<PAGE>   1
                                                                    EXHIBIT 10.1


                                    Agreement
                                     between
                          Lovelace Health Systems, Inc.
                                       and
                              Lifemark Corporation
                              (Contract #LHS00271)
<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
SECTION       TITLE                                                                                     PAGE
-------       -----------------------------------------------------------------------                   ----
<S>           <C>                                                                                       <C>
     1        Recitals                                                                                    2
     2        Definitions                                                                                 3
     3        Lifemark Duties                                                                             3
     4        LHS Duties                                                                                  4
     5        Administrative Services                                                                     5
     6        Performance Standards and Penalties                                                         9
     7        Reports and Records                                                                         9
     8        Compensation                                                                               10
     9        Relationship of Parties                                                                    11
     10       Ownership of Data                                                                          11
     11       Confidentiality                                                                            12
     12       Insurance and Indemnification                                                              13
     13       Term and Termination of Agreement                                                          13
     14       Rights and Obligations Upon Termination                                                    14
     15       Assignment and Delegation of Duties                                                        14
     16       Affirmative Action                                                                         14
     17       Interpretation                                                                             15
     18       Amendment                                                                                  15
     19       Entire Agreement                                                                           15
     20       Notice                                                                                     15
     21       Enforceability and Waiver                                                                  15
     22       Dispute Resolution                                                                         16
Exhibit A:    Standards for Delegation of Member Rights and Responsibilities Function
Exhibit B:    Minimum Requirements for Call Tracking System
Exhibit C:    Standards for Delegation of Utilization Management Activities
Exhibit D:    Standards for Delegation of Specific Preventive Health Activities
Exhibit E:    Standards for Delegation of Payment Administration Activities
Exhibit F:    Matrix of Performance Standards and Penalties
Exhibit G:    Matrix of Required Reports and Reporting Frequencies
Exhibit H:    Confidentiality Agreement
</TABLE>


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                        ADMINISTRATIVE SERVICES AGREEMENT

THIS AGREEMENT is made and entered into by and between Lovelace Health Systems,
Inc., a New Mexico Corporation (hereinafter called "LHS") and Lifemark
Corporation, a Delaware Corporation (hereinafter collectively called
"Lifemark").

1.   RECITALS

     WHEREAS, LHS is a New Mexico corporation wholly owned by HealthSource,
     Inc., a New Hampshire Corporation; and,

     WHEREAS, LHS is a health maintenance organization ("HMO"), doing business
     as Lovelace Health Plan ("LHP"), duly licensed under the New Mexico HMO Act
     (Chapter 59A, Article 46 NMSA 1978), as amended, federally qualified under
     the federal HMO Act of 1973 (42 U.S.C. Section 300e et seq.), as amended,
     and accredited by the National Committee on Quality Assurance (NCQA). LHP
     provides, insures, or administers health care benefits for participants
     ("Participants") in various insured and self-insured plans. In the course
     of its business, LHS establishes and administers contracts with physicians
     and other health care providers, conducts health care utilization
     management and quality improvement activities, maintains member services
     operations, and other administrative functions of an HMO; and,

     WHEREAS, LHS is also a health care delivery system ("LDS") consisting of a
     multispecialty medical group and an acute care hospital facility duly
     licensed by the New Mexico Department of Health ("DOH"), certified to
     participate in Medicare and Medicaid, and accredited by the Joint
     Commission on Accreditation of Healthcare Organizations ("JCAHO"). In the
     course of its business, the LDS operates inpatient and outpatient health
     care facilities in Albuquerque and Santa Fe, New Mexico, to provide health
     care services and supplies to LHP Participants, and to patients with other
     third party payor sources or who are financially responsible for their own
     care ("FFS Patients"). Participants and FFS Patients are hereinafter
     collectively referred to as "LHS Patients"; and,

     WHEREAS, LHS is a contracted health plan under a managed care program
     administered by the State of New Mexico Human Services Department ("HSD")
     for the provision of covered medical, dental, vision, behavioral, home
     health, and other health services to Medicaid recipients through a program
     known as SALUD! New Mexico Partnership for Wellness and Health ("Program");
     and,

     WHEREAS, LHS has organized Lovelace Community Health Plan ("LCHP") as a
     division of LHS for the purpose of contracting with HSD and performing
     LHS's obligations to manage and administer the Program; and,

     WHEREAS, Lifemark is primarily organized for and engaged in the
     development, management, and ownership of managed care health plans and
     programs serving the indigent and Medicaid population; and,

     WHEREAS, LHS desires to engage Lifemark, and Lifemark desires to be
     engaged, to provide administrative and management services in connection
     with LCHP's contract with the Program and the Members enrolled through the
     Program.

     NOW THEREFORE, in consideration of the mutual covenants and agreements
     contained herein, the parties agree as follows:

2.   DEFINITIONS

     a.   Covered Services. Medically necessary health care services or
          products, including those


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          medical, dental, vision, behavioral, home health, and other health
          care services to which Members are entitled under the Program as
          described in the Request for Proposal and contract between LHS and
          HSD.

     b.   Human Services Department or "HSD". The department of the State of New
          Mexico government responsible for administration of its State Medicaid
          Program pursuant to Title XIX of the Social Security Act and
          applicable law.

     c.   Members. Those individuals who are eligible for coverage under the
          Program and who have enrolled with LCHP to provide their health care
          benefits.

     d.   Participating Provider. A duly licensed (if subject to licensure)
          hospital, health care facility, medical group, physician, or other
          health care provider that has entered into a contract with LHS for the
          provision of Covered Services to Members.

     e.   Program. The State of New Mexico SALUD! New Mexico Partnership for
          Wellness and Health, a program established for the provision of
          covered medical, dental, vision, behavioral, home health, and other
          health services to Medicaid recipients in a managed care delivery
          setting as described in the Request for Proposal.

     f.   Request for Proposal or "RFP". The Request for Proposal for the
          Program and any amendments thereto issued by HSD.

3.   LIFEMARK DUTIES

     a.   Lifemark shall be responsible for furnishing administrative services
          to LCHP in accordance with the provisions of this Agreement, as well
          for all ordinary and necessary business expenses associated with
          Lifemark's employees and its responsibilities under this Agreement,
          including but not limited to the following:

          (1)  Office space (including all property lease/purchase
               arrangements);

          (2)  Business and operating licenses and/or certifications, except
               those specifically required of LHS;

          (3)  Office equipment/furniture;

          (4)  Utilities;

          (5)  Telephone lines and equipment;

          (6)  Computer hardware and software;

          (7)  Printing and copying equipment;

          (8)  Office supplies;

          (9)  Personnel and human resources;

          (10) Personnel training and education;

          (11) Travel, expenses, taxes.

     b.   Lifemark will appoint a Program Director who will reside in the
          Albuquerque area and be responsible for oversight of Lifemark's day to
          day Program related operational activities. Lifemark Program Director
          will be responsible for coordinating all Lifemark activities and, for
          purposes of this Agreement, will be subject to the oversight of the
          LHP General Manager and others as designated by LHP for this
          agreement. Lifemark will only use LHS, LHP, or LCHP trademarks, trade
          names, or logos as designated and approved by the LHP General Manager.

