NOTICE:

The TOWN of Morristown is requesting proposals from firms that can provide the TOWN with actuarial services needed to assure compliance with the New Jersey Division of Local Government Services Local Finance Notice 2007-15 which represents the implementation of GASB 45 – disclosure of other post-retirement benefits for municipalities and counties, for New Jersey local government units.

This contract will be awarded through Competitive Contracting procedure (N.J.S.A. 40A:11-4.1 et seq). Copies of the specifications may be obtained from the Office of the CFO, TOWN of Morristown, 200 South Street, 2nd Floor, Morristown, New Jersey 07960, Telephone 973/292-6661. Proposals must be submitted by 4:00 p.m., May 28, 2009.

NOTE: The Town of Morristown will consider proposals only from firms or organizations that have demonstrated the capability and willingness to provide high quality services in the manner described in this Request for Proposals.

REQUEST FOR PROPOSALS FOR ACTUARIAL SERVICES TO ASSIST THE TOWN OF MORRISTOWN IN COMPLYING WITH THE NEW JERSEY DIVISION OF

LOCAL GOVERNMENT SERVICES LOCAL FINANCE NOTICE 2007-15 WHICH IS NEW JERSEY’S APPROACH TO IMPLEMENATION OF GASB 45 – DISCLOSURE

OF OTHER POST-RETIREMENT BENEFITS FOR MUNICIPALITIES AND COUNTIES

Issued by the TOWN of Morristown

Date Issued:

April 30, 2009

Proposals Due by:

May 28, 2009

1. Procurement Process and Schedule.

The selection of Qualified Proposers is subject to the Competitive Contracting procedure pursuant to N.J.S.A. 40A:11-4.1 et seq. The Town of Morristown (hereinafter the “TOWN”) has structured a procurement process that seeks to obtain the desired results described hereinbelow, while establishing a competitive process to assure that each person and/or firm is provided with an equal opportunity to submit a Proposal in response to this Request for Proposal (“RFP”). Proposals will be evaluated in accordance with the criteria set forth in Section 4 of this RFP, which will be applied in the same manner to each Proposal. Proposers agree to at all times abide by all requirements of New Jersey law, including, but not limited to, “Pay to Play” laws, as well as any and all relevant Executive Orders and the New Jersey Election Law Enforcement Commission disclosure requirements.

Proposals will be reviewed and evaluated by the TOWN Administration and its legal and/or financial advisors (collectively, the "Review Team"). The Proposals will be reviewed to determine if the Proposer has met the minimum professional, administrative and financial criteria described in this RFP. Under no circumstances will a member of the Review Team review Proposals to an RFP for a position which they or their firm submitted a Proposal. Based upon the totality of the information contained in the Proposal, including information about the reputation and experience of each Proposer, the TOWN will (in its sole judgment) determine which Proposers are qualified from professional, administrative and financial standpoints. Each Proposer that meets the requirements of the RFP (in the sole judgment of the TOWN) will be designated as a Qualified Proposer and will be given the opportunity to participate in the selection process determined by the TOWN.

The RFP process commences with the issuance of this RFP. The steps involved in the process and the anticipated completion dates are set forth in Table 1, Procurement Schedule. The TOWN reserves the right to, among other things, amend, modify or alter the Procurement Schedule upon notice to all potential Proposers.

All communications concerning this RFP or the RFP process shall be directed to the TOWN’s Designated Contact Person, in writing.

Designated Contact Person:

Mr. Michael RogersBusiness AdministratorTOWN of Morristown200 South St. CN9144th Floor, Office of Mayor/AdministrationMorristown, NJ 07963-0914

Proposals must be submitted to, and be received by, the TOWN, by hand delivery or regular mail, by 4:00 p.m. prevailing time on May 28, 2009. Proposals will not be accepted by facsimile transmission or e-mail.

Subsequent to issuance of this RFP, the TOWN (through the issuance of addenda to all firms that have received a copy of the RFP) may modify, supplement or amend the provisions of this RFP in order to respond to inquiries received from prospective Proposers or as otherwise deemed necessary or appropriate by, and in the sole judgment of, the TOWN.

TABLE 1

ANTICIPATED PROCUREMENT SCHEDULE

ACTIVITY DATE

1. Issuance of Request for Proposals April 30, 2009

2. Receipt of Proposals May 28, 2009

3. Completion of Evaluation of Proposals by the Review Team June 4, 2009and Review of Recommendations

4. Approval of Contract by Resolutions of the Town Council June 9, 2009

1.1. Conditions Applicable to RFP.

Upon submission of a Proposal in response to this RFP, the Proposer acknowledges and consents to the following conditions relative to the submission and review and consideration of its Proposal:

• All costs incurred by the Proposer in connection with is Proposal to this RFP shall be borne solely by the Proposer.

• The TOWN reserves the right, in its sole judgment, to reject for any reason, any and all Proposals and components thereof and to eliminate any and all Proposals submitted in response to this RFP from further consideration for this procurement.

