Document:

exv10w43

EXHIBIT 10.43

KB HOME

FISCAL YEAR 2009 PHANTOM SHARES AGREEMENT

     This Phantom Shares Agreement (this “Agreement”) is made on October 2, 2008 (the “Grant Date”)
between KB Home, a Delaware corporation (the “Company”), and [NAME] (the “Employee”).

     WHEREAS, the Company desires to grant the Employee Phantom Shares (the “Award”);

     WHEREAS, the Award is a cash-based award designed to promote the interests of the Company and
its stockholders by retaining exceptional employees;

     WHEREAS, the Award is intended to constitute compensation that is payable within the
“short-term deferral” period after the Rights (as defined below) are no longer subject to a
“substantial risk of forfeiture” and that does not provide for the deferral of compensation under,
and is therefore exempt from, Section 409A of the Internal Revenue Code of 1986, as amended from
time to time (the “Code”), together with the Department of Treasury Regulations and other
interpretative guidance issued thereunder (“Section 409A”); and

     WHEREAS, the Award granted hereunder is not being issued pursuant to any the Amended and
Restated KB Home 1999 Incentive Plan, as amended on October 2, 2008 (the “Plan”), or pursuant to
any other existing plan.

     NOW, THEREFORE, in consideration of the foregoing, the Company and the Employee enter into
this Agreement as follows:

A G R E E M E N T

     1. Grant. Subject to the terms of this Agreement, the Company hereby grants to the
Employee an Award calculated by reference to an aggregate of [# RIGHTS] phantom share rights (the
“Rights”). Each Right, when fully vested hereunder, will represent the economic equivalent of
ownership of one share (“Share”) of common stock, $1.00 par value per Share, of the Company
(“Common Stock”); provided that the Rights will not entitle the Employee to, and the Employee will
not have any rights in, or own any, Shares of Common Stock. The Award is intended to constitute
compensation that is payable within the “short-term deferral” period after the Rights are no longer
subject to a “substantial risk of forfeiture” under Section 409A.

     2. Rights Vesting.

	 	(a)	 	Normal Rights Vesting. The Rights granted under this Agreement will
vest on
October 3, 2011 only if the Employee is employed by the Company or any “subsidiary
corporation” as defined in Section 424(f) of the Code and any applicable regulations
promulgated thereunder or any other entity of which a majority of the outstanding
voting stock or voting power is beneficially owned directly or indirectly by the
Company (each, a “Subsidiary”) on such date.
	 
	 	(b)	 	Change of Ownership. Notwithstanding the foregoing and subject to
Section 3, the Rights granted under this Agreement will vest upon a Change of
Ownership (as such term is defined in the Plan) of the Company.

     3. Forfeiture. Subject to Section 2, the Employee will immediately forfeit all rights,
title and interests in and to any and all Rights that have not vested on the date the Employee’s
employment with the Company or its Subsidiaries is terminated.

     4. Payment.

	 	(a)	 	As soon as reasonably practicable following the date of vesting of the Rights
in accordance with Section 2 above (the “Vesting Date”), but in no event later than the
later

 

 

	 	 	 	of (i) the fifteenth day of the third month following the end of the Employee’s
first taxable year in which the Vesting Date occurs or (ii) the fifteenth day of the
third month following the end of the Company’s first taxable year in which the
Vesting Date occurs, the Company will pay to the Employee for each vested Right an
amount in cash equal to (A) the Fair Market Value (as defined below) of one Share of
Common Stock as of the Vesting Date, plus (B) the cumulative value of all cash
dividends paid in respect of a Share of Common Stock from the Grant Date through and
including the Vesting Date.
	 
	 	(b)	 	For purposes of this Agreement, “Fair Market Value” shall have the meaning
given that term in the Plan.
	 
	 	(c)	 	The Company has the authority to deduct or withhold an amount sufficient to
satisfy applicable federal, state, local and foreign taxes (including the Employee’s
FICA obligation) required by law to be withheld with respect to any taxable event
arising from the vesting of any Rights or payment of any portion of the Award.

     5. No Stockholder Rights. The Employee will not be deemed to be a holder of or possess
any stockholder rights with respect to any Shares of Common Stock in connection with the Rights
granted hereunder.

     6. Adjustments. In the event of any of the transactions described in Section 13(a) of
the Plan, the Management Development and Compensation Committee (the “Committee”) of the Company
shall adjust or revise the Award in the same manner as it then adjusts any similar awards under the
Plan; provided that such an adjustment of the Award shall be made only to the extent that such
adjustment will not cause a violation of Section 409A.

     7. California Law. This Agreement will be construed, administered and enforced in
accordance with the laws of the State of California.

     8. Entire Agreement.

	 	(a)	 	This Agreement sets forth the entire agreement and understanding of the parties
with respect to the subject matter of this Agreement, and supersedes all prior and
contemporaneous oral and written agreements and understandings relating to such subject
matter.
	 
	 	(b)	 	Subject to applicable law, this Agreement, the Award and the Rights shall be
administered by the Committee, and the Committee shall have full power and authority to
determine and interpret the terms and conditions of this Agreement, the Award, and the
Rights, and make any determination and take any other action that the Committee deems
necessary or desirable for the administration of this Agreement, the Award, and the
Rights, based in each case on such considerations as the Committee in its sole
discretion determines.
	 
	 	(c)	 	All designations, determinations, interpretations, and other decisions under or
with respect to this Agreement, the Award and the Rights shall be within the sole
discretion of the Committee, may be made at any time and shall be final, conclusive,
and binding upon all Persons (as defined below), including, but not limited to, the
Company, any Subsidiary, the Employee, any stockholder and any employee of the Company
or any Subsidiary. THE EMPLOYEE ACKNOWLEDGES AND AGREES THAT THE COMMITTEE SHALL
ADMINISTER THIS AGREEMENT AND THE AWARD, AND THAT THE EMPLOYEE IS BOUND BY, AND THE
AWARD AND RIGHTS ARE SUBJECT TO, ANY TERMS, RULES OR DETERMINATIONS MADE BY THE
COMMITTEE.

-2-

 

     9. Non-Transferability. None of this Agreement, the Award or the Rights may be
assigned by the Employee by operation of law or otherwise. Any purported assignment by the Employee
shall be null and void. This Agreement shall, however, be binding upon the successors and assigns
of the Company.

     10. No Obligation. Neither the execution and delivery hereof nor the granting of the
Award or the Rights will constitute or be evidence of any agreement or understanding, express or
implied, on the part of the Company or any Subsidiary to employ or continue the employment of the
Employee for any period or in any capacity.

     11. Notice. Any notice given hereunder to the Company will be addressed to the
Company, attention: Senior Vice President, Human Resources, or a designee or successor thereof, and
any notice given hereunder to the Employee will be addressed to the Employee at his or her address
as shown on the records of the Company.

     12. Amendment and Cancellation. Subject to Section 14 hereof, at any time and from
time to time, the Committee may terminate, amend or modify this Agreement. Except with respect to
amendments made pursuant to Section 14 hereof, no termination, amendment, or modification of this
Agreement will adversely affect in any material way the Award or the Rights granted hereunder
without the prior written consent of the Employee.

     13. General Provisions.

	 	(a)	 	Severability. If any provision of this Agreement is or becomes or is
deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to the
Employee or the Award, or would disqualify the Award or the Rights under any law deemed
applicable by the Committee, such provision will be construed or deemed amended to
conform to the applicable laws, or if it cannot be construed or deemed amended without,
in the determination of the Committee, materially altering the intent of this
Agreement, such provision will be stricken as to such jurisdiction, and the remainder
of this Agreement will remain in full force and effect.
	 
	 	(b)	 	Other Laws. The obligation of the Company to make payment of the Award
will be subject to all applicable laws, rules, and regulations, and to such approvals
by government agencies as may be required. The Company may refuse to transfer any
consideration under this Agreement if, acting in its sole discretion, it determines
that transfer of such consideration might violate any applicable law or regulation or
entitle the Company to recover the same under Section 16(b) of the Exchange Act.
	 
	 	(c)	 	No Trust or Fund Created. This Agreement is intended to be an
“unfunded” plan for incentive compensation. This Agreement will neither create nor be
construed to create a trust or separate fund of any kind or a fiduciary relationship
between the Company or any Subsidiary or any affiliate and the Employee or any other
individual, corporation, partnership, association, joint-stock company, trust,
unincorporated organization, government or political subdivision thereof or other
entity (each, a “Person”). To the extent that any Person acquires a right to receive
payments from the Company or any Subsidiary pursuant to this Agreement, such right will
be no greater than the right of any unsecured general creditor of the Company or any
Subsidiary.
	 
	 	(d)	 	Headings. Headings are given to the Sections and subsections of this
Agreement solely as a convenience to facilitate reference. Such headings will not be
deemed in any way material or relevant to the construction or interpretation of this
Agreement or any provision thereof and, in the event of any conflict, the text of this
Agreement, rather than such titles or headings, will control.

