrees to take steps to implement safeguards that reasonably and appropriately protect the confidentiality, integrity and availability of electronic PHI maintained by CONEXIS on behalf of the Plan. CONEXIS will report to the Plan’s designated representative any use or disclosure of PHI otherwise than as provided by this Agreement, including any Security Incident, as soon as reasonably possible of becoming aware of such use or

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disclosure. As of the Compliance Date of 42 U.S.C. § 17931 and the regulations issued thereunder, CONEXIS agrees to comply with the Security Rule requirements set forth in 45 C.F.R. §§ 164.308, 164.310, 164.312, and 164.316.In addition, CONEXIS hereby agrees that it shall report to the Plan’s designated representative, without unreasonable delay, but not longer than 30 days following its discovery of any incident that, in CONEXIS’ reasonable determination, constitutes a Privacy Breach of Unsecured PHI. CONEXIS shall provide such notice to the Plan’s designated representative in accordance with 45 CFR 164.410 of the Breach Notification Rules, subject to the law enforcement delay set forth in 45 CFR 164.412.  In addition, CONEXIS may, in its sole discretion, provide any of the following notices of any incident that constitutes a Privacy Breach for which CONEXIS is required to provide notice to the Plan’s designated representative as set forth herein: (i) notice to affected individuals, including any substitute notice as necessary in accordance with 45 CFR 164.404 (ii) if required (and the to the extent permitted under applicable law), immediate notice to the Secretary of the Department of Health and Human Services (“HHS”), including maintaining a log or other documentation of Privacy Breaches to be provided to the Secretary on an annual basis in accordance with 45 CFR 164.408 and (iii) if required, notice to a media outlet in accordance with 45 CFR 164.406.

(h) Notice to Plan and Employer. (i) Immediately following execution of this Addendum, Employer will provide CONEXIS with written notice

identifying the Plan’s and the Employer’s designated representative for purposes of receiving notices required by CONEXIS under this Addendum.

(ii) Employer agrees to provide prompt written notice to CONEXIS of any changes to the names or positions of employees identified by Employer as a designated representative of the Employer and/or the Plan. CONEXIS shall have no duty to inquire whether the list of Designated Persons is accurate.

(iii) Employer shall indemnify and hold CONEXIS, its employees, agents and Affiliates harmless for any and all liability CONEXIS may incur as a result of any improper use or disclosure of PHI by Employer or a designated representative.

(i) To the extent applicable, CONEXIS, the Employer and the Plan agree to comply with the provisions of the Electronic Data Interchange Rule with respect to PHI disclosed by the parties.

IV. CONEXIS acting as Agent of the EmployerThe following services are performed by CONEXIS as an agent of the Employer and not on behalf of the Plan:

Services that facilitate and report the enrollment and disenrollment of employees and their eligible dependents in the Plan.

Services that facilitate the payment of premiums under the Group Health Plan.The Parties acknowledge that information created or received by CONEXIS in its capacity as agent of the employer is not PHI and is not subject to the HIPAA Privacy Rule, Electronic Data Interchange Rule, and Security Rule. Any such information received by CONEXIS as agent of the employer shall be deemed confidential information subject to the terms and conditions of confidentiality set forth in the Agreement.

V. Term/Termination

(a) Term. This Addendum shall continue until the Agreement is terminated or as set forth herein. (b) Termination for Cause. Upon a Party’s knowledge of a material breach of this Addendum by the other Party, the

non-breaching Party shall either:(i) Provide an opportunity for the breaching Party to cure the breach within 30 days or, if longer, such other

reasonable period of time, or end the violation and terminate this Addendum and, where necessary, the Agreement between the parties with respect to the services if the breaching Party does not cure the breach as set forth herein; or

(ii) Immediately terminate this Addendum and, where necessary, the Agreement if the breaching Party has breached a material term of this Agreement and cure is not possible; or

(ii) If neither termination nor cure is feasible, the non-breaching Party shall report the violation to the Secretary.

(c) Effect of Termination. Upon termination of this Addendum, for any reason, CONEXIS shall return or destroy all PHI received from Employer and/or the Plan, or created or received by CONEXIS on behalf of the Plan, except to the extent determined infeasible as set forth herein. This provision shall also apply to PHI that is in the possession of subcontractors or agents of CONEXIS. In the event that CONEXIS reasonably determines that returning or destroying

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the PHI is infeasible, CONEXIS shall provide of the conditions that make return or destruction infeasible. In the event that CONEXIS determines that return or destruction of the PHI is infeasible, CONEXIS will continue to extend the protections of this Agreement to such PHI and limit further uses and disclosures of such PHI to those purposes that make the return or destruction infeasible.

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