Document:

Exhibit 10.18(iii)

NON-QUALIFIED STOCK OPTION
AGREEMENT

UNDER THE

MEDECISION,
INC. 2006 EQUITY INCENTIVE PLAN

This Non-Qualified Stock Option Agreement (this “Agreement”)
evidences the grant by MEDecision, Inc. to [                  ]
(the “Optionee”) of an option to purchase up to [                     ]
shares of MEDecision, Inc. common stock at the price and on the terms set forth
herein (the “Option”).  This
Option is in all respects subject to the terms of the MEDecision, Inc. 2006
Equity Incentive Plan, which terms are incorporated herein by this
reference.  Unless the context otherwise
requires, capitalized terms used herein will have the meanings defined in the
Plan.

1.     Nature of the Option.  This Option is intended to be a Non-Qualified
Stock Option and is not intended to be an Incentive Stock Option.

2.     Date of
Grant; Term of Option.  This
Option was granted on [                     ]
(the “Grant Date”) and may not be exercised later than the tenth
anniversary of the Grant Date, subject to earlier termination as provided in
the Plan and in this Agreement.

3.     Option Exercise Price.  The purchase price for Shares subject to this
Option is $[                     ]
per Share, an amount intended to reflect the Fair Market Value on the Grant
Date.

4.     Exercise of Option.

(a)   Right to Exercise.  Subject to Section 7 of the Plan (and
provided, in each case, that the Optionee remains in continuous service with
the Company or an Affiliate of the Company through the applicable vesting
date), the Option will become exercisable during its term only in accordance
with the terms and provisions of the Plan and this Agreement, as follows:

[insert vesting
provision]

(b)   Method
of Exercise.  This
Option shall be exercisable by written notice which shall state the election to
exercise this Option, the number of Shares in respect to which the Option is
being exercised and such other representations of agreements as to the Optionee’s
investment intent with respect to such Shares as may be required by the Company
hereunder or pursuant to the provisions of the Plan.  Such written notice shall be signed by the
Optionee and shall be delivered in person or by certified mail to the Secretary
of the Company or such other person as may be designated by the Company.  The written notice shall be accompanied by
payment of the purchase price and the amount of any tax withholding arising in
connection with the exercise of the Option. 
Payment of the purchase price shall be in cash, by cashier’s check or by
such other method of payment authorized by the Board.

(c)   Issuance
of Shares.  The Optionee will have no right to vote or
receive dividends and will have no other rights as a shareholder with respect
to any Shares subject hereto, notwithstanding the exercise of the Option with
respect to those Shares, until the issuance (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company) of those Shares.  Any
certificate evidencing Shares acquired 

upon exercise of this Option will be legended as required under the
Plan and/or as appropriate under applicable law.

5.     Compliance with Laws.  Notwithstanding any other provision of this
Agreement, this Option may not be
exercised if the issuance of Shares upon such exercise would violate any law,
regulation or exchange listing requirement (including, without limitation,
Exchange Act Rule 16b-3).  The
Board may from time to time modify the terms of this Option or impose
additional conditions on the exercise of this Option as it deems necessary or
appropriate to facilitate compliance with any law, regulation or exchange listing requirement.

6.     Nontransferability
of Option.  This Option
may not be sold, pledged, assigned, hypothecated, gifted, transferred or
disposed or in any manner either voluntarily or involuntarily by the operation
of law, other than by the will or by the laws of descent or distribution, and
may be exercised during the lifetime of the Optionee only by such
Optionee.  Subject to the foregoing and
the terms of the Plan, the terms of this Option shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee.

7.     Continuation
of Service.  Neither the
Plan nor this Agreement shall confer upon any Optionee any right to continue in
the service of the Company or any of its Affiliates or limit in any respect the
right of the Company or its Affiliates to discharge the Optionee at any time,
with or without cause and with or without notice.

8.     Protection of Confidential
Information; Covenant Not to Compete.  

(a)   In view of the fact that the Optionee’s work for the
Company will bring Optionee into close contact with many confidential affairs
of the Company not readily available to the public, the Optionee agrees:

i.              to keep secret and retain in the
strictest confidence all Confidential Information (as defined below) and Trade
Secrets (as defined below) of the Company learned by Optionee heretofore or
hereafter, and not to disclose them to anyone outside of the Company, either
during or after the term of employment or service, except in the course of
performing his duties hereunder or with the Company’s express written consent;

ii.             To deliver promptly to the Company on
termination of employment or service, or at any time the Company may so
request, all memoranda, notes, records, reports, manuals, drawings, lists of
actual and potential customers and other documents relating to the Company’s
business and all property associated therewith that the Optionee may then
possess or have under the Optionee’s control; and

iii.            For purposes of this Agreement, “Confidential
Information” shall mean information disclosed to the Optionee or known by
the Optionee as a consequences or through his employment by or service for the
Company, not generally known in the industry in which the Company is or may
become engaged, about the Company’s products, processes, and services,
including but not limited to information relation to research, development,
inventions, manufacture, purchasing, accounting, engineering, marketing
(including the identities of actual and potential customers), merchandising and
selling.  For purposes of this Agreement,
“Trade Secret” means the whole or any portion or phase of any scientific
or technical information, design, process, formula, or improvement which is
secret and is not generally available to the 

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public, and which gives one who uses it an advantage over competitors
who do not know of or use it.

(b)           During Optionee’s employment and for one year thereafter, Optionee will
not, in the continental United States of America, directly or indirectly,
either as an employee, employer, consultant, agent, principal, partner,
stockholder, corporate officer, director, or in any other individual or
representative capacity, engage or participate in any business engaged in the
provision of integrated medical management services, technology-based clinical
decision support or transaction management solutions to managed care or other
payers (a “Competing Business”). 
Notwithstanding the foregoing, Optionee may hold up to 2% of the
outstanding securities of any class of any publicly-traded securities of
any company.

(c)           During his employment by the Company and for two (2) years thereafter,
Optionee will not, either directly or indirectly, on his own behalf or in the
service or on behalf of others:

i.              solicit, divert or appropriate, or attempt to
solicit, divert or appropriate, to any Competing Business any customer or
client of the Company, or any person or entity whose account has been solicited
by the Company or any subsidiary or affiliate of the Company;

ii.             influence or attempt to influence any person
to terminate or modify any employment, consulting, agency, distributorship or
other arrangement with the Company and/or any subsidiary or affiliate of the
Company; or

iii.            employ or retain any person who has been
employed or engaged as an employee, consultant, agent or distributor of the
Company or any affiliate or subsidiary of the Company within the preceding 12
months.

(d)           The
Optionee hereby recognizes that the services performed by Optionee are of
special, unique, unusual, extraordinary and intellectual character which gives
them particular value, a loss of which cannot be reasonably or adequately
compensated in damages in an action at law. 
Optionee will not, in any action or proceeding to enforce any of the
provisions of this Agreement, assert the claim or defense that such an adequate
remedy at law exists.The Optionee therefore expressly agrees that the Company,
in addition to any other right or remedies the Company may possess, shall be
entitled to injunctive and other equitable relief to prevent a breach of this
Agreement by the Optionee without any requirement that a bond or other security
be posted.  If the Optionee violates any
of the provisions of Paragraphs (a), (b), or (c) of this Section 8, the Company
shall have the following rights and remedies:

i.              In the event of a breach, or a threatened
breach, the right and remedy to have the provisions of Section 8 of this
Agreement specifically enforced by an court having equity jurisdiction, it
being acknowledged and agreed that ay such breach or threatened breach will
cause irreparable injury to the Company and money damages will not provide an
adequate remedy to the Company; and

ii.             In the event of an actual breach, the right
to recover damages for all losses, actual and contingent, and the right to
require the Optionee to account for and pay over to the Company all profits or
other benefits (collectively “Benefits”) derived or received by the 

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Optionee as the result of any transactions constituting such a breach,
and the Optionee hereby agrees to account for and pay over such Benefits to the
Company.

(e)           Each
of the rights and remedies enumerated above shall be independent of the other,
and shall be severally enforceable, and all of such rights and remedies shall
be in addition to, and not in lieu of, any other rights and remedies available
to the Company at law or in equity.  If
any of the covenants contained in Paragraphs (a), (b), or (c) of this Section
8, or any part thereof, is hereafter construed to be invalid or unenforceable,
the same shall not affect the remainder of the covenant or covenants, which
shall be given full effect, without regard to the invalid portions.  If any of the covenants contained in
Paragraphs (a), (b), or (c) of this Section 8, or any part thereof, is held to
be unenforceable because of the duration of such provision or the scope of the
subject matter thereof or the area covered thereby, the parties, agree that the
court making such determination shall have the power to reduce the duration,
scope and/or area of such provision and, in its reduced form, said provision
shall then be enforceable.

(f)            For
avoidance of doubt, the covenants contained in this Section 8 will apply (or
continue to apply) following any cessation of the Optionee’s service, without
regard to whether that cessation is initiated by the Company or by the Optionee
and without regard to the reason for that cessation.

(g)           Optionee acknowledges that
the provisions of this Section 8 are reasonable and necessary to protect the
legitimate interests of the Company and its affiliates, that the duration and
scope of the covenants contained in this Section 8 are reasonable and that the
Company would not have granted this Option if Optionee had not agreed to be
bound by the covenants set forth in this Section 8.

(h)           Optionee agrees to disclose
the existence and terms of the covenants contained in this Section 8 to any
other employer that Optionee may work for while these covenants are applicable.  The Company may disclose the existence and
terms of the covenants contained in this Section 8 to any of the Optionee’s
future employers.

(i)            If Optionee breaches the
covenants contained in Section 8(b) or (c), the restrictions contained therein
will be extended for a period equal to the period that Optionee was in breach.

9.     Intellectual Property.
 The Company shall be the sole owner
of all the products and proceeds of the Optionee’s services, including, but not
limited to, all materials, ideas, concepts, formats, suggestions, developments,
arrangements, packages, computer programs and other intellectual properties
that the Optionee may acquire, obtain, develop, or create in connection with
the Optionee’s employment or service, free and clear of any claims by the
Optionee (or anyone claiming under the Optionee) of any kind or character
whatsoever.  The Optionee shall, at the
request of the Company, execute such assignments, certificates or other
instruments as the Company may from time to time deem necessary or desirable to
evidence establish, maintain, perfect, protect, enforce, or defend its right,
or title and interest in or to any such properties.

10.  The Plan.  The Optionee has received a copy of the
Plan in its present form, has read the Plan and is familiar with its terms, and
hereby accepts the Option subject to all of the terms and provisions of the
Plan.  Pursuant to the Plan, the Board is
authorized to interpret the Plan and 

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to adopt rules and regulations not
inconsistent with the Plan as it deems appropriate.  The Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Board
regarding any questions arising under the Plan or this Agreement.

11.  Market Stand-Off.  The
Optionee agrees that, in connection with any public offering by the Company of
its equity securities pursuant to a registration statement filed under the
Exchange Act, he will not sell, make any short sale of, loan, hypothecate,
pledge, grant any option for the purchase of or otherwise dispose of any Shares
without the prior written consent of the Company or its underwriters, for such
period of time before or after the effective date of such registration as may
be reasonably requested by the Company or such underwriters.

12.  Tax Consequences.  The Company does not represent or warrant
that this Option (or the purchase or sale of the Shares subject hereto) will be
subject to particular tax treatment.  The
Optionee acknowledges that he has reviewed with his own tax advisors the tax
treatment of this Option (including the purchase and sale of Shares subject
hereto) and is relying solely on those advisors in that regard.  The Optionee understands that he (and not the
Company) will be responsible for his own tax liabilities arising in connection
with this Option.

13.  Entire Agreement.  This Agreement, together with the other
documents referenced herein, represents the entire agreement between the
parties regarding the Option, and merges and supersedes all prior and
contemporaneous discussions, agreements and understandings of every nature on
that topic.

14.          Governing
Law.  This Agreement will be
construed in accordance with the laws of the Commonwealth of Pennsylvania,
without regard to the application of the principles of conflicts of laws.  Any legal proceeding arising out of or relating to this
Agreement will be instituted in a state or federal court in the Commonwealth of
Pennsylvania, and Executive and the Company hereby consent to the personal and
exclusive jurisdiction of such court(s) and hereby waive any objection(s) that
they may have to personal jurisdiction, the laying of venue of any such
proceeding and any claim or defense of inconvenient forum.

15.  Amendment.  Except as otherwise provided herein, this
Agreement may only be amended by a writing signed by each of the parties
hereto.