-3-

 

     14. Section 409A.

	 	(a)	 	The Award and the Rights thereunder are intended to constitute compensation
that is payable within the “short-term deferral” period after the Rights are no longer
subject to a “substantial risk of forfeiture” and that does not constitute
“nonqualified deferred compensation” within the meaning of Section 409A. This
Agreement shall be interpreted in accordance with Section 409A, to the extent
applicable, including without limitation any Treasury Regulations or other Department
of Treasury guidance that may be issued or amended after the date hereof. In the event
that, following the date hereof, the Committee determines that the Award may be subject
to Section 409A, including such Department of Treasury guidance as may be issued after
the date hereof, the Committee may, in its discretion, adopt such amendments to this
Agreement or adopt such other policies and procedures (including amendments, policies
and procedures with retroactive effect), or take any other actions, as the Committee
determines are necessary or appropriate to (i) exempt the Award and Rights from Section
409A and/or preserve the intended tax treatment of the benefits provided with respect
to the Award and Rights, or (ii) comply with the requirements of Section 409A.
	 
	 	(b)	 	An Employee shall be solely responsible and liable for the satisfaction of all
taxes, interest, and penalties that may be imposed on such Employee or for such
Employee’s account in connection with the Award (including any taxes, interest, and
penalties under Section 409A), and neither the Company nor its affiliates shall have
any obligation to indemnify or otherwise hold such Employee harmless from any or all of
such taxes, interest, or penalties.

     15. Rescission. This Agreement, the Award and the Rights will be subject to
rescission by the Company if an original of this Agreement executed by the Employee is not received
by the Company within four weeks of the Grant Date.

     16. Term. Upon forfeiture of all of the Employee’s rights, title, and interests in
and to any and all of the Rights pursuant to Section 3 above, this Agreement shall terminate and be
of no further force or effect.

[Continued on the next page]

-4-

 

     IN WITNESS WHEREOF, the Company and the Employee have duly executed and delivered this
Agreement as of the date first above written.

	 	 	 	 	 
	 	KB HOME

 	 
	 	By:  	Jeffrey T. Mezger
 	 
	 	 	Chief Executive Officer and President 	 
	 	 	 	 
	 
	 	EMPLOYEE:

 	 
	 	
 	 
	 	 	[NAME] 	 
	 	 	 
	 

-5-EX-10.1

Exhibit 10.1

[Those portions of this agreement that have been omitted and filed separately with the U.S.
Securities and Exchange Commission pursuant to Spheris Inc.’s application requesting confidential
treatment are marked “[***]” herein.]

AGREEMENT FOR

HEALTH INFORMATION PROCESSING SERVICES

THIS AGREEMENT FOR HEALTH INFORMATION PROCESSING SERVICES (“Agreement”) is made and entered into as
of October 3, 2008 (the “Effective Date”) by and between Spheris (as defined below) and Client (as
defined below) and governs the provision and receipt of certain health information processing
services described herein.

	 	 	 
	Spheris:

	 	Client:
	 
	 	 
	Spheris Operations LLC, a Tennessee Limited Liability Company

	 	Community Health Systems Professional Services
Corporation, on behalf of itself and the facilities
listed on Exhibit E
	 
	 	 
	Principal Place of Business:

	 	Principal Place of Business:
	 
	 	 
	9009 Carothers Parkway, Suite C-3

	 	4000 Meridian Boulevard
	Franklin, Tennessee 37067

	 	Franklin, Tennessee 37067
	 
	 	 
	Notice Recipient(s) and Addressee(s):

	 	Notice Recipient(s) and Addressee(s):
	 
	 	 
	Legal Department

	 	Ms. Cheryl Hammen, Vice President
	Spheris Operations LLC

	 	Health Information Management
	9009 Carothers Parkway, Suite C-3

	 	Community Health Systems Professional Services Corporation
	Franklin, Tennessee 37067

	 	4000 Meridian Boulevard
	Fax: (615) 261-1790

	 	Franklin, Tennessee 37067
	 

	 	Fax: (615) 373-0445

This Agreement is comprised of the following documents, each of which is incorporated herein by
this reference:

	 	1.	 	This Cover Page; and
	 
	 	2.	 	The following attached exhibits:

	 	 	 
	Exhibit A:

	 	Services and Pricing
	Exhibit B:

	 	Turnaround Time; Performance Incentives; Quality
	Exhibit C:

	 	Standard Terms and Conditions
	Exhibit D:

	 	HIPAA Business Associate Addendum
	Exhibit E:

	 	List of Participating Facilities
	Exhibit F:

	 	Conversion Schedule
	Exhibit G:

	 	Facility Acknowledgement
	Exhibit H:

	 	Facility Annual VBC Volume
	Exhibit I:

	 	CHS Implementation Process Overview
	Exhibit J:

	 	Form of Requirements Document — HIM
	Exhibit K:

	 	Form of Requirements Document — Radiology

SERVICES: Spheris will provide to Client certain personnel, equipment and systems for transcribing
Authorized Dictation Recordings into Medical Reports, as more specifically described in Exhibit A
hereto (“Services”) to all Client’s hospital facilities, whether now owned or later-acquired, which
are listed on Exhibit E, as may be amended (each, a “Facility”). Each such Facility shall execute
a Facility Acknowledgement, a form of which is attached hereto as Exhibit G. For purposes of this
Agreement, “Authorized Dictation Recording” means a dictation recording created by a Client
physician or other authorized staff providing medical services at the Facilities, and “Medical
Report” means a medical report transcript created by Spheris as a result of submission to Spheris
by Client of an Authorized Dictation Recording.

TERM: The initial term of this Agreement (“Term”) shall be five (5) years, beginning on the
Effective Date hereof and expiring at midnight on the last day of the month in which the fifth
anniversary of the Term occurs. Unless otherwise terminated in accordance with the terms of this
Agreement, the Term will automatically be extended for additional successive one (1) year periods;
however, during such extensions, either party may terminate this Agreement by giving at least
ninety (90) days prior written notice.

Spheris Operations LLC

Standard Terms & Conditions

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the dates indicated below, to be
effective as of the Effective Date.

	 	 	 	 	 	 	 	 	 	 	 
	Spheris Operations LLC	 	Community Health Systems Professional Services

Corporation
	 
	 	 	 	 	 	 	 	 	 	 
	By:  

	/s/ Steven E. Simpson
	 	By:  
	/s/ Kenneth D. Hawkins	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	Name:  

	Steven E. Simpson
	 	Name:  
	Kenneth D. Hawkins	 	 	 
	 	Title:

	President and CEO
	 	Title:
	 Senior Vice President, Acquisitions & Development	 	 	 
	 
	Date:  October 3, 2008

	 	Date:  October 3, 2008
	 	 	 	 

Spheris Operations LLC — Confidential

2

 

EXHIBIT A

to

AGREEMENT FOR HEALTH INFORMATION PROCESSING SERVICES

SERVICES AND PRICING

I. SERVICES

Based on an understanding of Facility’s objectives, financial goals, system and service needs,
Spheris will devise an information processing solution that provides a framework addressing such
needs. The solution shall be embodied in a written “Requirements Document,” substantially in the
form attached hereto as Exhibit J and/or Exhibit K, to be created and agreed to mutually by Spheris
and Client detailing, among other things, an implementation plan, communications requirements,
project management, production planning, document formatting and delivery. Spheris is a global
company and may utilize any of its resources to perform the Services hereunder.

Implementation will be in accordance with Exhibit I (CHS Implementation Process Overview) and
Exhibit J (Form of Requirements Document — HIM) and/or Exhibit K (Form of Requirements Document —
Radiology). The Requirements Documents contain specific information related to workflow,
applications, training, support, setup, voice capture, telecommunications, networking, security,
interfaces, and document delivery.

II. PRICING

Spheris will invoice each Facility for medical transcription services based on Visual Black
Characters. A Visible Black Character is defined as any printed letter, number, symbol, and/or
punctuation mark excluding any/all formatting (e.g., bold, underline, italics, table structure,
formatting codes.). The parties agree that character counts shall be determined using Spheris’s
software system and shall not be derived from any third party software or interface system.

Pricing for each Facility shall be based on the annual volume) of Visible Black Character (“VBC”)
as stipulated in Exhibit H as follows:

	 	 	 
	Tier	 	Price
	[***]
	 	[***]
	[***]
	 	[***]
	[***]
	 	[***]

The annual volume of each respective Facility is listed on Exhibit H and fees for each Facility
shall be derived utilizing the volumes set forth therein, and after receiving twelve (12) months of
Service hereunder, shall be reset on the next anniversary of the Effective Date hereof. For
example, if a Facility is implemented in December of 2008, its volume tier will be reset in October
of 2010.

Optional Services:

	 	 	 
	Web Enabled View, Edit and E-Signature

	 	[***]
	 
	 	 
	Data Retrieval and EMR Interface

	 	[***]
	 
	 	 
	Implementation

	 	[***]
	 
	 	 
	Interface Services

	 	[***]
	 
	 	 
	Faxing

	 	[***]
	 
	 	 
	Professional Services

	 	[***]

Training. At “go-live,” Spheris shall provide to each Facility twenty-four (24) hours of
on-site training (scheduled across no less than three (3) calendar days, to be defined in
conjunction with the Facility) and unlimited self-paced interactive online training to relevant
users with respect to Spheris equipment. Additional training is available at a rate of [***] per
eight (8) hour day per trainer, plus expenses. In no event shall Spheris be responsible for
training on non-Spheris equipment (e.g., handheld devices). In the case of [***], training may
include Spheris training of internal Facility trainers.

