Exhibit 10.27
Professional Services Agreement
     This Professional Services Agreement (this “PSA”) is entered into as of
October 2, 2009 (the “Effective Date”), by and between athenahealth, Inc., a
Delaware corporation with a primary business address of 311 Arsenal Street,
Watertown, Massachusetts 02472 USA (hereinafter referred to as “Athena”);
International Business Machines Corporation, a New York corporation with a
primary business address of Armonk, New York 10504 USA (“IBM”).
     WHEREAS, Athena and IBM are parties to an IBM International Customer
Agreement fully executed as of October 16, 2000, relating to the provision of
services to Athena by IBM (the “Master Agreement”), as well as to a Pilot
Statement of Work dated May 18, 2009, relating to preparation for the delivery
of business process outsourcing services under the Master Agreement (the “Pilot
SOW”);
     WHEREAS, Athena and IBM Daksh Business Process Services Private Limited, a
wholly owned subsidiary of IBM (“IBM Daksh”), are parties to a certain Mutual
Non-Disclosure Agreement dated as of April 28, 2008 (the “Existing NDA”); and
     WHEREAS, the parties hereto now desire to have IBM provide the services set
forth in Schedule A (the “Services”).
     NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:
1. Relationship of Agreements
     a. Master Agreement. This PSA is considered a Transaction Document under
the Master Agreement, and the general terms and conditions of the Master
Agreement (excluding any and all Appendices and SOWs) are incorporated by
reference into this PSA. For purposes of this PSA, references to “Customer” in
the Master Agreement will be interpreted to mean “Athena.” Unless otherwise
defined herein, capitalized terms used in this PSA shall have the same meanings
as set forth in the Master Agreement. For clarification purposes, no machines or
licensed program products are acquired by Athena under this PSA.
     b. Pilot SOW. This PSA is intended to supersede the Pilot SOW.
     c. Existing NDA. This PSA constitutes a “definitive agreement” for purposes
of Section 2(c) of the Existing NDA and supersedes that agreement, and all
information considered Proprietary Information and Technology of a party under
the Existing NDA shall be considered Confidential Information of that party
under this PSA.
     d. Schedules to this PSA. The following Exhibit and Schedules are included
as attachments to this PSA:
          i. Exhibit A — Form of Project Change Request
          ii. Schedule A — Service Descriptions
          iii. Schedule B — Business Associate Terms and Conditions
          iv. Schedule C — Charges
     e. Conflicts. In the case of any conflict between this PSA and the Master
Agreement or any other agreement between the Parties, the terms of this PSA
shall control, and, regardless of any provision hereof to the contrary, the
conflicting terms from such agreements shall not be considered incorporated into
this PSA. In the case of a conflict between the terms of this PSA and any Change
Order or Schedule to this PSA, the terms of this PSA shall control unless
otherwise specifically stated in such Change Order or Schedule. There are no
other prior or collateral understandings or agreements between the Parties other
than those specifically described herein.

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2. Definitions
     a. “Athena’s Business Processes” means the business processes executed or
supported by IBM on Athena’s behalf under this PSA.
     b. “Athena’s Data” means any information relating to an identifiable
individual that IBM processes on behalf of Athena in performing the Services.
Athena’s Data excludes information: (i) processed by IBM for any reason other
than IBM’s performance of the Services; (ii) processed by IBM because of its
relationship with its customers (including Athena and Athena’s Enterprise)
generally; and (iii) relating to employees of IBM, its Enterprise, and their
permitted subcontractors.
     c. “Facilities” means any location: (i) owned, leased, rented, or used by
Athena that IBM may use in providing the Services; and (ii) that is listed
herein.
     d. “Kick Code” means a code attached to a claim to identify its current
status and/or the next step(s) in the claim handling process.
     e. “Party” means either IBM or Athena, which shall be referred to
collectively as the “Parties.”
     f. “Products” collectively means:
          i. “IBM Product(s),” which means any equipment, program, system,
product, or business process developed by IBM and used by IBM in conjunction
with the Services provided to Athena under this PSA, including IBM logoed
hardware or software made generally available by IBM or its Enterprise; and
          ii. “Athena’s Product(s),” which means any equipment, system, program,
product, or business process provided to IBM by Athena under this PSA or used in
conjunction with the Services.
     g. “Project Manager” means an individual assigned by a Party to manage the
performance of that Party’s obligations under this PSA, who has the authority to
represent and bind that Party for purposes of this PSA, and who will have a
specific operational role as described in this PSA. Athena and IBM will each
provide the other reasonable advance written notice of a change to the
respective Project Manager and will discuss any objections the other has to such
change.
     h. “Regulatory Requirements” collectively means:
          i. “IBM Regulatory Requirements,” which means the laws, regulations,
and rules applicable to IBM in its capacity as a provider of information
technology enabled services and personnel to support business process
outsourcing; and
          ii. “Athena’s Regulatory Requirements,” which means the laws,
regulations, and rules applicable to Athena, including laws applicable to
Athena’s Business Processes and/or use or receipt of the Services.
3. Additional Terms
     The following terms are applicable to this PSA and are in addition to or
modify those of the Master Agreement.
     a. Changes to the Agreement Terms
     Should the Parties mutually agree upon any addition, modification, or
change to any terms of this PSA, such addition, modification, or change shall be
done as per the procedure stated below and be signed by the Parties’ authorized
representatives (such a signed document, a “Change Order”).
          i. Project Change Control Procedure
          The following process will be followed if a change to this PSA is
required.

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               A. A Project Change Request (a “PCR”) will be the vehicle for
communicating change. Each PCR must describe the change being requested, the
rationale for that change, and the effect that change will have on the Services.
The designated Project Manager of the requesting Party will review the proposed
change and determine whether to submit the request to the other Party. A PCR
form is included as Exhibit A to this PSA.
               B. Both Project Managers will review the proposed change and
recommend it for further investigation or reject it. IBM will specify any
material charges for such investigation and present them to Athena for approval.
Each PCR must be signed by authorized representatives from both Parties to
authorize further investigation of the recommended changes. The investigation
will determine the effect that the implementation of the PCR will have on price,
schedule, and other terms and conditions of the PSA.
               C. A written change authorization or PCR must be signed by
authorized representatives from both Parties to authorize implementation of the
investigated changes. Until a change is agreed to in writing, both Parties will
continue to act in accordance with the latest agreed version of the PSA.
          ii. Changes Made by IBM on an Emergency Basis
          Except for changes made by IBM on an emergency basis, IBM will
schedule change activities in accordance with the Project Change Control
Procedure with the goal of minimizing unreasonable interruptions to Athena’s
business operations. With respect to changes made by IBM on an emergency basis,
IBM will provide Athena with notice of such changes within twenty-four
(24) hours and documentation of such changes within five (5) Business Days (as
that term is defined in Schedule A) after such changes are made.
     b. Required Consents
     Athena is responsible for promptly obtaining and providing to IBM all
Required Consents necessary for IBM to provide the Services described in this
PSA. A “Required Consent” means any consents or approvals required to give IBM,
its Enterprise, and any permitted subcontractors the right or license to access,
use and/or modify (including creating derivative works) Athena’s Products solely
as necessary for the performance of the Services without infringing the
ownership or license rights (including patent and copyright) of the providers or
owners of such Products. A Required Consent also includes any consents or
approvals required to give IBM, its Enterprise, and permitted subcontractors the
right or license to access or use Athena’s services or facilities (including the
Facilities).
     Failure of Athena to provide any Required Consents to IBM shall be a basis
for indemnification under Section 11 of this PSA.
     c. Service Recipients
     Athena represents to IBM that there will be no Services provided to third
parties (e.g., health care providers) under this PSA.
     d. Data Protection
          i. General
               A. IBM and Athena are each responsible for complying with its
respective obligations under the applicable data protection laws governing
Athena’s Data.
               B. Athena remains solely responsible for determining the purposes
and means of IBM’s processing of Athena’s Data under this PSA, including that
such processing will not place IBM in breach of the applicable data protection
laws.
               C. Data protection laws are Athena’s Regulatory Requirements with
respect to Athena’s Data, except and only to the extent that such data
protection laws regulate IBM’s processing of Athena’s Data in IBM’s performance
of the Services. IBM and Athena each acknowledge that each Party has the right
to investigate the steps the other is taking to comply with applicable data
protection laws and the Parties agree to

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reasonably cooperate with such investigation (including, but not limited to,
providing copies of HIPAA security risk analysis and risk management plans, as
well as any SAS-70 audits where reasonable to do so and subject to the terms of
the Confidentiality provisions under this PSA). Nothing in this PSA prevents IBM
or Athena from taking the steps it deems necessary to comply with applicable
data protection laws.
               D. If Athena requests additional or materially different services
to comply with the applicable data protection laws, such services will be
considered new services.
          ii. Security
               A. Athena acknowledges that Athena is solely responsible for
determining that the security measures specified herein constitute appropriate
technical and organizational measures to protect Athena’s Data as required by
the applicable data protection laws. IBM is not required to perform or adhere to
any security measures concerning Athena’s Data other than those specified in
this PSA.
               B. By executing this PSA, Athena appoints IBM as a data processor
of Athena’s Data. As a processor of Athena’s Data, IBM will process Athena’s
Data as specified herein. Athena agrees that IBM may perform such processing as
IBM reasonably considers necessary or appropriate to perform the Services. Upon
expiration or termination of this PSA and to the extent applicable, Athena will
give the data protection authority prompt notice of the termination of the
appointment of IBM as Athena’s data processor.
          iii. Transborder Data Flows
               A. IBM will not transfer any of Athena’s Data across a country
border unless IBM reasonably considers such transfer appropriate or useful for
IBM’s performance of the Services and obtains Athena’s prior written consent.
               B. Athena is solely responsible for determining that any transfer
by IBM or Athena of Athena’s Data across a country border under this PSA
complies with the applicable data protection laws.
               C. Athena shall obtain, with IBM’s reasonable assistance, all
necessary consents and regulatory approvals required for any transfers of
Athena’s Data across country borders, all at Athena’s reasonable expense.
          iv. Information
               A. If, under the applicable law, Athena is required to provide
information to a third party regarding Athena’s Data, IBM will reasonably
cooperate with Athena in providing such information. Athena will reimburse IBM
for its reasonable charges for such assistance.
               B. Upon IBM’s or Athena’s reasonable written request, Athena or
IBM will provide the other with such information that it has regarding Athena’s
Data and its processing that is necessary to enable the requester to comply with
its obligations under this Section and the applicable data protection laws.
               C. Nothing in this Section requires IBM to provide Athena access
to the premises or systems of IBM, its Enterprise, or any of their permitted
subcontractors or to information relating to the other customers of IBM, its
Enterprise, or their permitted subcontractors, except to the extent reasonably
necessary for Athena’s exercise of its rights under this PSA and upon reasonable
notice.
               D. Athena agrees to allow IBM to store the contact information of
Athena employees, such as names, phone numbers, and e-mail addresses, in any
country where IBM does business and to use such information internally and to
communicate with Athena for the purposes of Athena’s and IBM’s business
relationship.
     e. Severability and Waiver
     In the event that any provision of this PSA is held to be invalid or
unenforceable, the remaining provisions of the PSA remain in full force and
effect. Nothing in this PSA affects any statutory rights of consumers that

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cannot be waived or limited by contract. The exercise or waiver, in whole or in
part, of any right, remedy, or duty provided for in this PSA will not constitute
the waiver of any prior, concurrent or subsequent right, remedy, or duty within
this PSA.
     f. Audits
          i. Each Party will keep appropriate business records pertaining to
(A) its performance of this PSA; (B) the security measures to be maintained as
specified in Section 3(d) and Schedule B; (C) access to and use of Athena
Systems (as that term is defined in Section 12); (D) the compliance program
specified in Section 13(i); and (E) financial records to substantiate the
details of transactions specified in the invoices billed by IBM to Athena,
solely as they relate to the Services.
          ii. Each Party will have the right to audit the other Party’s records
to the extent reasonably necessary to verify any reports provided by such Party,
to verify compliance with the security measures outlined in this PSA, and to
verify each Party’s compliance with its other obligations under this PSA or to
verify any charge or payment amount. At Athena’s written request during the
course of any audit under this PSA, IBM will promptly make available to Athena
financial records to substantiate the details of the invoices billed to Athena
hereunder; provided, however, that IBM shall not be required to provide any
records pertaining to its costs of providing the Services or data relating to
the provision of services to other customers of IBM. A Party may conduct an
audit not more often than once during any consecutive twelve (12) month period,
starting from the Effective Date. Each audit will take place, upon reasonable
written notice to the Party being audited, during regular business hours, and at
any location of that Party or any affiliate thereof providing any of the
Services or at a mutually agreed location. All audits will be scheduled in such
a manner as not to interfere unreasonably with the operations of the Party
subject to the audit. The party conducting an audit shall bear the costs
relating to that audit.
          iii. In addition to the rights outlined above in this Section, Athena
shall have the right, from time to time and upon reasonable advance notice no
more frequently than quarterly, to request results of security assessments,
reports, and/or audits conducted by IBM of the physical, administrative, and
technical security measures in place at any facility at which Services are
provided.
4. Term and Termination
     a. Term.
     The initial term of this PSA (the “Initial Term”) shall commence as of the
Effective Date and will continue for a period of sixty-three (63) months
thereafter, unless earlier terminated in accordance with the provisions of this
PSA, with two (2) year automatic renewals to follow the Initial Term
(collectively, the “Term”). If either Party determines it does not wish to allow
an automatic renewal, then that Party shall provide the other Party with at
least twelve (12) months advance written notice, and no such automatic renewal
shall be added. *The provisions of Sections 6 through 11 and Section 14 shall
survive the termination of this PSA.
     b. Termination for Convenience.
     Either Party may elect to terminate this PSA for convenience by:
          i. providing the other with at least six (6) months advance written
notice of its election to terminate the convenience including the effective date
of such termination, which shall not be earlier than two (2) contract years from
the Effective Date of this PSA; and
          ii. in the case of termination by Athena, paying IBM any Termination
Charges for Convenience, Winddown Charges, and other fees as set forth in
Schedule C, Exhibit C-3: Termination for Convenience and Winddown Charges, for
the month in which termination becomes effective, which IBM and Athena agree is
Athena’s sole and exclusive liability for such termination for convenience,
except as otherwise set forth in this PSA. Minimum volume commitments from
Athena shall not apply to the six (6) months immediately prior to the effective
date of the termination.