[This space intentionally left blank; signature page
follows]

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16.
Execution.  This Agreement may be executed, including
execution by facsimile signature, in one or more counterparts, each of which
will be deemed an original, and all of which together shall be deemed to be one
and the same instrument.  The Option will
terminate automatically if a fully executed copy of this Agreement is not
returned to the Company within 30 days following the date indicated below the
signature of the Company’s authorized representative.

IN WITNESS
WHEREOF, this Agreement has been executed by the parties in each case on the
date indicated below, respectively.

	
   

  	
  MEDECISION, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
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  [OPTIONEE]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
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 6Exhibit 10.19(i)

CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND

FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

MEDecision

MEDecision,
Inc.    ̈   One
Devon Square,  724 W. Lancaster Avenue    ̈   Wayne,
PA  19087     ̈    Phone:
610-254-0202    ̈   Fax:
610-254-5100

	
  Master Product Agreement

  	
  Number: PHS-001

  

 

This Master Product
Agreement, including all exhibits, schedules, appendices and other documents
attached hereto (collectively, this “Agreement”) dated June 30, 2004 (“Effective
Date”) is between MEDecision, Inc. (“MEDecision”), with offices at One Devon
Square, 724 W. Lancaster Avenue, Wayne, PA 19087 and PacifiCare Health Systems,
Inc. (“Customer”), for itself and its Affiliates, with its principal offices at
10803 Hope Street, Cypress, CA 90630. 
MEDecision and Customer may each be referred to in this Agreement
individually as a “Party” and together as the “Parties.”

1.                                      GRANT
OF LICENSE.

1.1.                            License
Grant.  Subject to the terms of this
Agreement, MEDecision grants to Customer and its Affiliates a license to
install and use the Products and the Prior Customizations in accordance with
Schedule 1.

1.2.                            License
Conditions.

(a)                                  Ownership. 
Except as otherwise set forth herein or in the Master Services Agreement
entered into by and between the Parties on even date herewith, or any Statement
of Work or other exhibit thereto (collectively, the “MSA”) MEDecision and its
suppliers own all rights, title, and interest in and to the Products, the
Customizations and Enhancements and the MEDecision Confidential Information.

(b)                                 Copying, Modification, Access and Distribution.  Customer and its Affiliates may
copy the Products for Customer’s or its Affiliates’ own use, including copies
for use in development, test, disaster recovery and back-up purposes; provided
that only the number of copies licensed under Schedule 1 to this Agreement may
be used in production at the same time. 
Customer and its Affiliates may copy the Documentation for Customer’s
and/or its Affiliates’ internal use related to the Products.  All copies of Products and Documentation must
contain MEDecision’s proprietary rights notices.  The Products may not be modified, altered or
enhanced except as authorized by MEDecision in writing.  Except as specified in this Agreement,
Customer may not use the Products to provide an application service provider
service, in connection with a service bureau, for the benefit of any third
party (other than its Affiliates) or transfer or distribute the Products.  MEDecision agrees that independent
contractors and consultants engaged by Customer and/or its Affiliates to
provide services for Customer may be granted access to the Products in
accordance with the terms and conditions contained in this Agreement for the
purpose of providing such services, provided that: (a) Customer has written
Agreements in place with each such independent contractor and consultant with
terms at least as protective of MEDecision Confidential Information as those
contained in this Agreement, (b) Customer is liable for all acts and omissions
of such independent contractor and consultant that would constitute a breach of
this Agreement if such acts or omissions had been performed by Customer, and
(c) no such independent contractor or consultant is a MEDecision
Competitor.  Customer shall have the
right to use the Products in accordance with the terms and conditions contained
in this Agreement, on an interim basis, not to exceed one hundred eighty (180)
days, to provide services to any portion of Customer’s business which has been
be sold to a third party; provided that: (a) Customer has written agreements in
place with each such third party with terms at least as protective of
MEDecision Confidential Information as those contained in this Agreement, (b)
Customer is liable for all acts and omissions of such third parties that would
constitute a breach of this Agreement if such acts or omissions had been
performed by Customer, and (c) that no such third party is a MEDecision
Competitor.  MEDecision acknowledges that
Customer has entered into

 1
 

information technology services agreements
with International Business Machines Corporation (“IBM”) and Keane, Inc. (“Keane”)
for the provision of information technology, data processing and related
services, to Customer.  MEDecision hereby
agrees that, at no additional charge to Customer: (i) Customer and/or its
Affiliates may disclose to IBM and Keane all Products, hardware, software and
related products and documentation which are licensed or transferred to Customer
and/or its Affiliates pursuant to this Agreement (the “IT Systems”), (ii) IBM
and Keane shall have the limited right to use the IT Systems for the sole
purpose of delivering information technology, data processing and related
services to Customer and/or its Affiliates, and (iii) upon notice to
MEDecision, all or part of the IT Systems may be installed or relocated to a
facility controlled by IBM or Keane. 
Notwithstanding clauses (i) or (ii) above, neither IBM nor Keane shall
use the IT Systems in a manner that is inconsistent with Customer’s rights
under this Agreement.  Customer shall
ensure that written agreements are in place with IBM and Keane with terms at
least as protective of MEDecision Confidential Information as those contained
in this Agreement and Customer shall be liable for all acts and omissions of
IBM and Keane that would constitute a breach under this Agreement if such acts
or omissions had been performed by Customer.

(c)                                  Reverse Engineering.  Customer may not attempt to decompile, disassemble
or reverse engineer any Product.

2.                                      SUPPORT.  Subject to Customer’s payment of the Standard
Support Fees as set forth on Schedule 1, MEDecision shall provide the
Standard Support services set forth in Appendix A - Support Appendix, attached
hereto.  All such Standard Support
services are included in the Standard Support fee set forth in Schedule 1.  Standard Support services will automatically
renew each year unless Customer notifies MEDecision in writing no later than [***]
days prior to the renewal date that Customer no longer wishes to receive
Standard Support services.

3.                                      PAYMENT
TERMS.

3.1.                            Payments;
Taxes.  Payment of all undisputed
charges are due within [***] days of the receipt by Customer of a valid
invoice; provided however that Customer may withhold payment of any amounts it
disputes in good faith.  The Customer
agrees to provide notice to MEDecision of any amounts it disputes along with
the reasons for such items being in dispute as soon as reasonably practicable
after identification of such disputed items. 
The Parties agree to negotiate in good faith with respect to any
disputed payment or other amounts owing in respect of this Agreement.  With respect to any amount to be paid by
Customer hereunder, Customer may set-off against such amount any amount that
MEDecision is obligated to pay Customer hereunder.  Fees do not include any applicable
taxes.  MEDecision will separately
itemize any applicable taxes or duties on each invoice.  Each Party shall be responsible for any
personal property taxes on property it owns or leases, for franchise and
privilege taxes on its business, and for taxes based on its net income or gross
receipts.  MEDecision shall be
responsible for any sales, use, excise, value-added, services, consumption, and
other taxes and duties payable by MEDecision on any goods or services used or
consumed by MEDecision in providing the Products and services and Customer
shall be responsible for sales, use, excise, value-added, services,
consumption, or other tax that is assessed on the provision of the Products or
services as a whole, or on any particular Product or service received by
Customer from MEDecision (whether such tax is in existence as of the Effective
Date or later assessed by a governmental agency).  If Customer does not pay undisputed amounts
when due, MEDecision may charge interest at an annual rate equal to the lesser
of:  (a) the prime rate established from
time to time by Citibank, N.A. plus [***] and (b) the highest rate allowed by
applicable law.

3.2.                            Reports.  Upon MEDecision’s reasonable request, Customer
will provide MEDecision with documentation concerning Customer’s use and
reproduction of the Products.  Upon
reasonable notice and not more than twice per calendar year, 

*** Confidential material which has been omitted and filed separately
with the Securities and Exchange Commission.

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Customer will provide MEDecision with
reasonable access to its records during Customer’s normal business hours to
verify the information contained in these reports and Customer’s compliance
with this Agreement.

4.                                      CONFIDENTIALITY
AND COMPLIANCE.

4.1.                            Confidentiality.  Except as otherwise permitted hereunder, each
Party agrees that it shall not disclose to any third party the other Party’s
Confidential Information.  “Confidential
Information” shall mean information, whether oral, written, graphic,
electronic, visual or fixed in any tangible medium of expression, disclosed by
one Party to the other consisting of the following; (i) the terms and pricing
under this Agreement; (ii) any and all financial, sales, marketing, pricing and
personnel information relative to either Party as well as present or future
products or plans of either Party that have not been generally released to the
public by means that do not constitute a breach of this Agreement; (iii) any
trade secrets or intellectual property licensed to or owned by either Party;
(iv) either Party’s technology, inventions (whether or not patented), computer
software, object code, source code and technology plans and specifications; (v)
any other information held by or concerning a Party or its Affiliates which is
not readily available to the public that the other Party learns during the
course of the exercise of its rights and performance of its obligations under
this Agreement, including with respect to a Party’s past, present or future
customers, strategic partners, vendors or suppliers, the manner in which a
Party conducts its business, the types and levels of staffing utilized by a
Party or a Party’s operational or financial plans and/or expectations; and (vi)
all information clearly identified by either Party as confidential, proprietary
or secret at the time of disclosure.  In
addition, Customer’s Confidential Information shall include the following: all
information of or regarding Customer’s past, present or prospective enrollees,
providers, members, insureds, customers, Affiliates, strategic partners, payors
or other suppliers or service providers (collectively, “Related Party”), the
extent to which health care or other services are offered to or used by any
Related Party, or the costs to provide such services.  The Parties agree that the Confidential
Information is provided to the receiving Party in confidence and for use by the
receiving Party exclusively in accordance with the terms of this
Agreement.  Both Parties agree to take
all commercially reasonable steps (including, but not limited to, those steps
each Party takes to protect its own data or other property it considers
proprietary or confidential) to protect the confidentiality of the Confidential
Information, to prevent the Confidential Information from being disclosed to
any third party without the disclosing Party’s prior written consent, and to
use commercially reasonable measures to ensure that the Confidential
Information is not, in whole or in part, disclosed to or duplicated by or for
other parties without the disclosing Party’s prior written consent.  Notwithstanding the foregoing, Customer may
disclose MEDecision Confidential Information to its Affiliates, and Customer
may disclose to (ii) International Business Machines (“IBM”), (ii) Keane, Inc.
(“Keane”), and (iii) any other Outsourcer, MEDecision’s Confidential
Information for the sole purpose of delivering information technology, data
processing and related services to Customer and its Affiliates provided that
each such Outsourcer has executed an agreement with terms at least as
protective of MEDecision Confidential Information as those contained in this
Agreement and also provided that Customer is liable for all acts and omissions
of such entities related to such disclosure and/or use.  Moreover, each Party will not use the
Confidential Information except in the performance of this Agreement or as
otherwise expressly permitted by this Agreement.  The requirements in this Section 4.1 shall not
apply to any such information that (i) was previously known to the receiving
Party without an obligation of confidentiality, (ii) is or becomes generally
available to the public without breach of the provisions of this Agreement,
(iii) is received by the receiving Party from a third party with a legal or
contractual right to disclose such data without a fiduciary, confidential or
contractual duty to the disclosing Party to keep such information confidential,
or (iv) is independently developed by the receiving Party without reference to
the disclosing Party’s Confidential Information.  Notwithstanding the foregoing, the receiving
Party may make such disclosures to or as may be requested by regulators with
supervisory authority over the disclosing Party or their respective 

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Affiliates, or in response to a court or
administrative subpoena, order or other such legal process or requirement of
law, or in defense of any claim or cause of action asserted against it, provided
that the receiving Party shall, unless prohibited by law, first notify the
disclosing Party of the receipt of such request, subpoena, order or other legal
process or requirement of law or claim of defense and cooperate reasonably with
the disclosing Party, at the disclosing Party’s expense, in its attempts to
limit the nature and scope of any such required disclosure by protective order
or otherwise.

4.2.                            HIPAA.  The Parties agree to comply with the terms of
the Business Associate Addendum entered into by and between the Parties on even
date herewith.

5.                                      CUSTOMER
RESPONSIBILITIES.

5.1.                            System.  Except as set forth in this Agreement,
MEDecision will have no responsibility to provide any hardware or software for
Customer.

5.2.                            Configuration
and Communications.  Customer is
responsible for providing the configuration and communications, if applicable,
set forth in Appendix A to Schedule 1, as such Appendix may be revised from
time to time by mutual written agreement of the Parties, which agreement shall
not be unreasonably withheld by Customer, in connection with releases by
MEDecision of new Products or Upgrades.

5.3.                            Marketing.  Customer will issue a mutually agreeable
joint press release with MEDecision within thirty (30) days of the Effective
Date and provide suitable quotes from appropriate Customer personnel.  Customer will use reasonable efforts to
arrange for appropriate personnel to be available to serve as references for
the Products and MEDecision in the event of an inquiry from any member of the
press, any industry analysts or any potential customer.