Conversion Schedule. Within fifteen (15) days of the Effective Date of this Agreement,
Client and Spheris shall mutually agree on a conversion schedule detailing, among other things,
kick-off dates for each facility in a schedule substantially the form attached hereto as Exhibit F
(“Conversion Schedule”). The parties agree that the Conversion Schedule shall provide for
implementation of all Client facilities within thirty-six (36) months of the Effective Date hereof
and shall consist of [***] going live each month which, in the aggregate, generate an annual
equivalent of [***] “VBCs”. Thereafter, implementation shall follow the Conversion Schedule and
Client and each Facility shall use its respective best efforts to facilitate Spheris’
implementation of the Services according to the Conversion Schedule. Notwithstanding the foregoing,
the Client or Spheris, using a reasonableness standard, reserves the right to agree to amend the
Conversion Schedule beyond thirty-six (36) months in the event adhering to the then-current
Conversion Schedule adversely impacts either Facility operations or Spheris operations.

Implementation. Spheris and each Facility will use their respective reasonable commercial
efforts to implement the Services in accordance with the Requirements Document. Facility shall
provide to Client prior written notice in the event it requests any modifications to the
Requirements Document, which, if approved by Client, will then be submitted to Spheris. Promptly
after receiving such notice, Spheris shall evaluate Facility’s request and provide to Client a
proposal setting forth the proposed changes and/or development necessary to accommodate Facility’s
requested change, including cost estimates, projected time for completion and other appropriate
terms and conditions. In the event Spheris’ proposal is accepted, the fees and charges for the
modifications will be defined in an amendment to the agreement and Facility shall pay those fees
and charges. Telephone voice capture commands can and will be set up to “mimic” functionality of
existing hardware and/or transcription vendors when requested.

Spheris Operations LLC — Confidential

A-1

 

Billing. Spheris shall submit invoices monthly to each Facility for work transcribed from
the first of each month through the end of the month. The invoice will contain the following
information: number of reports and VBCs by work type or provider, billing rate, applicable taxes
and grand total. Each invoice shall be payable within thirty (30) days of invoice date. Spheris
will charge interest of [***] per month for invoices not paid within sixty (60) days of invoice due
date. The parties agree that withholding such payments is not a remedy for disputes relating to
this Agreement. Spheris shall notify Client in the event a Facility has not timely paid its
invoices and Client shall use its best efforts to resolve the payment issue. Spheris reserves the
right to suspend the Services at any time if past due invoices are not paid within fifteen (15)
days following notice by Spheris of such past due amounts, and all costs of collection, including
reasonable attorneys’ fees shall be paid by Facility. Facility shall have forty-five (45) days
following its receipt of an invoice to dispute such invoice and may request copies of such records
as are reasonably necessary to examine Spheris’ computation of the amount shown on such invoice.
In the event Spheris does not receive written notice of dispute within such forty-five (45) day
period, Spheris’ calculation of the invoiced amount shall be deemed correct and acceptable to
Facility for all purposes.

Spheris Operations LLC — Confidential

A-2

 

EXHIBIT B

to

AGREEMENT FOR HEALTH INFORMATION PROCESSING SERVICES

TURNAROUND TIME; PERFORMANCE INCENTIVES; QUALITY

Spheris shall transcribe Medical Reports meeting the following Turnaround Times. Turnaround times
shall be performed and adhered to twenty-four hours a day, seven days a week, 365 (or 366) days per
year.

	 	 	 
	 	 	Contract Turnaround Time
	            Work Type	 	with Continuous Electronic ADT
	 
	 	 
	STATS*

	 	[***]
	History & Physical

	 	[***]
	Discharge Summary

	 	[***]
	Operative/Procedure Notes

	 	[***]
	Radiology/Medical Imaging Reports

	 	[***]
	Consultation Reports

	 	[***]
	Emergency Department

	 	[***]
	Progress Notes

	 	[***]
	Other

	 	[***]

“Turnaround Time” is defined as the average time, computed on a monthly basis, from the time
an Authorized Dictation Recording is forwarded to Spheris by a Facility and the time the Medical
Report for such Authorized Dictation Recording is made electronically available to the given
Facility; provided, however, that any Authorized Dictation Recording submitted by a Facility to
Spheris containing information or data that is incomplete, inaudible or otherwise impaired shall
not be subject to the standards set forth in this Exhibit B.

The Turnaround Time requirements set forth above shall not be applicable:

	 	a)	 	Except for STAT work type, for a period of two (2) full calendar months
following the Start-up Date of each new Facility as well as any new work types or
changes to turnaround times for current work types to allow for appropriate ramp-up of
Services, except for Facilities with [***], which TATs shall apply three (3) full
calendar months after Start-up Date;
	 
	 	b)	 	For Facilities with [***], during invoice periods in which the
number of lines transcribed exceeds by more than fifteen percent (15%) the average
volume during the preceding three (3) months (TAT will apply to those reports up to 15%
beyond the average for the preceding three (3) months);
	 
	 	c)	 	During unscheduled Facility downtime;
	 
	 	d)	 	For a physician during any month in which the physician’s compliance with
demographic information entry requirements falls below ninety percent (90%); or
	 
	 	e)	 	In the event of noncompliance by a Facility with any material terms of this
Agreement or the actions of any third party with whom Facility has a relationship which
negatively impacts the Services through no fault of Spheris.

	 	 	 
	*	 	Medical Reports for which there exists a critical need (“STAT Reports”) shall be transcribed,
labeled “STAT” and transmitted to Facility in the Turnaround Time set forth above. For invoice
periods in which the volume of STAT Reports exceeds [***] of the total volume of Medical Reports
for a given Facility, Spheris shall assess a fee premium to the Facility of [***] of the amount
invoiced for STAT Reports for the period in which such STAT Report volume is exceeded.

Turnaround Time Performance Penalties

Turnaround time penalties shall be determined separately for each Facility. Spheris shall credit a
Facility’s invoice for non-compliance with contracted turnaround times as set forth in the table
below. Turnaround time shall be calculated as the average turnaround time divided by the average
contract turnaround time for all Medical Reports with the same contracted turnaround time during
the invoice period. (For example, “History and Physical” and “Emergency Department” shall be
combined to determine the average turnaround time.) This calculation shall accompany each invoice
sent to Facility and non-compliance shall be credited to that specific invoice as set forth below.

	 	 	 
	Percent Hours Outside	 	 
	Contracted Turnaround Time	 	Credit
	[***]

	 	[***]
	[***]

	 	[***]
	[***]

	 	[***]
	[***]

	 	[***]
	[***]

	 	[***]

Spheris Operations LLC — Confidential

B-1

 

Turnaround credits shall not be assessed where Turnaround Times requirements described above are
not applicable.

Quality

Sixty (60) days after a given Facility goes live, Spheris will maintain an average accuracy score
of [***] at each Facility, as defined in the Spheris Quality Program. Spheris will conduct random
audits that will be conducted utilizing Spheris auditing and reporting methodologies. The Spheris
Quality Program for Facilities covered under this Agreement will not be modified without the prior
approval of the Client. [***] of monthly volume, on a post-delivery basis, shall be audited.

The quality measurement process will utilize the following hierarchy of error determination: (i)
account specific instructions; (ii) Spheris error definitions policy; and (iii) Spheris
transcription standards.

Spheris will make a reasonable best effort to associate customer-provided patient identifying data
with available ADT at the time of transcription.

Blanks: There may be times when it is necessary for a transcriptionist to leave a blank in the
Medical Report. For this reason, Spheris will not be assessed error points for blanks as outlined
in the Spheris Quality Program. Spheris agrees to work in partnership with Facility to minimize
blanks and agrees to address opportunities for improvement regarding equipment, transcriptionist
error, author education, etc. Special processes shall be developed for Medical Reports containing
greater than [***].

Spheris aligns its processes, technology, people and policies to support its efforts to continually
improve. Therefore, Spheris will, in collaboration with Facility, develop a written plan that
includes a timeline for problem resolution, responsible parties and action steps to resolve
impacted service levels as part of the continuous quality improvement program.

Reporting

Spheris shall submit to Client a monthly report containing performance metrics by the
15th day following the end of each month, the format and content of which shall be
mutually agreed upon by the parties.

Remediation 

In the event Spheris fails to meet the performance metrics defined in this Exhibit B for thirty
(30) days, Facility shall send to Spheris written notice of such failure. Upon receipt of such
notice, Spheris shall promptly investigate the cause of the failure and will provide to Facility,
within fifteen (15) days, a plan to resolve such non-compliance (“Remediation Plan”). If within
twenty-one (21) days of presenting a Remediation Plan to Facility (“Remediation Period”), Spheris
is unable to remedy the performance issues, which performance issues are through no fault of
Facility, such Facility may be excluded by Client from participating under this Agreement and will
be added back to the Conversion Schedule and shall be re-implemented at a later time. Facilities
excluded under this Remediation Section shall not count towards [***].