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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
          iii. in the case of termination by IBM, IBM will pay Athena a $*
termination fee. The parties agree this is IBM’s sole and exclusive liability
for such termination for convenience, except as otherwise set forth in this PSA.
          iv. Restricted Activities
               A. In the event that, during the Term, IBM engages in Restricted
Activities, Athena may, upon providing IBM with * days advance written notice
and opportunity to cease any Restricted Activities, terminate this Agreement *.
               B. “Restricted Activities” means *
               C. “Athena Competitors” means eClinicalWorks; Epic Systems
Corporation; GE Healthcare; Greenway Medical Technologies, Inc.; McKesson
Corporation; Sage Software Healthcare, Inc.; Allscripts-Misys Healthcare
Solutions, Inc.; Siemens Medical Solutions USA, Inc.; and Quality Systems, Inc.
and their successors-in-interest upon notice to IBM.
     c. Termination for Cause
          i. Athena or IBM (the “Nonbreaching Party”) may elect to terminate
this PSA because of a material breach of this PSA by the other (the “Breaching
Party”) by following the process set forth in this Section.
          ii. The Nonbreaching Party will provide the Breaching Party with
written notice of such material breach within sixty (60) days after becoming
aware the material breach, describing in detail the specific nature and dates of
the material breach, and will provide the Breaching Party with the opportunity
to cure the material breach as follows:
               A. in the event of a failure to pay any amount due on the payable
date specified in this PSA or a Schedule to the PSA, ten (10) days after receipt
of such written notice; and
               B. in the event of any other material breach, forty-five
(45) days after receipt of such written notice. If the nature of any nonmonetary
breach is such that it would be unreasonable to expect a cure within forty-five
(45) days, an additional fifteen (15) days will be allowed.
          iii. If the material breach is not cured during the applicable cure
period set forth above, the Nonbreaching Party may terminate this PSA for
material breach by providing the Breaching Party with written notice within
sixty (60) days after the expiration of the cure period specified above,
declaring termination of this PSA for material breach under this Section,
effective on the date stated in such notice. Such effective date will be no
later than 120 days after the Breaching Party’s receipt of such notice of
termination for material breach. Minimum volume commitments from Athena shall
not apply to the time period between the date of such notice and the effective
date of the termination. If IBM terminates for cause due to failure to pay by
Athena, then Athena will pay the Termination Charges for Cause and Winddown
Charges set forth in Schedule C, Exhibit C-4: Termination for Cause and Winddown
Charges for the month in which termination becomes effective; if Athena
terminates for cause, then Athena shall not owe any such amounts to IBM.
     d. Transfer Assistance
          i. If Athena desires IBM’s assistance in transferring Services back to
Athena or a third party upon termination or expiration of this PSA (“Transfer
Assistance”), upon Athena’s six (6) month advance written request, or mutually
agreed shorter period of time in the case of Termination for Cause by Athena,
IBM will provide such Transfer Assistance to Athena:
               A. to the extent IBM can perform such requested Transfer
Assistance using its then-existing resources dedicated solely to providing the
Services under this PSA, until expiration or termination of this PSA; and
               B. to the extent IBM reasonably agrees to perform the requested
Transfer Assistance, for the period of time requested by Athena, which period
will end no later than twelve (12) months

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after the effective date of the expiration or termination of this PSA (the
“Transfer Assistance Period”). Charges associated with Transfer Assistance will
be subject to an inflation adjustment.
          ii. If IBM’s Transfer Assistance will require the use of different or
additional services or resources beyond that which IBM is then using to provide
the Services in accordance with the agreed baselines and performance metrics,
such request for Transfer Assistance will be considered a New Service and
performed for an additional charge.
          iii. During the Transfer Assistance Period, IBM will provide Athena
and its third-party designees, as necessary, with reasonable access to the
Machines and Software, provided:
               A. any such access does not interfere with IBM’s ability to
provide the Services or Transfer Assistance; and
               B. such third parties and Athena’s Enterprise comply with IBM’s
security and confidentiality requirements, including execution of a
confidentiality agreement reasonably acceptable to IBM.
          iv. Athena will allow IBM to use the Facilities, subject to reasonable
notification and Athena’s reasonable confidentiality and privacy restrictions as
communicated to IBM, to enable IBM to effect an orderly transition of resources,
for up to sixty (60) days after the later of:
               A. the expiration or termination of this PSA; or
               B. the last day of the Transfer Assistance Period.
          v. IBM will not provide Transfer Assistance if such Transfer
Assistance will unreasonably interfere with IBM’s ability to perform the
Services.
          vi. If IBM terminates this PSA for cause, IBM may provide Athena with
Transfer Assistance only if Athena pays for such Transfer Assistance in advance.
          vii. The applicable provisions of this PSA will remain in full force
and effect during the Transfer Assistance Period.
     e. Data Entry Application Access
     If IBM terminates for convenience or Athena terminates pursuant to either
Section 4(b)(iv) or Section 4(c), IBM will provide Athena access to the data
entry application (Intelligence Forms Processing) for internal use by Athena for
up to one (1) year from the effective date of termination on IBM’s standard
license terms for that application. IBM shall waive the license or usage fees
associated with such access for that one year. For any other termination, the
above access shall be granted at the license or usage fees associated with such
access at the then current commercially available rates. Athena shall pay for
any required services, support, or maintenance at the then current commercially
available rates during that one (1) year.
5. The Services
     IBM shall perform the Services in a professional and workmanlike manner
while striving to meet the Service Levels specified in Schedule A. IBM shall
not, absent the prior written consent of Athena, subcontract any portion of the
Services. The Parties acknowledge that IBM Daksh is a wholly owned subsidiary of
IBM that will be performing the Services under this PSA, and IBM will remain
responsible for the performance of IBM Daksh under this PSA. Athena shall, at
its cost and in a timely manner, provide the information or materials and
perform the actions required of it under this PSA. IBM’s failure to perform its
obligations under this PSA shall be excused if and to the extent that IBM’s
non-performance is caused by Athena’s failure to perform its obligations under
this PSA or by circumstances beyond the reasonable control of IBM. Any change to
the scope of the Services may only be effected as an amendment to Schedule A to
this PSA.
     If, following any applicable training and initial ramp-up period and
subject to the terms of this PSA, IBM’s performance falls significantly below
the Service Levels or Quality Standards specified in Schedule A, Athena will
notify IBM of that fact, and IBM will develop and implement agreed remedial
actions to address such performance

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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
issues within one week of its notification. Athena may reduce the volume of work
provided to IBM to allow IBM opportunity to implement the agreed remedial
actions or for other reasons in Athena’s reasonable discretion; the parties may
also adjust the minimum volume commitments by mutual agreement in writing.
     Athena and IBM will work together during the initial ninety (90) days of
the Initial Term to establish a governance structure to be used in the
management of the Services provided under this PSA to be updated thereafter as
appropriate within ninety (90) days of the effective date of any subsequent
effort authorized under this PSA. Such governance structure will be mutually
agreed by the Parties and may include guidance related to specific roles under
the PSA and escalation procedures.
     Should IBM determine the need to provide the Services from an alternative
location other than those contemplated in Schedule A as of the Effective Date of
this PSA, IBM will submit to Athena for approval notification of such proposed
move, including any known impact to the Services, provided that such approval be
provided within thirty (30) days of such notification and such approval may not
be unreasonably withheld by Athena.
6. Pricing and Payment
     a. Athena shall pay to IBM the fees for the Services at the rates set forth
in Schedule C. IBM shall invoice Athena for the Services provided each month by
the third (3rd) Business Day of the following month. The IBM invoice shall
include the Athena PO number, the invoiced rate for each type transaction that
is separately priced, the number of billable transactions, and the total billing
for each process. Athena shall remit payment to IBM for all invoiced amounts,
not subject to reasonable dispute in accordance with Section 6(b) below, by wire
transfer to a bank account designated by IBM no later than the last day of the
month in which Athena received such invoice (the “Payment Due Date”). In the
event that IBM provides the invoice after the third (3rd) Business Day of the
month, Athena shall remit payment to IBM within thirty (30) days of IBM’s
submission of the invoice. To support invoicing by IBM on the third (3rd)
Business Day of each month, Athena shall make available monthly production
reports necessary for invoicing by the first (1st) Business Day of the month
following when the Services were provided. In the event that IBM’s invoicing is
delayed beyond the 3rd Business Day of the month due to Athena’s failure to
provide the monthly production reports by the 1st Business Day of the month,
Athena’s payment of such invoice shall still be due for the last day of the
month in which the invoice is submitted by IBM. In any event, if Athena fails to
provide the monthly production reports by the 5th Business Day of the month, IBM
will invoice Athena based off IBM’s operational data and Athena shall pay such
invoice later than the last day of the month. All amounts payable for the
performance of the Services shall be invoiced in US dollars. For any undisputed
payment not received within * days of the Payment Due Date, Athena shall pay a
late payment fee equal to the lesser of *% of the balance due per month or the
maximum rate allowed by applicable law. IBM will provide prompt notice of any
late payment.
     b. In the event either Party in good faith disputes the accuracy or
applicability of any amount payable under this PSA, such Party shall, in writing
notify the other Party of the disputed amount in sufficient detail, including
basis for the dispute, within five (5) Business Days following the submission of
the invoice by IBM, or for claims that are not discernable within this time
period, within five (5) Business Days after becoming aware of the disputed
matter. In the event of a dispute pursuant to which a Party in good faith
believes it is entitled to withhold payment or receive a credit, said Party
shall continue to perform its obligations under this PSA pending resolution of
the dispute as provided herein. The Parties agree that Athena may withhold
payment provided such withheld amounts do not exceed an amount equal to the
average monthly fees for the preceding * (“Disputed Fee Cap”)). IBM shall
continue to perform the Services and Athena shall continue to pay any charges in
excess of the Disputed Fees Cap, under protest without waiver of its rights to
dispute such fees. Upon resolution of such dispute, if Athena owes the disputed
fees, such fees shall be paid to IBM within ten (10) Business Days. Athena shall
also pay IBM any late payment fees accrued from the original Payment Due Date
until such payment is received by IBM.
     c. Foreign Exchange Adjustment. IBM will be responsible for the first * in
price fluctuation (either up or down) from the original price associated with
changes in exchange rates as set forth in Schedule C for the respective charges.
Any deviation in price (up or down) beyond * based on the currency exchange rate
stated in Schedule C will be reflected as a price adjustment to the amounts
invoiced Athena, as more specifically set forth in Schedule C.

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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
     d. Economic Change Adjustment (ECA). Athena will be responsible for the
first * in price fluctuation (either up or down) associated with changes in the
cost of living based on the economic index value set forth in Schedule C for the
respective charges and such price adjustment will be reflected in the amounts
invoiced Athena. Any deviation in price (up or down) beyond * from the economic
index value stated in Schedule C will be the responsibility of IBM. The ECA
factor applicable to any Services set forth in Schedule A will be calculated
based on the economic index value stated in Schedule C as compared to the then
current economic index value for the applicable country. This comparison will be
performed on an annual basis using the most recent economic index factor rate as
published by the applicable country and any adjustment to rates will be
reflected in the next month’s invoice.
7. Taxes
     a. If any authority imposes a duty, tax, levy, or fee, excluding those
based on IBM’s net income, upon any transaction under this PSA, then Athena
agrees to pay that amount as specified in an invoice or supply exemption
documentation. Specifically, Athena will pay all:
          i. applicable taxes such as sales (including sales tax on services),
use, gross receipts, excise, occupation, value-added, and other
transaction-based taxes, duties, levies, and fees on IBM’s charges;
          ii. personal property, sales, value-added, and use taxes on Athena’s
personal property or the use of IBM’s personal property;
          iii. telecommunication taxes for network access (for example, lines)
and services used or provided by Athena; and
          iv. taxes, assessments, and other levies on Athena’s owned, leased,
rented, or purchased real property.
     b. IBM will pay all:
          i. personal property, sales, value-added, and use taxes on IBM’s
personal property operated by IBM personnel; and
          ii. taxes, assessments, and other levies on IBM’s owned, leased,
rented, or purchased real property.
     c. Each party shall be responsible for taxes based on its net income and
for compliance related to employment taxes of its employees.
     d. Athena and IBM agree to cooperate reasonably with the other to determine
Athena’s tax liability on IBM’s charges. IBM’s invoices will state applicable
taxes chargeable on the Services, if any, by tax jurisdiction. IBM and Athena
will provide and make available to the other any resale certificates; tax
exemption certificates; information regarding out-of-state sales or use of
equipment, materials, or services; direct pay certificates; and other exemption
certificates.
     e. Should Athena be required under any law or regulation of any
governmental entity or authority, domestic or foreign, to withhold or deduct any
portion of the payments due to IBM, then the sum payable to IBM shall be
increased by the amount necessary to yield to IBM an amount equal to the sum it
would have received had no withholdings or deductions been made.
8. HIPAA
     a. Generally. During the term of this PSA, Athena will provide IBM with
access to “Protected Health Information,” as that term is defined under the
Health Insurance Portability and Accountability Act of 1996 and the regulations
promulgated thereunder, as amended (collectively, “HIPAA”). IBM is therefore
acting as a “Business Associate” (as defined under HIPAA) of Athena in the
course of performing the Services. Athena and IBM therefore agree to be bound by
the Business Associate Terms and Conditions attached hereto as Schedule B.