6.                                      ACCEPTANCE,
WARRANTY AND DISCLAIMER.

6.1.                            Warranty
and Acceptance.  Unless otherwise
notified by Customer, each Product will be deemed accepted for purposes of
payment upon delivery to Customer.  Notwithstanding
the foregoing, or anything to the contrary, MEDecision warrants that, on the
initial Product delivery, and for a period of [***] thereafter (the “Warranty
Period”), the Product will substantially conform in all material respects with
its Documentation.  Customer may test
each Product during the Warranty Period to determine whether it performs in
accordance with its Documentation. 
Customer may notify MEDecision in writing of its intent to return any
Product for non-conformance during this period. 
Upon receipt of this notice, MEDecision will have a reasonable period of
time to cure the non-conformance.  If
MEDecision is unable to cure the non-conformance within such reasonable period
of time, Customer may return the non-conforming Product, and, upon any such
return, will immediately cease using such Product.  The License will be considered terminated
with regard to the returned Products. 
MEDecision will promptly refund the full amount of the license fees
paid, if any, for returned Products.

6.2.                            Warranty
of Ownership.  MEDecision warrants
that it is the owner of the MEDecision Products and that it has the right as a
distributor to grant the licensees to the Third Party Products licensed on a
Schedule to this Agreement.

6.3.                            DISCLAIMER.  THE PRODUCTS WERE DEVELOPED AS TOOLS TO BE
USED AS AN ADJUNCT TO GOOD PROFESSIONAL JUDGMENT BY THE CUSTOMER’S STAFF AND DO
NOT REPLACE OR SUPERSEDE PROFESSIONAL JUDGMENT AND DISCRETION OR THE USE OF
PHYSICIANS AND PSYCHOLOGISTS TO MAKE DECISIONS REGARDING THE PERFORMANCE OF
THEIR PEERS.  THEREFORE, IT IS THE
RESPONSIBILITY OF THE CUSTOMER’S STAFF AND CONSULTANTS, USING THEIR
PROFESSIONAL JUDGMENT, TO APPLY OR NOT APPLY THE PRODUCTS DURING THE REVIEW OF
INDIVIDUAL CASES.  THE CUSTOMER AGREES
THAT IT HAS THE LAST AND BEST OPPORTUNITY TO DETERMINE IF THE PRODUCTS ARE
CORRECT AND 

*** Confidential material which has been omitted and filed separately
with the Securities and Exchange Commission.

 4
 

APPLICABLE IN THE REVIEW OF INDIVIDUAL
CASES.  THE PRODUCTS ARE NOT AND ARE NOT
INTENDED TO BE MEDICAL DIAGNOSTIC TOOLS AND THE PRODUCTS ARE NOT INTENDED TO
ENABLE CUSTOMER TO ESTABLISH MEDICAL TREATMENT REGIMENS.  THE PRODUCTS ARE NOT AND ARE NOT INTENDED TO
BE A MEDICAL OPINION AND ARE NOT A SUBSTITUTE FOR MEDICAL DIAGNOSIS, TREATMENT
OR OTHER CARE RENDERED BY A LICENSED MEDICAL PROFESSIONAL PRACTITIONER.  MEDECISION DOES NOT REPRESENT, WARRANT OR
GUARANTEE THE TRUTHFULNESS, ACCURACY, OR RELIABILITY OF ANY OF THE
CONTENT.  MEDECISION DOES NOT ENDORSE ANY
SPECIFIC DISEASE MANAGEMENT INTERVENTIONS OR MEDICAL MANAGEMENT GUIDELINES THAT
MAY BE TRIGGERED BY USE OF THE HOSTED PRODUCTS. 
MEDECISION ACKNOWLEDGES THAT CUSTOMER’S RELIANCE ON CONTENT POSTED IN
THE PRODUCTS OR DOCUMENTATION AND THEIR FUNCTIONALITY IS AT CUSTOMER’S OWN RISK.  EXCEPT AS SET FORTH IN THIS AGREEMENT,
MEDECISION EXPRESSLY DISCLAIMS ANY OTHER WARRANTIES, WITH RESPECT TO THE
PRODUCTS, INCLUDING, WITHOUT LIMITATION, ALL IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

7.                                      LIMITATION
OF LIABILITY.  Each Party’s liability
for any cause of action arising under or in connection with this Agreement or
otherwise (whether arising in tort, contract or otherwise) will be limited to [***]. Under no circumstances will
either Party be liable for any incidental, special, punitive or consequential
damages arising out of or in connection with this Agreement or otherwise,
including but not limited to, liability for lost profits, business interruption
or loss of business.  The foregoing
restrictions shall not apply with respect to liability arising or resulting
from, or attributable to, any of the following circumstances:  (i) any breach or violation of Section 4.1
(Confidentiality); or (ii) claims that are the subject of the indemnification
obligations pursuant to Section 8.

8.                                      INDEMNITIES.

8.1.                            Indemnification
by MEDecision.  MEDecision shall be
solely financially responsible for and shall defend indemnify and hold harmless
Customer, its Affiliates, its and their directors, officers, attorneys, agents,
employees and representatives (collectively, the “Indemnitees”) from and
against any Claims made by the Indemnitees or third parties which are
attributable to or arising from:  (i) any
breach or alleged breach of the representations and warranties set forth in Article
6 (Acceptance, Warranty and Disclaimer); (ii) any fraudulent, intentional or
grossly negligent actions or omissions committed by MEDecision or its
contractors during or in connection with the performance under this Agreement,
including, without limitation, any injury to property, personal injury or
death; (iii) any violation of any confidentiality or security obligations of
MEDecision; (iv) the violation of any state, Federal or local law by
MEDecision, (v) a Claim that any materials provided by MEDecision or any
portion thereof or their use, are derived from or infringe upon any patent,
copyright, trade secret or other property right of any third party or are
subject to any interest, proprietary or otherwise; or (vi) any compensation,
fees, salary, bonuses, mandatory or fringe employee benefits, social security,
taxes or other withholdings which are alleged to be owed in respect of any
personnel or contractors of MEDecision; and MEDecision agrees to promptly pay
and fully satisfy any and all Losses, Judgments or Expenses incurred or
sustained, or reasonably likely to be incurred or sustained, by the Customer or
any Affiliate as a result of any Claims of the types described in the foregoing
clauses of this Section 8.1.

8.2.                            Indemnification
by Customer.  Customer shall be
solely financially responsible for and shall defend indemnify and hold harmless
MEDecision, and its directors, officers, attorneys, agents, employees and
representatives (collectively, the “MEDecision Indemnities”) from and against
any Claims made by the MEDecision Indemnities or third parties which are
attributable to or arising 

*** Confidential material which has been omitted and filed separately
with the Securities and Exchange Commission.

 5
 

from:  (i)
any fraudulent, intentional or grossly negligent actions or omissions committed
by Customer, its Affiliates, Outsourcers or its contractors during or in
connection with this Agreement, including, without limitation, any injury to
property, personal injury or death; (ii) the violation of any state, Federal or
local law by Customer, (iii) a Claim that any materials provided by Customer or
any portion thereof or their use are derived from or infringe upon any patent,
copyright, trade secret or other property right of any third party or are
subject to any interest, proprietary or otherwise; and Customer agrees to
promptly pay and fully satisfy any and all Losses, Judgments or Expenses
incurred or sustained, or reasonably likely to be incurred or sustained, by
MEDecision as a result of any Claims of the types described in the foregoing
clauses of this Section 8.2.

8.3.                            Indemnification
Procedures.  If the indemnified Party
becomes aware of a Claim that may require indemnification, the indemnified
Party will promptly notify the indemnifying Party in writing of the Claim and
provide the indemnifying Party with reasonable assistance and information
necessary to defend and settle the Claims. 
The indemnified Party’s counsel will have the right to participate in
the defense and settlement of the claim, at the indemnified Party’s own
expense, but the indemnifying Party will have the sole right to conduct the
defense of any such claim or action and all negotiations for its compromise or
settlement; provided that the indemnifying Party shall not enter into any
compromise or settlement that shall have the effect of creating any liability
or obligation (whether legal or equitable) on the indemnified Party without the
prior written consent of the indemnified Party, and no such compromise or
settlement is authorized unless the indemnified Party is provided with a
complete release of liability under such compromise or settlement.  If the indemnifying Party fails to
immediately begin the defense of such claim or action after receiving notice of
any such proceeding, the indemnified Party may retain counsel and undertake the
defense, compromise, or settlement of such claim or action, all at the expense
of the indemnifying Party.

9.                                      INSURANCE.  MEDecision shall at all times during the term
of this Agreement carry and maintain in full force and effect the following
insurance, at its sole cost and expense:

(a)                                  Commercial General Liability Insurance.  MEDecision shall maintain commercial general
liability insurance, including premises liability, products liability (if products
are being provided), completed operations coverage (if services are being
provided), and contractual liability insurance, with limits of not less than [***]
($[***]) per occurrence and [***] ($[***]) annual aggregate, for bodily injury
(including death) and property damage, covering all of MEDecision’s operations
under this Agreement.  Said insurance
shall be on an “occurrence” form.

(b)                                 Automobile Liability Insurance.  MEDecision shall maintain automobile
liability insurance (if performing any activities on the premises of the
Customer or any Related Party), with minimum limits of not less than [***]
($[***]) per occurrence, combined single limit, for bodily injury and property
damage, covering owned, non-owned and hired vehicles.

(c)                                  Workers Compensation and Employers Liability.  If MEDecision is an employer of one or more
employees, workers compensation and employers liability coverage with minimum
limits of:

	
  Workers Compensation:

  	
  Statutory limits as
  required by law

  
	
   

  	
   

  
	
  Employers Liability:

  	
   

  
	
  Bodily Injury by accident

  	
  $[***] each accident

  
	
  Bodily Injury by disease

  	
  $[***] each employee

  
	
  Bodily Injury by disease

  	
  $[***] policy limit

  
	
   

  	
   

  

 

(d)                                 Professional (Errors and Omissions) Liability.  If the Services provided include computer hardware
or software modifications to the systems of the Customer or any Related Party,
then MEDecision shall maintain errors & omissions 

*** Confidential material which has been
omitted and filed separately with the Securities and Exchange Commission.

 6
 

liability coverage with minimum limits of
[***] ($[***]) per occurrence, [***] ($[***]) annual aggregate.  Such coverage shall be maintained for a
period of not less than [***] after the expiration or termination of this
Agreement.

If, in any of the
foregoing cases, MEDecision has procured a claims-made based policy (or
policies) and such policy (or policies) are cancelled or not renewed,
MEDecision agrees to exercise any option contained in said policy (or policies)
to extend the reporting period to the maximum period permitted; provided,
however, that MEDecision need not exercise such option if the superseding
insurer will accept all prior claims.

(e)                                  Types of Insurance Carriers.  Each of MEDecision’s insurance policies
shall:  (i) be issued by companies that
are admitted insurers in the jurisdiction in which the Services or Deliverables
are being provided, (ii) be issued by companies that have an A. M. Best rating
of not less than “A-”, and are in a size category which is not lower than “VIII”;
(ii) be primary and noncontributory with any of the Customer’s insurance; (iii)
name the Customer as an additional insured (except workers compensation,
employers liability and errors and omissions coverage’s);  (iv) cover each of MEDecision’s Contractors
and subcontractors engaged in the performance of any services hereunder to the
same extent required of MEDecision, and (v) not be cancelled or non-renewed
except after at least thirty (30) days’ prior written notice to
PacifiCare.  MEDecision shall provide to
Customer certificates on ACORD form 25 (or its equivalent) evidencing all
insurance and endorsements required by this Section.

Notwithstanding any other
provision of this Agreement, failure to provide the coverage’s provided for
herein, or the certificates of insurance, shall be grounds for immediate
termination of this Agreement.

(f)                                    No Limitation on Liability.  None of the foregoing requirements as to the
type and limits of insurance to be maintained by MEDecision are intended to and
shall not in any manner limit or qualify the liabilities and obligations for
which MEDecision is responsible under this Agreement, any Statement of Work or
by law.

10.                               NONCOMPETITION.  In the event that Customer develops or
markets a product or service for the benefit of any third party (other than its
Affiliates) that competes with any MEDecision Product, then the following
restrictions shall apply: (i) [***], and (ii) [***].

11.                               TERM
AND TERMINATION.

11.1.                     Term.  This Agreement commences on the Effective
Date and will continue unless and until terminated in accordance with this
Article 11.