Spheris Operations LLC — Confidential

B-2

 

EXHIBIT C

to

AGREEMENT FOR HEALTH INFORMATION PROCESSING SERVICES

STANDARD TERMS AND CONDITIONS

1. System

1.1 Modification. Spheris may, from time to time, in its sole discretion, without liability
to Client or Facility, revise, modify, update or replace any software or other applications
(“Systems”) made available by Spheris under this Agreement; provided the Services are not adversely
affected in any material manner and Spheris notifies relevant Facility of any such change as soon
as practicable. Spheris shall furnish Facility with reasonably necessary information in connection
therewith to allow implementation and testing prior to the effective date of such event and, if
appropriate, Facility hereby agrees to cooperate in a reasonable manner to incorporate such
changes.

1.2 Connectivity. Spheris shall provide toll free connection from Facility to Spheris
for creation of voice files. Client and/or Facility is responsible for its own PBX and ensuring it
has sufficient outbound lines to accommodate its volume of voice dictation. Client and/or Facility
shall be responsible for all expenses incurred in connection with the installation and maintenance
of any cabling, networking, PC workstations, printers and any other support infrastructure as may
be described it he Requirements Document.

2. TERMINATION.

2.1. Termination. This Agreement shall continue in full force and effect for the Term
unless terminated upon the earliest to occur of any of the following events:

2.1.1. by Client thirty (30) days following the date Client gives Spheris written
notification of termination for Cause. For purposes of this paragraph, “Cause” shall mean:
(a) fraud in connection with the performance of this Agreement by Spheris; or (b) greater
than [***] of the Participating Facilities exclude themselves from participation under this
Agreement after following the procedures in Exhibit B, Remediation, due to Spheris’ failure
to perform;

2.1.2. by Facility immediately upon material breach by Spheris of the HIPAA Business
Associate Addendum attached hereto as Exhibit D (the “HIPAA Addendum”) or the
confidentiality provisions in Section 3;

2.1.3. by Spheris with respect to a Facility for delay in payment by such Facility of any
invoice in excess of forty-five (45) days after the due date thereof, such termination
being effective thirty (30) days from Facility’s receipt of such termination notice,
provided, however, that in order to effectuate such termination Spheris must have provided
written notice of Spheris’ intent to terminate to Client at least thirty (30) days prior to
the intended termination date; or

2.1.4. by Spheris thirty (30) days following the date Spheris gives Client written
notification of termination for Cause. For purposes of this paragraph, “Cause” shall mean:
(a) fraud in connection with the performance of this Agreement by Client; (b) breach of the
confidentiality provisions in Section 3; or (c) action taken by Client which materially
impairs the ability of Spheris to perform its obligations hereunder;

2.1.5. by either party if the other party: (a) commences, or has commenced, proceedings
under any bankruptcy law, unless within one hundred and twenty (120) days after
commencement of bankruptcy proceedings, this Agreement is affirmed by either party in the
bankruptcy proceeding (together with providing such assurances to the other party of its
ability to perform this Agreement as may be required by the US Bankruptcy Code or the
bankruptcy court); (b) if involuntary proceeding against either party commences, or has
commenced, under any bankruptcy insolvency or debtor’s relief law, unless such proceeding
is dismissed within sixty (60) days after such commencement; (c) either party commences, or
has commenced, proceedings under any insolvency or debtor’s relief law or undergoes an
assignment for the benefit of creditors; or (d) either party is liquidated or dissolved;
and/or (e) either party ceases to provide, in all material respects, all or substantially
all of the terms of the Agreement (individually a “Terminating Event”, and collectively,
the “Terminating Events”). The parties acknowledge and agree that the occurrence of a
Terminating Event is cause for termination of any statutory or judicial stay of a party’s
right to terminate this Agreement.

2.2. Effect of Termination. Except as otherwise provided herein, termination of this
Agreement shall terminate all obligations of Spheris hereunder, except for transcription of
Authorized Dictation Recordings received as of the effective date of such termination and
delivery/transmission of Medical Reports and other reports related to such Authorized Dictation
Recordings which are in process. Termination of this Agreement shall not nullify Client’s
obligation to pay any charges for Services performed by Spheris prior to the termination of
Services. Sections 2.2, 3, 4, 5, 6 and 7 shall survive termination of this Agreement.

3. PROPRIETARY RIGHTS AND CONFIDENTIALITY.

3.1. Proprietary Rights Client and Facility acknowledge and agree that the Services,
Equipment, Systems and all intellectual property rights (including without limitation, interfaces,
templates, copyright, patent, trade secrets, confidential information rights, know-how and moral
rights) derived or devolving from the Equipment or Systems or the performance of the Services and
all information regarding the foregoing and all copies of the foregoing, regardless of by whom
prepared, are owned by Spheris or its licensors and are valuable, special and unique assets of
Spheris’ business. Client and Facility further expressly acknowledge and agree that the foregoing
are the confidential property and trade secrets of Spheris or its licensors and “Confidential
Information” subject to Section 3.2 of this Agreement. All proprietary rights in and to the
foregoing shall remain exclusivity vested in Spheris. Neither Client nor Facility shall attempt to
reverse engineer, disassemble or create derivative works based on any portion of the Systems or
Equipment. The breach or threatened breach by Client or a Facility of any provision of this
Section 3 will result in immediate termination of all Client and/or Facility’s rights hereunder,
and Spheris shall be entitled to an injunction restraining such breach without limiting Spheris’s
other remedies for such breach or threatened breach, without the necessity of posting bond or
showing the value of the trade secret.

3.2. Confidentiality. Each party shall retain in confidence and not use or disclose to
any other person, the terms of this Agreement (including but not limited to the pricing of fees and
payments provided for in this Agreement), and any and all confidential or proprietary information
and materials of the other party (“Confidential Information”); provided, however, Confidential
Information shall not include information which (a) is or becomes generally available to the public
other than as a result of a wrongful disclosure by the recipient, (b) was independently developed
by the recipient, or (c) was disclosed by another entity without restriction. Confidential
Information shall be protected by each party in a commercially reasonable manner, including without
limitation protection from unauthorized use by agents and independent contractors of Client (such
as medical transcription personnel and employees), which shall be no less protective than the
standard of care which such party then uses to protect its own similar Confidential Information,
but in no event shall such standard be less than is reasonably adequate to protect such
Confidential Information. This provision shall survive the termination or expiration of this
Agreement.

3.3. HealthCare Privacy Obligations. Spheris and its personnel shall comply with all
applicable federal and state laws concerning the confidentiality and security of health-related
information, including, without limitation, the terms set forth in the HIPAA Addendum.

Spheris Operations LLC — Confidential

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4. NON-SOLICITATION OF PERSONNEL; EXCLUSIVITY.

4.1. Non-Solicitation. Client and Facility agree that, during the Term and for a one (1)
year period following expiration or termination of this Agreement for any reason, it will not,
directly or indirectly, either in its own capacity or as an agent of another person, or in any
other capacity whatsoever, contact, solicit, attempt to solicit, engage, hire or employ any
individual that was employed by Spheris at any time during the one (1) year period prior to the
effective date of termination of this Agreement.

Spheris shall make an offer of employment to all transcriptionists currently employed by a Facility
converting from in-house transcription or from a blend of outsourced and in-house transcription to
Spheris. Notwithstanding the foregoing, CHS and/or Facility reserves the right to re-hire any MT
who, during the duration of this Agreement, is hired by Spheris.

4.2. Exclusivity; Limitation of Use.

4.2.1. Client and each Facility agree to use Spheris as its exclusive provider for
outsourcing of medical transcription services and Client agrees to not enter into any
similar corporate level agreement during the Term of this Agreement.

4.2.2. [***].

4.2.3. Client and Facility agree that a Facility shall not employ or engage any third party
to perform transcription services on Spheris’ proprietary transcription platform (or
otherwise permit access to any of the Services hereunder) if such employee or
transcriptionist reasonably could be deemed a competitor of Spheris or its licensors.

5. ACCESS TO BOOKS AND RECORDS. If this Agreement is one to which 42 C.F.R. Subpart D, sections
420.300—304 applies, Spheris shall, upon written request and until the expiration of four (4)
years after the Services are furnished, make available to the Secretary of the Department of Health
and Human Services, Comptroller General of the United States, and their duly authorized
representatives books, documents and records necessary to verify the nature and extent of the cost
of providing the Services. If any subcontract entered into by Spheris is subject to 42 C.F.R.
Subpart D, sections 420.300-304, such subcontract shall contain a clause to the same effect as this
Section 5.