     c.   Lifemark shall not discriminate in arranging for delivery of Covered
          Services for LHS Patients based upon race, color, religion, sex,
          sexual preference, age, national origin, or payor source.

     d.   Lifemark shall comply with all aspects of LHS's response to the RFP,
          HSD regulations pertaining to the Program, all the regulations
          promulgated by the Medical Assistance program


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          under Title XIX of the Social Security Amendments of 1965 (Medicaid),
          and with all other federal and state laws and regulations applicable
          to the Administrative Services.

     e.   Lifemark shall be responsible for any sanctions or penalties imposed
          on LHS by HSD, HCFA, or other governmental entity that arise from
          Lifemark's failure to comply with any applicable law or regulation or
          any other nonperformance of obligations outlined in this Agreement.
          Lifemark shall not be responsible for the non-performance of LHS
          subcontractors, and Lifemark agrees to promptly notify LHS in writing
          of non-performance issues by LHS subcontractors when identified by
          Lifemark and will assist in developing recommended corrective action
          plans where applicable. As a condition to Lifemark's obligation to pay
          such penalties, at Lifemark's request, LHS shall appeal such penalties
          to the fullest extent possible under the regulation of HSD, HCFA or
          other governmental entity if reasonable grounds for such appeal exist.

     f.   Lifemark shall, upon request by LHS, and at no cost to LHS, assist LHS
          in developing and implementing reasonable and necessary undertakings
          initiated by LHS to comply with applicable regulations and HSD
          requirements, or to improve the quality of programs and services
          furnished to Members by LCHP. Such undertakings shall include
          Lifemark's participation, as requested, with LHS's response to the
          anticipated 2000-2001 HSD RFPs.

4.   LHS DUTIES

     a.   The primary liaison with HSD and other governmental entities for the
          purposes of LCHP's business and the Program shall be the General
          Manager of LHP or his/her designate.

     b.   LHS shall budget and pay the costs of marketing the Program to
          prospective Members in amounts consistent with HSD regulations and
          deemed reasonable by LHS. The procurement of such items shall utilize
          the standard LHS procurement system according to LHS policies if paid
          by LHS or its affiliates.

     c.   LHS shall select and recruit, negotiate and establish contracts with
          providers to become Participating Providers of LHS for medical dental,
          vision, behavioral, and other services to provide Covered Services to
          Members as required by the contract between HSD and LHS. Such
          contracts shall be between LHS and Participating Providers. All
          contracts with Participating Providers shall be in a form and contain
          such provisions as are acceptable to LHS, set forth the amount of
          compensation to Participating Providers, and specify that the
          Participating Providers shall be subject to all the requirements
          contained in the RFP and any contract between HSD and LHS. LHS shall
          submit any unusual payment methodologies to Lifemark for review and
          comment before executing contracts containing such methodologies.

     d.   LHS shall be responsible for credentialing and recredentialing of
          Participating providers.

     e.   LHS shall maintain its established process for subrogation tracking
          and recovery.

     f.   LHS shall be responsible for Quality Improvement programs requirements
          of HSD and appropriate accrediting bodies (e.g. NCQA, JCAHO, etc.).

     g.   LHS shall be responsible for performing or sub-contracting for case
          management services. Case management services shall encompass
          inpatient and outpatient case management as defined by HSD's case
          management benefit and as set forth in the contract between HSD and
          LHS.

     h.   LHS shall furnish the services of a Medical Director to provide
          oversight to Lifemark Utilization Management services.


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<PAGE>   6
     i.   LHS shall be responsible for the following Program-related expenses:

          (1)  Covered Services.

          (2)  Legal services of LHS.

          (3)  Actuarial Services of LHS

          (4)  All insurance and re-insurance premium of LHS.

          (5)  Expenses related to corporate existence for LHS.

          (6)  Income, property, premium, and other taxes of LHS and any
               assessments or license fees of LHS.

          (7)  Costs associated with health assessment administration, health
               education, and promotion (excluding Health Promotion Services for
               which Lifemark is engaged), administration of case management and
               quality management functions as they relate to NCQA, JCAHO, and
               HSD (including HSD's independent external quality review
               organization) quality requirements, credentialing, and marketing
               (except for those Marketing Services for which Lifemark is
               engaged.

          (8)  Costs associated with LHS's business operations and its employees
               including, but not limited to capitalized and non-capitalized
               computer equipment, office equipment furniture, software, office
               supplies, office space for LHS staff, printing, copying, postage
               (associated with quality management and case management),
               contracted labor (including clerical, word processing, and
               secretarial services), legal fees, sub-contracted professional
               fees, wages (including overtime wages), employee benefits,
               telephone line leases, telephone, utilities, licenses, seminars
               and all related travel expenses for LHS employees, audits, taxes,
               fees, and other expenses incurred.

          (9)  Costs associated with LCHP Medical Director(s), including, but
               not limited to, salaries and benefits.

          (10) Prescription drug claims processing and payment.

     j.   LHS shall establish and maintain a separate bank account ("Account")
          specifically for use by Lifemark for the purpose of depositing all
          receipts from any source including payments from HSD, and for the
          payment of claims for Covered Services under the Program and
          Lifemark's administrative fees. Failure to maintain an adequate
          balance in the Account, and any penalties incurred as a result, will
          be the sole responsibility of LHS; except where the failure by LHS to
          maintain an adequate Account balance occurred because Lifemark
          negligently mispaid, overpaid, or committed any other negligent action
          or omission in processing claims payable from the Account, in which
          case the penalties will be the responsibility of Lifemark.

5.   ADMINISTRATIVE SERVICES

     Lifemark shall furnish the following services ("Administrative Services"):

     a.   Marketing Service(s)

          (1)  Distribute (including postage) marketing materials developed or
               procured by LHS within the scope of normal plan operations as
               outlined by contractual requirements set forth by HSD and this
               Agreement.

     b.   Enrollment and Eligibility Service(s)

          (1)  Make available to LHS and Participating Providers, in a
               nationally accepted standard format (e.g. NSF 2.0), Member
               enrollment and eligibility information within three business days
               of receipt of such information from HSD.

          (2)  Make available electronic enrollment/eligibility data obtained by
               HSD in a format set forth by Lifemark and agreed to by LHP and
               its subcontractors. Lifemark will educate subcontractors about
               the electronic enrollment data file structure and processes, and
               will verify that data is being appropriately transferred to LHS
               subcontractors. It will be the responsibility of LHP
               subcontractor's to maintain interfaces that allow for electronic
               data interchange to obtain enrollment files maintained by
               Lifemark.


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          (3)  Provide card stock, print, and distribute member ID cards within
               timeframes required by HSD.

     c.   Member Service(s)

          (1)  Provide all Member Services functions as are required by the RFP,
               any and all existing and known contracts between HSD and LHS, and
               this Agreement.