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     b. Security Measures. Capitalized terms used in this Section, but not
otherwise defined, shall have the same meaning as those terms in 45 CFR §§160
through 164. In addition to and without diminishing its other obligations under
this PSA with respect to privacy, security, and confidentiality, IBM will:
          i. implement authentication and access controls to safeguard PHI
consistent with the requirements of HIPAA as specified in this PSA or as
directly applicable to IBM under HIPAA;
          ii. use encryption as mutually agreed by both IT teams when it
transmits PHI electronically;
          iii. not store PHI beyond periods necessary to perform work under this
PSA and to conduct reasonable troubleshooting and quality control checking in
connection with performance of such work;
          iv. maintain a formal program to comply with privacy and security
requirements, including written policies;
          v. maintain a full-time privacy officer on location;
          vi. not perform or allow performance of any work under this PSA other
than on IBM company premises and guard such facilities at all times with access
to them controlled by key cards and posted guards or similar protection;
          vii. restrict entry into work processing areas by proximity cards or
similar protection; and
          viii. except as required for the provision of the Services, restrict
employee access to the Internet, e-mail, and removable media, including without
limitation smart cards, USB devices, floppy disks, CDs, DVDs, removable hard
drives, and tapes to deter removal of PHI from IBM’s premises.
     c. To the extent that HIPAA laws and security measures are applicable
directly to IBM, IBM shall remain solely responsible for its compliance with
such laws and security measures.
9. Confidentiality
     a. Definition. Subject to Section 9(b) below, “Confidential Information”
means any and all information pertaining to the business, products, services, or
technology of a Party, or any third party on whose behalf that Party holds such
information in confidence, that is disclosed by that Party (the “Disclosing
Party”) or its agents to another Party (the “Recipient”) or its agents, and
(i) is identified as Confidential Information under any provision of this PSA;
(ii) is clearly labeled or otherwise identified in writing as confidential;
(iii) is identified orally as confidential at the time of disclosure with
written confirmation within fifteen days thereafter; or (iv) would be apparent
to a reasonable person, familiar with the Disclosing Party’s business and the
industry in which it operates, to be of a confidential or proprietary nature the
maintenance of which is important to the Disclosing Party. Confidential
Information shall include, but not be limited to, financial information,
business plans, marketing strategies, research and development activities, trade
secrets, computer programs and codes, software design, network topology and
security measures, claims processing rules and procedures, data relating to
customers and customer transactions, pricing information, and information
relating to the discussion or negotiation of any agreement or other relationship
between the Parties, including the terms of this PSA and its attachments.
     b. Exceptions. Regardless of any other provision of this PSA to the
contrary, Confidential Information shall not include any information that (i) is
or becomes publicly available (other than through unauthorized disclosure by the
Recipient), (ii) is shown by written record to have been in the possession of or
known to the Recipient prior to its disclosure hereunder, (iii) is shown by
written record to have been independently developed by the Recipient, or (iv) is
made available without restriction to the Recipient by any person other than the
Disclosing Party or any of its directors, officers, employees, attorneys, or
other advisors without breach of any obligation of confidentiality of such other
person.
     c. Use and Disclosure. From and after the Effective Date, the Recipient
shall hold and maintain all Confidential Information in confidence with at least
the same precautions and degree of care as the Recipient treats its own
confidential information, without disclosure to any third party absent the prior
written consent of the Disclosing Party, and shall use such information solely
for the purpose of performing the Recipient’s obligations under this PSA. The
Recipient shall use reasonable care to maintain the confidentiality of
Confidential Information, provided that such care shall be at least as great as
the precautions taken by the Recipient to protect its own confidential
information. Regardless of any provision of this PSA to the contrary, the
Recipient may disclose Confidential Information (i) on a “need-to-know” basis to
any of the Recipient’s directors, officers, and

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employees to the extent that the Recipient causes that individual to treat,
hold, and maintain such Confidential Information in the strictest confidence and
only use such Confidential Information for the purpose of performing the
Recipient’s obligations under this PSA and (ii) as required by law or any court
or governmental order, if, to the extent legally permissible, the Recipient
provides the Disclosing Party with prompt written notice of such requirement so
that the Disclosing Party may seek an appropriate protective order with respect
thereto.
     d. Return. Following termination of this PSA and upon the Disclosing
Party’s request, the Recipient will promptly deliver to the Disclosing Party all
materials containing or consisting of Confidential Information in the
Recipient’s actual or constructive possession or control. At such time, the
Recipient will also destroy any Confidential Information in an intangible format
(e.g., electronic or magnetic) that is in its actual or constructive possession
or control on equipment or media not owned by the Disclosing Party. Despite any
provision of this PSA to the contrary, the Recipient may retain for its records
a single copy of any correspondence between the Recipient and the Disclosing
Party that contains Confidential Information, which correspondence will be kept
strictly confidential by the Recipient.
     e. Ownership. All Confidential Information is and shall remain the property
solely of the Disclosing Party or the third party that provided such information
to the Disclosing Party, and the Recipient shall not obtain any right, title, or
interest in or to any Confidential Information under this PSA or by the
performance of any obligations hereunder. The Recipient may not decompile,
reverse engineer, or disassemble any portion of the Disclosing Party’s software,
programs, or code.
     f. Remedies. The Recipient acknowledges that a breach of this Section 9 may
cause irreparable harm to the Disclosing Party for which the Disclosing Party
could not be adequately compensated by money damages. Accordingly, the Recipient
agrees that, in addition to all other remedies available to the Disclosing Party
in an action at law, in the event of any breach or threatened breach by the
Recipient of the terms of this Section 9, the Disclosing Party maybe entitled to
seek injunctive relief, including, but not limited to, specific performance of
the terms hereof without the necessity of posting any bond or other security.
10. Intellectual Property
     a. All data, statistics, records, reports, programs, procedures, rules,
business processes, formats, screens, functionality, and similar items disclosed
or provided by Athena, obtained by IBM from Athena in connection with this PSA
(including, but not limited to, data and databases provided by Athena under this
PSA that have been processed or altered by IBM and the formats for such data),
or developed by IBM in connection with the performance of the Services and
either specifically developed at Athena’s request, as documented under a
Schedule or Change Order, or derivative of products or services of Athena, as
well as any intellectual property rights associated with any of the foregoing
(all of the foregoing, collectively, “Athena Property”) is and will at all times
remain the sole property of Athena or Athena’s customers. Athena grants to IBM a
nonexclusive, non-assignable, non-sublicensable, worldwide, paid-up, irrevocable
license for the term of this PSA to use, execute, reproduce, display, perform,
distribute copies of, and modify Athena Property that may be developed by IBM
under this PSA solely in accordance with this PSA and for the purpose of
performing IBM’s obligations under this PSA. IBM hereby irrevocably and
exclusively assigns to Athena any and all right, title, and interest IBM might
have in or to any and all Athena Property and shall use all reasonable efforts
to assist Athena in obtaining and enforcing, anywhere in the world, all
applicable intellectual property rights in any Athena Property, in each case at
Athena’s expense.
     b. Notwithstanding any provision to the contrary, nothing in this PSA shall
assign to a Party any ownership rights in or to the Pre-Existing Intellectual
Property of the other Party. For the purposes of this PSA, “Pre-Existing
Intellectual Property” means intellectual property or materials either
(i) developed, owned by, or licensed to a Party prior to the Effective Date;
(ii) otherwise independently developed outside of the scope of this PSA; or
(iii) any enhancements, modifications, or derivative works of (i) through
(iii) above. To the extent that the Parties agree to develop any intellectual
property not otherwise covered in this Section 10, the ownership of such
property will be agreed to by the Parties at such time.
11. Indemnification; Limitations
     a. Indemnification
          i. Indemnification by IBM. Subject to the limitations imposed by
Section 11(b), IBM shall indemnify, defend, and hold harmless Athena and
Athena’s directors, officers, employees, and agents from and

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against any and all third-party claims, suits, proceedings, damages,
liabilities, losses, costs, and expenses (including, but not limited to,
reasonable attorneys’ fees) (all of the foregoing, collectively, “Claims”) to
the extent that such Claims relate to or arise out of IBM’s (A) infringement of
any intellectual property right of a third party, except to the extent that IBM
is acting at Athena’s direction or resulting from Athena’s combination of the
Services or any deliverable with any other intellectual property not supplied by
IBM pursuant to this PSA; (B) breach of confidentiality as stated in Section 9
or of Schedule B of this PSA; (C) violation of any applicable law or regulation
to which IBM is obligated to comply under this PSA; (D) breach of any of the
representations and warranties of IBM in Section 13; or (E) the * of IBM or any
of IBM’s directors, officers, employees, or agents.
          ii. Indemnification by Athena. Subject to the limitations imposed by
Section 11(b), Athena shall indemnify, defend, and hold harmless IBM and its
directors, officers, employees, and agents from and against any and all
third-party claims, suits, proceedings, damages, liabilities, losses, costs, and
expenses (including, but not limited to, reasonable attorneys’ fees) (all of the
foregoing, collectively, “Claims”) to the extent that such Claims relate to or
arise out of Athena’s (A) infringement of any intellectual property right of a
third party; (B) breach of confidentiality as stated in Section 9 or of
Schedule B of this PSA; (C) violation of any applicable law or regulation to
which Athena is obligated to comply under this PSA; (D) breach of any of the
representations and warranties of Athena in Section 13; or (E) the recklessness
or willful misconduct of Athena or any of Athena’s directors, officers,
employees, or agents.
          iii. Procedure. Each indemnitee shall promptly notify the Party from
which it is seeking indemnification of any Claim that might give rise to that
Party’s obligations under this Section 11, and that Party shall be relieved of
such obligations as to that indemnitee if the indemnitee fails to provide such
notice and that Party is materially harmed by such failure. The indemnifying
Party shall have the right to immediately take control of the defense and
investigation of such Claim and to employ and engage attorneys of its sole
choice to handle and defend the same, at the its sole expense. Each indemnitee
shall cooperate in all reasonable respects with the indemnifying Party and its
attorneys in the investigation, trial, and defense of each Claim and any appeal
arising therefrom; provided, however, that the indemnitee may participate, at
its own expense, in such investigation of such Claim arising therefrom. No Party
shall be liable for any costs or expenses incurred without that Party’s prior
written authorization. The indemnifying Party has full authority to settle any
indemnified claims at the indemnifying Party’s expense, except that any
settlement requiring action by the indemnitee must be approved by the
indemnitee, such approval not to be unreasonably withheld.
     b. Limitation of Liability
     Notwithstanding any provision of this PSA to the contrary and subject to
Section 1.10 of the Master Agreement, except for breach of Section 10, no Party
shall, in any event, regardless of the form of claim, be liable for (i) any
indirect, special, punitive, exemplary, speculative, or consequential damages
(including, but not limited to, any loss of use, loss of data, business
interruption, and loss of income or profits), regardless of whether it had an
advance notice of the possibility of any such damages; or (ii) damages relating
to any claim that accrued more than two (2) years before the institution of
adversarial proceedings thereon.
12. AthenaNet System Access and Use
     a. Definitions
          i. The “athenaNet System” means software applications, associated
databases, and associated technology made available by Athena on an ASP basis
that comprises Athena’s multi-user practice and clinical management system. The
athenaNet System technology includes, without limitation, the screens,
functions, and formats for organizing or presenting data and data made available
by Athena as part of the athenaNet System and the manuals, specifications,
instructions, and training provided by Athena in connection with the athenaNet
System, whether written or otherwise.
          ii. “Other Systems” means other electronic systems or databases of
Athena to which IBM may need access rights for the performance of its
obligations under this PSA.
          iii. “Athena Systems” mean the athenaNet System and Other Systems,
collectively.
     b. Access and Use. IBM shall take, and have each of its users take, the
following steps when accessing the Athena Systems:

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          i. To the extent necessary for provision of Services under this PSA,
during the term of this PSA, Athena hereby grants to IBM the right to access and
use the Athena Systems on a non-exclusive basis subject to the terms and
conditions contained herein.
          ii. IBM will not access or use the Athena Systems other than in
compliance with all policies and procedures that Athena may provide to IBM from
time to time (including, without limitation, policies and procedures for
administering role-based access levels and adding and removing users).
          iii. To the extent that any software, hardware, equipment, or other
electronic system at Athena is necessary for use by IBM for provision of the
Services and is licensed to Athena by a third party, IBM will not access or use
such system other than in compliance with such license, and Athena will provide
the terms and restrictions of such license to IBM. Athena shall secure IBM the
right to access and use any such third-party system, and Athena shall pay any
fees, costs, and expenses associated with such access.
          iv. IBM will not knowingly, directly or indirectly, export or transmit
(A) any software, application, access to any Athena Systems, or any related
documentation or technical data or (B) any product, part, process, or service
that is the direct product of any of the Services in or to any country to which
such export or transmission is restricted by regulation or statute without the
prior written consent, if required, of the Office of Export Administration of
the United States Department of Commerce or such other governmental entity as
may have jurisdiction over such export or transmission. In addition, and without
limitation of the foregoing, IBM will not knowingly, directly or indirectly,
export or transmit any of the foregoing to any country other than as required to
perform its obligations under this PSA. Athena acknowledges IBM’s need and right
to access the Athena Systems from the remote locations set forth in this PSA.
          v. IBM will not access or use the Athena Systems except as required to
perform its obligations under this PSA.
          vi. In accessing or using the Athena Systems, IBM will not (A) make
such access or use in connection with provision of any services to any third
party; (B) make such access or use other than through and by its own employees
who are registered with Athena individually as authorized users thereof;
(C) make such access or use other than by electronically secure means and
methods approved in advance in writing by Athena and only by the use of unique
and confidential Login IDs and passwords applied to each individual user;
(D) resell, lease, encumber, sublicense, distribute, publish, transmit, or
provide such access or use to any third party in any medium whatsoever; (E) make
such access or use accessible on any public system or multiple computer or user
arrangement or network to anyone except Athena and IBM; (F) derive
specifications from, reverse engineer, reverse compile, disassemble, or create
derivative works based on Athena Systems applications; (G) copy data or screens
from the Athena Systems; or (H) knowingly input or post through or to the Athena
Systems any content that is illegal, threatening, harmful, lewd, offensive, or
defamatory or that infringes the intellectual property rights, privacy rights,
or rights of publicity of others or that contains any virus, worm, Trojan Horse,
or other mechanism that could damage or impair the operation of the Athena
Systems or grant unauthorized access thereto.
          vii. IBM will not make or operate or permit operation of any copy of
any elements of the Athena Systems, except as explicitly authorized by Athena in
writing or as may be necessary for the provision of the Services. If and to the
extent that IBM makes or operates any copy of the Athena Systems, such copy will
belong exclusively to Athena and will be located only upon a server with a root
password solely owned and controlled by Athena, and IBM will not restrict or
permit restriction of electronic or physical access of Athena to such server.
          viii. In accessing or using the Athena Systems, IBM will not knowingly
order, review, access, or use any data in excess of that reasonably necessary
for it to perform its obligations under this PSA.
          ix. IBM will limit access to and use of the Athena Systems by its
personnel to secure levels agreed to by Athena. IBM is responsible for the
actions of individuals to which IBM grants access to the Athena Systems. If IBM
or any of its employees discloses user credentials to an unauthorized person,
IBM is validating the identity and authority of such person to act on its behalf
as to any access or use of Athena Systems with such credentials and will be
responsible for such access and use. IBM will notify Athena immediately if it
becomes aware of any unauthorized use of any Athena Systems username or
password, or, where applicable, a IBM user making more than three failed system
log-on attempts during any given day, and will take reasonable steps with

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Athena to shut off access to the Athena Systems by the individual associated
with such username or password, and Athena will reset access only with IBM
authorization.
     c. Facility Security. With respect to a facility owned or leased by or on
behalf of IBM where it creates, receives, maintains, or transmits PHI on behalf
of Athena, where applicable, IBM shall implement administrative, physical, and
technical safeguards that reasonably and appropriately protect the
confidentiality, integrity, and availability of PHI.
13. Representations and Warranties
     a. Representations and Warranties of Both Parties. Each Party makes the
following representations and warranties to the other Party.
          i. Neither it nor, to its knowledge, its agents or permitted
subcontractors: (A) has been convicted of a federal health care crime; (B) has
been excluded from participation in any federal health care program; or (C) is
currently under investigation or involved in any legal proceeding which may lead
to such a conviction or exclusion. Each Party will notify the other Party
immediately if any of the foregoing occur, and such events shall constitute
cause for termination on the part of the notified Party.
          ii. Throughout the Term, it will maintain a compliance program
intended to conform in material respects with the guidelines set forth in the
U.S. Sentencing Guidelines and the Office of Inspector General’s Compliance
Program Guide for Third Party Medical Billing Companies. Upon request, a copy of
such compliance program will be provided to the other Party, which program shall
be treated as Confidential Information.
          iii. It has all requisite corporate power and authority to execute,
deliver, and perform its obligations under this PSA; the execution, delivery,
and performance of this PSA has been duly authorized by it; and no approval,
authorization, or consent of any governmental or regulatory authority is
required to be obtained by it or made in order for it to enter into and perform
its obligations under this PSA.
          iv. Throughout the Term, it shall not knowingly or as a result of
gross negligence permit any media, data, or software provided by it to the other
Party to contain any code, virus, or other mechanism to disable, adversely
affect, harm, or grant unauthorized access or use to Athena Systems or Athena’s
equipment or data. Upon its discovery of any such code, virus, or mechanism, it
shall promptly notify the other Party.
          v. Throughout the Term, (A) it shall not disclose Medicaid
Confidential Data as defined under statues or regulations of the State or New
York without prior written approval of the New York State Department of Health
Office of Medicaid Management; (B) to the extent that it has access to
eligibility data from Medicare or any Medicaid Program, it will each restrict
its access to such Medicaid and Medicare eligibility data to the sole purpose of
verification of patient eligibility for Medicaid and Medicare benefits
respectively where the patient has requested such payment for medical services;
and (C) to the extent that it receives or has access to health information
sourced from or provided by the State of New York or any agency thereof, it
shall be in compliance with the New York State AIDS/HIV Related Confidentiality
Restrictions Notice hereinafter stated:
“This information has been disclosed to you from confidential records, which are
protected by state law. State law prohibits you from making any further
disclosure of this information without the specific written consent of the
person to whom it pertains, or as otherwise permitted by law. Any unauthorized
further disclosure in violation of state law may result in a fine or jail
sentence or both. A general authorization for the release of medical or other
information is not sufficient authorization for further disclosure.”
     b. Representations and Warranties of IBM. IBM makes the following
representations and warranties to Athena.
          i. During the Term, IBM will comply with all employee and workplace
laws, regulations, and requirements in the countries in which IBM provides the
Services. IBM will provide to Athena, upon Athena’s

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reasonable request from time to time, appropriate written assurances regarding
the specific compliance steps and measures that IBM has taken.
          ii. IBM has sufficient right and title to all third-party software,
hardware, or other equipment (other than Athena Systems and third-party
software) that it uses in the provision of Services under this PSA, and,
throughout the Term, IBM will comply with all terms and conditions of licenses
or consents agreed to by IBM with any third party in respect of any software,
hardware, or other equipment that IBM uses to provide the Services.
          iii. Throughout the Term, any encryption software provided by IBM to
Athena for use in connection with the Services or used by IBM in connection with
the Services complies substantially with the encryption requirements set forth
in HCFA Internet Security Policy issued November 24, 1998, as it may be amended
or updated from time to time, and provides encryption protection equal to or
exceeding 128-bit encryption.
          iv. Each of the provisions of this PSA are valid and enforceable with
respect to each IBM entity in each jurisdiction in which IBM may provide the
Services.
14. General Provisions
     a. Nothing in this PSA is intended or shall be construed or interpreted to
give any person or entity other than the Parties any legal or equitable right,
remedy, or claim under or in respect of this PSA or any provision contained
herein.
     b. This PSA may be executed in counterparts, each of which shall be deemed
an original, but both of which together shall constitute one and the same
instrument.
     c. This PSA shall be governed and construed in all respects in accordance
with the laws of the Commonwealth of Massachusetts. Any claims relating to this
PSA or the provision of the Services shall be brought in the federal or state
courts sitting in Massachusetts, and IBM shall be considered IBM’s agent for
service of process.
     d. Nothing in this PSA shall be deemed to create a partnership, joint
venture, agency, or employment relationship between the Parties. IBM shall be
deemed to be an independent contractor. Except as expressly provided in this
PSA, IBM shall be responsible for all of its costs and expenses incurred in
connection with the provision of the Services, including, but not limited to,
all costs and expenses pertaining to its employees and agents.
     e. No Party may assign any of its rights or obligations under this PSA to
any third party without the prior written consent of the other Party; provided,
however, that Athena may assign its rights and obligations hereunder to any of
its affiliates or any successor-in-interest as the result of merger,
consolidation, or the acquisition of all or substantially all of the assets of,
or a majority equity interest in, Athena.
     f. Each Party shall be relieved of its failure to perform any obligations
under this PSA, other than a payment obligation, if and to the extent that such
failure is attributed to circumstances outside of its control, including, but
not limited to, the other Party’s failure to perform any of its responsibilities
in accordance with this PSA.
     g. Any amendment of or supplement to this PSA, and any waiver of any breach
or provision hereof, must be in writing and signed by both Parties.
     h. All notices and other communications under this PSA (other than routine
operational communications) must be in writing and shall be deemed given
(i) upon hand delivery, (ii) one day after deposit with an internationally
recognized overnight courier with a reliable system for tracking delivery, or
(iii) upon receipt of facsimile or electronic mail with confirmation of
delivery, in each case to the address, facsimile number, or email address of the
intended recipient set forth below or such other address, facsimile number, or
email address as the intended recipient may specify by notice from time to time:

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If to IBM:
  International Business Machines Corporation
 
  Senior Counsel, Managed Business Process Services
 
  294 Route 100, Building 4, 2D-09
 
  Somers, NY 10589-3216
 
  Attn: David Brown
 
  Facsimile: (914) 766-8445
 
  Email:                                                         
 
   
If to Athena:
  athenahealth, Inc.
 
  311 Arsenal Street
 
  Watertown, MA 02472
 
  Attn: Daniel Orenstein, General Counsel
 
  Facsimile: +1 617-402-1099
 
  Email: dorenstein@athenahealth.com

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          In witness whereof, the Parties have executed this PSA as of the
Effective Date.

                    International Business Machines Corporation      
athenahealth, Inc.  
 
                 
By:
  /s/ Anthony C. Martinez       By:   /s/ Jonathan Bush  
 
                 
 
  Name: Anthony C. Martinez           Name: Jonathan Bush  
 
  Title: General Manager           Title: CEO  
 
                Date: 10/2/09       Date: 10/2/09  

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Exhibit A — FORM OF PROJECT CHANGE REQUEST
In accordance with the terms and conditions of the Professional Services
Agreement dated September 30, 2009 (the “PSA”), between athenahealth, Inc.
(“Athena”) and International Business Machines Corporation (“IBM”), it is agreed
between the parties thereto that the additional services described below (the
“Services’’) are not currently included in the scope of services of Schedule A
to the PSA, as it may have been modified from time to time.
Athena has therefore requested a project change to include the Services under
the PSA, and IBM is willing to provide the Services under the same terms and
conditions of the PSA and Schedule A thereto, subject to the additional terms
(including payment terms) described herein:
IBM shall perform such Services as described below:
This Change Order is to be effective from _________ (the “Commencement Date”).
1. Description of Services

  a.   Initial Scope of Support:     b.   Required FTE’s and other required
support personnel:     c.   Is billable training required to support
implementation of PCR?     d.   If yes, describe below in detail the training to
be delivered, each parties responsibility related to the delivery of the
training, and the number of billable training hours authorized by the Athena    
e.   In support of implementation of the Services, the Athena will:     f.   In
support of implementation of the Services, IBM will:     g.   Completion
Criteria: This section to be used to document the criteria that will indicate
completion of this PCR

2. Payment
The price to be charged for the services will be as set forth below. The
invoicing and payments terms will be as per the PSA (if this is the case).
This section should include any relevant details supporting the Payment required
including number or hours, rates, any non-personnel related charges (travel
expenses, hardware or software, development costs, etc.)
3. Service Levels
This section to be used to document any expected Service Level impact related to
implementation of the change
4. Forecasts
This section to be used to document any expected Forecast impact related to
implementation of the change
In witness whereof, the parties below have executed this Project Change Request
as of the date first signed below.

                      International Business Machines Corporation      
athenahealth, Inc.    
 