6. LIMITATIONS OF LIABILITY; REMEDIAL ACTION.

6.1. DISCLAIMER; LIMITATIONS OF LIABILITY. EXCEPT AS EXPRESSLY SET FORTH HEREIN SPHERIS
AND ITS LICENSORS HEREBY DISCLAIM ALL REPRESENTATIONS AND WARRANTIES, INCLUDING WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR USE, AND NONINFRINGEMENT WITH RESPECT TO THE EQUIPMENT
AND SERVICES PROVIDED UNDER THIS AGREEMENT. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER
FOR INCIDENTAL, CONSEQUENTIAL, INDIRECT, PUNITIVE, EXPECTATION, OR SPECIAL DAMAGES EVEN IF SPHERIS
OR ITS LICENSORS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. SPHERIS’ AND ITS LICENSORS
AGGREGATE LIABILITY TO CLIENT AND/OR ANY FACILITY UNDER THIS AGREEMENT AND WITH RESPECT TO SERVICES
FURNISHED HEREUNDER (WHETHER UNDER CONTRACT, TORT OR ANY OTHER THEORY OF LAW OR EQUITY) SHALL NOT
EXCEED, UNDER ANY CIRCUMSTANCES, ONE MILLION DOLLARS ($1,000,000) PER OCCURRENCE/FIVE MILLION
DOLLARS ($5,000,000) AGGREGATE INSURANCE COVERAGE. CLIENT AND FACILITY ACKNOWLEDGE THAT SPHERIS’
OBLIGATIONS UNDER THIS AGREEMENT ARE FOR THE BENEFIT OF CLIENT AND ITS FACILITIES ONLY. THIS
LIMITATION OF LIABILITY IS INTENDED TO APPLY WITHOUT REGARD TO WHETHER OTHER PROVISIONS OF THIS
AGREEMENT HAVE BEEN BREACHED OR HAVE PROVEN INEFFECTIVE. THE FOREGOING LIMITATION OF LIABILITY
REPRESENTS THE ALLOCATION OF RISK OF FAILURE BETWEEN THE PARTIES AS REFLECTED IN THE PRICING
HEREUNDER AND IS AN ESSENTIAL ELEMENT OF THE BASIS OF THE BARGAIN BETWEEN THE PARTIES.

6.2. Remedial Action. Client, Facility and Spheris agree that each Facility is solely
responsible for ensuring the accuracy of the final Medical Report. In no event shall Spheris have
any liability resulting from: (a) the content of any Medical Report or other report transcribed by
Spheris; or (b) malpractice claims against Client’s or a Facility’s physicians. In the event
Spheris fails to transcribe an Authorized Dictation Recording in accordance with the terms of this
Agreement and such failure results in damage to Client or a Facility, then Spheris’ and its
licensors sole obligation and liability to such Client or Facility for such event (subject to
reasonable mitigation by Client and/or Facility) shall be limited to Spheris retranscribing and/or
retransmitting the Medical Report relating to such Authorized Dictation Recording and/or waiving
the fee associated with such Medical Report. Any claim against Spheris or its licensors by Client
and/or Facility that Client and/or Facility has knowledge of must be asserted in writing within
sixty (60) days after the transmission of inaccurate information on which the claim is based.
Client and/or Facility hereby agrees to promptly supply to Spheris documentation reasonably
requested by Spheris to support any claim of Client. THE FOREGOING STATES THE ENTIRE LIABILITY OF
SPHERIS AND ITS LICENSORS WITH RESPECT TO CLAIMS THAT INFORMATION WAS NOT TRANSMITTED OR WAS
TRANSMITTED INACCURATELY BY SPHERIS AND ITS LICENSORS, AND SUCH LIABILITY IS FURTHER LIMITED BY THE
LIMITATIONS OF LIABILITY APPEARING IN SECTION 6.1 ABOVE.

6.3. HIPAA Indemnification. Spheris shall indemnify and hold Client and its indemnitees
harmless from any claim by a third party and, at its own expense, shall defend any action brought
or threatened against Client to the extent that such claim arises from any breach the HIPAA
Addendum, by Spheris or its employees, directors, officers, subcontractors or agents.

7. GENERAL.

7.1. Insurance. During the term of this Agreement, Spheris agrees to carry and maintain
levels of insurance with such minimum amounts as follows:

	 	•	 	Worker’s Compensation insurance in accordance with statutory limits;
	 
	 	•	 	Errors and Omissions Insurance for at least Two Million Dollars ($2,000,000) per
occurrence/Ten Million Dollars ($10,000,000) aggregate; and
	 
	 	•	 	Occurrence type Commercial General Liability Insurance including but not limited to,
blanket contractual liability coverage for bodily injury including death, personal injury
and property damage with limits of not less than Two Million Dollars ($2,000,000) combined
single limit per occurrence.

Spheris agrees to provide to Client certificates of insurance showing the required policies and
limits within thirty (30) days of Client’s reasonable request.

7.2. [***]

7.3. Notice of Acquisition or Sale of Facilities. Client shall give Spheris written notice
as soon as practicable prior to either an acquisition or sale of a Facility. Upon receipt of such
notice, the parties shall work together to mutually agree on either a conversion schedule or a
separation schedule, as the case may be.

7.4. Counterparts; Entire Agreement; Amendments. This Agreement may be executed in any
number of counterparts and each counterpart, whether by original signature, copy or facsimile
signature, is intended to have the same effect as an original. This Agreement constitutes the only
agreement of the parties hereto with respect to the matters covered by this Agreement, and fully
and finally sets forth the rights, duties and obligations of each to the other as of its date. Any
prior agreements, promises, negotiations or representations, either written or oral, not set forth
in this Agreement, including the Pilot Agreement for Health Information Processing by and between
Client and Spheris dated April 30, 2008, are of no force and effect. In the event of a conflict
between these Standard Terms and any addendum or Requirements Document, these Standard Terms shall
govern unless the provisions of these Standard Terms explicitly state the Parties’ intention that
the particular relevant portion of the Addendum should supersede these Standard Terms. Unless
otherwise provided, this Agreement may be amended or modified only upon the written mutual consent
of the parties hereto. The parties acknowledge that the covenants set forth in this Agreement are
intended solely for the benefit of the parties, their successors and permitted assigns. Nothing
herein, whether express or implied, shall confer upon any person or entity, other than the parties,
their successors and permitted assigns,

Spheris Operations LLC — Confidential

C-2

 

any legal or equitable right whatsoever to enforce any provision of this Agreement.

7.5. Governing Law; Jurisdiction. This Agreement and any dispute, controversy or claim
arising out of or relating to this Agreement or a breach hereof, shall be governed by, and
construed in accordance with, the laws of the State of Tennessee. Each party agrees to the
exclusive jurisdiction of the state courts sitting in Williamson County Tennessee for the
resolution of any disputes arising from or related to this Agreement.

7.6. Waiver. Should either party hereto in any one or more instances fail to require the
strict performance of any of the terms, covenants or conditions of this Agreement, such failure
shall not be construed as a waiver or relinquishment of future performance of any such term,
covenant or condition by the other party hereto, but the obligation of such party with respect to
such future performance shall continue in full force and effect in accordance with the terms of
this Agreement.

7.7. Assignment. This Agreement will not be assignable by either party hereto without the
prior written consent of the other party. Notwithstanding the foregoing, either party may assign
this Agreement to a wholly owned affiliate or, in the event of merger, acquisition or other
corporate reorganization to its successor-in-interest.

7.8. Acts Beyond Control. Neither party will be responsible for delays or failures in
performance resulting from acts or events beyond its control, including but not limited to, acts of
nature, governmental actions, fire, labor difficulties or shortages, civil disturbances, terrorism,
transportation problems, interruptions of power, natural disasters, telecommunications failures,
the failure of any third-party equipment or services, or other causes beyond the reasonable control
of Spheris.

7.9. Independent Relationship. The parties hereto are independent entities. Neither party
nor any of their respective officers, directors or employees shall be construed to be the agent,
employee or representative of the other. Nothing herein shall be construed to create any rights or
remedies in any third parties.

Spheris Operations LLC — Confidential

C-3

 

EXHIBIT D

to

AGREEMENT FOR HEALTH INFORMATION PROCESSING SERVICES

HIPAA BUSINESS ASSOCIATE ADDENDUM

     This Business Associate Addendum (the “Addendum”) is made as of the 3rd day of
October, 2008 (the “Effective Date”), by and between Business Associate and Covered Entity
(collectively the “Parties”) to comply with privacy standards adopted by the U.S. Department of
Health and Human Services as they may be amended from time to time, 45 C.F.R. parts 160 and 164,
subparts A and E (“the Privacy Rule”) and security standards adopted by the U.S. Department of
Health and Human Services as they may be amended from time to time, 45 C.F.R. parts 160, 162 and
164, subpart C (“the Security Rule”) and any applicable state confidentiality laws.

RECITALS

WHEREAS, Business Associate provides transcription services (“Services”) to or on behalf of Covered
Entity;

WHEREAS, Covered Entity and Business Associate entered into an Agreement dated October 3, 2008,
(the “Agreement”);

WHEREAS, in connection with these services, Covered Entity discloses to Business Associate certain
protected health information that is subject to protection under the Privacy Rule; and

WHEREAS, the Privacy Rule requires that Covered Entity receive adequate assurances that Business
Associate will comply with certain obligations with respect to the PHI received in the course of
providing services to or on behalf of Covered Entity.