• The TOWN reserves the right, in its sole judgment, to reject any Proposer that submits an incomplete Proposal to this RFP, or a Proposal that is not responsive to the requirements of this RFP.

• The TOWN reserves the right, without prior notice, to supplement, amend, or otherwise modify this RFP, or otherwise request additional information.

• All Proposals shall become the property of the TOWN and will not be returned.

• All Proposals will be made available to the public at the appropriate time, as determined by the TOWN, in the exercise of its sole discretion, in accordance with applicable law.

• The TOWN may, but shall not be required to, request Proposers to send representatives to the TOWN for interviews.

• Any and all Proposals not received by the TOWN by 4:00 p.m. prevailing time on May 28, 2009 will be rejected.

• Neither the TOWN, its consultants or advisors, nor their respective staffs, including, but not limited to, the Review Team, shall be liable for any claims or damages resulting from the solicitation or preparation of the Proposal, nor will there be any reimbursement to Proposer for the cost of preparing and submitting a Proposal or for participating in this procurement process.

Section 1.2. Rights of Town.

The TOWN reserves, holds and may exercise, at its sole discretion, the following rights and options with regard to this RFP and the procurement process in accordance with the provisions of applicable law:

• To determine that any Proposal received complies or fails to comply with the terms of this RFP.

• To supplement, amend or otherwise modify the RFP through issuance of addenda to all prospective Respondents who have received a copy of this RFP.

• To waive any technical non-conformance with the terms of this RFP.

• To change or alter the schedule for any events called for in this RFP upon the issuance of notice to all prospective Proposers who have received a copy of this RFP.

• To conduct investigations of any or all of the Proposers, as the TOWN deems necessary or convenient, to clarify the information provided as part of the Proposal and to request additional information to support the information included in any Proposal.

• To suspend or terminate the procurement process described in this RFP at any time in the TOWN’S sole discretion. If terminated, the TOWN may determine to commence a new procurement process or exercise any other rights provided under applicable law without any obligation to the Proposers.

The TOWN shall be under no obligation to complete all or any portion of the procurement process described in this RFP.

1.3 Addenda or Amendments to RFP.

During the period provided for the preparation of Proposals to this RFP, the TOWN may issue addenda, amendments or answers to written inquiries. Those addenda will be noticed by the TOWN and will constitute a part of the RFP All Proposals to this RFP shall be prepared with full consideration of the addenda issued prior to the proposal submission date.

1.4 Cost of Proposal Preparation.

Each Proposal and all information required to be submitted pursuant to the RFP shall be prepared at the sole cost and expense of the Proposer. There shall be no claims whatsoever against the TOWN, its staff, its consultants or such consultants’ staff, for reimbursement for the payment of costs or expenses incurred in the preparation of the Proposal or other information required by the RFP.

1.5 Proposal Format.

Proposals should cover all information requested in the questions to be answered in this RFP.

Proposals which in the judgment of the TOWN fail to meet the requirements of the RFP or which are in any way conditional, incomplete, obscure, contain additions or deletions from requested information, or contain errors may be rejected.

2. Purpose and Intent.

Through this RFP, the TOWN of Morristown (hereinafter the “TOWN” or “Morristown”) seeks to engage a vendor for actuarial services, reports, valuations, and supporting information pertaining the New Jersey’s implementation of GASB 45 for local government units for the 2008, 2009, and 2010 TOWN years commencing upon award of contract. This contract will be awarded through Competitive Contracting procedure (N.J.S.A. 40A:11-4.1 et seq). The successful vendor shall estimate liabilities in accordance with the New Jersey Division of Local Government Services Local Finance Notice 2007-15 which represents New Jersey’s implementation of rules concerning “Other Post-Retirement Benefits for Municipalities and Counties” in accordance with GASB 45:

ALL SERVICES CONTEMPLATED HEREIN RELATED TO YEARS 2008 AND 2009 SHALL BE COMPLETED WITHIN NINETY (90) DAYS OR LESS OF THE COMMENCEMENT OF THIS AGREEMENT.

3. Proposal Submission.

Submit (a) one original paper copy, clearly marked as the “ORIGINAL” plus an electronic copy on CD or disk in Word format. The proposal must be sealed, marked as an RFP Proposal and addressed as follows:

Town of Morristown200 South Street

Morristown, New Jersey 07960Attn: Michael Rogers, Business Administrator

The proposal must be received by May 28, 2009 at 4:00 p.m., prevailing time, at which time all Proposals in response to this RFP will be opened and read, in summary form, in public in the Municipal Clerk’s Office at Morristown Town Hall, located on the 1st Floor of the above location.

Faxed and emailed proposals will NOT be accepted.

Any inquiry concerning this RFP should be directed in writing to Mr. Rogers at the above address. All answers to such inquiries will be in writing and will be distributed to all vendors that requested a copy of this RFP.

All documents/information submitted in response to this solicitation for proposals shall be available to the general public as required by the New Jersey Open Public Records Act, N.J.S.A. 47:1A-1 et seq.

