TRANSITION SERVICES
AGREEMENT
TRANSITION
SERVICES AGREEMENT, dated August 31, 2005, between HMS
BUSINESS SERVICES, INC., a New York corporation
(“HMS”), and ACCORDIS INC., a New York corporation
(“Accordis”).
WHEREAS, HMS
Holdings Corp., a New York corporation (“Holdings”) and
the parent of HMS, and Accordis Holding Corp., a New York
corporation (“Accordis Holding”), have entered into a
Stock Purchase Agreement, dated August 31, 2005 (the
“Stock Purchase Agreement”), pursuant to which Accordis
Holding has acquired on the date hereof, by the purchase of the
outstanding capital stock of Accordis from Holdings, the EMS
Business and the Business Office Business (as defined in the Stock
Purchase Agreement) of Accordis;
WHEREAS HMS
currently provides, directly or through third party vendors, the
EMS Business and the Business Office Business (collectively, the
“Businesses”) with certain corporate administrative
services, including, but not limited to, payroll and benefit plan
administration;
WHEREAS, Accordis
requires such services to be provided to the Businesses during a
transition period until Accordis is able to provide such services
independently;
WHEREAS, HMS has
agreed to provide or to cause its third party vendors to provide
Accordis with such services during such transition period;
and
WHEREAS, in
connection with the services to be provided pursuant to this
Agreement, HMS will collect and disburse funds on behalf of
Accordis, subject to reconciliation and reimbursement in accordance
with the terms of this Agreement; and
WHEREAS, the
execution and delivery of this Agreement by HMS is a condition to
the obligation of Holdings and Accordis Holding to consummate the
transactions contemplated by the Stock Purchase
Agreement;
NOW, THEREFORE, in
consideration of the foregoing and the mutual agreements contained
herein, the parties hereto hereby agree as follows:
1.
Provision of Services . (a) HMS agrees to provide, or
cause to be provided, to Accordis, for the period from the date
hereof to and including December 31, 2005 (or for the period
from the date hereof to and including the date of closing the
December 31, 2005 year-end financial statements, in the
case of the services described in clause (vii) below), the
staffing necessary to complete the tasks listed below, which is
expected to be the equivalent of six (6) full time employees,
to assist with the provision of the services (the “Transition
Services”) described below:
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(i)
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read-only access to the information
stored in HMS’s human resource information system with
respect to Accordis employees;
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(ii)
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payroll accounting services,
including, without limitation, recording and providing necessary
information for the preparation of payroll taxes and preparation
and distribution of paychecks to the employees of Accordis, after
calculating the amounts owed to such employees, taking into account
appropriate adjustments or deductions for taxes, and any other
applicable adjustments and deductions; provided that such
adjustments shall include those relating to the provision of
benefits under the HMS Plans and HMS Prudential Plans (as defined
below) to employees of Accordis pursuant to Section 2(ii)
below;
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(iii)
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provision of benefits to employees
of Accordis under the medical, dental, vision care and short term
disability plans of Holdings (the “HMS Plans”) and in
accordance with the administrative procedures of Holdings until
December 31, 2005 or, if earlier, a date which shall be a
minimum of 14 days after the date on which Accordis directs HMS in
writing to stop providing such benefits (the “Benefits
Period”) and provision of benefits to employees of Accordis
under the supplemental short term disability, long term disability,
life insurance and supplemental life insurance plans of Holdings
(the “HMS Prudential Plans”) and in accordance with the
administrative procedures of Holdings until October 30, 2005
or, if earlier, a date which shall be a minimum of 14 days
after the date on which Accordis directs HMS in writing to stop
providing such benefits (the “Prudential Benefits
Period”); provided that Accordis may not terminate the
monthly cost of providing medical benefits to any terminated
Accordis employee unless HMS shall receive notice of such
termination prior to the 14 th day of such month;
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(iv)
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invoicing support services for
Accordis with respect to the Businesses;
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(v)
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support services for the ordinary
collection and application of the accounts receivable of Accordis
with respect to the Businesses, it being understood that HMS shall
only have the obligation to take in funds received from Accordis
accounts and shall have no other obligations with respect to such
collection activities (HMS shall maintain and use the lockboxes and
banks currently maintained and used by the Businesses in connection
with such collection activities, subject to change for normal
business reasons);
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(vi)
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support services for the accounts
payable activities and other disbursements of Accordis in
connection with the Businesses; and
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(vii)
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accounting services for producing
financial statements of Accordis in connection with the Businesses;
provided, however, that Accordis shall be ultimately responsible
for the financial statements so prepared;
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(b) HMS
undertakes in connection with the Transition Services to be
provided directly by it hereunder that subject to applicable
law:
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(i)
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it
shall perform the Transition Services in a timely fashion and
consistent with the manner and level of care with which such
services were previously provided to the Businesses;
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(ii)
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it
shall perform the Transition Services in accordance with all of
those operating procedures in respect of each Transition Service as
followed by HMS as of the date hereof, as amended from time to time
by mutual agreement;
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(iii)
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it
shall provide the Transition Services to Accordis in the manner and
in scope substantially similar to the manner and scope that HMS
provided the Businesses with the Transition Services prior to the
closing of the Stock Purchase Agreement;
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(iv)
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it
will maintain correct, complete and separate books and records (and
shall maintain segregated books and accounts in connection
therewith) in connection with and related to the Transition
Services provided hereunder and the costs thereof and shall provide
access to Accordis to such books and records at all reasonable
times upon request; and
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(v)
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it
is acting solely as agent for Accordis in performing the Transition
Services, including, without limitation, the Transition Services
relating to the collection of accounts receivable and the payment
of the accounts payable of Accordis, as set forth
herein.
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(c) Accordis
acknowledges that certain Transition Services to be provided
hereunder will be provided by third party vendors and that the cost
of providing such services will be allocated to Accordis in the
same manner as such costs are currently allocated to Accordis and
other affiliates of Holdings. Accordis shall reimburse HMS as
provided in Section 2 below for all fees and expenses of third
party vendors incurred on behalf of, or allocated to, Accordis. HMS
shall not be responsible to Accordis for the performance of any
Transition Services by third party vendors.
2.
Payment for Transition Services; Periodic Adjustments
.
(a) On or
prior to the business day immediately preceding each payroll
payment date for Accordis employees, Accordis shall deposit with
HMS (or with its payroll services provider) the total amount of
payroll payments to be made to Accordis employees, including
amounts relating to the provision of benefits under the HMS Plans
and HMS Prudential Plans.
(b) Within
three business days after the last day of each calendar
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