11.2.                     Termination
by MEDecision for Breach.  MEDecision
may terminate this Agreement or any license to a Product by giving written
notice to Customer, if the Customer fails to remedy any of the following
breaches of this Agreement within thirty (30) days after its receipt of notice
of breach and intent to terminate:  (i)
Customer fails to pay MEDecision when due any undisputed licensee fees under
this Agreement (in which case MEDecision may terminate the applicable
licenses), (ii) Customer fails or is unable to comply with the obligations
under Article 4, or (iii) Customer attempts to assign this Agreement to a
Vendor Competitor in violation of Section 12.6. 
If MEDecision terminates the license for any Product under this Section
11.2, PacifiCare shall have a reasonable period of time, not to exceed [***]
from the receipt of MEDecision’s notice of termination to migrate from the
Product to the software of another vendor. 
During this migration period, Customer may continue using the Products
subject to the terms and conditions of this Agreement and Customer will
continue to pay any recurring license and support fees.  For the avoidance of doubt, in no event may
any provision of this Section 11.2 be interpreted to allow any MEDecision
Competitor to have access to the Products without the prior written consent of
MEDecision.

*** Confidential material which has been
omitted and filed separately with the Securities and Exchange Commission.

 7
 

11.3.                     Termination
by Customer.  Customer may terminate
this Agreement, in whole or in part, or with respect to any Product, at any
time with or without cause, without penalty, and, except as otherwise set forth
in this Agreement, without additional consideration and for the convenience of
the Customer thirty (30) days after Customer has given MEDecision notice of
such termination.

11.4.                     Effect of
Termination.  Except as otherwise set
forth herein, on termination of this Agreement or termination or expiration of
any license to any Product, the following will occur:

(a)                                  All rights granted to
the affected Product(s) and all license, support and other fees associated with
the affected Product(s) will immediately terminate.  Customer must deinstall and return to MEDecision
the affected Product(s) and Customizations and Enhancements; provided that in
such event MEDecision grants to Customer and its Affiliates a non­ exclusive,
fully-paid, royalty-free, limited license for read-only copies of the Products
and Customizations and Enhancements for Customer’s and its Affiliates’ internal
use solely for litigation, appeal and quality management defense purposes and
Customer and its Affiliates, pursuant to such license, may retain copies of the
Products and Customizations and Enhancements. 
MEDecision will return to Customer or destroy all Protected Health
Information (as defined in the Business Associate Addendum), in whatever form
or medium (including in any electronic medium under MEDecision’s custody or
control), that MEDecision created or received for or from Customer, including
all copies of and any data or compilations derived from and allowing
identification of any individual who is a subject of the Protected Health
Information.  Each Party will return the
Confidential Information of the other Party.

(b)                                 All rights and
obligations granted under Sections 1.2, 3 (only with respect to any amounts
owed prior to termination), 4, 6,7,8,9,10,11,12 and 13 will survive.

(c)                                  Termination will not
affect any claim, liability or right of Customer or MEDecision arising prior to
the termination.

11.5.                     Termination
and Bankruptcy.  Any rights and
licenses granted under or pursuant to this Agreement are, and shall otherwise
by deemed to be, for the purposes of Section 365(n) of Title 11, U.S. Code (the
“Bankruptcy Code”), licenses and rights to “intellectual property” as defined
under Section 101 of the Bankruptcy Code. 
The Parties agree that the Customer, as licensee of such rights, shall
retain and may fully exercise all of its rights and elections under the
Bankruptcy Code.  The Parties further
agree that the occurrence of any bankruptcy event shall not, and shall not be
deemed or construed to in any way restrict or impair the Customer’s right to
terminate this Agreement pursuant to Section 11.3, above.

11.6.                     Transition
Assistance Following Termination or Expiration of Agreement.  Notwithstanding anything to the contrary, in
connection with the expiration or termination of this Agreement, and if
requested in writing by the Customer prior to the applicable expiration date or
date of termination, MEDecision will provide transition assistance services,
the nature and extent of which will be determined by the Customer and approved
by MEDecision, such approval not to be unreasonably withheld or delayed.  The Parties will enter into a Statement of
Work under the MSA for such services and Customer will pay Vendor for such
Services at the Hourly Rates set forth in the MSA and shall reimburse
MEDecision’s travel and incidental expenses in accordance with the travel
policy set forth in Exhibit D to the MSA.

12.                               GENERAL.

12.1.                     Independent
Parties.  Neither Customer nor
MEDecision is a legal representative or agent of the other or is legally a
partner of the other.

12.2.                     Entirety.  This Agreement, the MSA, the Escrow Agreement
and the Business Associate Addendum, represent the entire agreement of the
Parties regarding the subject matter hereof, superseding all other
agreements.  Delivery of an executed
counterpart of this Agreement by facsimile of any other reliable means will be
deemed to be as effective for all purposes as delivery of the manually executed
counterpart.  This Agreement may not be
amended except in writing signed by both Parties.  No waiver of rights 

 8
 

by either Party may be implied from any
actions or failures to enforce rights under this Agreement.

12.3.                     Severability.  Each of the provisions of this Agreement is
severable from all of the other provisions. 
The invalidity or unenforceability of any provision will not affect or
impair the remaining provisions, which will continue in full force and effect.

12.4.                     Restricted
Rights Legend - U.S. Government.  The
Products acquired by the United States of America, its agencies and/or
instrumentalities are and will be provided with RESTRICTED RIGHTS FOR SOFTWARE
DEVELOPED AT PRIVATE EXPENSE.  Use,
duplication or disclosure by the U.S. government is subject to the restrictions
set forth in subparagraph (c)(1)(ii) of the Rights in Technical Data and
Computer Software clause at 48 C.F.R. 252.227 or DFAR 52.227, as applicable.

12.5.                     Export.  Customer will not export the Products in
violation of the export laws of the United States or of any other country.

12.6.                     Assignment.  Except as otherwise provided in this Section
12.6, neither Party shall assign or otherwise transfer this Agreement (whether
by operation of law or otherwise) without the prior written consent of the
other Party, which consent shall not be unreasonably withheld or delayed and
any attempt to do so shall be void and of no force or effect for any purpose
whatsoever and shall constitute a breach of this Agreement.  Notwithstanding the above, (i) Customer may
assign this Agreement to an Affiliate or in the case of a merger or sale of all
or substantially all of the stock or assets of Customer provided that the
assignee agrees to be bound by all of the terms and conditions of this
Agreement and also provided that the entity is not a MEDecision Competitor, and
(ii) MEDecision may assign this Agreement in the case of a merger or sale of
all or substantially all of the stock or assets of the business unit
responsible for the Products provided that the assignee agrees to be bound by
all of the terms and conditions of this Agreement and also provided that the
entity is not a PacifiCare Competitor.

12.7.                     Force
Majeure.  Neither Party shall be
liable to the other for any delay or failure to perform due to causes beyond
its reasonable control; provided the non-performing Party is without fault in
causing such default or delay, and such default or delay could not have been
prevented by reasonable precautions and can not reasonably be circumvented by
the non-performing Party through the use of alternate sources, workaround plans
or other means.  In such event
performance times shall be considered extended for a period of time equivalent
to the time lost because of any such delay as long the non-performing Party
continues to use its best efforts to recommence performance or observance
whenever and to whatever extent possible without delay.

12.8.                     Governing
Law.  This Agreement will be governed
by the laws of California without regard for its choice of law provisions.

12.9.                     Notice.  All notices must be in writing to the address
shown on page 1 of this Agreement and will be effective on the date received.

12.10.              Escrow.  MEDecision, Customer and DSI Technology
Escrow Services are parties to that certain Preferred Escrow Agreement
effective as of April 4, 2000 (the “Escrow Agreement”), a copy of which is
attached as Exhibit D.  Within ninety (90)
days of the Effective Date, the Parties agree to enter into an amendment of
such Escrow Agreement, substantially in the form attached hereto in Exhibit D.

12.11.              [***].

[***]

12.12.               [***].

[***]

13.                               DEFINITIONS.

13.1.                     Affiliate
shall mean corporations, partnerships or other entities that directly or 

*** Confidential material which has been
omitted and filed separately with the Securities and Exchange Commission.

 9
 

indirectly through one or more
intermediaries, control, are controlled by, or are under common control with
Customer as of the Effective Date and includes any other entity that, after the
Effective Date, directly or indirectly through one or more intermediaries,
control, are controlled by, or are under common control with Customer, provided
that s (i) Customer is liable for all acts and omissions of such entities that
would constitute a breach of this Agreement if such acts or omissions had been
performed by Customer, and (ii) that no such entity is a MEDecision Competitor.  The term “control” (including, with its
correlative meanings, “controlled by” and “under common control with”) means
possession, directly or indirectly, of power to direct or cause the direction
of management or policies (whether through ownership of securities or partnership
or other ownership interest, by contract or otherwise).  Affiliates as of the Effective Date are
listed in Appendix B (the “Current Affiliates”).

13.2.                     Claim
means any claim, legal or equitable cause of action, suit, litigation,
proceeding (including a regulatory or administrative proceeding), grievance,
complaint, demand, charge, investigation, audit, arbitration, mediation or
other process for settling disputes or disagreements, including, without
limitation, any of the foregoing processes or procedures in which injunctive or
equitable relief is sought.

13.3.                     Customizations
and Enhancements means any customization or enhancement or other derivative
work made to the MEDecision Products under a Statement of Work or otherwise
pursuant to the MSA (i.e., the creation of or modification to any MEDecision
Product Source Code, source help files and/or source clinical content).  Customizations and Enhancements include all
Prior Customizations.

13.4.                     Documentation
means the user manuals and operations manuals that accompany a Product, as well
as updates of such manuals, including in electronic format and other documents
published by MEDecision pertaining to the current versions of the Products or
portions thereof (including sales literature), as such published documents may
be updated from time to time; provided that in no event will Documentation
include any descriptions of product plans, future versions of products,
products not yet released, future company plans and future industry directions.

13.5.                     Error
means a failure of the Products to substantially conform in all material
respects with the applicable Documentation and a failure of the Customizations to
substantially conform in all material respects with the Specifications.

13.6.                     Expense
means any and all costs, expenses, and fees, including costs of settlement,
attorneys’ fees, accounting fees, and expert costs and fees incurred or
reasonably likely to be incurred in connection with Claims which are the
subject of indemnification under this Agreement or Losses or Judgments arising
from such Claims.

13.7.                     Hardware
means equipment, hardware configuration, audit controls, back-up plans, network
management and operating methods necessary to install and use the Products.

13.8.                     HIPAA
means the Health Insurance Portability and Accountability Act of 1996.

13.9.                     Judgment means
any judgment, writ, order, injunction, award or decree of or by any court,
judgment, justice or magistrate, including any bankruptcy court or judge and
any order of or by any governmental authority.

13.10.              Loss means and
includes any loss, assessment, fine, penalty, deficiency, interest, payment,
expense (including legal fees), cost, debt, indebtedness, liability, lien,
Judgment or damages which is sustained, incurred or accrued.

13.11.              MEDecision Competitor
means an entity that is a competitor of MEDecision as listed in Appendix C, as
such list may be amended from time to time by MEDecision and upon approval of
such amendment by Customer, such approval to not be unreasonably withheld.

13.12.              MEDecision Product
means a MEDecision product identified on a Schedule entered into by the Parties
during the term of this Agreement, including all associated Documentation.

13.13.              Members/Lives
means primary members, subscribers or eligible dependents covered under (i)
Customer’s or its Affiliates’ medical plan(s) in which MEDecision’s Products(s)
is being utilized to 

 10
 

process such members’, subscribers’ or
eligible dependents’ data or (ii) a third party medical plan, but for whom
Customer provides services and in which MEDecision’s Product(s) is being
utilized to process such members’, subscribers’ or eligible dependents’ data.

13.14.              Outsourcer means
a third party that has entered into an agreement with Customer for the
provision of information technology, data processing and/or other related
services.

13.15.              PacifiCare
Competitor means an entity that is a competitor of Customer as set fort in
Appendix C, as such list may be amended from time to time by Customer and upon
approval of such amendment by MEDecision, such approval to not be unreasonably
withheld.

13.16.              Prior Customizations
mean all customizations and enhancements and other derivative works to the
Products developed pursuant to the Agreement for Products and Services,
previously entered into by the Parties as of February 1, 1998.

13.17.              Products mean
collectively the MEDecision Products, the Third Party Products and any Upgrades
that MEDecision may provide to Customer as part of the Support services
described in Section 2.

13.18.              Software means
operating system software, databases, communication lines, utility programs and
all other items necessary for the proper operation of Customer’s information
systems and software applications necessary to install and use the Products and
receive Support services.

