AMENDMENT NO. 4 TO MASTER SERVICES AGREEMENT

A.    Supplier and Health Net entered into a Master Services Agreement dated September 30, 2008, as previously amended (collectively the “Agreement”) which, among other things, requires Supplier to perform Services for Health Net.

B.    The initial term of the Agreement was due to expire on December 31, 2013.

C.    Supplier and Health Net desire to extend the term of the Agreement and to modify certain terms and conditions contained in the Agreement as provided in this Amendment;

NOW, THEREFORE, in consideration of the mutual promises, covenants, agreements and other undertakings set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

1.    Definitions: Defined terms used in this Amendment shall have the same meaning as in the Agreement unless otherwise specifically defined herein.

2.    Section 4.1 (Initial Term) of the General Terms and Conditions is hereby deleted in its entirety and replaced with the following language:

“The term of this Agreement shall commence on the Effective Date and expire on December, 31, 2018, unless it is terminated earlier or is extended pursuant to the terms of this Agreement (such period, together with all extensions thereof, the “Term”).”

3.    The following replaces Sections 10.1 (a) through (c) of the General Terms and Conditions:

10    INVOICING AND PAYMENT

(i)    Time & Material (T&M) Invoicing

Supplier shall invoice Health Net for all amounts due under this section 10(a)(i) on a monthly basis in arrears (i.e., Charges for Services delivered in August will be invoiced on the invoice delivered to Health Net in September), or as otherwise agreed by the Parties in writing. Supplier shall submit timesheets via Planview (or such other tool as may be agreed by Health Net) within a reasonable time from work performed. Supplier shall render a single consolidated invoice within *** for each month’s Charges showing such details as reasonably specified by Health Net, including as necessary to satisfy Health Net’s internal accounting and chargeback requirements (such as allocating Charges among Service components, locations and departments). The form of invoice shall be mutually agreed by the Parties during Transition and any changes to such form invoice during the Term must be approved by Health Net. Health Net shall pay for only time reported, submitted and approved via Planview (or such other tool as may be agreed by Health Net).

Each month’s invoice shall be complete as to the Charges for such month. ***

(ii)    Fixed Pricing (Fixed Delivery/Fixed Bid) Invoicing

For Fixed Pricing (Fixed Delivery/Fixed Bid) invoicing purposes, Supplier shall submit to Health Net a Deliverable Acceptance Document (DAD) (or other such document as agreed by Health Net) for signature of milestone/deliverable acceptance within *** days of milestone completion. Supplier shall submit to Health Net the invoice and signed DAD for said milestone/deliverable within *** days of DAD signature date. *** Cognizant’s ability to invoice work is dependent upon reasonable expectation of Health Net’s reasonable cooperation.

(c)    Each invoice shall, for each Charge on the invoice, cite the specific section of the Agreement on which such Charge is based. Supplier shall include the calculations utilized to establish the Charges.

4. The first paragraph of Section 3.1 (Application Maintenance Services) of Schedule A (Scope of Services) is deleted in its entirety and replaced with the following:

 

5. Section 4.6(b) (Earnback Opportunities) is modified by adding the following. Also Table 1 has been added to include the new SLA references:

***

6. Section 5.4(a) (ii) (Continuous) of Schedule B (Service Levels) is deleted in its entirety and replaced with the following:

***

7.    Section 2 (Service Level Metrics) of Exhibit B-1(Service Level Metrics) is modified by adding the Continuous Improvement and implementing new Service Levels:

***

***

8. Section 4.4(a)(iii) (Minor Enhancements) of Schedule C (Charges) is deleted in its entirety and replaced with the following:

“(iii)    As of January 1, 2014, each Contract Year through 2018, the Baseline Minor Enhancement Hours shall equal *** per calendar quarter, unless adjusted pursuant to Section 4.4(b).”

9. Section 4.6 (Productivity Assumptions) of Schedule C (Charges) is deleted in its entirety and replaced with the following:

“If the Production Support Charge is revised pursuant to Section 4.2 in connection with the addition of a new In-Scope Application, the revised Production Support Charge shall, at a minimum, reflect the Productivity Commitments stated in the table below for each remaining year of the Term. In the instance of adding a new In-Scope Application pursuant to Section 4.2, the Productivity Commitments will be applied to the Production Support Charge using CY1 as the first year reduction, CY2 the second year reduction, and continue each year thereafter as indicated in the table below. The yearly reduction will be equitably prorated based on the month the In-Scope Application is introduced. For example, in the event the new In-Scope Application effective date is June 1^st, the *** CY1 reduction will apply to the next year’s Production Support Charge starting on June 1^st of the subsequent year.