          (2)  Establish and maintain a complaint resolution procedure to
               process Member and Participating Provider complaints that
               complies with applicable law, LHS's contract with HSD (including
               HSD's independent external quality review organization),
               applicable law and regulations, NCQA standards, and, with respect
               to Member complaints, LHS's "Standards for Delegation of Member
               Rights and Responsibilities Function", which is attached hereto
               as Exhibit A.

          (3)  Operate or provide for a member services call center in
               accordance with HSD and Lovelace requirements. This will be
               accomplished by Lifemark using the LHS nurse hotline after normal
               business hours.

          (4)  Implement an enhanced call tracking system and reporting
               capabilities in accordance with NCQA standards and LHS
               requirements attached as Exhibit B. Implementation to be
               substantially completed by June 30, 2001.

     d.   Provider Contracting Service(s)

          Supply consultation to LHS regarding geographic distribution of
          network and negotiated rates.

     e.   Provider Relations Service(s)

          (1)  Lifemark will appropriately update its information systems with
               new or revised contract information within ten (10) business days
               after complete and accurate information has been received by
               Lifemark personnel. Lifemark will periodically perform audits of
               its contract loading functions and allow oversight by LHS Medical
               Economics group if requested by LCHP, LHP, or LHS. Lifemark will
               have the right to review all non-standard SALUD! provider and
               subcontractor agreements prior to final execution to ensure
               compliance with system administration. Lifemark will not be held
               responsible for timely processing of claims for contracts that
               have been executed, or for provider information forwarded to
               Lifemark staff, with effective dates prior to receipt date by
               Lifemark. However, Lifemark will be responsible for timely
               processing after the tenth (10th) day following receipt by
               Lifemark of the signed contract.

          (2)  Produce and distribute a new Provider Reference Manual on an
               annual basis and produce and distribute an update to the Manual
               every six months.

          (3)  Perform orientation of new Participating Providers regarding
               features of the Program and LCHP.

          (4)  Align the geographic territory assignment of Lifemark's Provider
               Relations Representatives consistent with the geographic
               territory assignment of LHP's Provider Relations alignment, even
               if LHP changes the territory assignments of its Provider
               Relations Representative. LHP shall give Lifemark reasonable
               advance notice of such changes.

          (5)  Conduct on-going education of existing Participating Providers
               regarding features of the Program and LCHP, and any changes that
               may have be implemented by HSD.

          (6)  Update, print, and distribute a directory of Participating
               Providers two times per year after receiving approval of the
               draft by LHP personnel.

          (7)  Operate a provider relations call center to address Participating
               provider and non-participating provider inquiries about billing,
               referrals/authorizations, claims issues, etc.

     f.   Utilization Management Service(s)

          (1)  Conduct Utilization Management ("UM") in accordance with a UM
               program plan, which shall be submitted to LHS annually for review
               by the Health Plan Quality Council. Such


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               plan and related activities shall comply with LHS's contract with
               HSD (including HSD's independent external quality review
               organization requirements), applicable law and regulations, NCQA
               standards, and LHS's "Standards for Delegation of Utilization
               Management Activities", which is attached hereto as Exhibit C.
               Lifemark shall obtain and maintain any license, certification, or
               accreditation necessary to perform it UM activities. Lifemark
               agrees that its UM activities shall be subject to oversight and
               supervision of the designated LHS Medical Director.

          (2)  Ensure necessary interfaces for electronic data interchange to
               timely update the claims system related to referrals, prior
               authorizations, and other UM activities.

          (3)  Perform prior authorization function in accordance with HSD and
               LHS requirements.

          (4)  Perform referral process in accordance with HSD and LHS
               requirements and performance standards.

     g.   Preventive Health Service(s)

          (1)  Perform Member outreach and education for well childcare,
               including but not limited to EPSDT (including the behavioral
               health screening component of the EPSDT) and prenatal care in
               accordance with HSD requirements and the requirements of any
               appropriate accrediting body in which LHS participates (e.g.
               NCQA, JCAHO, etc.) as set forth in the "Standards for Delegation
               of Specific Preventive Health Activities", which is attached
               hereto as Exhibit D.

          (2)  Cooperate with other reasonable preventive health or quality
               improvement initiatives as requested by LHS.

     h.   Claims Administration Services(s)

          (1)  Process and pay claims to Participating Providers for all
               approved Covered Services rendered to Members (except
               prescription drug benefit claims and other benefits for which LHS
               has sub-contracted claims payment) in accordance with contracts
               entered into between Participating Providers and LHS, the RFP,
               HSD requirements, and this Agreement.

          (2)  Comply with LHS "Standards for Delegation of Payment
               Administration Activities", attached hereto as Exhibit E.

          (3)  Comply with the requirements of the RFP, the contract between HSD
               and LHS, and the contracts between LHS and Participating
               Providers with respect to payment of claims to Participating
               Providers. Claims payments shall be made by check or drafts
               signed by Lifemark out of the Account established under the terms
               of this Agreement.

          (4)  Ensure necessary interfaces to accept electronic data interchange
               of claims and encounter data.

          (5)  Process complete encounter data that has been received from
               Participating Providers who pay their own claims. Such encounter
               data must be received by Lifemark in a nationally accepted
               standard format (or other format agreed to by Lifemark). Lifemark
               will upload such data into Lifemark information systems or data
               repository systems for reporting purposes.

          (6)  Conduct necessary activities in connection with coordination of
               benefits, third-party liability recoveries, and reinsurance as
               required under the provisions of the RFP and HSD requirements.
               Such activities will include but not be limited to the following:

               (a)  Recovering or coordinating medical expenses incurred by
                    Members from all third-party liability sources on behalf of
                    LHS, and depositing any amounts recovered in the Account;

               (b)  Establishing and maintaining files of Members' third-party
                    liability information;

               (c)  Receiving third-party liability information from HSD and
                    updating the Members' files on a timely basis;

               (d)  Informing HSD and the LHS of third-party liability
                    information discovered during the course of business
                    operations;


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<PAGE>   9
               (e)  Providing HSD and the LHS with required reports relating to
                    amounts recovered from third-parties;

               (f)  Recovering reinsurance revenues payable to LHS from HSD and
                    /or other reinsurers.

          (7)  Cooperate with LHS in the development of a subrogation tracking
               and recovery program and provide LHS with any information,
               reports, or other data in its possession which indicates that a
               right of recovery may exist with respect to a benefit or service
               provided under the Program.

     i.   Accounting and Finance Services(s)

          (1)  Install appropriate controls and perform finance accounting
               functions as reasonably requested by the LHS VP of Financial
               Operations.

          (2)  Make deposits to and payments from the Account established by LHS
               for LCHP. Payments from the account are expressly limited to (i)
               payment of approved provider claims, (ii) payment of monthly
               (PMPM) fees in accordance with Section 8 of this Agreement, and
               (iii) other expenses as expressly approved in advance by LHS.

          (3)  Reconcile Account statements as reasonably requested by LHS.

          (4)  Performing all day to day financial and accounting functions of
               LCHP, including preparation of regulatory financial reporting,
               claims accounts payable, and premium accounts receivable
               administration.