                   
By:
 
 
      By:  
 
   
 
  Name:           Name:    
 
  Title:           Title:    
 
                   
Date:
 
 
      Date:  
 
   

      IBM/Athena Confidential   Exhibit A-1

 

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Schedule A — Services Description
This Schedule A describes the Services to be provided by IBM under the PSA
including the duties and responsibilities of IBM and Athena related to IBM’s
provision of the Services as well as any related service levels and
deliverables. This Schedule A also consists of the following attachments which
describe the specific effort which comprise the Services:

  1)   Schedule A-1 — Explanation of Benefits Posting Process     2)  
Schedule A-2 — Payer Contact Services     3)   Schedule A-3 — Enrollment
Services     4)   Schedule A-4 — Clinical Document Services

Capitalized terms used but not defined in this Schedule shall have the same
meaning assigned to such terms in the PSA unless the context in which such terms
are used in this Schedule require a different meaning.
1. Definitions

  1)   Agent means an IBM resource working on the Athena account.     2)   At
Risk Amount shall mean the amount available for Service Level Credits and shall
not exceed an amount equal to * of the previous month’s monthly recurring
charges for the Service described in that specific Schedule (e.g., Schedule A-1,
Schedule A-2, etc). For the avoidance of doubt, in no event shall the aggregate
At Risk Amount for any month exceed * of the aggregate recurring charges for
such month.     3)   athenaNet means the Athena proprietary application used by
IBM to provide the Services described in this Schedule to Athena.     4)  
Available Hour means the number of hours an Agent is available to work on
Athena’s project.     5)   Batch means a group of images which may include EOBs,
checks, and other remittance documents. This batch of documents will be provided
to IBM by Athena as set forth in this Schedule A for processing by IBM.     6)  
Business Days refers to the days in which Athena is open for business. For
purposes of this Schedule A, it will be Monday through Friday (excluding
Saturday and Sunday and Athena holidays. Athena and IBM will establish the
holiday schedule on an annual basis.     7)   Claim Data Dump means the daily
file provided by Athena listing all claims sent to the Payers in a mutually
agreed format.     8)   EOB means the scanned image of the paper copy of the
explanation of benefits supplied by the Payers.     9)   Evaluation Period shall
mean * days from the Go Live date for a given business process during which
period IBM will validate the targeted Service Levels which have been provided to
IBM by Athena.     10)   FTP Server means the file transfer protocol server
provided by IBM for Athena to transfer daily batch of EOBs, Claims Data Dump,
Payer Data Dump and Remittance Data File.     11)   Go Live means the time when
pre-process and process training is complete and Agents begin to perform the
Services.     12)   IBM Project Executive means the full-time IBM resource
responsible for the delivery of the Athena project. The IBM Project Executive
will be a full-time resource who acts as a single point of contact for the
Athena management.     13)   Kick Code means a code attached to a claim to
identify its current status and/or the next step(s) in the claim handling
process.

      IBM/Athena Confidential   Page 1 of 20

 

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  14)   Payer means health insurance companies to whom Athena sends claims on
behalf of the providers.     15)   Payer Data Dump means the daily file provided
by Athena listing Payer information in a mutually agreed format.     16)  
Payment Posting Process means the Athena process of processing the electronic
remittance file (ANSI 835 transaction) and Remittance Data File into the
athenaNet application.     17)   Remittance Data File means the daily file
created by IBM by entering EOB remittance data in a mutually agreed format.    
18)   Service Level shall mean those levels of service as established in
accordance with Section 4 of this Schedule A and set forth in Schedules A-1
through A-4.     19)   Wave means a group of IBM trainees starting and
completing pre-process and process training together as a class.

2. Overall Description of Services
IBM shall provide the Services as specifically described in Schedules A-1
through A-4 attached hereto. In support of the provision of such Services and in
addition to the responsibilities set forth in Schedules A-1 through A-4, the
parties will perform the general responsibilities described below.

  2.1   General Responsibilities

  (a)   IBM Responsibilities. In support of the Services, IBM will:

  (i.)    Participate in conference calls (as needed) to review progress against
mutually agreed transition plan and ongoing operations. Provide web conference
and/or video conference capabilities if available and as necessary to
accommodate business needs;     (ii.)    Provide process training to IBM
resources after the completion of process training for the initial transition
Wave at designated IBM locations in India and the Philippines;     (iii.)   
Provide Athena with clear and consistent communication related to the any issues
affecting or impacting the delivery of requirements described in each of the
schedules;     (iv.)    Perform athenaNet administration tasks necessary to
maintain the user groups for IBM resources;     (v.)    Communicate to the
Athena Operations Manager any changes that may materially affect Athena’s
business operating environment;     (vi.)    Report to Athena management
problems and issues impacting IBM’s provision of the Services that may require
Athena’s attention and/or resolution;     (vii.)    Coordinate resolution of
issues raised by Athena management and, as necessary, escalate within IBM;    
(viii.)    Work with Athena to provide findings and recommendations intended to
improve operational efficiencies;     (ix.)    Manage the transition of the
processes according to the agreed schedule; and     (x.)    Jointly work with
Athena to develop a communication and management plan, which may consist of the
following:

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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

  a.   Performance reviews with respect to the Services;     b.   Forecasting
and scheduling review with Athena’s workforce management team;     c.   Training
review with Athena’s training team;     d.   Quality review with Athena’s
quality team;     e.   Quality calibrations; and     f.   Monthly and quarterly
reviews as agreed by both Parties.

To the extent that Athena’s performance of any obligation requires or is
contingent upon IBM’s performance of an obligation under this Schedule, and IBM
unreasonably delays or withholds its performance beyond the applicable time
period therefor (or beyond five (5) business days, if a time period is not
specified), Athena will be relieved of such obligation until a reasonable period
following IBM’s performance of its responsibility. *

  (b)   Athena Responsibilities. In support of the Services, Athena will:

  (i)   Provide forecasts and transaction inflow data to identify anticipated
volume patterns for each Service. Current estimates of those volume distribution
patterns are provided in each subsequent schedule;     (ii)   Ensure athenaNet
system is available daily from 6 AM to 1 AM ET, seven (7) days a week, with
99.7% availability during this timeframe;     (iii)   Provide trainers and
training material to IBM during process training for the initial transition Wave
at designated IBM locations in India and the Philippines. The support of Athena
trainers and SME to IBM would continue as needed for a period of up to four
(4) weeks following completion of classroom training of the initial transition
Wave;     (iv)   Provide training materials as appropriate for any changes in
AthenaNet application or Athena-owned business processes. Any extraordinary
training would be through the PCK process. Routine updates are covered in cost;
    (v)   Maintain the underlying athenaNet functionality that supports the
activities comprising the Services;     (vi)   Provide detailed workflow
information and supplemented training information as needed to support the
Services;     (vii)   Provide IBM with a glide path for Service Level
performance goals during Evaluation Period for each of the Services described in
this Schedule;     (viii)   Manage the transition of the processes according to
the agreed schedule;     (ix)   Provide IBM clear and consistent direction and
communication related to the Services, and manage communication between IBM and
any other parties engaged by Athena;     (x)   Participate in conference calls
(as needed) to review progress against mutually agreed transition plan and
ongoing operations. Provide web conference and/or video conference capabilities
if available and as necessary to accommodate business needs; and     (xi)  
Jointly work with IBM to develop a communication and management plan, why may
consist of the following:

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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

  1.   Performance reviews with respect to the Services;     2.   Forecasting
and scheduling review with Athena’s workforce management team;     3.   Training
review with Athena’s training team;     4.   Quality review with Athena’s
quality team;     5.   Quality calibrations; and     6.   Monthly and quarterly
reviews as agreed by both Parties.

To the extent that IBM’s performance of the Services requires or is contingent
upon Athena’s performance of an obligation (including providing approval or
notification or taking a recommended corrective action) under this Schedule, and
Athena unreasonably delays or withholds its performance beyond the applicable
time period therefor (or beyond * business days, if a time period is not
specified), IBM will be relieved of its obligation to perform such Services
until a reasonable period following Athena’s performance of its responsibility.
Athena will pay IBM for any additional expenses incurred as a result of Athena’s
delay or nonperformance.

  2.2   Disaster Recovery Responsibilities

Within the first 90 days following the Effective Date, IBM will work with Athena
to jointly develop a business continuity/disaster recovery plan for the delivery
of Services. IBM will at all times maintain, at a minimum, its predefined Level
1/Level 2 support disaster recovery plan which includes the following:

     
Information & Technology
  *
Power & Utilities
  *
Transport & Catering
  *
Fire & Medical Emergencies
  *
IT services Availability
  *
Server Management Level
  *
Network & Connectivity Media Level
  *
Call Center Technology / Voice Infrastructure
  *

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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Infrastructure
3. Service Levels

  3.1   Evaluation Period

  (a)   With respect to the Service Levels set forth in this Schedule A, IBM
shall, during the Evaluation Period, measure the actual performance of the
Services against such Service Levels using the measurement tools and processes
agreed upon by the Parties and, based on such measured actual performance. The
value for such Service Level following the Evaluation Period shall be
established by taking into account the average levels of performance achieved by
Athena prior to the Effective Date of the PSA and the levels achieved by IBM
during the Evaluation Period. If it is determined that the Evaluation Period is
not indicative of Athena’s normal operating environment, Athena and IBM shall
mutually define another period, which is representative of Athena’s normal
operating environment.     (b)   Service Level Credits will not apply during the
Evaluation Period.

  3.2   Service Level Performance Reports

Each Service Level shall be measured on a monthly basis unless otherwise set
forth in the applicable Schedule. Within * Business Days after the end of each
calendar month during the Term, IBM shall provide to Athena monthly performance
reports, in soft copy form, to verify IBM’s performance with respect to the
Service Levels, including any failures to achieve the Service Levels and any
Service Level Credits to which Athena is entitled for such month. IBM shall
provide reasonably detailed supporting information for each report to Athena in
machine-readable form suitable for use on a personal computer. For Service
Levels that are not capable of being measured using a system tool, the Parties
shall agree upon an appropriate measurement methodology, including sample size
and measurement and reporting frequencies.

  3.3   Service Level Values.

Service Level values for the Services are set forth in the respective Schedules
A-1 through A-4 attached hereto.

  3.4   Credit Calculation.

For failure to meet a Service Level, IBM will pay Athena a Service Level Credit
which will be determined according to the following:

  1.   Each Service Level is assigned a weighting factor, as set forth in the
respective Services Schedules. No single weighting factor shall exceed * with
the exception of those Services Schedules that have *. The total of the
weighting factors for all Service Levels within a Service Schedule shall not
exceed *.     2.   The weighting factor for any missed Service Level in a given
month will be multiplied by the applicable At Risk Amount for such month to
determine the amount of Service Level Credit to be subtracted from the following
months invoice. In no event shall the total amount due as a credit in any given
month exceed the At Risk Amount for such month. Additionally, if the monthly
recurring charge for a given month has not been incurred, or for any other
reason has been credited or waived, no Service Level Credit will be applicable
for such month.     3.5   Service Level Exclusions.

IBM shall be excused from failure to meet any Service Level (including being
excused from any related Service Level Credit) to the extent such failure is
attributable to:

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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

  (a)   Force Majeure;     (b)   Breach of the PSA by Athena or any Athena
obligation under the PSA to the extent it affects IBM’s ability to achieve any
Service Level;     (c)   Act or omission by Athena;     (d)   Athena’s
prioritization of IBM’s resources provided IBM has informed Athena that such
prioritization may adversely impact IBM’s performance, including Athena request
for or utilization of the Services beyond * of the forecasted volumes;     (e)  
Problems determined to be caused by software code provided by Athena;     (f)  
Problems attributed to world wide web Internet cloud beyond IBM control; and    
(g)   Problems resulting from a technology component (network, hardware,
software, applications, etc.) for which Athena is responsible to the extent it
affects IBM’s ability to achieve any Service Level.

4. Reporting
IBM will provide standard monthly reports of volume processed each month and the
quality and turn around results as measured by IBM based on reports provided by
athenaNet. Athena will provide standard monthly report to IBM listing quality
results of Athena quality monitoring process. In addition, Athena will provide
IBM timely access to necessary production reports to enable IBM to manage their
performance of the Services.
5. Charges
IBM will invoice Athena in accordance with Section 6 of the PSA for the Services
described herein based on the amounts set forth in Schedule C.

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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Schedule A-1 — Explanation of Benefits Posting Process
1. Description of Services
The EOB posting process involves the processing of remittance related documents
received by Athena. Non-electronic payments, related EOB forms, and other
payment related documents are posted to provider accounts.
2. Exhibits

  •   Exhibit 1 — Claim Data Dump format     •   Exhibit 2 — Payer Data Dump
format     •   Exhibit 3 — Remittance Data File format

3. Location and Hours of Operations
EOB posting services will be provided from IBM location in Pune, India. Services
may be provided between the hours of 5 AM to 1 AM ET (following day) seven
(7) days a week. Volume distribution by day is expected to be approximately as
follows (these estimates are to be used for planning purposes only):

                              Monday   Tuesday   Wednesday   Thursday   Friday  
Saturday
Volume
  *   *   *   *   *   *

4. IBM Responsibilities

  4.1   Payment Posting Services

  (a)   Payment Batch Creation: IBM will review images in a daily batch and
perform any divisions necessary to prepare batches appropriate for EOB data
entry using the athenaNet application.     (b)   EOB Data Entry: IBM will:

  (i)   Perform data entry of payment and denial data from EOBs, payer or
patient checks, and other Payer provided documentation using IBM provided
offline application;     (ii)   Validate line item charges on EOBs against the
Claims Data Dump and payment;     (iii)   Enter denial data into Remittance Data
File;     (iv)   Utilize the Claims Data Dump and the Payer Data Dump to
facilitate data validation and to auto populate fields in order to expedite the
data entry process;     (v)   Provide the completed data from the application to
Athena using the Remittance Data File;     (vi)   post the Remittance Data File
to the IBM FTP server upon creation; and     (vii)   not be required to archive
any of these images after the processing of the image.