4. Mandatory contents of proposal and selection process.

In its proposal, the firm must include the following. This information will be used by the TOWN to evaluate and rate the Proposal using the weighting system identified herewith:

1) Contact Information: Provide the name and address of the firm, the name, telephone number, fax number, and e-mail address of the individual responsible for the preparation of the proposal.

Information only, 0 points.

2) A fee proposal covering all anticipated services for the three year period of the contract for:

30 points.

3) An executive summary of not more than one page identifying and substantiating why the vendor is best qualified to provide the requested services.

10 points

4) A staffing plan listing those persons who will be assigned to the engagement if the vendor is selected, including the designation of the person who would be the vendor’s officer responsible for all services required under the engagement. This portion of the proposal should include the relevant resume information for the individuals who will be assigned. This information should include, at a minimum, a description of the person’s relevant professional experience, years and type of experience, and number of years with the vendor. Also include a copy of the data forms required by the Department of Banking and Insurance pursuant to N.J.A.C. 11:15 – 2.6 (c) 8.

25 points

5) A description of the vendor’s experience in performing services of the type described in this RFP. Specifically identify client size and specific examples of similarities with the scope of services required under this RFP.

15 points

6) A description of resources of the vendor (i.e., location, financial resources, ability to travel to assure accessibility, computer resources, other resources, etc.).

5 points

7) The location of the office, if other than the vendor’s main office, at which the vendor proposes to perform services required under this RFP. Describe your presence in New Jersey and experience with New Jersey local government entities and with the regulatory entities that have jurisdiction over NJ Joint Insurance Towns and municipalities.

5 points

8) Provide references including the contact names, titles, phone numbers, and email addresses.

10 points

9) In its proposal, the vendor must identify any existing or potential conflicts of interest, and disclose any representation of parties or other relationships that might be considered a conflict of interest with regard to this engagement, or the TOWN.

Information only, no points, but the existence of a conflict of interest, or the failure to disclose a conflict, can disqualify a vendor and proposal.

10) In its proposal the vendor shall identify all information needed by the actuary from the membership and/or from the TOWN to make the estimates (plan designs, census data, current premiums, etc.).

Information only, no points, but the failure to supply information for this item can lead to rejection of the proposal.

5. Contract.

The contract between the TOWN and the selected vendor(s) shall be comprised of the contract attached as Exhibit “A”, this RFP, and any clarifications or addenda thereto, the selected vendor’s proposal, and any other changes mutually agreed to by the parties that are not inconsistent with this RFP or applicable laws and regulations.

Exhibit “A”

PROFESSIONAL SERVICES AGREEMENTBETWEEN THE TOWN OF MORRISTOWN AND

WHEREAS, the Town of Morristown, hereinafter referred to as the "TOWN", has been organized under the provisions of N.J.S.A 40A: 10-36 et seq., and requires the regular services of an Actuary; and

WHEREAS, ___________ hereinafter referred to as "SERVICE PROVIDER" with offices located in ______________ is experienced and qualified to perform actuarial services associated with compliance with the New Jersey Division of Local Government Services Local Finance Notice 2007-15 (LFN 2007-15) which represents New Jersey’s implementation of rules concerning “Other Post-Retirement Benefits for Municipalities and Counties” in accordance with GASB 45.

NOW, THEREFORE, IT IS AGREED, by and between the TOWN and the SERVICE PROVIDER as follows:

I. APPOINTMENT. The SERVICE PROVIDER is hereby appointed and retained to provide actuarial services associated with compliance by New Jersey local units of government with LFN 2007-15.

II. TERM/COMPLETION OF SERVICES

A. The term of this appointment shall commence on __________________, 2009, and shall continue through __________________, 20__, and until a successor is appointed, in accordance with the terms and conditions of this Agreement, subject to earlier termination pursuant to Article III.

B. The services herein relating to years 2008 and 2009 shall be completed within ninety (90) days or less of the commencement of this Agreement.

III. TERMINATION OF AGREEMENT. The TOWN shall have the right to terminate this Agreement at any time, for cause, upon written notice to the SERVICE PROVIDER specifying the effective date of such termination. Either the TOWN or the SERVICE PROVIDER may terminate this Agreement at any time during the term hereof, upon sixty (60) days prior written notice to the other party, for any reason (other than for cause) or no reason, ("Termination for Convenience"), such written notice to state the reason(s), if any, for the termination. In the event of a Termination for Convenience, and provided that the TOWN has paid the Service Fees that are determined to be payable as of the effective date of the termination (with appropriate adjustments in light of the basis for such termination), the SERVICE PROVIDER shall return to the TOWN, in the SERVICE PROVIDER's standard format, all claims records and files no later than ten (10) business days following the termination date.

A. The SERVICE PROVIDER shall have the opportunity for a hearing before the TOWN's Mayor and/or Business Administrator.

B. The TOWN's Executive Committee shall determine whether the reasons for the termination can be amicably and reasonably resolved or whether, in its sole determination, the Agreement shall be terminated; it being understood that this contract is for employment at will.

C. For the purposes of this Agreement, "cause" shall mean a material failure of the SERVICE PROVIDER to perform in accordance with the terms of this Agreement or the reasonable belief by the TOWN that the SERVICE PROVIDER is incapable of providing the services to be provided under the terms of this Agreement.