          (5)  Provide LHS with financial statement information and related
               supporting documentation (including information that Lifemark
               possesses for required filings for the New Mexico Department of
               Insurance.

          (6)  Prepare for LHS's review, signature and submission any financial
               and regulatory reports required by HSD in connection with the
               Program.

     j.   Information Systems Services(s)

          (1)  Maintain an automated management information system as required
               by the contract with HSD, HSD requirements, and as necessary for
               Lifemark to fulfill its obligations under the provisions of this
               Agreement.


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     k.   Exit/Transition Planning Services(s)

          (1)  Cooperate in a professional and businesslike manner with
               transition to new vendor.

          (2)  Continue, for no additional administrative fee, to process and
               pay claims accurately for dates of service up to termination date
               for a period of one hundred, eighty (180) days following the
               effective date of termination/expiration of the Agreement.

          (3)  Transition of data upon termination shall include transfer of
               file data, accruals against benefit limitations and copayment
               carryover if appropriate, and shall be timely enough to allow
               smooth transition of activities to the new vendor.

6.   PERFORMANCE STANDARDS AND PENALTIES

     a.   Lifemark agrees that performance standards pertaining to certain
          Administrative Services, along with penalties for failure on the part
          of Lifemark to achieve the performance standards, shall be
          established. A matrix of Performance Standards and Penalties is
          attached and made part of this Agreement as Exhibit F.

     b.   The methods of measurement of performance related to each Performance
          Standard is also contained in Exhibit F.

     c.   Lifemark shall supply, from its information and other systems, all
          data necessary for measurement of performance against the Performance
          Standards.

     d.   The periods of performance and reporting dates shall be as follows:

          (1)  For the period from September 1, 2000, through June 30, 2001,
               Lifemark will supply performance data to LHS no later than July
               31, 2001. The total of all penalties imposed for this period of
               performance shall not exceed [ ]* of the total amount paid by LHS
               to Lifemark for Administrative Services for the same period.

          (2)  For the period July 1, 2001, through December 31, 2001, Lifemark
               will supply performance data to LHS no later than January 31,
               2002. The total of all penalties imposed for this period of
               performance shall not exceed [ ]* of the total amount paid by LHS
               to Lifemark for Administrative Services for the same period.

          (3)  For each six- (6-) month period thereafter, Lifemark will supply
               performance data to LHS for that period no later than thirty (30)
               days following the close of the period. The total of all
               penalties imposed for each such period of performance shall not
               [   ]* of the total paid by LHS to Lifemark for Administrative
               Services for the same period.

     e.   Subject to Lifemark's rights under section 22 hereof, Lifemark shall
          pay penalties related to performance standards within ninety (90) days
          following the close of the period of performance.

     f.   In addition to penalties related to performance standards as described
          herein, Lifemark shall also be responsible for any penalties pursuant
          to Paragraph 3.e.

7.   REPORTS AND RECORDS

     a.   Lifemark shall maintain financial, utilization, claims, and other
          records necessary to demonstrate that it has met its obligations under
          this Agreement.

     b.   Lifemark agrees to furnish certain data and reports in a form and
          format mutually agreed and in the frequency reasonably required by
          HSD, LHS, and other third parties. A matrix of Required Reports and
          Reporting Frequencies is attached and made part of this Agreement


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                        *Confidential Treatment Requested
<PAGE>   11
          as Exhibit G.

     c.   For each occurrence of failure on the part of Lifemark to furnish the
          on-time reports as described in Exhibit G, Lifemark shall pay LHS,
          upon request, a penalty of [   ]* per report for each day it is not
          delivered as scheduled, to a maximum of [   ]* per occurrence. Penalty
          shall not be imposed if said reports are not produced due to data that
          has not been received from third parties other than Lifemark
          subcontractors.

     d.   Until the expiration of four (4) years after performing Administrative
          Services under this Agreement, Lifemark and its subcontractors whose
          subcontracts are of a value or cost of [       ]* or more, shall upon
          written request, make available to the Secretary of the Department of
          Health and Human Services, the Comptroller General of the United
          States, or any of other duly authorized government entity, the
          Agreement and such books, documents, and records of Lifemark and such
          subcontractors, if any, as are necessary to certify the nature and
          extent of the costs to LHS of performance of the Agreement. The
          subcontracts, if any, shall contain a clause similarly requiring the
          retention and availability of like documentation. LHS may, at any
          reasonable time, audit the financial records related to Administrative
          Services.

     e.   Notwithstanding the obligations of this section. Lifemark acknowledges
          and agrees that all information concerning Members, including, but not
          limited to, eligibility lists, utilization data, and claims
          information, which are generated by HSD, LHS, Lifemark or other third
          parties, shall be treated by Lifemark as confidential and proprietary
          information of LHS and shall be returned to LHS upon request by LHS
          and upon termination or expiration of this Agreement. Any use of such
          information for other than the express purpose for which it is
          provided is prohibited and shall be construed as a material breach of
          this Agreement.

     f.   Lifemark shall treat as confidential all Member records in compliance
          with all applicable state and federal laws and regulations and this
          Agreement.

     g.   LHS shall have the exclusive right to use, publish, distribute,
          market, or sell any such information and data in statistical form, but
          the release of such information shall not violate the right of privacy
          of any LHS Patient or any trade secrets of Lifemark. Subject to the
          qualification herein, Lifemark hereby authorizes the release of all
          such information and data.

8.   COMPENSATION

     a.   LHS shall compensate Lifemark as follows for Administrative Services
          performed by Lifemark in accordance with the provisions of this
          Agreement.

          (1)  For the period from September 1, 2000, to June 30, 2001, LHS
               shall pay Lifemark at the rate of [   ]* per Member per month
               (PMPM).

          (2)  If by June 30, 2001, LHS has not implemented electronic
               transmission of claims data (in a nationally accepted data format
               or UB-92 claim) for facility services provided to Members in the
               LDS, LHS shall increase the rate of compensation to [     ]* PMPM
               beginning on July 1, 2001. If LHS has implemented electronic
               transmission of claims data for facility services provided to
               Members in the LDS, the rate of payment will remain [     ]* PMPM
               through June 30, 2002.

          (3)  In the event this Agreement is renewed for additional one (1)
               year periods, the rate of payment for the new period, beginning
               on July 1, shall increase by the percentage of increase in the
               CPI-All Items for the twelve-month period most recently published
               by the U.S. Department of Labor, Bureau of Labor Statistics.


                                       10

                        *Confidential Treatment Requested
<PAGE>   12
          (4)  The above compensation rates are predicated on the scope of
               Administrative Services performed by Lifemark as of the effective
               date of this Agreement (e.g., management of behavioral health
               benefits is not included).