  (c)   Manual Payment Posting: IBM will:

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  (i)   manually post EOB charge lines that fail to auto-match and/or auto-post
in athenaNet; and     (ii)   will resolve the transactions in the batch that
were not automatically posted to athenaNet using IBM staff (“Posting Analysts”).

  4.2   Resolution of Unpostable Records: IBM will resolve records marked as
unpostable during the Payment Posting process and queued accordingly in the
AthenaNet application.     4.3   Resolution of Posting Errors: IBM will correct
records that are identified as having been posted in error and queued
accordingly in the AthenaNet application.

5. Athena Responsibilities
In support of IBM’s provision of the Services as described in this Schedule,
Athena will:

  (a)   Populate IBM posting exception work queues in AthenaNet by 5 AM ET each
Business Day;     (b)   Perform the following activities on days when images are
to be processed:

  (i)   Prepare daily batch of images and transfer them to the FTP Server by 5
AM ET each Business Day;     (ii)   Transfer Claims Data Dump to the FTP Server
by 5 AM ET each Business Day; and     (iii)   Transfer Payer Data Dump to the
FTP Server by 5 AM ET each Business Day.

  (c)   Provide monthly forecast of projected volume in terms of relevant
planning and billing units for each process;     (d)   Pull IBM posted
Remittance Data File from the FTP Server daily throughout the Business Day per
the agreed upon schedule     (e)   Maintain the connectivity of their FTP
servers to the Internet and sufficient bandwidth to support the volume and
timeframes depicted in this Schedule;     (f)   Provide IBM with application
licenses required to perform the Services, including CITRIX licenses if
required; and     (g)   Provide a real-time assignment queue in athenaNet to
allocate unresolved batches in priority order to Posting Analysts.

6. Service Levels
In accordance with Section 4 of Schedule A, IBM will strive to perform the
Services in accordance with business rules supplied by Athena as of the
Effective Date and meet the Service Levels and Quality Standards set forth in
this Section. If such business rules change in a manner so that the Service
Levels and Quality Standards are affected, then IBM shall notify Athena, and the
Parties will work together as necessary to establish new Service Levels and
Quality Standards.
During the Evaluation Period for each process, IBM will evaluate the actual
performance against the targeted service levels which have been provided by
Athena. Should discrepancies exist, IBM and Athena will jointly develop an
appropriate plan to revise the targeted Service Level.

  6.1   Measurement.

Performance against the Service Levels stated herein will be measures as
described below.

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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

  (a)   Process Turnaround Time: Average process turnaround time for all
remittance related documents in any given month will be within *. Process
turnaround time will be measured as the time duration between the placement of
the remittance images on the IBM FTP Server by Athena to the placement of the
Remittance Data File on the IBM FTP server by IBM.     (b)   Quality: IBM and
Athena will work jointly to develop a data accuracy quality management process
by the end of Evaluation Period. IBM is expected to meet * data accuracy quality
standard.

  6.2   Service Level Weighting Factors:

          Service Level   Weighting Factor
Process Turnaround Time
    *  
Quality
    *  
Total Weighting Factor (not to exceed 100%)
  100%

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Schedule A-1, Exhibits 1, 2 and 3
Exhibit 1 — Claim Data Dump format (attachment removed)
Exhibit 2 — Payer Data Dump format (attachment removed)
Exhibit 3 — Remittance Data File format (attachment removed)

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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Schedule A-2 — Payer Contact Services
1. Description of Services
Payer Contact Services consist of the communication needed between Athena and
the payer community for the purposes of Revenue Cycle Management. Payers may be
contacted to determine the status of a claim and related payment, provide
additional detail regarding a claim, or clarify the reason for denied claim.
2. Location and Hours of Operations
Payer Contact Services will be provided from IBM locations in Pune, India and in
Manila, Philippines. Services may be provided between the hours of 8 AM to 8 PM
ET on Business Days. Volume distribution by day is expected to be approximately
as follows (these estimates are to be used for planning purposes only):

                                                      Monday   Tuesday  
Wednesday   Thursday   Friday   Saturday
Volume
    *       *       *       *       *       *  

3. IBM Responsibilities

  3.1   Claim Tracking Services

Claim Tracking involves contacting payers via web, telephone, fax, and direct
mail inquiries in an effort to obtain claim status information and to update
athenaNet with the same. The claims processed in this workflow have an unknown
payer adjudication status or require payer contact to process. The goal of the
workflow is to identify any payer processing issues that may have delayed
adjudication and payment and to either resolve the issue or notify the
appropriate next responsible party to initiate resolution.
Athena places claims in this workflow in a worklist daily for processing by the
IBM Claim Tracking Team. Prior to contacting the payer for claim status, claims
must first be thoroughly reviewed through a detailed analysis of the claim
history, including, without limitation, (i) review of claim-related events in
chronological order to understand the processing to date of each claim,
(ii) review of any payments posted or documentation attached to the claim that
could impact the dialogue with the payer once contact is established, and
(iii) review of all relevant demographic data prior to contacting the payer so
that the call agent has a firm understanding of the types of insurance coverage
the patient currently has or may have had in the past.
On completion of the above analysis, including identification of the payer with
whom processing status is unknown, the agent will contact the payer by calling
the number(s) listed in athenaNet, or by another contact method as directed by
Athena.
The Claim Tracking team will follow documented workflows supplied by Athena.
Details of the call and the relevant data points collected for each payer
contact event will be updated in athenaNet through (i) direct entry in unique
data fields and (ii) creation of an updated claim note that contains a unique
Kick Code to characterize the information received from the payer and to
identify the specific reason for the call.

  3.2   Remittance Tracking Services

Remittance Tracking involves contacting payers via web, telephone, fax, and
direct mail inquiries to obtain copies of claim remittance and proof of payment
to be used for posting

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activities. The claims processed in this workflow are known to be paid claims,
as documented in connection with a previous payer contact event. The goals of
this workflow are to (i) obtain a copy of the remittance detail (EOB/ERA) and
proof of payment (check copy of verbal confirmation of disbursement details),
(ii) forward the remittance detail and proof of payment to the posting
department for claim posting, and (iii) identify any possible reasons for the
initial failure of the remittance documents to be received and processed in a
timely manner. The primary activity is confirmation of the pay-to address used
by the relevant payer.
Athena places claims in this workflow in a worklist daily for processing by the
IBM Remittance Tracking Team. Prior to contacting the payer for claim status,
claims must first be thoroughly reviewed through a detailed analysis of the
claim history, including, without limitation, (i) review of claim-related events
in chronological order to understand the processing to date of each claim,
(ii) review of any payments posted or documentation attached to the claim that
could impact the dialogue with the payer once contact is established,
(iii) review of all relevant unpostables inventory in athenaNet to search for
missing remittance documentation prior to contacting the payer, and (iv) review
of all relevant demographic data.
It can be the case that the remittance documents have already been received and
a processing oversight or timing delay may have resulted in a failure to apply
information to the claim. Since the payer has already been contacted and
confirmed payment, the claim history will contain many of the payment details.
These payment details can be used to search data fields in the unpostables
library in order to aid the process of identifying previously received data that
might now be able to be applied to the claim.
On completion of the above analysis, including identification of the payer from
which remittance documentation is needed, the agent will contact the payer by
calling the number(s) listed in athenaNet, or by another contact method as
directed by Athena.
The Remittance Tracking Team will follow documented workflows supplied by
Athena. Details of the call and the relevant data points collected for each
payer contact event will be updated in athenaNet through (i) direct entry in
unique data fields, and (ii) creation of an updated claim note that contains a
unique Kick Code to characterize the information received from the payer and to
identify the specific reason for the call.

  3.3   Unpostables Tracking

Unpostables Tracking involves contacting payers via web, telephone, fax, and
direct mail inquiries to obtain detailed claim data or copies of claim
remittance and proof of payment to be used for posting activities for unpostable
records. Unpostable records are not able to be uniquely associated with a
specific charge line in athenaNet and therefore are not yet postable into the
system. The goal of the workflow is to obtain the information needed to
supplement the unpostable record so that the data can then be applied to
individual charge lines in athenaNet and posted accordingly.
Only unpostable records for which contact with the payer is required to aid
resolution are processed in this workflow. Unpostable records are categorized by
the characteristics and resolution path of the records. The categories handled
by the Unpostables Tracking process are:

  •   Missing EOB     •   Missing Check     •   Missing EFT     •   Missing Page
    •   Provider Takeback     •   Check Amount Different than EOB     •   Rebate
Check

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  •   Unreadable EOB

Athena places claims in this workflow daily for processing by the IBM
Unpostables Tracking Team. Prior to contacting the payer on an unpostable
record, the record must first be thoroughly reviewed through a detailed analysis
of the unpostable history, including, without limitation, (i) review of all
events visible from the unpostable edit page in chronological order to
understand the processing to date of each record, and (ii) review of any changes
in status or added notes that could impact the dialogue with the payer once
contact is established.
On completion of the above analysis, including identification of the payer from
which remittance documentation is needed, the agent contacts the payer by
calling the number(s) listed in athenaNet, or by another contact method as
directed by Athena.
The Unpostables Tracking team will follow documented workflows supplied by
Athena. Details of the call and the relevant data points collected for each
payer contact event will be updated in athenaNet through (i) direct entry in
unique data fields; (ii) creation of an updated unpostable note that contains a
unique Kick Code to characterize the information received from the payer and to
identify the specific reason for the call; and (iii) identify likely reasons for
the initial failure of the transaction to be received and processed in a timely
manner.

  3.4   Denial Management Services

Denials Management involves contacting payers via web, telephone, fax, and
direct mail inquiries in an effort to obtain denial status information and to
update athenaNet with the same. The claims processed in this workflow have been
processed and denied by payers. The goal of the workflow is to identify any
opportunity to initiate reprocessing or reconsideration of the claim to have the
denial overturned and payment issued. In the case of a final denial, the goal is
to obtain as much detail about the reasons for the denial as possible to
appropriately categorize the payer and to use such information to avoid future
denials.
Athena places claims in this workflow in a worklist daily for processing by the
IBM Denial Management Team. Prior to contacting the payer for claim status,
claims must first be thoroughly reviewed through a detailed analysis of the
claim history, including, without limitation, (i) review of claim-related events
in chronological order to understand the processing to date of each claim,
(ii) review of any payments posted or documentation attached to the claim that
could impact the dialogue with the payer once contact is established, and
(iii) review of all relevant demographic data prior to contacting the payer so
that the call agent has a firm understanding of the types of insurance coverage
the patient currently has or may have had in the past.
On completion of the above analysis, including identification of the payer with
which the claim has been denied, the agent will contact the payer by calling the
number(s) listed in athenaNet, or by another contact method as directed by
Athena.
The Denials Management team will follow documented workflows supplied by Athena.
Whenever possible, reconsideration should be initiated over the phone. Team
members must exercise any available opportunity to initiate action over the
phone or a follow-up faxed resubmission, which may quickly re-start activity on
the claim and obtain payment. Details of the call and the relevant data points
collected for each payer contact event will be updated in athenaNet through
(i) direct entry in unique data fields and (ii) creation of an updated claim
note that contains a unique Kick Code to characterize the information received
from the payer and to identify the specific reason for the call, and
(iii) identify likely reasons for the initial failure of the claim to be
received and processed/approved in a timely manner.
4. Athena Responsibilities
In support of IBM’s provision of the Services as described in this Schedule,
Athena will:

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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

  (a)   Populate IBM work queues in athenaNet by 7 AM ET on all Business Days;
and     (b)   Provide IBM timely access to necessary production reports to
enable IBM to manage their performance of the Services; and     (c)   Provide
IBM with application licenses required to perform the Services, including CITRIX
licenses if required.

5. Service Levels
In accordance with Section 5 of Schedule A, IBM will strive to perform the
Services in accordance with business rules supplied by Athena as of the
Effective Date and meet the Service Levels and Quality Standards set forth in
this Section. If such business rules change in a manner so that the Service
Levels and Quality Standards are affected, then IBM shall notify Athena, and the
Parties will work together as necessary to establish new Service Levels and
Quality Standards.
During the Evaluation Period for each process, IBM will evaluate the actual
performance against the targeted service levels which have been provided by
Athena. Should discrepancies exist, IBM and Athena will jointly develop an
appropriate plan to revise the targeted Service Level.

  5.1   Measurement.

Performance against the Service Levels stated herein will be measures as
described below.

  (a)   Average process turnaround time for all claims in any given month will
be within *. Process turnaround time will be measured as the duration from the
date and time that the claim is received into the IBM work queue until the date
and time that the claim has been updated with a Kick Code and claim note.    
(b)   Quality: IBM will strive to maintain a quality rate of at least * each of
the service activities included in this Schedule A-2. The quality rating shall
be a combined quality score based on separate equally weighted scores for each
of (i) claims and (ii) calls, with respect to each such payer contact activity,
evaluated by Athena and IBM on a monthly basis. The quality measurement tool and
scoring method will be provided by Athena.         IBM will be required to
perform its own independent quality review using the Athena quality methodology.
Calibration sessions will be held periodically throughout the month to assist in
synchronization of global quality efforts. The size of the quality sample will
be determined and agreed by Athena and IBM.