IV. AFFIRMATIVE ACTION. During the performance of this agreement, the SERVICE PROVIDER agrees as follows:

The SERVICE PROVIDER, where applicable, will not discriminate against any employee or applicant for employment because of age, race, creed, color, national origin, ancestry, marital status, sex, affectional or sexual orientation. The SERVICE PROVIDER will take affirmative action to ensure that such applicants are recruited and employed, and that employees are treated during employment, without regard to their age, race, creed, color, national origin, ancestry, marital status, sex, affectional or sexual orientation. Such action shall include, but not be limited to the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The SERVICE PROVIDER agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by the Public Agency Compliance Officer setting forth provisions of this nondiscrimination clause;

The SERVICE PROVIDER, where applicable will, in all solicitations or advertisements for employees placed by or on behalf of the SERVICE PROVIDER, state that all qualified applicants will receive consideration for employment without regard to age, race, creed, color, national origin, ancestry, marital status, sex, affectional or sexual orientation;

The SERVICE PROVIDER, where applicable, will send to each labor union or representative of workers with which it has a collective bargaining agreement or other contract or understanding, a notice, to be provided by the agency contracting officer advising the labor union or workers' representative of the SERVICE PROVIDER's commitments under this act and shall post copies of the notice in conspicuous places available to employees and applicants for employment.

The SERVICE PROVIDER, where applicable, agrees to comply with the regulations promulgated by the Treasurer pursuant to P.L. 1975, c. 127, as amended and supplemented from time to time and the Americans with Disabilities Act. The SERVICE PROVIDER agrees to attempt in good faith to employ minority and female workers consistent with the applicable county employment goals prescribed by N.J.A.C. 17:27-5.2 promulgated by the Treasurer pursuant to P.L. 1975, c. 127, as amended and supplemented from time to time or in accordance with a binding determination of the applicable county employment goals determined by the Affirmative Action Office pursuant to N.J.A.C. 17:27-5.2 promulgated by the Treasurer pursuant to P.L. 1975, c. 127, as amended and supplemented from time to time.

The SERVICE PROVIDER agrees to inform, in writing, appropriate recruitment agencies in the area, including employment agencies, placement bureaus, colleges, universities, labor unions, that it does not discriminate on the basis of age, creed, color, national origin, ancestry, marital status, sex, affectional or sexual orientation, and that it will discontinue the use of any recruitment agency which engages in direct or indirect discriminatory practices.

The SERVICE PROVIDER agrees to revise any of its testing procedures, if necessary, to assure that all personnel testing conforms with the principles of job-related testing, as established by the statutes and court decisions of the State of New Jersey, and as established by applicable Federal law and applicable Federal court decisions.

The SERVICE PROVIDER agrees to review all procedures relating to transfer, upgrading, downgrading and layoff to ensure that all such actions are taken without regard to age, creed, color, national origin, ancestry, marital status, sex, affectional or sexual orientation, and conform with the applicable employment goals, consistent

with the statutes and court decisions of the State of New Jersey, and applicable Federal law and applicable Federal court decisions.

The SERVICE PROVIDER shall furnish such reports or other documents to the Affirmative Action Office as may be requested by the office from time to time in order to carry out the purposes of these regulations, and public agencies shall furnish such information as may be requested by the Affirmative Action Office for conducting a compliance investigation pursuant to Subchapter 10 of the New Jersey Administrative Code (N.J.A.C. 17:27).

The SERVICE PROVIDER shall further adhere to all of the provisions contained in the Exhibit “B” to this Contract as to Affirmative Action statutes, rules and regulations.

V. NEW JERSEY LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New Jersey.

VI. BINDING ON SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, all terms, provisions and conditions of this Agreement shall be binding on, and inure to the benefit of, the parties hereto, their respective personal representatives, successors and assigns. Notwithstanding the foregoing, the SERVICE PROVIDER shall not transfer or assign this Agreement or its duties and responsibilities hereunder without the prior written consent of the TOWN.

VII. MODIFICATION. No modification of this Agreement shall be valid or binding unless the modification shall be in writing and executed by the TOWN and the SERVICE PROVIDER.

VIII. NO WAIVER. No waiver of any term, provision or condition contained in this Agreement, nor any breach of any such term, provision or condition, shall constitute a waiver of any subsequent breach of any such term, provision or condition by either party, or justify or authorize the non-observance on any other occasion of the same or any other term, provision or condition of this Agreement by either party.

IX. PARTIAL INVALIDITY. If any term, provision or condition contained in this Agreement, or the application thereof to any person or circumstances shall, at any time, or to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which this Agreement is invalid or unenforceable, shall not be affected thereby, and each term, provision or condition contained in this Agreement shall be valid and enforced to the fullest extent permitted by the law, provided, however, that no such invalidity shall in any way reduce services to be performed by the SERVICE PROVIDER to the TOWN.