          (5)  Programming expenses related to the transition of data upon
               termination or expiration of this Agreement shall be paid by LHS
               at Lifemark's cost plus [      ]*, to a maximum of [        ]*.

     b.   The compensation payable by LHS to Lifemark shall not be subject to
          withholding for taxes, F.I.C.A. or otherwise, and nothing in this
          Agreement creates for LHS any duties of an employer with respect to
          Lifemark under any state workers' compensation laws or any state or
          federal laws applicable to employers. The amount paid by LHS hereunder
          shall be inclusive of all taxes and Lifemark will be responsible for
          all applicable sales, use, real or personal property, franchise or
          other like taxes attributable to this Agreement.

     c.   The payment rates specified herein shall be payment in full for all
          Administrative Services provided under this Agreement, Lifemark agrees
          that in no event including but not limited to nonpayment by LHS,
          insolvency of LHS, or breach of this Agreement, shall Lifemark bill,
          charge, collect a deposit from, seek compensation, remuneration, or
          reimbursement from or have any recourse against a Member, HSD, or
          persons other than LHS for Administrative Services provided pursuant
          to this Agreement. This hold harmless provision shall survive the
          termination of this Agreement with respect to Administrative Services
          performed by Lifemark under the provisions of this Agreement.

9.   RELATIONSHIP OF PARTIES

     a.   Lifemark shall perform Administrative Services under this Agreement as
          an independent contractor of LHS. Nothing contained in this Agreement
          shall be deemed or construed to make Lifemark or any of Lifemark's
          employees an agent, employee, partner, or joint venturer of or with
          LHS.

     b.   Lifemark agrees that Lifemark and its personnel are not employees of
          LHS and are not entitled to worker's compensation or employee benefits
          provided by LHS to its employees. In addition, Lifemark agrees that
          Lifemark is responsible for Lifemark's own federal, state and local
          income, social security, unemployment, sales, disability and any other
          applicable local, state or federal taxes arising out of Lifemark's
          performance of Administrative Services under this Agreement.

     c.   Lifemark is available to perform services for entities other than LHS.
          However, Lifemark warrants and represents that there is no breach of
          any duties to LHS in the delivery of Administrative Services under
          other contracts for services.

     d.   Both Lifemark and LHS agree not to employ personnel from the other
          party for the period of one year after an employee has left its
          respective organization or for one year following the effective date
          of termination or expiration of this agreement, unless approved in
          advance by the other party.

10.  OWNERSHIP OF DATA

     a.   The parties acknowledge that Lifemark may use certain proprietary
          software programs, source and object codes and databases, the trade
          secrets related thereto, the copyright of Managed Care One, CareOne,
          or other Lifemark software, the trademark of the names, all
          intellectual property rights associated with the programs, the
          technical information, design concepts, processes, formulae and
          algorithms and all other rights and aspects pertaining thereto are
          highly confidential and the exclusive property of Lifemark. Nothing in
          this Agreement shall be construed to be an assignment, transfer,
          purchase, lease or license of


                                       11

                        *Confidential Treatment Requested
<PAGE>   13
          such rights. Lifemark has selected Managed Care One in fulfilling its
          duties under this Agreement and may elect at any time in its sole
          discretion to use a different information system; provided however
          that no disruption of LCHP functions, increase in LHS cost or
          reduction in LCHP capability will result from such decision. LHS
          waives all claim, right or interest whatsoever in Managed Care One,
          CareOne, or other Lifemark software, or any of the above described
          aspects and features thereof, and all amendments or revisions thereto.

     b.   All data entered into Lifemark's information systems in the course of
          fulfilling its duties under this Agreement are owned by LHS. Lifemark
          shall furnish such data to LHS, in a nationally accepted form and
          format (as described in Exhibit C, paragraph 5.c.) reasonably
          requested by LHS, upon request from LHS.

11.  CONFIDENTIALITY

     a.   During the term of the Agreement, the parties may have access to
          certain proprietary materials of each other.

          (1)  In the case of Lifemark, LHS acknowledges that certain features
               of Managed Care One and CareOne are proprietary software programs
               of Lifemark subject to protection by copyright law and Lifemark's
               policies procedures, systems, clinical, financial or
               administrative assessment tools, systems, data information, or
               other related content are highly confidential and proprietary
               ("Trade Secrets").

          (2)  In the case of LHS, Lifemark acknowledges that while supplying
               Administrative Services under this Agreement, Lifemark will be
               exposed to records, documents, client lists, records, computer
               data and systems information, provider information and listings,
               and other written or verbal information ("Information")
               considered confidential and proprietary in nature to LHS.

     b.   Neither party shall disclose any of the other party's Trade Secrets or
          Information, directly or indirectly, during or after the term of the
          Agreement. The parties shall not photocopy or otherwise duplicate any
          such material without the prior written consent of its owner except as
          otherwise required under the terms of this Agreement. All Trade
          Secrets and Information shall remain the exclusive property of its
          owner and shall be returned thereto immediately upon the termination
          of the Agreement.

     c.   Without limiting the foregoing, the parties specifically agree that
          all software associated with the operation of the Services, including
          without limitation, each party's accounting systems, and other
          software, are owned by or licensed to each party. Access or use of
          such software shall not create any right, title, interest, or
          copyright in such software, except to the party that owns or licenses
          the software and only the party that owns or licenses the software
          shall retain such software beyond the termination of the Agreement.

     d.   Lifemark further agrees that its personnel, contractors, and
          subcontractors involved in the performance of Administrative Services
          under the terms of this Agreement shall sign a Confidentiality
          Agreement, which is attached hereto as Exhibit H. For purposes of that
          Confidentiality Agreement, all activities performed under this
          Administrative Services Agreement shall be considered "an activity
          managed by Lifemark Corporation."

     e.   The obligations of this section shall survive the termination of this
          Agreement.


                                       12

<PAGE>   14
12.  INSURANCE AND INDEMNIFICATION

     a.   During the term of this Agreement, LHS shall maintain, at its sole
          expense, a policy of HMO-type professional liability insurance
          coverage with minimum limits of liability of [   ]* per occurrence and
          [   ]* in the annual aggregate or such greater limits of liability as
          may be required by applicable state or federal law.

     b.   LHS and Lifemark shall each maintain, at its sole expense, throughout
          the term of this Agreement, the following types of insurance with the
          indicated minimum limits:

          (1)  Workers' Compensation insurance to the full extent as required by
               applicable laws but not less than [     ]* each occurrence; and,

          (2)  Comprehensive General Liability coverage, including bodily
               injury, property damage, and contractual liability coverage, with
               a combined single limit of not less than [     ]*; and,

          (3)  Motor Vehicle liability insurance with a combined single limit of
               not less than [     ]* for any owned vehicles or operated for the
               purpose of fulfilling its duties under this Agreement; and,

          (4)  Errors and Omissions coverage with limits of liability of [   ]*
               per occurrence and [     ]* in the aggregate; and,

          (5)  Fidelity Bond with a minimum of [    ]* coverage limit.

     c.   Each party shall, upon request from the other party, furnish the other
          party with evidence of insurance reflecting the coverage and amounts
          set forth in this section. Each party shall provide the other party
          with a minimum of thirty (30) days prior written notice in the event
          any of the insurance policies required by this Agreement are
          cancelled, modified, or restricted in any way.

     d.   LHS and Lifemark agree to indemnify, defend, and hold harmless the
          other, its agents and employees from and against any and all liability
          or expense, including defense costs and reasonable legal fees,
          incurred in connection with claims for damages of any nature,
          including but not limited to bodily injury, death, personal injury,
          property damage, financial loss, or other damages arising from the
          performance of, or failure to perform, the indemnifying party's
          obligations under this Agreement, unless it is determined that the
          liability was the direct consequence of negligence or willful
          misconduct on the part of the other party, its agents or employees."