  5.2   Service Level Weighting Factors:

          Service Level   Weighting Factor
Process Turnaround Time
    *  
Quality
    *  
Total Weighting Factor (not to exceed 100%)
  100%

6. Workflow, Security, and Technology
Specific workflow and training documentation will be provided by Athena. All
work to be completed must be based in, and all responses logged in, athenaNet
directly. All PHI and transaction data must be directly entered into athenaNet
and not stored in any auxiliary systems. Whenever present, discreet data fields
must be individually populated to store information rather than storing the same
in free text note fields. Each member of IBM’s staff must have an individual
workstation configuration that includes (at a minimum) Adobe

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Reader, and a desktop efax software program, as well as a direct call-back
extension and an individual voicemail box; protocols will be provided by Athena
regarding each staff member’s access to MS Office, personal email, web browsing,
printers, removable drives, and related matters. IBM will provide to Athena the
IP addresses of each workstation for access to athenaNet. Live call monitoring
and recording must be available.
As it relates to information technology,
IBM will:

  •   extend the voice connectivity provided by IBM at the IBM Points of
Presence (PoP) at New York and Los Angeles to the IBM Service Delivery locations
using IBM owned and maintained equipment. The application accessibility will be
through an internet based VPN connectivity;     •   procure and maintain voice
circuits and the associated toll free numbers (TFN);     •   provide voice T1 at
IBM POPs for outbound calling;     •   access application servers at the Athena
data center for application access (there is no local application server to be
hosted at IBM );     •   record * of voice calls after obtaining any consent
required from each call recipient to do so, which will be stored on-line for
thirty days and archived to tape for at least one year (Athena to provide such
advice and data as may be reasonably necessary to determine whether consent is
required); and     •   generate a standard Avaya CMS report to view agent
statistics.

Athena will:

  •   provide and maintain any external connectivity requirements to any other
third-party suppliers; and     •   provide application licenses required to
perform the Services, including CITRIX licenses if required.

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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

Schedule A-3 — Enrollment Services
1. Description of Services
This service consists of the activities necessary to onboard provider’s onto
Athena’s system with accurate remittance information, as well as to
maintain/monitor remittance information maintained by the payer. Activities
include contact payers and providers to validate remittance addresses and other
billing related information.
2. Location and Hours of Operations
Enrollment Services will be provided from IBM location in Manila, Philippines.
Services may be provided Business Days between the hours of 8 AM to 8 PM ET.
Volume distribution by day is expected to be approximately as follows (these
estimates are to be used for planning purposes only):

                                                      Monday   Tuesday  
Wednesday   Thursday   Friday   Saturday
Volume
    *       *       *       *       *       *  

3. IBM Responsibilities

  3.1   Outbound calling

This service entails verification and provider enrollment work across different
zones (Pay-to verification & changes, Lockbox Migration, Eligibility, Small
Group Implementation, Post Live Provider Number Add Services). Enrollment
Analysts typically call the Payer to verify the information provided in
athenaNet is accurate and follow up with Payers to make sure enrollment
paperwork is approved and confirmed. Once the Payer has verified the correct
information, then the same is documented in the athenaNet System along with any
pertinent information. In addition, the required documents (W-9, request letter,
Payer form) are faxed to the Payer to change the address. The majority of the
enrollment work is voice related, however in some cases faxing and/or website
verification is utilized. The Enrollment Analysts are allotted their daily work
through tasks in the AthenaNet application. If a client signature is required
for migration work, the US Team will complete this work. Any forms can be saved
to Citrix and sent back to the athena US Based Enrollment Team for completion.
Enrollment Analysts refer to the Payer Set-up Guide to determine the eligibility
enrollment process for Payers and clearinghouses. The Enrollment Analysts then
follow the process outlined in the Payer Set-up Guide to complete enrollment.
4. Athena Responsibilities
In support of IBM’s provision of the Services as described in this Schedule,
Athena will:

  (a)   Populate IBM work queues in athenaNet by 7 AM ET each Business Day; and
    (b)   Provide IBM timely access to necessary production reports to enable
IBM to manage their performance of the services.

5. Service Levels
In accordance with Section 5 of Schedule A, IBM will strive to perform the
Services in accordance with business rules supplied by Athena as of the
Effective Date and meet the Service Levels and Quality Standards set forth in
this Section. If such business rules change in a manner so that the Service
Levels and Quality Standards are affected, then IBM shall notify Athena, and the
Parties will work together as necessary to establish new Service Levels and
Quality Standards.

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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
During the Evaluation Period for each process, IBM will evaluate the actual
performance against the targeted service levels which have been provided by
Athena. Should discrepancies exist, IBM and Athena will jointly develop an
appropriate plan to revise the targeted Service Level.

  5.1   Measurement.

Performance against the Service Levels stated herein will be measures as
described below.

  (a)   Process Turnaround Time: IBM will process the work items in an average
of no later than * from the day the work item is received in the IBM work queue.
During the Evaluation Period, the Parties will work to define specific
timeframes at a task level. Process turnaround time will be measured as the date
and time from which the work is received into the IBM work queue until the date
and time that the appropriate update to the record has been made.

  5.2   Service Level Weighting Factors:

          Service Level   Weighting Factor
Process Turnaround Time
  100%
Total Weighting Factor (not to exceed 100%)
  100%

6. Workflow, Security, and Technology
Specific workflow and training documentation will be provided by Athena. All
work to be completed must be based in, and all responses logged in, athenaNet
directly. All PHI and transaction data must be directly entered into athenaNet
and not stored in any auxiliary systems, unless dictated by the process as
defined by Athena. Whenever present, discreet data fields must be individually
populated to store information rather than storing the same in free text note
fields. Each member of IBM’s staff must have an individual workstation
configuration that includes (at a minimum) Adobe Reader, and a desktop efax
software program, as well as a direct call-back extension and an individual
voicemail box; protocols will be provided by Athena regarding each staff
member’s access to MS Office, personal email, web browsing, printers, removable
drives, and related matters. IBM will provide to Athena the IP addresses of each
workstation for access to athenaNet. Live call monitoring and recording must be
available.
As it relates to information technology,
IBM will:

  •   extend the voice connectivity provided by IBM at the IBM Points of
Presence (PoP) at New York and Los Angeles to the IBM Service Delivery location
using IBM owned and maintained equipment. The application accessibility will be
through an internet based VPN connectivity;     •   procure and maintain voice
circuits and the associated toll free numbers (TFN);     •   provide voice T1 at
IBM POPs for outbound calling;     •   access application servers at the Athena
data center for application access (there is no local application server to be
hosted at IBM);     •   record 100% of voice calls after obtaining any consent
required from each call recipient to do so, which will be stored on-line for
thirty days and archived to tape for at least one year (Athena to provide such
advice and data as may be reasonably necessary to determine whether consent is
required); and

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  •   generate a standard Avaya CMS report to view agent statistics.

Athena will:

  •   provide and maintain any external connectivity requirements to any other
third-party suppliers; and     •   provide application licenses required to
perform the Services, including CITRIX licenses if required.

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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

Schedule A-4 — Clinical Document Services
1. Description of Services
This service includes appropriate classification and data extraction of various
document types of general correspondence to the provider office. The classified
documents follow specific works flows which facilitate further action (filing,
data entry, or other steps). Documents may include HIPAA forms, sports physical
forms, prescriptions, and lab results.
2. Location and Hours of Operations
Clinical Document Services will be provided from IBM location in Pune, India.
Services may be provided Business Days between the hours of 5 AM to 10 PM ET.
Volume distribution by day is expected to be approximately as follows (these
estimates are to be used for planning purposes only):

                                                      Monday   Tuesday  
Wednesday   Thursday   Friday   Saturday
Volume
    *       *       *       *       *       *  

3. IBM Responsibilities
IBM will work collaboratively with Athena to improve the efficiency of the
operation over time.

  3.1   Clinical Document Classification Services

IBM will identify the Document type and classify each Document in athenaNet in
accordance with the Business Rules. IBM will also, if applicable and in
accordance with the Business Rules, identify the patient to whom a Document
applies by reviewing the unique identifiers in each relevant document.

  3.2   Clinical Data Entry Services

IBM will enter appropriate data into the relevant fields in athenaNet in
accordance with the Business Rules.

  3.3   Clinical Quality Monitoring Services

IBM will perform quality assurance steps on each document by comparing the
information that IBM enters in athenaNet to the data contained within each
document, in accordance with quality assurance measures as mutually agreed
between Athena and IBM. In addition, Athena and IBM shall work together during
the term of this Statement of Work to develop formal, written Clinical Services
quality assurance specifications (the “QA Specifications”) which shall apply
upon approval by Athena and IBM. Prior to approval of the QA Specifications,
quality assurance shall be performed by both IBM and Athena. Upon such approval
of the QA Specifications, IBM shall assume full responsibility for quality
assurance with respect to the Clinical Services.
4. Athena Responsibilities
In support of IBM’s provision of the Services as described in this Schedule,
Athena will:

  (a)   Provide IBM timely access to necessary production reports to enable IBM
to manage their performance of the services.     (b)   Maintain the underlying
functionality of athenaNet that supports the worklists and queuing of records
for each of the clinical document services activities.

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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

  (c)   Provide application licenses required to perform the Services, including
CITRIX licenses if required.     (d)   Work collaboratively with IBM to improve
the efficiency of the operation over time.

5. Service Levels
In accordance with Section 5 of Schedule A, IBM will strive to perform the
Services in accordance with business rules supplied by Athena as of the
Effective Date and meet the Service Levels and Quality Standards set forth in
this Section. If such business rules change in a manner so that the Service
Levels and Quality Standards are affected, then IBM shall notify Athena, and the
Parties will work together as necessary to establish new Service Levels and
Quality Standards.
During the Evaluation Period for each process, IBM will evaluate the actual
performance against the targeted service levels which have been provided by
Athena. Should discrepancies exist, IBM and Athena will jointly develop an
appropriate plan to revise the targeted Service Level.

  5.1   Measurement.

     Performance against the Service Levels stated herein will be measured as
described below.

  (a)   Process Turnaround Time: IBM will process the work item in *from the
time the document is received and placed in athenaNet in the appropriate IBM
work queue. Other work items may have a turnaround time of * from the time the
work item is received on the IBM work queue. These turnaround times are valid
for the planned hours of operation as set forth in this Schedule. Process
turnaround time will be measured as the date and time from which the work is
received into the IBM work queue until the date and time that IBM has performed
the applicable action based on document type.

  5.2   Service Level Weighting Factors:

          Service Level   Weighting Factor
Process Turnaround Time
    *  
Total Weighting Factor (not to exceed 100%)
  100%

  5.3   Service Level Objectives

     Performance against the service level objective (SLO) stated below will be
measured as described below.

  (a)   Agent Productive Time: Assuming the IBM work queues are full, IBM will
achieve a monthly average of * per agent per hour with no agent below a monthly
average of * per hour.

This Service Level Objective will be monitored and benchmarked during the
Evaluation Period. Subsequent to the Evaluation Period, the Service Level
Objective shall revert to a Service Level Measurement, which will carry its own
performance target and Weighting Factor and all of the same standards and
obligations of other Service Level Measurements. At the time of its introduction
as a Service Level Measurement, the Productive Time Measure will be equally
weighted with the Process Turnaround Time Measure. Parties intend to move to a
transaction based pricing model over time at which time, this service level
measure may be replaced.

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Schedule B — BUSINESS ASSOCIATE TERMS AND CONDITIONS
1. Definitions. For purposes of this Appendix, capitalized terms used, but not
otherwise defined in the PSA or this Appendix shall have the same meaning as
given to those terms in 45 CFR §§160 and 164. For purposes of this Appendix,
“Business Associate” refers to IBM, and “Covered Entity” refers to Athena.
“Privacy Rule” refers to the privacy standards adopted under HIPAA and set forth
at 45 CFR § 164 Subpart E. “Security Rule” refers to the security standards
adopted under HIPAA and set forth at 45 CFR § 164 Subpart C.
2. Obligations and Activities of Business Associate
     Notwithstanding any provision to the contrary in the PSA, Business
Associate will:
     a. not use or disclose Protected Health Information that it receives from
or on behalf of Covered Entity (including Protected Health Information of
Covered Entity’s customers) or that it creates on behalf of Covered Entity
(collectively “PHI”) other than as permitted or required by the PSA, this
Appendix, or as required by law;
     b. not use or disclose PHI in a manner that would violate the requirements
of the Privacy Rule when done by Covered Entity, except as permitted by the PSA,
Section 3(b) or 3(c) below;
     c. use appropriate safeguards as specified in the PSA or as directly
applicable to IBM under HIPAA to prevent use or disclosure of the PHI other than
as provided for by the PSA and this Appendix;
     d. implement administrative, physical, and technical safeguards that
reasonably protect the confidentiality, integrity, and availability of PHI
(including electronic PHI) in accordance with the Privacy Rule as specified in
the PSA or as directly applicable to IBM under HIPAA;
     e. mitigate, to the extent practicable, any harmful effect that is known to
Business Associate of a use or disclosure of PHI by Business Associate in
violation of the requirements of the PSA or this Appendix;
     f. report promptly to Covered Entity (i) any use or disclosure of the PHI
not provided for by the PSA or this Appendix and (ii) any “security incident” as
defined in the Security Rule;
     g. require any agent, including a subcontractor, to whom it provides PHI
agrees to the same restrictions and conditions that apply through this Appendix
to Business Associate with respect to such information, and provide evidence of
such restrictions and conditions to Covered Entity at its request;
     h. provide access, at the request of Covered Entity, and in the time and
manner designated by Covered Entity, to PHI in a Designated Record Set, to
Covered Entity in order to meet the requirements under 45 CFR §164.524;
     i. make any amendment(s) to PHI in a Designated Record Set that Business
Associate maintains, if any, that Covered Entity directs or agrees to pursuant
to 45 CFR §164.526 at the request of Covered Entity or an individual, and in the
time and manner designated by Covered Entity;
     j. make its internal practices, books, and records relating to the use and
disclosure of PHI available to Covered Entity, or at the request of Covered
Entity to the Secretary, in a time and manner designated by the Covered Entity
or the Secretary, for purposes of the Secretary determining Covered Entity’s
compliance with the Privacy Rule;
     k. document such disclosures of PHI and information related to such
disclosures as would be required for Covered Entity to respond to a request by
an individual for an accounting of disclosures of PHI in accordance with 45 CFR
§164.528;
     l. provide to Covered Entity, in a time and manner designated by Covered
Entity, information collected in accordance with this Appendix, to permit
Covered Entity to respond to a request by an individual for an accounting of
disclosures of PHI in accordance with 45 CFR 164.528;
     m. establish and enforce appropriate clearance procedures and supervision
such that its workforce follows requirements consistent with HIPAA as specified
in the PSA or as directly applicable to IBM under HIPAA;
     n. act immediately to terminate access to PHI of any of its staff upon such
staff member’s termination or reassignment;