13.19.              Specification
means any specifications for a Customization set forth on the applicable
Statement of Work to the MSA in which the Customization is developed.

13.20.              Standard Support
means support services provided by MEDecision, as described in Appendix A.

13.21.              Third Party Product
means a third party product identified on a Schedule entered into by the Parties
during the term of this Agreement, including all associated Documentation.  Nothing in this Agreement will prohibit
Customer from licensing a Third Party Product directly from the applicable
third party vendor or from any other vendor.

13.22.              Upgrade means a
Release, Version or Maintenance Fix of a MEDecision Product.  Release means a later version of a Product
identified by a change in the first digit to the left of the decimal point
((X).xx); Version means a later version of a Product identified by a change in
the first digit to the right of the decimal point ((x).Xx; and Maintenance Fix
means a later version of a Product identified by a change in the second digit
to the right of the decimal point ((x).xX.

The following documents
are attached hereto as exhibits, the terms of which are incorporated by
reference in their entirety:

Appendix A - Support
Appendix

Appendix B - Current
Affiliates

Appendix C – Competitors

Appendix D - Source Code
Escrow Agreement and Amendment

Schedule 1 Appendix A to
Schedule 1 - Communication and Configurations

 11
 

Intending to be legally
bound, the Parties have had this Agreement executed by their duly authorized
officials.

	
  MEDECISION, INC.

  	
   

  	
  PACIFICARE
  HEALTH SYSTEMS, INC.

  
	
  By:

  	
  /s/ Danielle Russella

  	
   

  	
  By:

  	
  /s/ Sharon
  Garrett

  	
   

  
	
  Name:

  	
  Danielle Russella

  	
   

  	
  Name:

  	
  Sharon Garrett

  	
   

  
	
  Title:

  	
  Senior Vice President,
  Sales

  	
   

  	
  Title:

  	
  Executive Vice President,
  Enterprise Services

  	
   

  
	
  Date:

  	
  June 30, 2004

  	
   

  	
  Date:

  	
  June 30, 2004

  	
   

  
										

 

 12
 

Appendix
A -Support Appendix

MEDecision shall
provide Standard Support services for the Products, and any Customizations and
Enhancements, as generally described below.

Error Correction Services

MEDecision shall correct
all Errors in the Products, including Errors in Customizations and
Enhancements.  MEDecision shall provide
remote support services for Errors through telephone, fax, Internet and e-mail.  MEDecision support representatives will
record all Error reports and coordinate responses.  Customer may submit Error reports by
telephone or electronically.  MEDecision
will supply telephone numbers and e-mail addresses.  Customer may also request electronic status
reports on reported Errors by telephone, fax or e-mail.

Customer will designate
up to three (3) support personnel responsible for reporting Errors and
receiving Upgrades.  MEDecision and
Customer will cooperate in efforts to resolve reported Errors.  For all reported Errors, MEDecision will
assign a call tracking number and a severity level of the Error, will work to
determine the source of the Errors and will use best efforts to provide a fix,
by-pass, or work-around.  If reasonably
possible, Customer will submit a test case that duplicates the Error, instruct
MEDecision how to duplicate the Error, and provide problem log dumps,
diagnostic tests or other investigative support.  Customer will provide all reasonably
requested information to assist in arriving at a problem solution.  In all cases, MEDecision will work to provide
at least a temporary resolution in the form of a workaround or other
correction, to be followed where necessary by a permanent fix.  If MEDecision is unable to correct an Error
through the remote support described above, MEDecision will provide the Error
corrections on-site.

Product Versions

MEDecision shall support
the [***] of the Product and at least [***] for a period of [***].  In no event will MEDecision support any [***]
for less than [***]; provided however that MEDecision reserves the right, at
any time, to withdraw the availability of support for a Product with two (2)
years prior written notice.

Support Services - Telephone Support

MEDecision shall provide
Technical Support and Application Support for Customer as part of the Standard
Support Services for up [***] (“Normal Business Hours”), exclusive of
MEDecision holidays.  From [***], the
Technical Support and Application Support is provided from MEDecision’s
offices; and from [***] such support is provided via cell phone or pager.  In the event Customer requests and receives
Technical Support or Application Support services in excess of [***],
MEDecision may charge customer for such support at the Hourly Rate set forth in
the MSA.  Time spent (i) [***] and (ii) [***]
shall not be counted against Customer’s Technical Support and Application
Support.  All hours unused on each
anniversary of the Effective Date of this Agreement will expire.

Technical Support

Technical Support
consists of the availability of MEDecision’s Technical Support personnel by
phone during Normal Business Hours to answer Customer’s technical questions and
resolve problems, including through remote login access, related to the
Products, Customizations and Enhancements, including in the following areas:

i.                                 [***]

ii.                              [***]

iii.                           [***]

iv.                          [***]

v.                             [***]

vi.                          [***]

***
Confidential material which has been omitted and filed separately with the
Securities and Exchange Commission.

 13
 

Application Support

Application Support
consists of the availability of MEDecision’s Application Support personnel by
phone during Normal Business Hours to answer Customer’s questions and resolve
problems, including through remote login access, in the following areas related
to the Products, Customizations and Enhancements:

i.                                [***]

ii.                             [***].

Training

MEDecision will provide [***]
on the Products for the Customer’s trainers at a site designated by Customer
(site costs are at Customer’s expense) no more often than annually, as
requested by Customer and Customer will apply its Technical Support and
Applications Support hours towards this training.  MEDecision will provide training guides and
user’s manuals in electronic form.  In addition,
at Customer’s option, MEDecision will provide Customer with an additional [***]
no more often than [***] and Customer will apply its Technical Support and
Applications Support hours towards this training/consultation.

Excluded Services

MEDecision shall provide
the following services, which are outside the scope of the Standard Support
Services (the “Excluded Services”), at the Hourly Rates set forth in the MSA:

i.                                [***].

ii.                             [***].

iii.                          [***].

iv.                         [***].

v.                            [***].

vi.                         [***].

vii.                      [***].

viii.                   [***].

ix.                           [***].

Account Management Services

An Account Manager will
be available for up to [***] to consult with Customer regarding use, value, and
plans for Advanced Medical Management (AMM), to provide upon request, written
initial services estimates and to act as internal ombudsman for Customer to
facilitate projects, negotiations, escalate issues, and product ideas.  All unused [***].  Notwithstanding anything to the contrary, [***].

Audit Services

As part of the Standard
Support services, MEDecision will provide an annual audit to Customer.  The audit includes an on-site review of
Customer’s current use of MEDecision’s Products at one selected site and a
report to recommend the optimal use of MEDecision’s Products as installed at
Customer.  The annual audit Includes up
to [***] of effort from MEDecision personnel per Contract Year.  [***].

Installation of Maintenance Fixes

As part of the Standard
Support services, MEDecision will install (remotely, if possible) and configure
Maintenance Fixes for MEDecision Products.

Miscellaneous Services Costs

Communications charges
for faxes, phone calls, normal copying and courier services are included in
Support Fees; however commercial teleconference charges are not included and
will be paid by Customer.

All additional services
not described in this Appendix A will be provided, upon request and approval by
Customer, at the hourly rates set forth in the MSA.

Upgrades

From time to time,
MEDecision may provide Upgrades of the MEDecision Products.  MEDecision shall provide Customer with all
Upgrades it makes generally available to its customers.  Customer may elect to implement such
Upgrades, in its sole discretion.  All

***
Confidential material which has been omitted and filed separately with the
Securities and Exchange Commission.

 14
 

hardware
and third party product costs related to Upgrades will be the responsibility of
Customer.  MEDecision will assist
Customer in the installation, configuration and customization of Upgrades at
the rates set forth in the MSA or as otherwise agreed between the Parties.

Customer may elect not to
receive, or may cancel, Standard Support service.  However, if Customer wishes to reinstate
Standard Support services, it must pay the Standard Support that would have
applied during the lapsed period and bring the Product up to the most current
Release.

Travel and Living Expenses

Customer will pay all
travel and incidental expenses incurred by MEDecision personnel in providing
the training or Excluded Services under this Support Appendix in accordance
with the travel policy set forth in the MSA.

 15
 

Error Resolution:

MEDecision will adhere to
the following schedule in resolving Errors with the Products:

	
  Priority

  	
   

  	
  Response

  Time

  	
   

  	
  Description

  
	
  1

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  2

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  3

  	
   

  	
  [***]

  	
   

  	
  [***]

  

 

*** Confidential material
which has been omitted and filed separately with the Securities and Exchange
Commission.

 16
 

APPENDIX B - CURRENT AFFILIATES

1.                                       [***]

2.                                       [***]

3.                                       [***]

4.                                       [***]

5.                                       [***]

6.                                       [***]

7.                                       [***]

8.                                       [***]

9.                                       [***]

10.                                 [***]

11.                                 [***]

12.                                 [***]

13.                                 [***]

14.                                 [***]

15.                                 [***]

16.                                 [***]

17.                                 [***]

18.                                 [***]

19.                                 [***]

20.                                 [***]

21.                                 [***]

22.                                 [***]

23.                                 [***]

24.                                 [***]

25.                                 [***]

26.                                 [***]

27.                                 [***]

28.                                 [***]

29.                                 [***]

30.                                 [***]

*** Confidential material
which has been omitted and filed separately with the Securities and Exchange
Commission.

 17
 

31.                                 [***]

32.                                 [***]

33.                                 [***]

*** Confidential material
which has been omitted and filed separately with the Securities and Exchange
Commission.

 18
 

Appendix
C – Competitors

PACIFICARE COMPETITORS

[***]

MEDECISION COMPETITORS

[***]

*** Confidential material
which has been omitted and filed separately with the Securities and Exchange
Commission.

 19
 

Appendix D- SOURCE CODE ESCROW
AGREEMENT and AMENDMENT

See Attached.

 20

PREFERRED ESCROW AGREEMENT

Account
Number  [***]

 

This Agreement is
effective April 4, 2000 among DSI Technology Escrow Services, Inc. (“DSI”), MEDecision, Inc. (“Depositor”) and PacifiCare
Health Systems, Inc. (“Preferred Beneficiary”), who collectively maybe
referred to in this Agreement as “the parties.”

A.            Depositor and Preferred Beneficiary
have entered or will enter into a license agreement, development agreement,
and/or other agreement regarding certain proprietary technology of Depositor
(referred to in this Agreement as “the License Agreement”).

B.            Depositor desires to avoid
disclosure of its proprietary technology except under certain limited
circumstances.

C.            The availability of the proprietary
technology of Depositor is critical to Preferred Beneficiary in the conduct of
its business and, therefore, Preferred Beneficiary needs access to the
proprietary technology under certain limited circumstances.

D.            Depositor and Preferred Beneficiary
desire to establish an escrow with DSI to provide for the retention,
administration and controlled access of the proprietary technology materials of
Depositor.

E.             The parties desire this Agreement
to be supplementary to the License Agreement pursuant to 11 United States
[Bankruptcy] Code, Section 365(n).

1.             DEPOSITS.

1.1.         Obligation
to Make Deposit. 
Upon the signing of this Agreement by the parties, Depositor shall
deliver to DSI the proprietary technology and other materials (“Deposit
Materials”) required to be deposited by the License Agreement or, if the
License Agreement does not identify the materials to be deposited with DSI,
then such materials will be identified on an Exhibit A. If Exhibit A is
applicable, it is to be prepared and signed by Depositor and Preferred
Beneficiary.  DSI shall have no
obligation with respect to the preparation, signing or delivery of Exhibit A.

1.2.         Identification of Tangible Media.  Prior to the delivery of the Deposit
Materials to DSI, Depositor shall conspicuously label for identification each
document, magnetic tape, disk, or other tangible media upon which the Deposit
Materials are written or stored. 
Additionally, Depositor shall complete Exhibit B to this Agreement by
listing each such tangible media by the item label description, the type of
media and the quantity.  The Exhibit B
must be signed by Depositor and delivered to DSI with the Deposit
Materials.  Unless and until Depositor
makes the initial deposit with DSI, DSI shall have no obligation with respect
to this Agreement, except the obligation to notify the parties regarding the
status of the deposit account as required in Section 2.2 below.

1.3.         Deposit Inspection.  When DSI receives the Deposit Materials and
the Exhibit B, DSI will conduct a deposit inspection by visually matching the
labeling of the tangible media containing the Deposit Materials to the item
descriptions and quantity listed on the Exhibit B. In 

*** Confidential
material which has been omitted and filed separately with the Securities and
Exchange Commission.

 1
 

addition to the deposit
inspection, Preferred Beneficiary may elect to cause a verification of the
Deposit Materials in accordance with Section 1.6 below.

