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Final Execution Copy
expenses are (i) approved in advance by Health Net and documented in advance and in writing; and (ii) incurred in accordance with
Health Net’s travel and expense policy.
(a) On January 1 of each calendar year *** Supplier shall increase (i) the Production Support Charge, (ii) the Applications
Development Charge, and (iii) the T&M Rates (collectively, the “Adjustable Charges”) by multiplying such Adjustable Charges by
the applicable Inflation Factor defined below (each adjustment, a “COLA”). ***.
(b) The “Onshore Inflation Factor” for each calendar year *** for the T&M Rates for Onshore Personnel (including the fee set
forth in Section 5.6 for Transitioned Employees performing Applications Development Services) shall be determined by the change in
the AHE, and shall be equal to the sum of (i) one (1) plus (ii) the quotient of (A) the AHE of the current calendar year less the AHE o
f
the prior calendar year (the “Prior Year AHE”) over (B) the Prior Year AHE; provided the Onshore Inflation Factor shall not exceed
*** in any calendar year. The AHE used for this calculation will be the index published in September of current year and September
of immediately preceding year.
(c) The “Offshore Inflation Factor” for each calendar year *** for the T&M Rates for Offshore Personnel shall be determined
by the change in the UNME, and shall be equal to the sum of (i) one (1) plus (ii) the quotient of (A) the UNME of the current
calendar year less the UNME of the prior calendar year (the “Prior Year UNME”) over (B) the Prior Year UNME; provided the
Offshore Inflation Factor shall not exceed *** in any calendar year. The UNME used for this calculation will be the index published
in September of current year and September of immediately preceding year.
(d) ***.
(e) Supplier shall give Health Net notice of the applicable COLA for each calendar year at least thirty (30) days prior to the
beginning of such year, including detailed calculations and supporting documentation as to the determination of the Inflation Factor
and the resulting changes to the Charges for such year.
(f) Under no circumstances, shall any of the Inflation Factors used be less than 1.
(g) “AHE” means Average Hourly Earnings of Production workers for Professional and business services as published by the
Bureau of Labor Statistics of the Department of Labor. If the Bureau of Labor Statistics (or its successor agency) stops publishing the
AHE or substantially changes its content and format, the Parties will substitute another comparable index published at least annually
by a mutually agreeable source. “UNME” means Indian Consumer Price Index for Urban Non-Manual Employees as published by
Ministry of Statistics and Programme Implementation, Government of India. If the Ministry of Statistics and Programme
Implementation (or its successor agency) stops publishing the UNME or substantially changes its content and format, the Parties will
substitute another comparable index published at least annually by a mutually agreeable source.
Supplier shall credit any Service Level Credits earned in a month against the subsequent month’s Charges.
8. ADJUSTMENTS TO CHARGES
8.1 Cost of Living Adjustment (COLA)
8.2 Service Level Credits
Schedule C (Char
g
es)
C - 11
Health Net / Co
g
nizant Confidential