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

	A.	 	Definitions. Terms used herein, but not otherwise defined, shall have meaning ascribed by
the Privacy Rule and the Security Rule.

	 	1.	 	Business Associate. “Business Associate” shall mean Spheris Operations, LLC.
	 
	 	2.	 	Covered Entity. “Covered Entity” shall mean Community Health Systems.
	 
	 	3.	 	Designated Record Set. “Designated Record Set” shall mean a group of records
maintained by or for a Covered Entity that is: (i) the medical records and billing
records about Individuals maintained by or for a covered health care provider; (ii)
the enrollment, payment, claims adjudication, and case or medical management record
systems maintained by or for a health plan; or (iii) used, in whole or in part, by or
for the covered entity to make decisions about Individuals. For purposes of this
definition, the term “record” means any item, collection, or grouping of information
that includes protected health information and is maintained, collected, used, or
disseminated by or for a covered entity.
	 
	 	4.	 	HIPAA Rules. The Privacy Rule and the Security Rule are referred to
collectively herein as “HIPAA Rules.”
	 
	 	5.	 	Individual. “Individual” shall mean the person who is the subject of the
protected health information.
	 
	 	6.	 	Protected Health Information (“PHI”). “Protected Health Information” or PHI
shall mean individually identifiable health information that is created or received by
Business Associate for or from Covered Entity or on behalf of Covered Entity.
	 
	 	7.	 	Required by Law. “Required by Law” shall mean a mandate contained in law
that compels a use or disclosure of PHI.
	 
	 	8.	 	Secretary. “Secretary” shall mean the Secretary of the Department of Health
and Human Services or his or her Designee.

	B.	 	Purposes for which PHI May Be Disclosed to Business Associate. In connection with the
services provided by Business Associate to or on behalf of Covered Entity described in this
Addendum, Covered Entity may disclose PHI to Business Associate for the purposes of Business
Associate performing Services pursuant to the Agreement.
	 
	C.	 	Obligations of Covered Entity. If Covered Entity shall:

	 	1.	 	provide Business Associate a copy of its Notice of Privacy Practices
(“Notice”) produced by Covered Entity in accordance with 45 C.F.R. 164.520 as well as
any changes to such Notice and shall ensure that any Covered Entity Notice or other
policies of privacy practices do not conflict with or limit the ability of Business
Associate to perform the Services;
	 
	 	2.	 	only transmit PHI to Business Associate for which it has all consents and
authorizations necessary to permit such disclosure and to permit Business Associate to
perform the Services, and shall promptly provide Business
Associate with any changes in, or revocation of, authorizations by Individuals
relating to the use and/or disclosure of PHI, if such changes affect Business
Associate’s permitted or required uses and/or disclosures;
	 
	 	3.	 	notify Business Associate of any restriction to the use and/or disclosure of
PHI to which Covered Entity has agreed in accordance with 45 C.F.R. 164.522;
	 
	 	4.	 	notify Business Associate of any amendment to PHI to which Covered Entity has
agreed that affects a Designated Record Set maintained by Business Associate; and

 

 

	 	5.	 	If Business Associate maintains a Designated Record Set, provide Business
Associate with a copy of its policies and procedures related to an Individual’s right
to: access PHI; request an amendment to PHI; request confidential communications of
PHI; or request an accounting of disclosures of PHI.

	D.	 	Obligations of Business Associate. Business Associate agrees to comply with applicable
federal and state confidentiality and security laws, specifically the provisions of the
Privacy Rule applicable to business associates (as defined by the Privacy Rule), including:

	 	1.	 	Use and Disclosure of PHI. Except as otherwise permitted by this Addendum or
applicable law, Business Associate shall not use or disclose PHI except as necessary
to provide Services pursuant to the Agreement to or on behalf of Covered Entity, and
shall not use or disclose PHI that would violate the HIPAA Rules if used or disclosed
by Covered Entity. Provided, however, Business Associate may use and disclose PHI as
necessary for the proper management and administration of Business Associate, or to
carry out its legal responsibilities. Business Associate shall in such cases:

	 	(a)	 	provide information to members of its workforce using or
disclosing PHI regarding the confidentiality requirements of the Privacy Rule
and this Addendum;
	 
	 	(b)	 	obtain reasonable assurances from the person or entity to
whom the PHI is disclosed that: (a) the PHI will be held confidential and
further used and disclosed only as Required by Law or for the purpose for
which it was disclosed to the person or entity; and (b) the person or entity
will notify Business Associate of any instances of which it is aware in which
confidentiality of the PHI has been breached; and
	 
	 	(c)	 	agree to notify the designated Privacy Officer of Covered
Entity of any instances of which it is aware in which the PHI is used or
disclosed for a purpose that is not otherwise provided for in this Addendum or
for a purpose not expressly permitted by the HIPAA Rules.

	 	2.	 	Data Aggregation. In the event that Business Associate works for more than
one Covered Entity, Business Associate is permitted to use and disclose PHI for data
aggregation purposes, however, only in order to analyze data for permitted health care
operations, and only to the extent that such use is permitted under the Privacy Rule.
	 
	 	3.	 	De-identified Information. Business Associate may use and disclose
de-identified health information if the de-identification is in compliance with 45
C.F.R. §164.502(d), and the de-identified health information meets the standard and
implementation specifications for de-identification under 45 C.F.R. §164.514(a) and
(b).
	 
	 	4.	 	Safeguards. Business Associate shall maintain appropriate safeguards to
ensure that PHI is not used or disclosed other than as provided by this Addendum or as
Required by Law. Business Associate shall implement administrative, physical and
technical safeguards that reasonably and appropriately protect the confidentiality,
integrity, and availability of any electronic PHI it creates, receives, maintains, or
transmits on behalf of Covered Entity.
	 
	 	5.	 	Minimum Necessary. Business Associate shall attempt to ensure that all uses
and disclosures of PHI are subject to the principle of “minimum necessary use and
disclosure,” i.e., that only PHI that is the minimum necessary to accomplish the
intended purpose of the use, disclosure, or request is used or disclosed.
	 
	 	6.	 	Disclosure to Agents and Subcontractors. If Business Associate discloses PHI
received from Covered Entity, or created or received by Business Associate on behalf
of Covered Entity, to agents, including a subcontractor, Business Associate shall
require the agent or subcontractor to agree to the same restrictions and conditions as
apply to Business Associate under this Addendum. Business Associate shall ensure that
any agent, including a subcontractor, agrees to implement reasonable and appropriate
safeguards to protect the confidentiality, integrity, and availability of the
electronic PHI that it creates, receives, maintains, or transmits on behalf of the
Covered Entity. Business Associate further expressly warrants that its agents or
subcontractors will be specifically advised of, and will be required to comply in all
respects with, the terms of this Addendum.
	 
	 	7.	 	Individual Rights Regarding Designated Record Sets. If Business Associate
maintains a Designated Record Set on behalf of Covered Entity Business Associate
agrees as follows:

	 	(a)	 	Individual Right to Copy or Inspection. Business Associate
agrees that if it maintains a Designated Record Set for Covered Entity that is
not maintained by Covered Entity, it will permit an Individual to inspect or
copy PHI about the Individual in that set as directed by Covered Entity to
meet the requirements of 45 C.F.R. § 164.524. Under the Privacy Rule, Covered
Entity is required to take action on such requests as soon as possible, but
not later than 30 days following receipt of the
request. Business Associate agrees to make reasonable efforts to assist
Covered Entity in meeting this deadline. The information shall be
provided in the form or format requested if it is readily producible in
such form or format; or in summary, if the Individual has agreed in
advance to accept the information in summary form. A reasonable,
cost-based fee for copying health information may be charged. If Covered
Entity maintains the requested records, Covered Entity, rather than
Business Associate shall permit access according to its policies and
procedures implementing the Privacy Rule.
	 
	 	(b)	 	Individual Right to Amendment. Business Associate agrees, if
it maintains PHI in a Designated Record Set, to make amendments to PHI at the
request and direction of Covered Entity pursuant to 45 C.F.R. 164.526. If
Business Associate maintains a record in a Designated Record Set that is not
also maintained by Covered Entity, Business Associate agrees that it will
accommodate an Individual’s request to amend PHI only in conjunction with a
determination by Covered Entity that the amendment is appropriate according to
45 C.F.R. § 164.526.

 

 

	 	(c)	 	Accounting of Disclosures. Business Associate agrees to
maintain documentation of the information required to provide an accounting of
disclosures of PHI in accordance with 45 C.F.R. § 164.528, and to make this
information available to Covered Entity within a reasonable period of time
following Covered Entity’s request, in order to allow Covered Entity to
respond to an Individual’s request for accounting of disclosures. Under the
Privacy Rule, Covered Entity is required to take action on such requests as
soon as possible but not later than 60 days following receipt of the request.
Business Associate agrees to use its best efforts to assist Covered Entity in
meeting this deadline. Such accounting must be provided without cost to the
individual or Covered Entity if it is the first accounting requested by an
individual within any 12 month period; however, a reasonable, cost-based fee
may be charged for subsequent accountings if Business Associate informs the
individual in advance of the fee and is afforded an opportunity to withdraw or
modify the request. Such accounting is limited to disclosures that were made
in the six (6) years prior to the request (not including disclosures prior to
the compliance date of the Effective Date) and shall be provided for as long
as Business Associate maintains the PHI.