13.  TERM AND TERMINATION OF AGREEMENT

     a.   This Agreement shall be effective on September 1, 2000, and shall be
          for an initial term of twenty-two months, ending on June 30, 2002.
          Thereafter, it shall continue from year to year, unless terminated as
          set forth below.

     b.   Lifemark or LHS may terminate this Agreement at any time for cause.
          Cause for termination includes, but is not limited to, the following:

          (1)  Except as otherwise set forth in the Exhibits hereto, material
               breach that is not remedied within 60 days of receipt of written
               notice thereof by either party.

          (2)  An adverse change in the financial condition of the other party
               that results in its inability to materially perform this
               Agreement.

          (3)  Failure by either party to maintain licenses or certificates
               required to comply with the terms of this Agreement, or to comply
               with applicable laws or regulations that have not been cured
               within 60 days of written notice by the other party.

          (4)  Any material misrepresentation or material intentional
               falsification of any information


                                       13

                        *Confidential Treatment Requested

<PAGE>   15
          (5)  submitted by Lifemark to LHS.

          (6)  Failure of either party to maintain required insurance coverage
               protection that has not been cured within 60 days of written
               notice by the other party.

          (7)  Intentional failure of either party to comply with Section 8,
               Confidentiality.

          (8)  Expiration or termination of the contract between HSD and LHS.

     c.   This Agreement may be terminated by either party without cause at any
          time upon one hundred, eighty (180) days' prior written notice by
          either party. This paragraph may not be exercised by either party
          before January 1, 2002.

14.  RIGHTS AND OBLIGATIONS UPON TERMINATION

     a.   Upon termination of this Agreement for any reason, the rights of each
          party hereunder shall terminate, except as otherwise provided in this
          Agreement.

     b.   Termination shall not release Lifemark or LHS from obligations under
          this Agreement prior to the effective date of termination.

     c.   LHS shall compensate Lifemark for any services rendered in accordance
          with the provisions of this Agreement prior to the effective date of
          termination.

15.  ASSIGNMENT AND DELEGATION OF DUTIES

     a.   Neither party shall assign any right or interest in this Agreement
          without the written permission of the other party. Neither party shall
          delegate any duty owed under this Agreement without the written
          permission of the other party.

     b.   Any attempted assignment or delegation without the written permission
          of the other party shall be wholly void and totally ineffective for
          all purposes.

     c.   Notwithstanding the foregoing, either party may assign its rights or
          delegate its duties under this Agreement, in whole or in part, to its
          parent, affiliates and/or subsidiaries, provided that such assignee or
          delegate agrees in writing to comply with all applicable provisions of
          this Agreement and prior notice of such assignment is given to the
          other party. Assignment or delegation by either party will not act to
          relieve that party of any of its obligations under this Agreement.

16.  AFFIRMATIVE ACTION

     a.   Lifemark agrees that, if Lifemark employs any other individuals to
          perform services under this Agreement, that Lifemark shall comply with
          all federal, state, and municipal laws and regulations dealing with
          equal employment opportunity.

     b.   The provisions set forth in U.S. Department of Labor regulations
          dealing with employment opportunity obligation of government
          contractors and subcontractors, employment by government contractors
          of Vietnam-era and disabled veterans, and employment of the physically
          handicapped by government contractors and subcontractors, are
          incorporated herein by reference and shall constitute additional terms
          and conditions to the extent required by law.

     c.   Lifemark warrants that, to the best of Lifemark's knowledge, no laws,
          regulations, or ordinances of the United States, or any state, or
          government authority or agency has been violated, including the Fair
          Labor Standards Act, as amended, in the performance of work pursuant
          to this Agreement, and agrees to indemnify and hold harmless from any
          and all claims arising out of its own failure to comply with all laws,
          rules and regulations with respect


                                       14

<PAGE>   16
          to Lifemark's performance hereunder.

17.  INTERPRETATION

     The validity, enforceability and interpretation of this Agreement shall be
     governed by any applicable federal law and by the laws of the state of New
     Mexico.

18.  AMENDMENT

     No changes, amendments, or alterations to this Agreement will be effective
     unless in writing and signed by both parties.

19.  ENTIRE AGREEMENT

     This Agreement, together with all its Exhibits, contains all the terms and
     conditions agreed upon by the parties, and supersedes all other agreements,
     expressed or implied, regarding the subject matter.

20.  NOTICE

     a.   Any notice required hereunder shall be in writing and shall be sent by
          United States mail, postage prepaid, Certified, return receipt
          requested or by facsimile (as evidenced by written confirmation of
          receipt by recipient's machine), to LHS and Lifemark at the addresses
          set forth below.

          (1)  To LHS at:          Lovelace Health Systems, Inc.
                                   c/o Lovelace Health Plan
                                   4101 Indian School Rd., N.E., Suite 110 S
                                   Albuquerque, New Mexico 87110
                                   Attention: General Manager

               With a copy to:     Lovelace Health Systems, Inc.
                                   5400 Gibson Blvd., S.E.
                                   Albuquerque, NM 87108
                                   Attention: Senior Contracting Officer

          (2)  To Lifemark at:     Lifemark Corporation
                                   7600 North 16th Street, Suite 150
                                   Phoenix, AZ  85020
                                   Attention: Michael Kennedy, CFO

               With a copy to:     Smyth, Schneck, Fisher, Smyth and Herrod, PC
                                   1221 E. Osborn
                                   Albuquerque, NM 87108
                                   Phoenix, AZ, 85014
                                   Attention: Mr. Stephen Smyth

     b.   Either party may change the address to which notice is to be delivered
          upon reasonable notice.

21.  ENFORCEABILITY AND WAIVER

     The invalidity and nonenforceability of any term or provision of this
     Agreement shall in no way affect the validity or enforceability of any
     other term or provision. The waiver by either party of a breach of any
     provision of this Agreement shall not operate as or be construed as a
     waiver of any subsequent breach thereof.

22.  DISPUTE RESOLUTION


                                       15
<PAGE>   17
     a.   Attempts to resolve any disputes between the parties arising with
          respect to the performance or interpretation of the Agreement should
          first be made at the operational levels of both LHS's and Lifemark's
          organizations.

     b.   Should the dispute not be resolved through the aforementioned process,
          then the parties shall refer the dispute, controversy or question
          arising under this Agreement to arbitration as follows:

          (1)  Each party shall select an arbitrator of its choice and the
               appointed arbitrators will select a third arbitrator.

          (2)  The panel of three arbitrators will hear the parties and settle
               the dispute, controversy or question.

          (3)  The proceeding shall be governed by the Rules of the American
               Arbitration Association then in effect, and shall be held in
               Albuquerque, New Mexico.