1.4.         Acceptance of Deposit.  At completion of the deposit inspection, if
DSI determines that the labeling of the tangible media matches the item
descriptions and quantity on Exhibit B, DSI will date and sign the Exhibit B
and mail a copy thereof to Depositor and Preferred Beneficiary.  If DSI determines that the labeling does not
match the item descriptions or quantity on the Exhibit B, DSI will (a) note the
discrepancies in writing on the Exhibit B; (b) date and sign the Exhibit B with
the exceptions noted; and (c) mail a copy of the Exhibit B to Depositor and
Preferred Beneficiary.  DSI’s acceptance
of the deposit occurs upon the signing of the Exhibit B by DSI.  Delivery of the signed Exhibit B to Preferred
Beneficiary is Preferred Beneficiary’s notice that the Deposit Materials have
been received and accepted by DSI.

1.5.         Depositor’s Representations.  Depositor represents as follows:

(a)           Depositor lawfully possesses all of the Deposit Materials
deposited with DSI;

(b)           With respect to all of the Deposit Materials, Depositor
has the right and authority to grant to DSI and Preferred Beneficiary the
rights as provided in this Agreement;

(c)           The Deposit Materials are not subject to any lien or other
encumbrance; d.            The Deposit
Materials consist of the proprietary technology and other materials identified
either in the License Agreement or Exhibit A, as the case may be; and e.        The Deposit Materials are readable and
useable in their current form or, if the Deposit Materials are encrypted, the
decryption tools and decryption keys have also been deposited.

1.6.         Verification.  Preferred Beneficiary shall have the right,
at Preferred Beneficiary’s expense, to cause a verification of any Deposit
Materials.  A verification determines, in
different levels of detail, the accuracy, completeness, sufficiency and quality
of the Deposit Materials.  If a
verification is elected after the Deposit Materials have been delivered to DSI,
then only DSI, or at DSI’s election an independent person or company selected
and supervised by DSI, may perform the verification.

1.7.         Deposit Updates.  Unless otherwise provided by the License
Agreement, Depositor shall update the Deposit Materials within thirty (30) days
of each release of a new version of the product which is subject to the License
Agreement.  Such updates will be added to
the existing deposit.  All deposit
updates shall be listed on a new Exhibit B and the new Exhibit B shall be
signed by Depositor.  Each Exhibit B will
be held and maintained separately within the escrow account.  An independent record will be created which
will document the activity for each Exhibit B. 
The processing of all deposit updates shall be in accordance with
Sections 1.2 through 1.6 above.  All
references in this Agreement to the Deposit Materials shall include the initial
Deposit Materials and any updates.

1.8.         Removal of Deposit Materials.  The Deposit Materials may be removed and/or
exchanged only on written instructions signed by Depositor and Preferred
Beneficiary, or as otherwise provided in this Agreement.

2.             CONFIDENTIALITY
AND RECORD KEEPING.

2.1.         Confidentiality.  DSI shall maintain the Deposit Materials in a
secure, environmentally safe, locked facility which is accessible only to
authorized representatives of DSI.  DSI
shall have the obligation to reasonably protect the confidentiality of the
Deposit Materials.  Except as provided in
this Agreement, DSI shall not disclose, transfer, make available, or use the
Deposit Materials.  DSI shall not
disclose the content of this Agreement to any third party.  If DSI receives a subpoena or other order of
a court or other judicial tribunal pertaining to the 

 2
 

 

disclosure or release of the
Deposit Materials, DSI will immediately notify the parties to this
Agreement.  It shall be the
responsibility of Depositor and/or Preferred Beneficiary to challenge any such
order; provided, however, that DSI does not waive its rights to present its
position with respect to any such order. 
DSI will not be required to disobey any court or other judicial tribunal
order.  (See Section 7.5 below for
notices of requested orders.)

2.2.         Status Reports.  DSI will issue to Depositor and Preferred
Beneficiary a report profiling the account history at each time a change is
reported to DSI.  DSI may provide copies
of the account history pertaining to this Agreement upon the request of any
party to this Agreement.

2.3.         Audit Rights.  During the term of this Agreement, Depositor
and Preferred Beneficiary shall each have the right to inspect the written
records of DSI pertaining to this Agreement. 
Any inspection shall be held during normal business hours and following
reasonable prior notice.

3.             GRANT
OF RIGHTS TO DSI.

3.1.         Title to Media.  Depositor hereby transfers to DSI the title
to the media upon which the proprietary technology and materials are written or
stored.  However, this transfer does not
include the ownership of the proprietary technology and materials contained on
the media such as any copyright, trade secret, patent or other intellectual
property rights.

3.2.         Right to Make Copies.  DSI shall have the right to make copies of
the Deposit Materials as reasonably necessary to perform this Agreement.  DSI shall copy all copyright, nondisclosure,
and other proprietary notices and titles contained on the Deposit Materials
onto any copies made by DSI.  With all
Deposit Materials submitted to DSI, Depositor shall provide any and all
instructions as may be necessary to duplicate the Deposit Materials including
but not limited to the hardware and/or software needed.

3.3.         Right to Transfer Upon Release.  Depositor hereby grants to DSI the right to
transfer the Deposit Materials to Preferred Beneficiary upon any release of the
Deposit Materials for use by Preferred Beneficiary in accordance with Section
4.5.  Except upon such a release or as
otherwise provided in this Agreement, DSI shall not transfer the Deposit
Materials.

4.             RELEASE
OF DEPOSIT.

4.1.         Release Conditions.  As used in this Agreement, “Release Condition”
shall mean the following:

(a)           In the event that Depositor shall be unable to provide the
majority of the Maintenance and Support Services described in Attachment C to
the Agreement for Products and Services, provided that:

1.                                       Maintenance
Services are not resumed within thirty (30) day’s of written notice;

2.                                       Customer
has paid all outstanding invoices;

3.                                       Customer
is not in breach of any provision of the Agreement for Products and Services;
and

4.                                       Customer
agrees not to re-sell or re-license the Products or their derivatives, if any;
or

(b)           In the event that Depositor shall, for any reason, cease
to conduct business.

4.2.         Filing For Release.  If Preferred Beneficiary believes in good
faith that a Release Condition has occurred, Preferred Beneficiary may provide
to DSI written notice of the 

 3
 

 

occurrence of the Release
Condition and a request for the release of the Deposit Materials.  Upon receipt of such notice, DSI shall
provide a copy of the notice to Depositor by commercial express mail.

4.3.         Contrary Instructions.  From the date DSI mails the notice requesting
release of the Deposit Materials, Depositor shall have ten business days to
deliver to DSI Contrary Instructions. “Contrary Instructions” shall mean the
written representation by Depositor that a Release Condition has not occurred
or has been cured.  Upon receipt of
Contrary Instructions, DSI shall send a copy to Preferred Beneficiary by
commercial express mail.  Additionally,
DSI shall notify both Depositor and Preferred Beneficiary that there is a
dispute to be resolved pursuant to the Dispute Resolution section (Section 7.3)
of this Agreement.  Subject to Section
5.2, DSI will continue to store the Deposit Materials without release pending
(a) joint instructions from Depositor and 
Preferred  Beneficiary;  (b) 
resolution pursuant  to  the 
Dispute  Resolution provisions; or
(c) order of a court.

4.4.         Release of Deposit.  If DSI does not receive Contrary Instructions
from the Depositor, DSI is authorized to release the Deposit Materials to the
Preferred Beneficiary or, if more than one beneficiary is registered to the
deposit, to release a copy of the Deposit Materials to the Preferred
Beneficiary.  However, DSI is entitled to
receive any fees due DSI before making the release.  Any copying expense in excess of $300 will be
pre-approved in writing by Preferred Beneficiary before charges are incurred by
Preferred Beneficiary.  This Agreement
will terminate upon the release of the Deposit Materials held by DSI.

4.5.         Right to Use Following Release.  Unless otherwise provided in the License
Agreement, upon release of the Deposit Materials in accordance with this
Article 4, Preferred Beneficiary shall have the right to use the Deposit
Materials for the sole purpose of continuing the benefits afforded to Preferred
Beneficiary by the License Agreement and shall not be required to pay any
source code license fees to Depositor. 
Preferred Beneficiary shall be obligated to maintain the confidentiality
of the released Deposit Materials.

5.             TERM
AND TERMINATION.

5.1.         Term of Agreement.  The initial term of this Agreement is for a
period of one year.  Thereafter, this
Agreement shall automatically renew from year-to-year unless (a) Depositor and
Preferred Beneficiary jointly instruct DSI in writing that the Agreement is
terminated; or (b) the Agreement is terminated by DSI for nonpayment in
accordance with Section 5.2.  If the
Deposit Materials are subject to another escrow agreement with DSI, DSI
reserves the right, after the initial one year term, to adjust the anniversary
date of this Agreement to match the then prevailing anniversary date of such
other escrow arrangements.

5.2.         Termination for Nonpayment.  In the event of the nonpayment of fees owed
to DSI, DSI shall provide written notice of delinquency to all parties to this
Agreement.  Any party to this Agreement
shall have the right to make the payment to DSI to cure the default.  If the past due payment is not received in
full by DSI within one month of the date of such notice, then DSI shall have
the right to terminate this Agreement at any time thereafter by sending written
notice of termination to all parties. 
DSI shall have no obligation to take any action under this Agreement so
long as any payment due to DSI remains unpaid.

5.3.         Disposition  of Deposit 
Materials Upon  Termination.  Upon 
termination  of this Agreement,
DSI shall destroy, return, or otherwise deliver the Deposit Materials in
accordance with Depositor’s instructions. 
If there are no instructions, DSI may, at its sole discretion, destroy
the Deposit Materials or return them to Depositor.  DSI shall have no obligation to return or
destroy the Deposit Materials if the Deposit Materials are subject to another
escrow agreement with DSI.

 4
 

5.4.         Survival of Terms Following Termination.  Upon termination of this Agreement, the
following provisions of this Agreement shall survive:

(a)           Depositor’s Representations (Section 1.5);

(b)           The obligations of confidentiality with respect to the
Deposit Materials;

(c)           The rights granted in the sections entitled Right to
Transfer Upon Release (Section 3.3) and Right to Use Following Release (Section
4.5), if a release of the Deposit Materials has occurred prior to termination;

(d)           The provisions of Article 7; and

(e)           Any provisions in this Agreement which specifically state
they survive the termination or expiration of this Agreement.

6.             DSI’S
FEES.

6.1.         Fee Schedule.  [***]

6.2.         Payment Terms.  DSI shall not be required to perform any
service unless the payment for such service and any outstanding balances owed
to DSI are paid in full.  Fees are due [***] of a signed contract or receipt
of the Deposit Materials whichever is earliest. 
If invoiced fees are not paid, DSI may terminate this Agreement in
accordance with Section 5.2.  Late fees
on past due amounts shall accrue interest at the rate of one percent (1%) per
month (12% per annum) from the date of the invoice.  If Depositor or Preferred Beneficiary
terminate this agreement, Preferred Beneficiary shall receive a prorated refund
based upon the annual fee paid for on the attached Exhibit “D” (Escrow Service
fees).

7.             LIABILITY
AND DISPUTES.

7.1.         Right to Rely on Instructions.  DSI may act in reliance upon any instruction,
instrument, or signature reasonably believed by DSI to be genuine.  DSI will require Depositor and Preferred
Beneficiary to have an authorized representative of the company (Director, Vice
President, Sr.  Vice President) to give any
written notice, request, or instruction. 
DSI shall not be responsible for failure to act as a result of causes
beyond the reasonable control of DSI.

7.2.         Indemnification.  DSI shall be responsible to perform its
obligations under this Agreement and to act in a reasonable and prudent manner
with regard to this escrow arrangement. 
Provided DSI has acted in the manner stated in the preceding sentence,
Depositor and Preferred Beneficiary each agree to indemnify, defend and hold
harmless DSI from any and all claims, actions, damages, arbitration fees and
expenses, costs, attorney’s fees and other liabilities incurred by DSI relating
in any way to this escrow arrangement.

7.3.         Dispute Resolution.  Any dispute relating to or arising from this
Agreement shall be resolved by arbitration under the Commercial Rules of the
American Arbitration Association.  Unless
otherwise agreed by Depositor and Preferred Beneficiary, arbitration will take
place in Los Angeles, California, U.S.A. 
Any court having jurisdiction over the matter may enter judgment on the
award of the arbitrator(s).  Service of a
petition to confirm the arbitration award 

*** Confidential material
which has been omitted and filed separately with the Securities and Exchange
Commission.

 5
 

 

may be made by First Class mail
or by commercial express mail, to the attorney for the party or, if
unrepresented, to the party at the last known business address.