X. CAPTIONS. The captions or paragraph headings contained in this Agreement are solely for purpose of convenience and shall not be deemed part of this Agreement for the purpose of construing the meaning thereof or for any other purpose.

XI. NO ASSIGNMENT. This Agreement shall not be assigned by the SERVICE PROVIDER without the specific written consent of the TOWN.

XII. INSURANCE. Except as elsewhere provided herein, SERVICE PROVIDER shall provide, at its own cost and expense, proof of the following insurance to the TOWN:

Professional Liability Insurance: A minimum limit of liability of $1,000,000/$1,000,000 aggregate.

Failure by the SERVICE PROVIDER to supply such written evidence shall result in default.

It is required that, wherever possible, the TOWN be named as an "additional named insured" on any certificate of insurance.

The insurance companies for the above coverages must be licensed, solvent, and acceptable to the TOWN. SERVICE PROVIDER shall not take any action to cancel or materially change any of the above insurance required under this Agreement without TOWN approval. Maintenance of insurance under this section shall not relieve SERVICE PROVIDER of any liability greater than the insurance coverage.

XIII. INDEMNIFICATION AND HOLD HARMLESS. SERVICE PROVIDER shall defend, indemnify and hold the TOWN, its Commissioners, appointed officials and member municipalities harmless from any and all claims or liabilities arising out of the activities of the SERVICE PROVIDER, its employees and agents in connection with all activities undertaken by the SERVICE PROVIDER, pursuant to this Agreement. It is the intention of the parties that in the event of any claim for relief of any type being asserted against the TOWN, its Commissioners, appointed officials and member municipalities, based upon any negligent act or omission of the SERVICE PROVIDER, its affiliates and successors, the SERVICE PROVIDER shall defend, indemnify and hold the TOWN harmless from same.

XIV. INDEPENDENT CONTRACTOR STATUS. The SERVICE PROVIDER at all times shall be an independent contractor, and employees of SERVICE PROVIDER shall in no event be considered employees of the TOWN. No agency relationship between the parties, except as expressly provided for herein, shall exist either as a result of the execution of this Agreement or performance thereunder.

XV. ENTIRE AGREEMENT. This instrument contains the entire Agreement of the parties hereto with respect to its subject matter and may not be amended, modified, released or discharged, in whole or in part, except by an instrument in writing signed by the parties hereto.

XVI. OWNERSHIP OF RECORDS.

A. All records and data of any kind relating to the TOWN shall belong to the TOWN, and be surrendered to the TOWN upon expiration or termination of this Agreement.

B. At all times during the term of this Agreement and for a period of two (2) years following any termination or expiration, the TOWN, its appointed officials and other designated representatives, as authorized by the TOWN, shall have access to records and files maintained by the SERVICE PROVIDER for the TOWN during normal business hours. Furthermore, such records, books, and files relating to the operation and business of the TOWN are the property of the TOWN, regardless of site stored. Upon termination of the Agreement, all records will be surrendered to the TOWN.

C. Information released to the SERVICE PROVIDER by the TOWN for the purpose of performing the services as outlined herein shall be used only in connection with the performance of said duties and shall not be used in any form or manner for other than TOWN purposes without the prior written consent of the TOWN.

XVII. NOTICES. Notices under this Agreement shall be sent via certified mail, postage pre-paid, return receipt requested, by recognized overnight delivery service, or by personal delivery, to the party to be notified at the following addresses, or such other address as the parties may designate by a written notice sent to the other party in the specified manner:

Service Provider:

___________________________________________________________________________

Town:

TOWN of Morristown200 South StreetMorristown, NJ 07960Attn: Business Administrator

XVIII. SERVICES. During the term of this Agreement, the SERVICE PROVIDER agrees to provide the following services:

A. Attend, through its designated representative, such meetings of the TOWN's governing body as may be reasonably required.

B. Provide actuarial memoranda and other documents to the TOWN and/or to its members, and/or to New Jersey regulatory agencies upon its request.

C. Calculate post retirement benefit liabilities of local government units that are members of the TOWN. (Such calculations to be in accordance with New Jersey Division of Local Government Services Local Finance Notice 2007-15 which represents New Jersey’s implementation of GASB 45 for local government units.)

D. Calculate post retirement benefit liabilities of local government units that are not members of the TOWN or the members TOWNS that choose to cooperatively purchase actuarial services with the TOWN. (Such calculations to be in accordance with the New Jersey Division of Local Government Services Local Finance Notice 2007-15.)

J. SERVICE PROVIDER shall comply with the applicable data transmission, security, and privacy requirements of the Health Insurance Portability and Accountability Act (HIPAA) of 1996, Public Law 104-191, including but not limited to, the requirements set forth (and as outlined) in Attachment 1, Business Associate Contract Provisions, which is attached hereto and made a part hereof.

IX COMPENSATION: The TOWN shall pay the SERVICE PROVIDER the amount of _______________.

Any unanticipated work assignments outside of the services described in Clause XVIII must be authorized by the Executive Committee and agreed to by the SERVICE PROVIDER.