          (4)  Each party shall assume its own costs, but the compensation and
               expenses of the arbitrator(s) and any administrative fees or
               costs associated with the arbitration proceeding shall be borne
               equally by the parties.

          (5)  Arbitration shall be the exclusive remedy for the settlement of
               disputes arising under this Agreement.

          (6)  The decision of the arbitrators shall be final, conclusive and
               binding, and no action at law or in equity may be instituted by
               either party other than to enforce the award of the
               arbitrator(s).

          (7)  Judgment upon the award rendered by the arbitrator(s) may be
               entered in any court of competent jurisdiction.

IN WITNESS whereof the parties have caused this Agreement to be signed by their
duly authorized representatives on the date first set forth above.

Lovelace Health Systems, Inc.          Lifemark Corporation

By:   /s/ Gayle Adams                  By:     /s/ Rick Jelinek
      -----------------------------            -------------------------------
      (Signature)                              (Signature)

      Gayle Adams                              Rick Jelinek
      -----------------------------            -------------------------------
      (Print Name)                             (Print Name)

Its:                                   Its:
      -----------------------------            -------------------------------
      (Title)                                  (Title)

Date:                                  Date:
      -----------------------------            -------------------------------

APPROVED AS TO FORM

/s/ Nicholas R. Hatrim
----------------------------------
Senior Contracting Officer


                                       16
<PAGE>   18
                                    EXHIBIT A
     STANDARDS FOR DELEGATION OF MEMBER RIGHTS AND RESPONSIBILITIES FUNCTION


1.   Lifemark shall administer the written policies and procedures developed by
     the LHS and Lifemark for the timely and appropriate resolution of Member
     concerns and complaints that meet LHS's requirements, requirements set
     forth in applicable law and LHS's contract with HSD, and NCQA requirements.
     Lifemark shall not materially modify such written policies and procedures
     without LHS's prior written approval.

     a.   Lifemark shall document appropriate procedures that address the
          various types of complaints.

     b.   Lifemark's/LCHP's procedures shall define at least a two-step process:
          (1) how the organization responds to first-level concerns; and (2) how
          the organization responds to second level complaints with a review by
          individual(s) not involved in the original decision.

     c.   LHS retains the responsibility for the final level of appeal (third
          step) in all cases of Member grievances.

     d.   Lifemark shall maintain appropriate documentation of the substance of
          concerns and complaints received and the investigation of such
          concerns/complaints.

     e.   Lifemark shall maintain appropriate documentation of its monitoring of
          complaints to ensure that appropriate actions are taken, as well as
          compliance with standards for timeliness of resolution.

     f.   Lifemark's/LCHP's procedures for the resolution of complaints about
          quality of care issues shall specify when a review by a clinical
          person is required.

     g.   Lifemark's/LCHP's procedures shall include timely notification to
          Members of the resolution of the problem and should inform Member of
          his or her right to appeal during each step of the complaint and
          appeal process.

     h.   Lifemark's procedures will include a mechanism for notifying LHS
          within one working day of a Member's request for final appeal
          (grievance).

2.   Lifemark shall maintain Lifemark developed written policies and procedures
     that protect the confidentiality of Member information and records.

3.   Lifemark shall make available the following information to LHS:

     a.   Lifemark's/LCHP's complaint and grievance policies and procedures -
          annually.

     b.   Lifemark's tracking and trending reports for complaints and
          grievances, including timeliness of resolution - quarterly.

     c.   Lifemark's confidentiality policies and procedures - annually.

4.   LHS, its designee and any applicable governmental authorities or
     accrediting bodies shall have the right to conduct routine periodic audits
     at LHS's expense, of the performance hereunder upon reasonable prior
     notice, and Lifemark shall cooperate with any such audits. LHS will conduct
     an onsite visit at least annually and will provide a written assessment of
     findings. If the audit reveals any deficiencies, Lifemark shall submit a
     written corrective action plan to LHS within 30 days of receipt of LHS's
     findings. Such plan must be acceptable to LHS. Evidence that corrective
     actions have been implemented must be documented and submitted to LHS by
     Lifemark within 90 days of Lifemark's receipt of the audit findings. All
     identified deficiencies shall be corrected as soon as
<PAGE>   19
     possible but no later than 6 months after Lifemark's receipt of the audit
     findings.

5.   Lifemark's system must be capable of administering appropriate payment,
     adjustments and coordination of benefits in a timely manner.

Lifemark acknowledges receipt of the above standards for delegation of Member
rights and responsibilities function and agrees to comply with the standards set
forth herein.

Lifemark Corporation

By:    /s/ Rick Jelinek
       ---------------------------------
       (Signature)


       ---------------------------------
       (Print Name)

Its:
       ---------------------------------
       (Title)

Date:
       ---------------------------------
<PAGE>   20
                                    EXHIBIT B
                  MINIMUM REQUIREMENTS FOR CALL TRACKING SYSTEM


-    Subscriber Information
     Name, address, phone number, date of birth, effective date, primary care
     physician, SCHIPS member

-    Who's Calling - Member or Provider?

-    Reasons for calls - Inquiry, Concern, Complaint

INQUIRY REASONS:*
Core benefits
Delegated benefits - VSP, CBH, Superior, Doral
Coverage questions (i.e. referral process, change primary care physician)
Location of services
Enrollment status emergency care
* Within the reasons categories there should be built in categorization

CONCERN REASONS:
Core benefit (hardcoded selections)
Delegated benefit (hardcoded selections)
Claims (hardcoded selections)
Quality of services (hardcoded - location, provider)
Quality of care (hardcoded - location, provider)
Referral denial (hardcoded - type of service)
Access (hardcoded - location, provider)
Physical plant (hardcoded - location)
Prescription coverage
Etc.

COMPLAINT REASONS:

Quality/appropriateness of care (hardcoded selections)
Attitude of provider (hardcoded selections)
Refusal to provide care (hardcoded selections)
Risk management/safety issues (hardcoded - location)
Referral denials (hardcoded - type of service)

The Call Tracking System must have the capability of showing historical calls by
Member, which includes date stamping for each call date. Member Services
Representative should not be able to change the reason categories or change
free-text without there being a chronological listing of events and who made the
change.

The System must be able to report on each of the global categories and have the
capability to break down the reasons to the next level of detail.

Written letters from members should be tracked in the System and reported as
part of the call tracking system.
<PAGE>   21
                                    EXHIBIT C
          STANDARDS FOR DELEGATION OF UTILIZATION MANAGEMENT ACTIVITIES


1.   Lifemark shall be subject upon reasonable prior notice to a site review and
     evaluation of the Lifemark/LCHP utilization management program ("UM
     Program").