7.4.         Controlling Law.  This Agreement is to be governed and
construed in accordance with the laws of the State of California, without
regard to its conflict of law provisions.

7.5.         Notice of Requested Order.  If any party intends to obtain an order from
the arbitrator or any court of competent jurisdiction which may direct DSI to
take, or refrain from taking any action, that party shall:

(a)           Give DSI at least two business days’ prior notice of the
hearing;

(b)           Include in any such order that, as a precondition to DSPs
obligation, DSI be paid in full for any past due fees and be paid for the
reasonable value of the services to be rendered pursuant to such order; and

(c)           Ensure that DSI not be required to deliver the original
(as opposed to a copy) of the Deposit Materials if DSI may need to retain the
original in its possession to fulfill any of its other duties.

8.             GENERAL
PROVISIONS.

8.1.         Entire Agreement.  This Agreement, which includes the Exhibits
described herein, embodies the entire understanding among the parties with
respect to its subject matter and supersedes all previous communications,
representations or understandings, either oral or written.  DSI is not a party to the License Agreement
between Depositor and Preferred Beneficiary and has no knowledge of any of the
terms or provisions of any such License Agreement.  DSFs only obligations to Depositor or
Preferred Beneficiary are as set forth in this Agreement.  No amendment or modification of this
Agreement shall be valid or binding unless signed by all the parties hereto,
except that Exhibit A need not be signed by DSI, Exhibit B need not be signed
by Preferred Beneficiary and Exhibit C need not be signed.

8.2.         Notices.  All notices, invoices, payments, deposits and
other documents and communications shall be given to the parties at the
addresses specified in the attached Exhibit C. 
It shall be the responsibility of the parties to notify each other as
provided in this Section in the event of a change of address.  The parties shall have the right to rely on
the last known address of the other parties. 
Unless otherwise provided in this Agreement, all documents and
communications may be delivered by First Class mail.

8.3.         Severability.  In the event any provision of this Agreement
is found to be invalid, voidable or unenforceable, the parties agree that
unless it materially affects the entire intent and purpose of this Agreement,
such invalidity, voidability or unenforceability shall affect neither the
validity of this Agreement nor the remaining provisions herein, and the
provision in question shall be deemed to be replaced with a valid and
enforceable provision most closely reflecting the intent and purpose of the
original provision.

8.4.         Successors.  This Agreement shall be binding upon and
shall inure to the benefit of the successors and assigns of the parties.  However, DSI shall have no obligation in
performing this Agreement to recognize any successor or assign of Depositor or Preferred
Beneficiary unless DSI receives clear, authoritative and conclusive written
evidence of the change of parties.

8.5.         Assignment.  DSI shall not assign or otherwise transfer
all or any part of its rights, obligations or interest under the Agreement, and
any attempt to do so shall be void and of no force or effect for any purpose
whatsoever and shall constitute a breach of the Agreement.  If DSI assigns this Agreement and Depositor
and Preferred Beneficiary are not in agreement, 

 6
 

Depositor and Preferred
Beneficiary can terminate this Agreement pursuant to Section 5.1.  Notwithstanding any contrary provision of the
Agreement, Preferred Beneficiary and Depositor shall have the right to assign
or otherwise transfer its interest in the Agreement to a parent, subsidiary or
affiliate, or to an entity into which Preferred Beneficiary or Depositor is
merged or with which Preferred Beneficiary or, Depositor is consolidated, or to
the purchaser of all or substantially all of the assets of Preferred Beneficiary
or Depositor only upon written authorization from all parties to this
Agreement.  Preferred Beneficiary shall
also have the right upon written authorization from all parties to assign to an
outsourcer selected by Preferred Beneficiary to provide information technology
services.

8.6.         Regulations.  Depositor and Preferred Beneficiary are  responsible 
for and warrant compliance with all applicable laws, rules and
regulations, including but not limited to customs laws, import, export, and
re-export laws and government regulations of any country from or to which the
Deposit Materials may be delivered in accordance with the provisions of this
Agreement.

	
  

  	
   

  	
  PacifiCare
  Health Systems, Inc.

  
	
  Depositor

  	
   

  	
  Preferred
  Beneficiary

  
	
  By:

  	
  /s/ Michael Nightingale

  	
   

  	
  By:

  	
  /s/ Kathleen
  Lindner

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Michael Nightingale

  	
   

  	
  Name: Kathleen
  Lindner

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Executive Vice President

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  February 22, 2000

  	
   

  	
  Date:

  	
  February 8, 2000

  	
   

  
	
   

  
	
   

  
	
  DSI Technology
  Escrow Services, Inc.

  
										

 

	
  By:

  	
  /s/ Jeffrey Andrey

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Jeffrey Andrey

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Contract Administrator

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  April 4, 2000

  	
   

  	
   

  
							

 7
 

EXHIBIT A

MATERIALS TO BE DEPOSITED

Account Number 
[***]

Depositor
represents to Preferred Beneficiary that Deposit Materials delivered to DSI
shall consist of the following:

Source Code (which
includes all code (object and source), user documentation not already provided
to Preferred Beneficiary, copies of compilers, instructions for compilation,
set-up, and implementation, and all technical documentation) for the current
version in production at PacifiCare as well as all other, more recent releases
in general release for the following products:

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

	
  

  	
   

  	
  PacifiCare
  Health Systems, Inc.

  
	
  Depositor

  	
   

  	
  Preferred
  Beneficiary

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael Nightingale

  	
   

  	
  By:

  	
  /s/ Kathleen
  Lindner

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Michael Nightingale

  	
   

  	
  Nam: Kathleen
  Lindner

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Executive Vice President

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  February 22, 2000

  	
   

  	
  Date:

  	
  February 8, 2000

  	
   

  
										

 

*** Confidential material
which has been omitted and filed separately with the Securities and Exchange
Commission.

 8
 

EXHIBIT C

DESIGNATED CONTACT

Account
Number  [***]

	
  Notices, deposit material
  returns and 

  communications to Depositor 

  should be addressed to:

  	
  Invoices to
  Depositor should be 

  addressed to:

  
	
   

  	
   

  
	
  Company Name: MEDecision, Inc. 

  	
  MEDecision 

  
	
  Address: 

  	
  724 W. Lancaster Ave.

  	
  724 W. Lancaster
  Ave. 

  
	
   

  	
  Suite 200 Wayne, PA 19087 

  	
  Suite 200 Wayne,
  PA 19807 

  
	
  Designated Contact: Technical Services 

  	
  Contact: Finance
  Department 

  
	
  Telephone: 610-254-0202 

  	
   

  	
   

  
	
  Facsimile: 610-254-5100

  	
  P.O.#,
  if required:

  	
   

  	
   

  
	
   

  	
   

  
	
  Notices and communications to Preferred 

  Beneficiary should be addressed to:

  	
  Invoices to
  Preferred Beneficiary 

  should be addressed to:

  
	
   

  	
   

  
	
  Company: PacifiCare Health Systems, Inc.

  	
  PacifiCare
  Health Systems, Inc.

  
	
  Address: 

  	
  10803 Hope Street 

  	
  10803 Hope
  Street

  
	
   

  	
  M/S: CY26-109

  	
  M/S: CY26-109 

  
	
   

  	
  Cypress, CA 90630 

  	
  Cypress, CA
  90630 

  
	
  Designated Contact: I.S. Contract Management 

  	
  Contact: IS.
  Finance 

  
	
  Telephone: 714/226-8474 

  	
  Fax:
  714/226-6041 

  
	
  Facsimile: 714/226-6041

  	
   

  
	
   

  	
  P.O.#,
  if required:

  	
   

  	
   

  

 

Requests from
Depositor or Preferred Beneficiary to change the designated contact should be
given in writing by the designated contact or an authorized employee of
Depositor or Preferred Beneficiary.

	
  Contracts, Deposit Materials
  and notices to 

  DSI should be addressed to:

  	
  Invoice
  inquiries and fee remittances 

  to DSI should be addressed to:

  
	
   

  	
   

  
	
  DSI 

  Contract Administration 

  Suite 202 

  9265 Sky Park Court 

  San Diego, CA 92123

  	
  DSI 

  Accounts Receivable 

  P.O. Box 45156 

  San Francisco, CA 94145-0156

  
	
   

  	
   

  
	
  Telephone: (858)499-1600 

  Facsimile: (858)499-1601

  	
  (415) 398-7900 

  (415) 398-7914

  
	
  Date:

  	
   

  	
   

  	
   

  
				

 

*** Confidential
material which has been omitted and filed separately with the Securities and
Exchange Commission.

 9
 

EXHIBIT D

DSI FEE
FOR ESCROW SERVICES

TO:                         Monique Precheur,
MEDecision, Inc.

FROM:                  Grant Jones, DSI, Inc.

DATE:                   February 8, 2000

Escrow Fees are as
follows:

	
  PRODUCT

  	
   

  	
  DESCRIPTION

  	
   

  	
  FEE

  	
   

  
	
  Preferred Protection System

  	
   

  	
  One time set-up fee -includes contract 

  review and account establishment

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Deposit Account - V2 cubic foot storage 

  unit, Initial Deposit, Beneficiary fee, 

  Semi-Annual Account Histories, Deposit 

  Notification for all updates

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Unlimited Updates

  	
   

  	
  [***]

  	
   

  
	
  Total 1st Year Fees

  	
   

  	
   

  	
   

  	
  $

  	
  [***]

  	
   

  

 

You will have two
options regarding updating the deposit account:

Individual Updates              $[***].

Unlimited Updates               $[***]

*** Confidential
material which has been omitted and filed separately with the Securities and
Exchange Commission.

 10

MEDecision

Addendum
#001

This Addendum #001 to the
Preferred Escrow Agreement (“the Addendum #001”), effective as of June 30, 2004
is entered into by and between MEDecision, Inc. (“Depositor”), One Devon
Square, 724 W. Lancaster Avenue, Suite 200, Wayne, PA 19087 and PacifiCare
Health Systems, Inc (“Preferred Beneficiary”), 10803 Hope Street, Cypress, CA
90630 and DSI Technology Escrow Services, Inc. (“DSI”) Sometimes hereinafter,
Depositor and Preferred Beneficiary and DSI may each be referred to in this
Addendum #001 individually as a “Party” and together as the “Parties”.

WHEREAS, the Parties have
executed and have been operating under a Preferred Escrow Agreement, with an
effective date of April 4,2000 (“the Preferred Escrow Agreement”);

WHEREAS, Preferred
Beneficiary and Depositor have executed a Master Product Agreement with an
effective date of June 30,2004 (“MPA”) and a Master Services Agreement with an
effective date of June 30,2004 (“MSA”); and WHEREAS, the Parties wish to amend
the Preferred Escrow Agreement to add and modify certain terms, but maintain
the definitions set forth in the Preferred Escrow Agreement except as modified
herein.

NOW THEREFORE, in
consideration of the mutual promises and covenants herein set forth, Depositor
and the Preferred Beneficiary and DSI agree as follows:

1.                                      Paragraph
4.1.a

The Parties agree to
replace paragraph 4.1 .a of the License Agreement with the following:

4.1.a In the event that
Depositor shall be unable or fail to materially perform any function obligated in
Appendix A of the MPA, the Standard Support Appendix, provided that:

1.                                       [***]; and

2.                                       [***].

2.                                      Paragraph
4.5

The Parties agree
to add the following to paragraph 4.5 of the License Agreement:

The Preferred Beneficiary and such third parties as
are authorized to access the Products pursuant to the MPA, may modify and
create derivative works of the Deposit Materials.

3.                                      Exhibit
A to the License Agreement

*** Confidential material
which has been omitted and filed separately with the Securities and Exchange
Commission.

 1
 

The Parties agree to
replace Exhibit A, Materials To Be Deposited, with Exhibit A to this Addendum
#001.

Intending to be legally
bound, the parties have had this Addendum #001 executed by their duly
authorized officials.

	
  MEDECISION, INC.

  	
   

  	
  PACIFICARE HEALTH SYSTEMS, INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DSI TECHNOLOGY ESCROW SERVCIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  	
   

  
																

 

 2
 

Exhibit A

MATERIALS TO BE DEPOSITED

Account Number: 
[***]

Depositor represents to
Preferred Beneficiary that Deposit Materials delivered to DSI shall consist of
the following:

Source Code (which
includes all code (object and source), user documentation not already provided
to Preferred Beneficiary, instructions for compilation, set-up, and
implementation, and all technical documentation) for the current version in
production at Preferred Beneficiary as well as all other, more recent Upgrades
(as defined in the MPA) in general release for the following MEDecision
Products:

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

	
  MEDECISION, INC.