XX. SPECIAL PROVISIONS RELATING TO COMPENSATION. The compensation or service fee set forth in Section XIX of this Agreement includes:

A. All administrative staff including support staff necessary to perform the work required of the SERVICE PROVIDER. The TOWN shall use its best efforts to insure the accuracy and completeness of all data and information provided to the SERVICE PROVIDER for purposes of the performance of its services hereunder.

B. Use of all physical equipment, and there shall be no further charges for rent, light, heat,

office equipment or similar items.

C. In-house computer services including all software and hardware provided by the SERVICE PROVIDER for the TOWN's use, it being understood that the software and hardware is and shall remain the property of the SERVICE PROVIDER. All data and records provided by the TOWN shall, however, be the property of the TOWN and upon the request of the TOWN's Executive Committee or Executive Director/Administrator the SERVICE PROVIDER shall provide a complete and current copy of all such data and records to the TOWN's Executive Committee or Executive Director/Administrator in either hard copy or on computer tape or disk or both as the TOWN's Executive Committee or Executive Director/Administrator may specify providing the SERVICE PROVIDER is able to comply with the type of copy request.

Furthermore, the SERVICE PROVIDER shall take all reasonable steps necessary to safeguard data files, reports or other information from loss, destruction or erasure. The TOWN shall be responsible for making and retaining a backup copy of all records, data, software and any other material or documents provided to the SERVICE PROVIDER hereunder.

Neither party shall be liable for any failure to perform its obligations hereunder resulting from circumstances beyond its control, including, without limitation, fire or other casualty, acts of God, strike or labor dispute, war or other violence, or any law, order of requirement of any government agency or authority.

XXI. SERVICE PROVIDER REPRESENTATIVE. SERVICE PROVIDER's designated representative shall be a member of the American Academy of Actuaries and is qualified in loss reserves and rate making according to professional guides, recommendations, interpretations and opinions of the Academy, or a member of the Society of Actuaries.

The SERVICE PROVIDER agrees to notify the TOWN in writing of any request to change its designated representative.

XXII. CONFLICT of INTEREST. This contract may be voided by the Executive Committee if the SERVICE PROVIDER fails to disclose an actual or potential conflict of interest as defined in the TOWN'S Code, or in N.J.S.A. 40A: 9-22.1 et seq. (the Local Government Ethics Laws).

XXIII. CONFIDENTIALITY of PROPRIETARY INFORMATION. The SERVICE PROVIDER shall not reveal to any third party any information, which the TOWN has defined as proprietary without the express written consent of the TOWN. In addition, the SERVICE PROVIDER shall promptly advise the TOWN upon being interviewed or retained by a prospective new client operating in the field of health insurance involving public entities or public agencies in the State of New Jersey. Failure to comply with these requirements shall represent cause for termination of this Agreement, in accordance with Section III of this Agreement.

XXIV. ELECTRONIC MAIL - The SERVICE PROVIDER agrees that it shall maintain and utilize the electronic mail systems in order to communicate with other service providers of the TOWN and to meet reporting requirements of the Executive Director/Administrator's office. The SERVICE PROVIDER agrees that all financial and agenda reports shall be submitted in electronic formats established by the executive committee via electronic mail. It further agrees that all personnel working under this contract shall direct access to the SERVICE PROVIDER's electronic mail system and shall have individual electronic mail addresses.

IN WITNESS WHEREOF, this Agreement has been executed on this day of 2009, for the purposes

and the term specified herein.

ATTEST: TOWN OF MORRISTOWN, a Municipal Corporation of the State of New Jersey

__________________________________ By:______________________________Matthew Stechauner, Municipal Clerk Donald Cresitello, Mayor

WITNESS:

________________________ By: _________________________________

Addendum 1 to Services Agreement

Business Associate Contract Provisions

I. Definitions

a. Business Associate. "Business Associate" shall mean the SERVICE PROVIDER.

b. Covered Entity. "Covered Entity" shall mean the TOWN.

c. Individual. "Individual" shall have the same meaning as the term "individual" in 45 CFR § 164.501 and shall include a person who qualifies as a personal representative in accordance with 45 CFR § 164.502(g).

d. Privacy Rule. "Privacy Rule" shall mean the Standards for Privacy of Individually Identifiable Health Information at 45 CFR Part 160 and Part 164, Subparts A and E.

e. Protected Health Information. "Protected Health Information" shall have the same meaning as the term "protected health information" in 45 CFR § 164.501, limited to the information created or received by Business Associate from or on behalf of Covered Entity.

f. Required By Law. "Required By Law" shall have the same meaning as the term "required by law" in 45 CFR § 164.501.

g. Secretary. "Secretary" shall mean the Secretary of the Department of Health and Human Services or his designee.