	 	8.	 	Internal Practices, Policies and Procedures. Except as otherwise specified
herein, Business Associate shall make available its internal practices, policies and
procedures relating to the use and disclosure of PHI, received from or on behalf of
Covered Entity to the Secretary or his or her agents for the purpose of determining
Covered Entity’s compliance with the HIPAA Rules, or any other health oversight
agency, or to Covered Entity. Records requested that are not protected by an
applicable legal privilege will be made available in the time and manner specified by
Covered Entity or the Secretary.
	 
	 	9.	 	Notice of Privacy Practices. Business Associate shall abide by the
limitations of Covered Entity’s Notice of which it has knowledge. Any use or
disclosure permitted by this Addendum may be amended by changes to Covered Entity’s
Notice; provided, however, that the amended Notice shall not affect permitted uses and
disclosures on which Business Associate relied prior to receiving notice of such
amended Notice.
	 
	 	10.	 	Withdrawal of Authorization. If the use or disclosure of PHI in this
Addendum is based upon an Individual’s specific authorization for the use or
disclosure of his or her PHI, and the Individual revokes such authorization, the
effective date of such authorization has expired, or such authorization is found to be
defective in any manner that renders it invalid, Business Associate shall, if it has
notice of such revocation, expiration, or invalidity, cease the use and disclosure of
the Individual’s PHI except to the extent it has relied on such use or disclosure, or
if an exception under the Privacy Rule expressly applies.
	 
	 	11.	 	Knowledge of HIPAA Rules. Business Associate agrees to review and understand
the HIPAA Rules as it applies to Business Associate, and to comply with the applicable
requirements of the HIPAA Rule, as well as any applicable amendments.
	 
	 	12.	 	Security Incident. Business Associate agrees to promptly report to the
Covered Entity any security incident of which Business Associate becomes aware. The
parties acknowledge and agree that this section constitutes notice by Business
Associate to Covered Entity of the ongoing existence and occurrence of attempted but
Unsuccessful Security Incidents (as defined below) for which no additional notice to
Covered Entity shall be required. “Unsuccessful Security Incidents” shall include,
but not be limited to, pings and other broadcast attacks on Business Associate’s
firewall, port scans, unsuccessful long-on attempts, denials of service and any
combination of the above, so long as no such incident results in unauthorized access,
use or disclosure of Covered Entity’s electronic PHI.

	E.	 	Term and Termination.

	 	1.	 	Term. This Addendum shall be effective as of the Effective Date and shall
terminate upon the earlier of (a) termination of the Agreement, or (b) termination as
set forth below.
	 
	 	2.	 	Termination for Breach. If Business Associate breaches any provision in this
Addendum, Covered Entity may, at its option, request records of Business Associate
related to its use and disclosure of PHI, require Business Associate to submit to
monitoring and reporting, and such other conditions as Covered Entity may determine is
necessary to ensure compliance with this Addendum, or Covered Entity may terminate
this Addendum on a date
specified by Covered Entity, but in no event earlier than thirty (30) days after
written notice from Covered Entity of such breach to Business Associate, and
Business Associate failing to cure such breach during such thirty (30) day period.
	 
	 	3.	 	Effect of Termination. Upon termination of this Addendum for any reason,
Business Associate agrees to return or destroy all PHI received from Covered Entity,
or created or received by Business Associate on behalf of Covered Entity, maintained
by Business Associate in any form. If Business Associate determines that the return
or destruction of PHI is not feasible, Business Associate shall inform Covered Entity
in writing of the reason thereof, and shall agree to extend the protections of this
Addendum to such PHI and limit further uses and disclosures of the PHI to those
purposes that make the return or destruction of the PHI not feasible for so long as
Business Associate retains the PHI.

	F.	 	Miscellaneous.

	 	1.	 	Mitigation. If Business Associate violates this Addendum or either of the
HIPAA Rules, Business Associate agrees, to the extent practicable, to mitigate any
damage caused by such breach.
	 
	 	2.	 	Rights of Proprietary Information. Covered Entity retains any and all rights
to the proprietary information, confidential information, and PHI it releases to
Business Associate.

 

 

	 	3.	 	Survival. The respective rights and obligations of Business Associate under
Section E.3 of this Addendum shall survive the termination of this Addendum.
	 
	 	4.	 	Notices. Any notices pertaining to this Addendum shall be given in writing
and shall be deemed duly given when personally delivered to a Party or a Party’s
authorized representative as listed below or sent by means of a reputable overnight
carrier, or sent by means of certified mail, return receipt requested, postage
prepaid. A notice sent by certified mail shall be deemed given on the date of receipt
or refusal of receipt. All notices shall be addressed to the appropriate Party as
follows:

If to Covered Entity:

                                                             

Community Health Systems Professional Services Corporation

4000 Meridian Boulevard

Franklin, TN 37067

Attn: Legal Department

If to Business Associate:

                                                            

Spheris Operations LLC

9009 Carothers Parkway, Suite C-3

Franklin, TN 37067

Attn: Legal Department

	 	5.	 	Amendments. This Addendum may not be changed or modified in any manner
except by an instrument in writing signed by a duly authorized officer of each of the
Parties hereto. The Parties, however, agree to amend this Addendum from time to time
as necessary, in order to allow Covered Entity’s to comply with the requirements of
the HIPAA Rules.
	 
	 	6.	 	Choice of Law. This Addendum and the rights and the obligations of the
Parties hereunder shall be governed by and construed under the laws of the State set
forth in the Agreement.
	 
	 	7.	 	Assignment of Rights and Delegation of Duties. This Addendum is binding upon
and inures to the benefit of the Parties hereto and their respective successors and
permitted assigns. However, neither Party may assign any of its rights or delegate
any of its obligations under this Addendum without the prior written consent of the
other Party, which consent shall not be unreasonably withheld or delayed.
Notwithstanding any provisions to the contrary, however, Covered Entity retains the
right to assign or delegate any of its rights or obligations hereunder to any of its
wholly owned subsidiaries, affiliates or successor companies. Assignments made in
violation of this provision are null and void.
	 
	 	8.	 	Nature of Addendum. Nothing in this Addendum shall be construed to create
(i) a partnership, joint venture or other joint business relationship between the
Parties or any of their affiliates, (ii) any fiduciary duty owed by one Party to
another Party or any of its affiliates, or (iii) a relationship of employer and
employee between the Parties.
	 
	 	9.	 	No Waiver. Failure or delay on the part of either Party to exercise any
right, power, privilege or remedy hereunder shall not constitute a waiver thereof. No
provision of this Addendum may be waived by either Party except by a writing signed by
an authorized representative of the Party making the waiver.
	 
	 	10.	 	Equitable Relief. Any disclosure or misappropriation of PHI by Business
Associate in violation of this Addendum will cause Covered Entity irreparable harm,
the amount of which may be difficult to ascertain. Business Associate therefore
agrees that Covered Entity shall have the right to apply to a court of competent
jurisdiction for specific performance and/or an order restraining and enjoining
Business Associate from any such further disclosure or breach and for such other
relief as Covered Entity shall deem appropriate. Such
rights are in addition to any other remedies available to Covered Entity at law or
in equity. Business Associate expressly waives the defense that a remedy in
damages will be adequate, and further waives any requirement in an action for
specific performance or injunction for the posting of a bond by Covered Entity.

	 	11.	 	Severability. The provisions of this Addendum shall be severable, and if any
provision of this Addendum shall be held or declared to be illegal, invalid or
unenforceable, the remainder of this Addendum shall continue in full force and effect
as though such illegal, invalid or unenforceable provision had not been contained
herein.
	 
	 	12.	 	No Third Party Beneficiaries. Nothing in this Addendum shall be considered
or construed as conferring any right or benefit on a person not party to this Addendum
nor imposing any obligations on either Party hereto to persons not a party to this
Addendum.
	 
	 	13.	 	Headings. The descriptive headings of the articles, sections, subsections,
exhibits and schedules of this Addendum are inserted for convenience only, do not
constitute a part of this Addendum and shall not affect in any way the meaning or
interpretation of this Addendum.
	 
	 	14.	 	Entire Agreement. This Addendum and the Agreement, together with all
Exhibits, Riders and amendments, if applicable, which are fully completed and signed
by authorized persons on behalf of both Parties from time to time while this Addendum
is in effect, constitutes the entire agreement between the Parties hereto with respect
to the subject matter hereof and supersedes all previous written or oral
understandings, agreements, negotiations, commitments, and any other writing and
communication by or between the Parties with respect to the subject matter hereof. In
the event of any inconsistencies between any provisions of this Addendum in any
provisions of the Exhibits, Riders, or amendments, the provisions of this Addendum
shall control.