  	
   

  	
  PACIFICARE HEALTH SYSTEMS, INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
													

 

*** Confidential material
which has been omitted and filed separately with the Securities and Exchange
Commission.

 3
 

 

MEDecision

MEDecision,
Inc.    ̈   One
Devon Square,  724 W. Lancaster Avenue    ̈  
Wayne, PA  19087     ̈   
Phone: 610-254-0202    ̈   Fax:
610-254-5100

Schedule
1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Number:  PHS-001P

Customer:                                          PACIFICARE HEALTH SYSTEMS, INC.

This Schedule 1
incorporates the Master Product Agreement Number: PHS-001

Customer Purchase Order
Number (optional):                                                            

Authorized
Locations:  Any one or more locations of
Customer, an Affiliate or Outsourcer

Effective Date of this
Schedule 1:  June 30,2004

MEDecision Products.  MEDecision grants to Customer and its
Affiliates a nonexclusive, [***] license to install the following MEDecision
Products at the Authorized Locations and to use the MEDecision Products in (a)
the normal course of the Customer’s and its Affiliates’ managed care,
preadmission certification, continued stay review and/or case management
business, and/or (b) any other business of Customer and its Affiliates as
mutually agreed upon in writing between the Parties.  The Customer agrees that the Products will
only be used for the Customer’s and its Affiliates’ internal use during the
term of this license.

Prior Customizations.  MEDecision grants to Customer and its
Affiliates a nonexclusive, [***] license to install at the Authorized Locations
and use the Prior Customizations in (a) the normal course of Customer’s and its
Affiliates’ managed care, preadmission certification, continued stay review
and/or case management business, and/or (b) any other business of Customer and
its Affiliates as mutually agreed upon in writing between the Parties.  The Customer agrees that the Prior
Customizations will only be used for the Customer’s and its Affiliates’
internal use during the term of this license.

	
  MEDecision
  Product Code

  	
   

  	
  MEDecision Product Name

  	
   

  	
  Number of Members/ Lives

  	
   

  	
  Number of Production Environments (4)

  	
   

  	
  ASP or Installed

  	
   

  	
  Initial License Fees

  	
   

  	
  First Year’s Annual Standard Support Fees

  	
   

  	
  Recurring Annual

  Standard Support

  Fees (5)

  
	
   

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

*** Confidential material
which has been omitted and filed separately with the Securities and Exchange
Commission.

 4
 

 

	
  MEDecision
  Product Code

  	
   

  	
  MEDecision Product Name

  	
   

  	
  Number of Members/ Lives

  	
   

  	
  Number of Production Environments (4)

  	
   

  	
  ASP or Installed

  	
   

  	
  Initial License Fees

  	
   

  	
  First Year’s Annual Standard Support Fees

  	
   

  	
  Recurring Annual

  Standard Support

  Fees (5)

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  
																		

 

1              License
to [***] will terminate one (1) year from first date of Customer’s use of [***]
in a production environment.

2              License
to [***] will terminate one (1) year from first date of Customer’s use of [***]
in a production environment.  Customer
will be responsible for acquiring the licenses for upgrades for the following
Third Party Products necessary for running this MEDecision Product:  [***].

3              Customer
will be responsible for acquiring the licenses for the following Third Party
Products necessary for running this MEDecision Product: [***].

4              Number
of Production Environments is the number of environments of the licensed
MEDecision Products that can be in production at any given time.  Additional Production Environments would be
subject to additional license and support fees. 
The Parties agree that Customer may use the Products in additional test
environments for no additional fees.

5              For
the initial [***] of this Agreement, the Annual Standard Support Fees for
MEDecision Products will not increase. 
Thereafter, Annual Standard Support Fees for MEDecision Products may
increase by the lesser of (i) [***], or (ii) [***].

*** Confidential material
which has been omitted and filed separately with the Securities and Exchange
Commission.

Pricing.  Any and all Members/Lives of Customer and the
Current Affiliates, existing as of the Effective Date or added at any time in
the future, other than the addition of Members/Lives through a merger or
acquisition as described in the following sentence, are included in the Initial
License Fee set forth above.  In the
event that Customer’s or any Affiliates’ Members/Lives increase due to (a)
Customer or such Affiliate merging with a third party, or (b) Customer or such
Affiliate acquiring the assets or stock of any third party, then Customer will
notify MEDecision in writing within [***]
days following the closing of the applicable transaction, which notice shall
contain an election by Customer regarding the manner in which Customer
will pay the additional license fees as described below.

	
  Additional License Fee Schedule
  for Members/Lives added due to Acquired or Merged Entities

  

 

	
  License and Additional Annual Standard Support fees

  	
   

  	
  License Fee

  	
   

  	
  Additional Annual 

  Standard Support Fee

  	
   

  
	
  Customer shall
  elect one of the following:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1. [***], -or-

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  2. [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  [***]

  	
   

  
								

 

Third
Party Products

Third Party Products.  MEDecision grants to Customer and its
Affiliates a nonexclusive, [***] license to install the following Third Party
Products at the Authorized Locations and to use the Third Party Products solely
in conjunction with MEDecision Products in (a) the normal course of the
Customer’s and its Affiliates’ managed care, preadmission certification,
continued stay review and/or case management business, and/or (b) any other
business of Customer and its Affiliates as mutually agreed upon in writing
between the Parties.  The Customer agrees
that each Third Party Product will only be used for the Customer’s and its
Affiliates’ internal use during the term of the applicable license.  MEDecision represents that it is
contractually obligated to make the following third parties beneficiaries of
this Agreement: [***].

*** Confidential material
which has been omitted and filed separately with the Securities and Exchange
Commission.

 5
 

 

	
  Third Party

  Product

  Code

  	
   

  	
  Term of

  License

  	
   

  	
  Third Party

  Product

  Name

  	
   

  	
  Number of

  Servers

  	
   

  	
  Number of

  Instances

  of the Third

  Party

  Product

  	
   

  	
  Number of

  Concurrent

  Users

  	
   

  	
  Initial

  License 

  Fees

  	
   

  	
  First

  Year’s

  Recurring

  Annual

  License

  Fees

  	
   

  	
  Recurring Annual

  License

  Fees**

  	
   

  	
  First

  Year’s

  Annual

  Standard

  Support

  Fees

  	
   

  	
  Recurring

  Annual

  Standard

  Support

  Fees**

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  TOTALS

  	
   

  	
   

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  	
  $

  	
  [***]

  
																										

 

PAYMENT
TERMS

MEDecision will invoice
Customer for License Fees of US $[***] and first year’s Annual Standard Support Fees of US $[***] on the Effective Date of this
Schedule 1 and such fees shall be payable in accordance with Section 3.1 of
this Agreement.  Thereafter, Recurring
Annual License Fees for Third Party Products and Annual Standard Support Fees
for MEDecision Products and Third Party Products are due and payable at the
later of: (a) [***] or (b)
within [***] days of receipt by
Customer of a valid invoice in accordance with Section 3.1 of this Agreement.

*** Confidential material
which has been omitted and filed separately with the Securities and Exchange
Commission.

 6
 

APPENDIX
A to SCHEDULE 1- Configuration and Communications

 [***] environments-Partitioned server model

	
  Supported
  Platforms

  	
   

  	
  AIX 4.3.3 or higher

  	
   

  	
  AIX 4.3.3 or higher

  	
   

  	
  AIX 4.3.3 or higher

  
	
  MEDecision Application

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  LPAR and number of concurrent users

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  Model (Mid-range Class Server)

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  Processors

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  Memory

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  Disk Space Requirements (1)

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  Additional Server Hardware

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  Third Party Software

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  

 

[***] Server Requirements (Two servers required) (1)

	
  Supported Platforms

  	
   

  	
  AIX 4.3.3 or higher

  
	
  Model (Entry Class Server)

  	
   

  	
  [***]

  
	
  Processors

  	
   

  	
  [***]

  
	
  Memory

  	
   

  	
  [***]

  
	
  Disk Space Requirements (2)

  	
   

  	
  [***]

  
	
  Additional Server Hardware

  	
   

  	
  [***]

  

 

(1)           See Fault Tolerance Options
Section.  Disk Space specified is an
estimate based off of similar client configurations.  A final disk space configuration can be
provided upon completion of the questionnaires.

(1)           Request will load balanced across
both web servers

*** Confidential material
which has been omitted and filed separately with the Securities and Exchange
Commission.

 7
 

 

	
  Third Party Software

  	
   

  	
  IBM HTTP web server

  

[***]

	
  Supported Platforms

  	
   

  	
  Windows 2000, NT 4.0,9x

  
	
  Model
  (Entry Level Server)

  	
   

  	
  [***]

  
	
  Processors

  	
   

  	
  [***]

  
	
  Memory

  	
   

  	
  [***]

  
	
  Disk
  Space Requirements

  	
   

  	
  [***]

  
	
  Additional
  Server Hardware

  	
   

  	
  [***]

  
	
  Third
  Party Software

  	
   

  	
  [***]

  

 

[***] Client
Workstation Requirements

	
  Supported Platforms

  	
   

  	
  Windows XP, 2000 Workstation, NT 4.0 

  Workstation, 9x

  
	
  Model
  (Workstation Class Machine)

  	
   

  	
  [***]

  
	
  Memory

  	
   

  	
  [***]

  
	
  Required
  Disk Space

  	
   

  	
  [***]

  
	
  Network
  protocol

  	
   

  	
  [***]

  
	
  Accessories

  	
   

  	
  [***]

  
	
  Third
  Party Software

  	
   

  	
  [***]

  

 

[***]

MIDR Server (1)

Broadcast Agent Scheduler Server (2)

	
  Supported Platforms

  	
   

  	
  Windows 2000, NT 4.0

  
	
  Model
  (Entry Server Class Machine)

  	
   

  	
  [***]

  
	
  Processors

  	
   

  	
  [***]

  
	
  Memory

  	
   

  	
  [***]

  
	
  Recommended
  Disk Space

  	
   

  	
  [***]

  
	
  Accessories

  	
   

  	
  [***]

  
	
   

  	
   

  	
  [***]

  
	
  Third
  Party Software

  	
   

  	
  [***]

  

 

Mail Server

The [***] environment requires
a mail server capable of receiving SMTP requests from both the Cache database
server and the MIDR server.  An E-mail
containing the status of the Extract Transformation and Load process (ETL) will
be sent to the [***] client(s).

(3)           Required
for customers using Solaris or HP for their main server platform.

(1)           See MIDR requirements on partition
server configuration (LPAR 3)

 8
 

2              MEDecision provides these hardware requirements on
behalf of our third-party vendor, Business Objects.

[***]

Business Objects Supervisor/Designer/Reporter
Clients (2)

	
  Supported Platforms

  	
   

  	
  Windows 2000, NT 4.0, XP (1)

  
	
  Model
  (Workstation Class Machine)

  	
   

  	
  [***]

  
	
  Processors

  	
   

  	
  [***]

  
	
  Memory

  	
   

  	
  [***]

  
	
  Recommended
  Disk Space

  	
   

  	
  [***]

  
	
  Accessories

  	
   

  	
  [***]

  
	
   

  	
   

  	
  [***]

  
	
  Third
  Party Software

  	
   

  	
  [***]

  

 

[***]

Top Down Client Letter Server

	
  Supported Platforms

  	
   

  	
  Windows XP, 2000, NT 4.0 or 98

  
	
  Model
  (Entry Class Server)

  	
   

  	
  [***]

  
	
  Processors

  	
   

  	
  [***]

  
	
  Memory

  	
   

  	
  [***]

  
	
  Recommended
  Disk Space

  	
   

  	
  [***]

  
	
  Accessories

  	
   

  	
  [***]

  
	
   

  	
   

  	
  [***]

  
	
  Third
  Party Software

  	
   

  	
  [***]

  

 

*** Confidential material
which has been omitted and filed separately with the Securities and Exchange
Commission.

 9
 

[***]  (2)

	
  Supported
  Platforms

  	
   

  	
  Windows 2000 /NT 4.0

  	
   

  	
  AIX 4.3.3/AIX 5.x

  	
   

  	
  Solaris 8 / 9

  
	
  Model (Entry Class Server)

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  Processors

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  Memory

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  Disk Space Requirements

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  Additional Server Hardware

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  Third Party Software (Choose one of the following databases for client letter database
  repository)

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  

 

The Parties may mutually
agree in writing to change the Communications and Configuration specifications
described above.

(2)           The [***] may reside on the [***]
server.

(3)           Dedicated Tape Drive for server is
optional.  MEDecision recommends server
be backed up using dedicated or enterprise backup solution.

*** Confidential material
which has been omitted and filed separately with the Securities and Exchange
Commission.

 10

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