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     o. provide training for its staff to comply with its obligations consistent
with the requirements of HIPAA as specified in the PSA or as directly applicable
to IBM under HIPAA; and
     p. implement (i) disposal and reuse procedures with respect to documents
and equipment, (ii) authentication and access controls, and (iii) encryption, in
ease case to protect PHI consistent with the requirements of the Security Rule
as specified in the PSA or as directly applicable to IBM under HIPAA.
3. Permitted Uses and Disclosures by Business Associate
     a. Except as otherwise limited in this Appendix or by other applicable
federal or state law, Business Associate may use PHI only as necessary for its
provision of the Services consistent with the PSA.
     b. Business Associate will not disclose PHI to any person or entity other
than Covered Entity without Covered Entity’s express prior written consent.
     c. Business Associate will not disclose PHI to subcontractors or agents of
Business Associate without Covered Entity’s express prior written consent,
except as may be required for the provision of the Services.
4. Obligations of Covered Entity
     a. Covered Entity will notify Business Associate of any changes in, or
revocation of, permission by an individual to use or disclose PHI of which
Covered Entity has knowledge, to the extent that such changes may affect
Business Associate’s use or disclosure of PHI.
     b. Covered Entity will notify Business Associate of any restriction on the
use or disclosure of PHI to which Covered Entity is bound under 45 CFR §164.522
and of which Covered Entity has knowledge, to the extent that such restriction
may affect Business Associate’s use or disclosure of PHI.
5. Term and Termination
     a. The term of this Appendix will be the same as that of the PSA.
     b. Upon material breach of this Appendix by Business Associate, Covered
Entity:
          i. Will provide an opportunity for Business Associate to cure the
breach or to end the violation, and, if Business Associate does not cure the
breach or end the violation within a reasonable time specified by Covered
Entity, Covered Entity will have the right to terminate the PSA effective on
notice of termination, without further liability by reason of such termination;
          ii. If cure is not possible, Covered Entity will have the right
immediately to terminate the PSA without further liability by reason of such
termination; or
          iii. If neither termination nor cure is feasible, Covered Entity will
report the violation to the Secretary.
     c. Except as provided in paragraph (d) of this Section 5, upon any
termination or expiration of the PSA, Business Associate will return all PHI to
Covered Entity. Business Associate will retain no copies of PHI (including, but
not limited to, paper or electronic copies).
     d. If return or destruction of the PHI is not feasible, Business Associate
will notify Covered Entity in writing of the conditions that make its return or
destruction not feasible. Business Associate will extend the protections of this
Appendix to such PHI and limit further uses and disclosures of such PHI to those
purposes that make its return or destruction not feasible, for so long as
Business Associate maintains such PHI.
6. Miscellaneous
     a. The parties agree to take such action to amend the PSA and this Appendix
from time to time as is necessary for either party to comply with the
requirements of HIPAA, the Privacy Rule, and the Security Rule.
     b. The obligations of Business Associate under Sections 5(c) and (d) of
this Appendix will survive the termination of the PSA.

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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Budget and Planning Estimate
Schedule C — Charges
This Schedule C sets forth the Charges applicable to the Services to be provided
by IBM under the PSA. Such charges may include one-time charges, ramp-up service
charges, monthly recurring charges, training charges, pass-thru charges and
termination charges.
Capitalized terms used but not defined in this Schedule shall have the same
meaning assigned to such terms in the PSA or Schedule A unless the context in
which such terms are used in this Schedule require a different meaning.

1.   Service Delivery Locations       Services will be delivered out of Manila,
Philippines and Pune, India. For detail on the types of Services being performed
from each location, please refer to Exhibit C-1 (Baselines).   2.   Service Ramp
and Volume Schedule       For detailed description of the projected monthly
volume by location please refer to Exhibit C-1 (Baselines). Each service
category in this table has been defined as either voice or non-voice.       All
non-voice work will be performed in Pune, India. All voice work will be
delivered * from Pune, India and Manila, Philippines. Should Athena make a
request to increase voice work in Manila and/or reduce the amount of voice work
in Pune, which results in the number of Agents in Manila exceeding the total
number of Voice Agents in Pune, India; such excess voice work performed in
Manila will be charged *.       The total number of voice Agents across
Philippines and India will be less than * of the total number of Agents.      
Athena will commit to annual minimum charges as reflected by minimum charges
amount in Exhibit C-2 (Annual Charges).   3.   Billing Unit and Rates       For
detailed information on billing unit and rates, please refer to Exhibit C-1
(Baselines).   4.   Transaction Based Payments       For Services which are
billed on a per transaction or other per unit basis, as set forth in Exhibit C-1
(Baselines), IBM will invoice Athena in accordance with Section 6 of the PSA for
the Services provided during the previous calendar month and also submit to
Athena a spreadsheet showing the number of transactions executed during the
preceding month as calculated by IBM based on transaction information (“Monthly
Transactions Spreadsheet”).       Athena will be responsible for maintaining the
athenaNet application(s) for IBM to perform its responsibilities in the
provision of the Services. Should any outage period of athenaNet exceed one hour
in duration during a non-maintenance window, and that results in unbillable time
for any transaction based operation, IBM will invoice for the outage period
based on the average daily volume for the same period for the same operation
during the previous week;, not exceeding *.       Should Athena’s business
process or supporting applications, such as athenaNet, change requiring IBM to
significantly update the training previously provided to its Agents, the Parties
will address such changes via the PCR process.

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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Budget and Planning Estimate

5.   Hourly Based Payments       For Services which are billed on an hourly
basis, as set forth in the pricing table in Exhibit C-1 (Baselines), IBM will
invoice Athena in accordance with Section 6 of the PSA for the applicable
Services provided by the mutually agreed minimum number of Agents in the
previous month’s forecasting cycle. Athena shall pay IBM for a fixed number of *
hours per Agent per month. The Parties acknowledge that the objective is to
limit the hourly-based payment method to initial piloting of new Service areas
or piloting Services to be performed in a new manner or new location and the
terms and conditions in respect of the same shall be mutually agreed between the
Parties and set forth in the applicable Schedule or in a change order.   6.  
Forecasting       Athena shall provide IBM with a 12-month rolling volume
forecast for the various Services. This forecast will be provided quarterly
according to the following schedule:

      Forecast Delivery Date   Forecast Period
November 1
  January to December
February 1
  April to March
May 1
  July to June
August 1
  October to September

    Forecast volumes are not inclusive of * per month variance buffers within
which it is assumed there would be no degradation in Service Level Measurements.
Should actual monthly volume be greater than * above the most recent forecast
for any given month, IBM will make reasonable effort to staff accordingly for
the additional volume. Should the parties find it necessary, they may mutually
agree to use the PCR process to authorize IBM to use overtime to respond and
achieve additional volume. If the actual transaction/volumes in a month are less
than * of that month’s committed forecast, IBM will invoice and Athena shall pay
at * of the committed volumes. IBM will accommodate changes to the committed
volumes with minimum lead time of * days.       Should IBM fail to deliver in
accordance with the levels of service set forth in Schedule A during the
Evaluation Period, the Parties’ respective Project Executives will meet to
discuss the matter and determine what reductions, if any, to the ramp forecast
may be appropriate.   7.   Foreign Exchange       Subject to Section 6(b) of the
PSA, IBM will calculate and apply an adjustment to the billing rates in
Exhibit C-1 (Baselines) annually based upon movements in the underlying currency
rates as described below starting on January 1, 2011. IBM has established the
billing rates as of the Effective Date based on the foreign exchange rates in
the table below as Current Foreign Exchange Rate (CFER).

              Service Location   Currency   CFER 1 $U.S. equivalent to:
India
  India (Rupee)   47.72  INR
Philippines
  Philippines (Peso)   47.55  Pesos

    Actual foreign exchange rate (AFER) published in the New York Times as of
the last Business Day of the previous calendar year will be used to calculate
the rate adjustment. A foreign exchange rate adjustment percentage for each
currency will be calculated as follows: ((CFER — AFER) / CFER). *

    For example, if the AFER published in the New York Times for India as of
December 30, 2010 equals 50.60 INR to 1 USD, the foreign exchange adjusted would
be calculated as follows:

*

      IBM/Athena Confidential   Page 2 of 6

 

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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Budget and Planning Estimate

8.   Economic Cost Adjustment (ECA)       For purposes of pricing under this
Schedule C, the economic index factors set forth below will be used for
calculating annual economic cost adjustment for the respective Services based on
their location of delivery beginning January 1, 2011. The rates set forth may be
adjusted in accordance with Section 6 of the PSA as applicable using these
values as a basis:

      Service     Location   Source
India
  Consumer Price index for All India Urban Non-Manual Employees (UNME) as
published by the Government of India, Ministry of Statistics
(http://mospi.nic.in/mospi_cpi.htm) (India Price Index)
 
   
Philippines
  Monthly Consumer Price Index for all Income Households NCR by Commodity Group,
as published by Philippines National Statistics Office
(http://www.census.gov.ph/data/sectordata/datacpi.html (Philippines National
Capital Region Price Index)

    In the event the current source stops publishing the values or substantially
changes its content and format, the Parties may substitute another comparable
index published by a mutually agreeable source.       IBM will calculate and
invoice Athena for the ECA, if any, starting January 2011 and annually
thereafter. In January of each year, beginning 2011, the ECA will be calculated
as a percent increase in the index value between the previous two (2) Decembers.
*       The cost of living adjustment in each calendar year shall be determined
as follows:       Adjusted Rate = Prior Rate x (1 + Economic Change Factor)
where “Adjusted Rate” means the rates for the calendar year for which the cost
of living adjustment is being computed, and “Prior Rate” means the rate set
forth in Section 3, as such rate has been adjusted for ECA and foreign exchange
adjustment (if any).       For example, if the December 2009 Base Year Index is
180, and the December 2010 Economic Change Index is 182.6, then beginning
January 2011, the ECA Factor would be *       ECA Factor equals *       Resource
Unit Price equals *       New Resource Unit Price would be *   9.   Termination
Charges       In the event of termination for convenience by Athena in
accordance with Section 4(b) of the PSA, IBM will invoice Athena the applicable
termination and wind-down fees on the effective date of the termination as set
forth in Exhibit C-3 (Termination for Convenience and Winddown Charges).      
In the event of termination for cause by IBM in accordance with Section 4(c) of
the PSA, IBM will invoice Athena the applicable unrecovered investment and
wind-down fees set forth in Exhibit C-4 (Termination for Cause Charges).   10.  
Composition of Services       The pricing set forth in this Schedule C is based
on the factors affecting the entire portfolio of Services provided under the PSA
including the types, quantities and physical locations of such Services. As
substantial changes in factors relating to the Services provided under this PSA
may impact the economic feasibility of continuing to provide the Services, the
parties agree to act in good faith to promptly amend the PSA or applicable
Schedules to reflect in equitable adjustment in the terms to restore the
economic feasibility of the continued provision of the Services under this PSA.

      IBM/Athena Confidential   Page 3 of 6

 

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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Budget and Planning Estimate
Exhibit C-1: Baselines.

                                                                      Production
    Monthly Baseline     Monthly Minimum         Description   Location     Unit
    Start Date     Volume     Volume     2009/2010 Rates  
*
                                               

Exhibit C-2: Annual Charges.

                                                      2009     2010     2011    
2012     2013     2014  
*
                                               

      IBM/Athena Confidential   Page 4 of 6

 

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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Budget and Planning Estimate
Exhibit C-3: Termination for Convenience and Winddown Charges.

                                                              Termination
Charges                             Termination Charges               Month  
for Convenience     Windows Charges     Total     Month     for Convenience    
Windows Charges     Total  
*
                                                       

      IBM/Athena Confidential   Page 5 of 6

 

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Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Budget and Planning Estimate
Exhibit C-4: Termination for Cause and Winddown Charges.

                                                              Termination
Charges                             Termination Charges               Month  
for Convenience     Windows Charges     Total     Month     for Convenience    
Windows Charges     Total  
*
                                                       

      IBM/Athena Confidential   Page 6 of 6