II. Obligations and Activities of Business Associate

a. Business Associate shall not use or disclose Protected Health Information other than as permitted or required by the Professional Services Agreement or as Required By Law.

b. Business Associate shall use appropriate safeguards to prevent use or disclosure of the Protected Health Information other than as provided for by this Agreement.

c. Business Associate shall mitigate, to the extent practicable, any adverse or harmful effect that is known to Business Associate to arise out of or be related to the use or disclosure of Protected Health Information by Business Associate in violation of the requirements of this Agreement.

d. Business Associate shall, promptly upon having information or notice of any such use or disclosure, report to Covered Entity any use or disclosure of the Protected Health Information not provided for by this Agreement.

e. Business Associate shall ensure that any agent, including a subcontractor, to whom it provides Protected Health Information received from, or created or received by Business Associate on behalf of Covered Entity agrees to the same restrictions and conditions applicable to Business Associate under the terms of this Agreement with respect to such information received by such agent or subcontractor.

f. Covered Entity, or Individuals designated by Covered Entity, shall, as and when requested and in the time and manner as determined by the Covered Entity, have access to Protected Health information in a Designated Record Set maintained by Business Associate in order to meet the requirements under 45 CFR § 164.524.

g. At the request of Covered Entity or an Individual, Business Associate shall make any amendment(s) to Protected Health Information in a Designated Record Set that the Covered Entity directs or agrees to pursuant to 45 CFR § 164.526.

h. Business Associate shall make internal practices, books, and records, including policies and procedures and Protected Health Information, relating to the use and disclosure of Protected Health Information received from, or created or received by Business Associate on behalf of, Covered Entity available to the Covered Entity, or to the Secretary, in a time and manner designated by Covered Entity or the Secretary, when required by the Secretary to determine Covered Entity's compliance with the Privacy Rule.

i. Business Associate shall document such disclosures of Protected Health Information and information related to such disclosures as would be required for Covered Entity to respond to a request by an Individual for an accounting of disclosures of Protected Health Information in accordance with 45 CFR § 164.528.

j. Business Associate shall provide to Covered Entity or an Individual, information collected in accordance with its service agreement, to permit Covered Entity to respond to a request by an Individual for an accounting of disclosures of Protected Health Information in accordance with 45 CFR § 164.528.

III. Permitted Uses and Disclosures by Business Associate

Except as otherwise limited in this Agreement, Business Associate may use or disclose Protected Health Information on behalf of, or to provide services to, Covered Entity for the purpose of complying with its service agreement with the Covered Entity, if such use or disclosure of Protected Health Information would not violate the Privacy Rule if done by Covered Entity or the minimum necessary policies and procedures of the Covered Entity. IV. Specific Use and Disclosure Provisions

a. Except as otherwise limited in this Agreement, Business Associate may use Protected Health Information for the proper management and administration of the Business Associate or to carry out the legal responsibilities of the Business Associate.

b. Except as otherwise limited in this Agreement, Business Associate may disclose Protected Health Information for the proper management and administration of the Business Associate, provided that disclosures are Required By Law, or Business associate obtains reasonable assurances from the person to whom the information is disclosed that it will remain confidential and used or further disclosed only as Required By Law or for the purpose for which it was disclosed to the person, and the person notifies the Business Associate of any instances of which it is aware in which the confidentiality of the information has been breached.

c. Except as otherwise limited in this Agreement, Business Associate may use Protected Health Information to provide Data Aggregation services to Covered Entity as permitted by 42 CFR § 64.504(e)(2)(i)(B).

d. Business Associate may use Protected Health Information to report violations of law to appropriate Federal and State authorities, consistent with § 164.502(j)(1).

V. Obligations of Covered Entity

a. Covered Entity shall notify Business Associate of any limitation(s) in its notice of privacy practices of Covered Entity in accordance with 45 CFR § 164.520, to the extent that such limitation may affect Business Associate's use or disclosure of Protected HealthInformation.

b. Covered Entity shall notify Business Associate of any changes in, or revocation of, permission by Individual to use or disclose Protected Health Information, to the extent that such changes may affect Business Associate's use or disclosure of Protected HealthInformation.

c. Covered Entity shall notify Business Associate of any restriction to the use or disclosure of Protected Health Information that Covered Entity has agreed to in accordance with 45 CFR § 164.522, to the extent that such restriction may affect Business Associate's use or disclosure of Protected Health Information.

VI. Permissible Requests by Covered Entity

Covered Entity shall not request Business Associate to use or disclose Protected Health Information in any manner that would not be permissible under the Privacy Rule if done by Covered Entity.

VII. Term and Termination

a. Term. The Term of this Agreement shall be effective as of the date of the contract for the within services and shall terminate when all of the Protected Health Information provided by Covered Entity to Business Associate, or created or received by Business Associate on behalf of Covered Entity, is destroyed or returned to Covered Entity, or, if it is infeasible to return or destroy Protected Health Information, protections are extended to such information, in accordance with the termination provisions in this Section.

b. Termination for Cause. Upon Covered Entity's knowledge of a material breach by Business Associate, Covered Entity shall either:

1. Provide an opportunity for Business Associate to cure the breach or end the violation and terminate this Agreement if Business Associate does not cure the breach or end the violation within the time specified by Covered Entity;

2. Immediately terminate this Agreement if Business Associate has breached a material term of this Agreement and cure is not possible; or

3. If neither termination nor cure are feasible, Covered Entity shall report the violation to the Secretary.

c. Effect of Termination.