 

 

	 	15.	 	Interpretation. Any ambiguity in this Addendum shall be resolved in favor of
a meaning that permits Covered Entity to comply with the HIPAA Rules and any
applicable state confidentiality laws. The provisions of this Addendum shall prevail
over the provisions of any other agreement that exists between the Parties that may
conflict with, or appear inconsistent with, any provision of this Addendum or the
HIPAA Rules.
	 
	 	16.	 	Regulatory References. A citation in this Addendum to the Code of Federal
Regulations shall mean the cited section as that section may be amended from time to
time.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Agreed to:	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Business associate	 	 	 	Covered entity	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Russell G. Adkins	 	 	 	By: 	 	/s/ Kenneth D. Hawkins	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	(Authorized Signature)
	 	 	 	 	 	 	 	(Authorized Signature)	 	 
	 

	 	Name:
	 	Russell G. Adkins
	 	 	 	 	 	Name:	 	Kenneth D. Hawkins	 	 
	 

	 	 	 	 
(Type or Print)
	 	 
	 	 	 	 	 	 

(Type or Print)
	 	 
	 

	 	Title:	 	Vice President; Secretary	 	 	 	 	 	Title:	 	Senior Vice President, Acquisitions
& Development	 	 
	 
	Date: October 3, 2008
	 	 	 	Date: October 3, 2008
	 	 
	 

	 	 	 	 
	 	 
	 	 	 	 

	 	 

 

 

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PARTICIPATING FACILITIES

Abilene Regional Medical Center

Affinity Medical Center — Doctor’s Campus/ Massillon Campus

Alta Vista Regional Hospital

Barstow Community Hospital

Bedford County Medical Center

Berwick Hospital Center

Big Bend Regional Medical Center

Bluffton Regional Medical Center

Brandywine Hospital

Brownwood Regional Medical Center

Byrd Regional Hospital

Carlsbad Medical Center

Carolinas Hospital System

Cedar Park Regional Medical Center

Cherokee Medical Center

Chesterfield General Hospital

Chestnut Hill Hospital

Claremore Regional Hospital

Cleveland Regional Medical Center

College Station Medical Center

Crestwood Medical Center

Crossroads Community Hospital

Deaconess Hospital

Dekalb Regional Medical Center

DeTar Hospital — Navarro/North

Dukes Memorial Hospital

Dupont Hospital

Dyersburg Regional Medical Center

Eastern New Mexico Medical Center

Easton Hospital

Evanston Regional Hospital

Fallbrook Hospital

Fannin Regional Hospital

Flowers Hospital

Forrest City Medical Center

Gadsden Regional Medical Center

Galesburg Cottage Hospital

Gateway Health System

Gateway Regional Medical Center

Greenbrier Valley Medical Center

Harris Hospital

Haywood Park Community Hospital

Heartland Regional Medical Center

Helena Regional Medical Center

Henderson County Community

Hill Regional Hospital

Jennersville Regional Hospital

Kentucky River Medical Center

Kosciusko Community Hospital

L.V. Stabler Memorial Hospital

Lake Granbury Medical Center

Lake Wales Medical Center

Lakeway Regional Hospital

Laredo Medical Center

Lea Regional Medical Center

Lock Haven Hospital

Longview Regional Medical Center

Lutheran Hospital of Indiana

Marlboro Park Hospital

Martin General Hospital

Mary Black Health System

Mat-Su Regional Medical Center

McKenzie Regional Hospital

McKenzie-Williamette Medical Center

McNairy Regional Hospital

Medical Center Enterprise

Medical Center of South Arkansas

Memorial Hospital of Salem

Mesa View Regional Hospital

Mimbres Memorial Hospital

Moberly Regional Medical Center

Mountain View Regional Medical Center

Mountain West Medical Center

Navarro Regional Hospital

North Okaloosa Medical Center

Northeast Regional Medical Center

Northern Louisiana Medical Center

Northwest Medical Center — Oro Valley

Northwest Medical Center — Tucson

Northwest Medical Center- Springdale

Northwest Medical Center-Bentonville

Parkway Regional Hospital

Payson Regional Medical Center

Phoenixville Hospital

Plateau Medical Center

Ponca City Medical Center

Porter Health

Pottstown Memorial Medical Center

Presbyterian Hospital of Denton

Red Bud Regional Hospital

Regional Hospital of Jackson

Rehabilitation Hospital of Fort Wayne

River Region Health System

San Angelo Community Medical Center

Scenic Mountain Medical Center

SkyRidge Medical Center

South Baldwin Regional

South Texas Regional Medical

Southampton Memorial Hospital

SouthCrest Hospital

Southern Virginia Regional Medical Center

Southside Regional Medical Center

Springs Memorial Hospital

St. Joseph Hospital

Sunbury Community Hospital

Three Rivers Medical Center

Trinity Hospital of Augusta

Trinity Medical Center

Union County Hospital

Vista Medical Center East

Volunteer Community Hospital

Watsonville Comm. Hospital

Weatherford Regional Medical Center

Wesley Medical Center

Western Arizona Regional

Willow Creek Women’s Hospital

Women & Children’s Hospital

Woodland Heights Medical Center

Woodward Regional Hospital

 

 

EXHIBIT F

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AGREEMENT FOR HEALTH INFORMATION PROCESSING SERVICES

CONVERSION SCHEDULE

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Spheris Must	 	 	 	 
	 	 	 	 	 	 	 	 	Receive all	 	 	 	 
	 	 	 	 	Facility Identified	 	Projected	 	Information from	 	 	 	 
	 	 	 	 	and Notified by	 	Project	 	CHS	 	Requirement	 	Projected
	S. No.	 	Name of the facility	 	CHS Corporate	 	Kickoff	 	(Facility & Corporate)	 	Doc Sign off	 	Go-Live
	1
	 	 	 	 	 	 	 	 	 	 	 	 
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Spheris Operations LLC — Confidential

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Spheris Must	 	 	 	 
	 	 	 	 	 	 	 	 	Receive all	 	 	 	 
	 	 	 	 	Facility Identified	 	Projected	 	Information from	 	 	 	 
	 	 	 	 	and Notified by	 	Project	 	CHS	 	Requirement	 	Projected
	S. No.	 	Name of the facility	 	CHS Corporate	 	Kickoff	 	(Facility & Corporate)	 	Doc Sign off	 	Go-Live
	56
	 	 	 	 	 	 	 	 	 	 	 	 
	57
	 	 	 	 	 	 	 	 	 	 	 	 
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Spheris Operations LLC — Confidential

 

 

EXHIBIT G

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AGREEMENT FOR HEALTH INFORMATION PROCESSING SERVICES

FACILITY ACKNOWLEDGEMENT

	 	 	 	 	 
	Facility Name: 

	 	(“Facility”)
 

	 	  
	 
	 	 	 	 
	Effective Date:
	 	 	 	 
	 

	 	 

	 	 
	Address:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 

	 	 	 	 	 
	Conversion Kick-off Date:
	 	 	 	 
	 

	 	 

	 	 

     Facility hereby acknowledges that, effective as the Effective Date stated above, it will
participate under that certain Agreement for Transcription Health Information Processing Services
Agreement by and between Community Health Systems Professional Corporation and Spheris Operations
LLC, dated October 3, 2008 (“Agreement”). The terms and conditions of the Agreement shall govern
the relationship between Facility and Spheris.

AGREED AND ACCEPTED:

FACILITY

	 	 	 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 

	Date:  	 	 	 
	 

Spheris Operations LLC — Confidential

 

 

EXHIBIT H

to

AGREEMENT FOR HEALTH INFORMATION PROCESSING SERVICES

FACILITY ANNUAL VISUAL BLACK CHARACTER COUNT

[***]

[Four pages have been omitted and filed separately with

the U.S. Securities and Exchange Commission pursuant to

Spheris Inc.’s application requesting confidential treatment.]

Spheris Operations LLC — Confidential

 

 

EXHIBIT I

to

AGREEMENT FOR HEALTH INFORMATION PROCESSING SERVICES

IMPLEMENTATION PROCESS OVERVIEW

[***]

[Three pages have been omitted and filed separately with

the U.S. Securities and Exchange Commission pursuant to

Spheris Inc.’s application requesting confidential treatment.]

Spheris Operations LLC — Confidential

 

 

EXHIBIT J

to

AGREEMENT FOR HEALTH INFORMATION PROCESSING SERVICES

FORM OF REQUIREMENTS DOCUMENT — HIM 

[***]

[Thirty-one pages have been omitted and filed separately with

the U.S. Securities and Exchange Commission pursuant to

Spheris Inc.’s application requesting confidential treatment.]

Spheris Operations LLC — Confidential

 

 

EXHIBIT K

to

AGREEMENT FOR HEALTH INFORMATION PROCESSING SERVICES

FORM OF REQUIREMENTS DOCUMENT — RADIOLOGY 

[***]

[Twenty-eight pages have been omitted and filed separately with

the U.S. Securities and Exchange Commission pursuant to

Spheris Inc.’s application requesting confidential treatment.]

Spheris Operations LLC — Confidential

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