10. Section 5.2 (Joint Capacity Planning Process) of Schedule C (Charges) is deleted in its entirety, replaced with the following and renamed to Section 5.2 (Joint Capacity Managing Process):

“In connection with the Joint Capacity Planning Process, the Parties shall work together to develop and maintain a rolling six (6) month forecast of AD Projects and associated resource requirements (“AD Project Forecast”). Each month, and as otherwise requested by Health Net, the Parties shall meet to update the AD Project Forecast as necessary to remain current with Health Net’s estimated AD Project demand Supplier to work with Health Net on a case by case basis on applicability of Application Development and Quality (Testing) Service levels for projects that are started with insufficient lead time or fast tracked or where work needs to start without clear requirements.”

11. Section 7.4 (Disaster Recovery) of Schedule C (Charges) is deleted in its entirety and replace with the following:

“The Charges for all disaster recovery Services described in this Agreement as of the Effective Date are included in the Production Support Charge. This includes but is not limited to Disaster Recovery testing activities as well as all activities required in the case of a Disaster Recovery event.”

12. Section 7.8 (Minimum Commitment) of Schedule C (Charges) is hereby deleted in its entirety and replaced with the following:

(a)    The chart in this Section 7.8 sets forth a minimum AD Services revenue commitment for each Contract Year of the Term (each a “Minimum Commitment”). To the extent the total Charges payable by Health Net under this Agreement for AD Services in a Contract Year are less than (or reasonably likely to be less than) the applicable Minimum Commitment for that Contract Year as a result of Health Net’s decision to withdraw AD Services from this Agreement and either perform them itself or use a third party to perform them, then the Parties shall work in good faith to equitably adjust the Charges to reflect the reduced volume of AD Services. If after working in good faith the Parties are unable to agree on such an equitable adjustment, then Health Net, at its option, shall either (i) pay Supplier an additional amount equal to the difference between (A) the applicable Minimum Commitment for such Contract Year and (B) the total Charges paid by Health Net for AD Services in such Contract Year, to the extent such difference results from Health Net’s decision to withdraw AD Services from this Agreement and either perform them itself or use a third party to perform them; or (ii) terminate this Agreement in whole or in part for convenience. The Minimum Commitment shall be prorated for partial Contract Years.

(b) If Health Net terminates AD Services in part pursuant to Section 16.1 of the Terms and Conditions, the Minimum Commitment for each Contract Year shall be reduced by an amount proportionate to the percentage of the Charges attributable to the terminated Services for each Contract Year as set forth as of the Effective Date.”

13. The first sentence of Section 1.2(a) (Work Orders) of Exhibit A-6 (Project Framework) is deleted in its entirety and replaced with the following:

“Prior to commencing work or authorizing performance of a Project, the Parties will document the Project requirements in a detailed work order (“Work Order”), substantially, unless otherwise agreed by the parties, in the form of Exhibit A-12 (Work Order Template).

14. A new Work Order Template is added as Exhibit A-12

[See attachment]

15. The following is added as Section 1.3 (Exception Process) of Exhibit A-6 (Project Framework):

“ (c) The Parties shall follow the Project Exception Service Request User Guide, attached as Schedule M (Project Exception Service Request User Guide).

16. The following document entitled “Project Exception Service Request User Guide is added to Schedule M

[See attachment]

17.    Except as amended and modified by this Amendment, all of the terms and conditions of the Agreement shall remain in full force and effect. This Amendment may not be modified except in writing signed by both parties hereto. This Amendment, the Agreement and exhibits and schedules thereto constitute the entire agreement of the parties with respect to the subject matter contained therein and supersedes any and all prior or contemporaneous agreements between the parties, whether oral or written, concerning the subject matter contained herein.

IN WITNESS WHEREOF, the parties hereto by their duly authorized representatives executed this Amendment to be effective as of the Amendment Effective Date.

COGNIZANT TECHNOLOGY SOLUTIONS    HEALTH NET, INC.

By /s/ Eugene Solomonov                By /s/ James E. Woys            

Name Eugene Solomonov                Name James E. Woys            

Title Corporate Counsel                Title C.O.O.                

        

[Cognizant Technology Solutions Company Logo]

        

This Work Order dated MMM DD, YYYY is issued pursuant to the Application Outsourcing Master Services Agreement date Sep 30th, 2008 (the “Agreement”), by and between Health Net Inc. and Cognizant Technology Solutions U.S. Corporation (“Vendor”).

<Description about the project>

Infrastructure & capacity are in Place, no additional infrastructure requirement for this project.

The tentative schedule for the applicable phase should be given below (Spread by Week). If any changes in schedule, it will be agreed upon mutually between Cognizant and Health Net.

Following is the proposed timeline

 

The tentative billing amount for the entire project duration is $XXXX.XX. Vendor will not incur charges in excess of the Fee Estimate without Health Net’s prior written approval. Charges are computed as below:

ITG Project Brief for XXXXX.

Client: Health Net

Project Name: <Project Name>

Project Description As stated in the prior sections of this Work Order.

    

This Work Order is agreed and accepted by:

Cognizant Technology Solutions         Health Net

By:    ___________________________        _________________________

    

Name:                         Name:    

Title:                            Title:    

Date:                            Date:

Health Net PO# :

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