1. Except as provided in paragraph (2) of this section, upon termination of this Agreement, for any reason, Business Associate shall return or destroy all Protected Health Information received from Covered Entity, or created or received by Business Associate on behalf of Covered Entity. This provision shall apply to Protected Health Information that is in the possession of subcontractors or agents of Business Associate. Business Associate shall retain no copies of the Protected Health Information.

2. In the event that Business Associate determines that returning or destroying the Protected Health Information is infeasible, Business Associate shall provide to Covered Entity notification of the conditions that make return or destruction infeasible.Upon determination that return or destruction of Protected Health Information is infeasible, Business Associate shall extend the protections of this Agreement to such Protected Health Information and limit further uses and disclosures of such Protected Health Information to those purposes that make the return or destruction infeasible, for so long as Business Associate maintains such Protected Health Information.

VIII. Miscellaneous

a. Regulatory References. A reference in this Agreement to a section in the Privacy Rule means the section as in effect or as amended.

b. Amendment. The Parties agree to take such action as is necessary to amend this Agreement from time to time as is necessary for Covered Entity to comply with the requirements of the Privacy Rule and the Health Insurance Portability and Accountability Act of 1996, Pub. L. No. 104-191.

c. Interpretation. Any ambiguity in this Agreement shall be resolved to permit Covered Entity to comply with the Privacy Rule.

d. Survival. The respective rights and obligations of Business Associate under Section VII (c.) of this Agreement shall survive the termination of this Agreement.

EXHIBIT "B"

P.L. 1975, c. 127 (N.J.A.C. 17:27)

MANDATORY AFFIRMATIVE ACTION LANGUAGE

PROCUREMENT, PROFESSIONAL AND SERVICE CONTRACTS

During the performance of this Contract, the Contractor agrees as follows:

The Service Provider (hereinafter sometimes referred to as “Contractor” or “Subcontractor”, where applicable), will not discriminate against any employee or applicant for employment because of age, race, creed, color, national origin, ancestry, marital status, sex, affectional or sexual orientation. The Contractor will take affirmative action to ensure that such applicants are recruited and employed, and that employees are treated during employment, without regard to their age, race, creed, color, national origin, ancestry, marital status, sex, affectional or sexual orientation. Such action shall include, but not be limited to, the following: Employment, upgrading, demotion, or transfer, recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation, and selection for training, including apprenticeship. The Contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by the Public Agency Compliance Officer setting forth provisions of this nondiscrimination clause.

The Contractor or Subcontractor, where applicable, will, in all solicitations or advertisements for employees placed by or on behalf of the Contractor, state that all qualified applicants will receive consideration for employment without regard to age, race, creed, color, national origin, ancestry, marital status, sex, affectional or sexual orientation.

The Contractor or Subcontractor, where applicable, will send to each labor union or representative or workers with which it has a collective bargaining agreement or other contract or understanding, a notice, to be provided by the agency contracting officer, advising the labor union or workers' representative of the contractor's commitments under this Act and shall post copies of the notice in conspicuous places available to employees and applicants for employment.

The Contractor or Subcontractor, where applicable, agrees to comply with the regulations promulgated by the Treasurer pursuant to P.L. 1975, c.127, as amended and supplemented from time to time and the Americans with Disabilities Act.

The Contractor or Subcontractor agrees to attempt in good faith to employ minority and female workers consistent with the applicable county employment goals prescribed by N.J.A.C. 17:27-5.2 promulgated by the Treasurer pursuant to P1. 1975, c.127, as amended and supplemented from time to time or in accordance with a binding determination of the applicable county employment goals determined by the Affirmative Action Office pursuant to P.L. 1975, c.127, as amended and supplemented from time to time.

The Contractor or Subcontractor agrees to inform in writing appropriate recruitment agencies in the area, including employment agencies, placement bureaus, colleges, universities, labor unions, that it does not discriminate on the basis of age, creed, color, national origin, ancestry, marital status, sex, affectional or sexual orientation, and that it will discontinue the use of any recruitment agency which engages in direct or indirect discriminatory practices.

The Contractor or Subcontractor agrees to revise any of its testing procedures, if necessary, to assure

that all personnel testing conforms with the principles of job-related testing, as established by the statutes and court decisions of the State of New Jersey and as established by applicable Federal law and applicable Federal court decisions.

The Contractor or Subcontractor agrees to review all procedures relating to transfer, upgrading, downgrading and layoff to ensure that all such actions are taken without regard to age, creed, color, national origin, ancestry, marital status, sex, affectional or sexual orientation, and conform with the applicable employment goals, consistent with the statutes and court decisions of the State of New Jersey, and applicable Federal law and applicable Federal court decisions.

The Contractor and its subcontractors shall furnish such reports or other documents to the Affirmative Action Office as maybe requested by the office from time to time in order to carry-out the purposes of these regulations, and public agencies shall furnish such information as may be requested by the Affirmative Action Office for conducting a compliance investigation pursuant to Subchapter 10 of the Administrative Code (N.J.A.C. 17: 27).