2.   Lifemark shall maintain a written UM Program description which includes:

     a.   Description of Lifemark's/LCHP's

          (1)  Policies/procedures to evaluate Medical Necessity, and,

          (2)  Use of nationally recognized and locally approved criteria and
               information sources; and,

          (3)  Process to review and approve services.

     b.   Description of Lifemark's/LCHP's mechanism to periodically update the
          UM Program description and the UM Program's policies and procedures;

     c.   Documented evidence of approval of Lifemark's/LCHP's UM Program by
          LHS;

     d.   Description of the roles and functions of Lifemark's/LCHP's UM Program
          to include a definition of the roles and responsibilities of
          Lifemark's/LCHP's UM Program staff; and

     e.   Evidence demonstrating a utilization management work plan which
          responds to identified opportunities for improvement and action steps,
          as well as a process for, and evidence of, an annual evaluation of the
          UM Program.

3.   Lifemark's/LCHP's UM Program shall at a minimum comply in all respects with
     the requirements of an appropriate accrediting body designated by LHS (i.e.
     NCQA, JCAHO, etc.), the requirements established by LHS herein, the
     Administrative Services Agreement, the contract between LHS and HSD, and
     the requirements of applicable law. Lifemark shall maintain all applicable
     licensures and certifications required to perform the delegated utilization
     management activities. Lifemark shall maintain appropriate records with
     respect to all utilization management activities for the duration of the
     managed care provider agreement with LHS and six years thereafter. Lifemark
     shall regard all clinical records of Members and any other records
     containing individually identifiable information with respect to Members as
     confidential and shall comply with all applicable federal and state laws
     and regulations regarding such records.

4.   Lifemark shall maintain adequate professional liability coverage as
     required by the Administrative Services Agreement. Any Lifemark
     subcontractor shall be required to comply with all standards applicable to
     Lifemark with regard to the subcontracted services.

5.   Lifemark shall provide LHS with a copy of Lifemark's/LCHP's written UM
     Program description upon request. Such UM Program description shall be
     submitted to LHS for review and approval and annually thereafter and shall
     not be materially modified without LHS's prior written approval.

6.   With respect to each request for medical services for which Lifemark
     performs utilization management hereunder, Lifemark shall apply the
     utilization management criteria set forth in the Lifemark/LCHP UM Program
     description as required by HSD applicable to the Member for whom medical
     services have been requested.

7.   All information relating to Lifemark's utilization management activities
     hereunder shall be confidential, shall not be disclosed to any third
     parties except as required by applicable law and
<PAGE>   22
     except as required to fulfill Lifemark's utilization management
     responsibilities hereunder, and shall be maintained in such a manner so
     that such information shall be protected from discovery and use in judicial
     or administrative proceedings to the fullest extent possible under
     applicable law. In the event that Lifemark receives a subpoena, civil
     investigative demand or other similar process requesting disclosure of
     information relating to its utilization management activities hereunder,
     Lifemark shall immediately notify LHS of such subpoena, demand or process
     so as to afford LHS with an adequate opportunity to seek an appropriate
     protective order should it choose to do so.

8.   This exhibit, all information provided by LHS to Lifemark pertaining to
     LHS's delegation of utilization management to Lifemark and all data made
     known to Lifemark relating to services rendered to Members under the
     managed care provider agreement is confidential and proprietary information
     subject to the protections set forth in the confidentiality provision
     contained in Lifemark's managed care provider agreement with LHS. In the
     event that Lifemark receives a subpoena, civil investigative demand or
     other similar process requesting disclosure of such confidential and
     proprietary information, Lifemark shall immediately notify LHS of such
     subpoena, demand or process so as to afford LHS with an adequate
     opportunity to seek an appropriate protective order should it choose to do
     so.

9.   Lifemark shall authorize services requested to be provided by
     noncredentialed providers within approved guidelines and protocols.

10.  All UM Program activities shall be supervised by appropriately qualified
     professionals including:

     a.   use of a licensed physician to conduct medical review on any denial;
          and

     b.   use of board certified specialists to assist in determining Medical
          Necessity and in preparing documentation to support the decision.

11.  Total UM Program staff ratios (including nurses) shall be at least 1 per
     10,000 Members. The UM Program shall utilize clinical nurses (RN or
     LPN/LVN) licensed to practice nursing as required by the State of New
     Mexico with a ratio of licensed clinical nurses to Members to be agreed
     upon by Lifemark and LHS. Non-clinical staff shall utilize protocols and
     criteria approved by the Medical Director and shall not make medical
     appropriateness/necessity decisions. All decisions of the non-clinical
     staff shall be supervised by clinical staff. Lifemark shall maintain
     appropriate levels of telephone line staffing for the utilization
     management activities required to be performed hereunder and shall satisfy
     the following standards: (a) the overall abandonment rate for the
     pre-certification telephone line shall be less than 5%; (b) 80% of all
     calls to the pre-certification telephone line shall be answered in less
     than 30 seconds; (c) telephone prompts shall be clear and user friendly;
     and (d) a telephone message after hours shall give normal business hours
     information and after hours instructions.

12.  Lifemark shall maintain a set of written utilization management decision
     protocols that are based on reasonable available medical evidence, are
     acceptable to LHS and indicate that:

     a.   Criteria for appropriateness of medical services are clearly
          documented, communicated to participating physicians, and available to
          the physician upon request; and,

     b.   An appropriate mechanism is present for checking the consistency of
          application of criteria across physician and non-physician reviewers;
          and

     c.   An appropriate mechanism is present for updating review criteria
          periodically and the time of the update is specified in protocol or
          policy.


                       * Confidential Treatment Requested

<PAGE>   23
13.  In connection with all utilization management activities hereunder,
     Lifemark shall obtain all necessary information, including pertinent
     clinical information, and consult with the treating physician, as
     appropriate, and document such efforts.

14.  Denials must be clearly documented including:

     a.   Documentation indicating who recommended denial and why;

     b.   Documentation that an explanation is provided to the Member and
          applicable provider;

     c.   Notification to the Member and applicable provider in writing, which
          includes all information required by applicable law, including but not
          limited to, the specific reason for the denial, and a description of
          how to file a final appeal.

          Lifemark's form denial letters will be made available to LHS and HSD
          and shall not be materially modified without LHS's and HSD's prior
          written approval. LHS shall administer the appeal process with respect
          to all appeals of determinations hereunder. In connection with any
          such appeal, LHS shall assist and cooperate with Lifemark and shall
          promptly provide all documentation reasonably requested by Lifemark.
          LHS, or the applicable governmental authority (i.e. HSD), as
          applicable, shall have final decision making authority with regard to
          all appeals (including expedited appeals) of determinations hereunder.

     In connection with any such appeal, Lifemark shall assist and cooperate
     with LHS and shall promptly provide all documentation reasonably requested
     by LHS and any such other relevant information as Lifemark deems
     appropriate.

15.  Lifemark's/LCHP's UM Program decisions shall be made in a timely manner.

     a.   Lifemark's/LCHP's UM Program policies and procedures shall clearly
          define the maximum time frames for utilization management decisions.
          All utilization management decisions shall be made within the time
          frames that satisfy all applicable legal requirements (e.g. HSD).

     b.   Lifemark shall implement an appropriate mechanism to monitor and
          document timeliness of decisions which shall include:

          (1)  Documentation to show Emergency requests are responded to as soon
               as possible and as necessary in relate to the Member's medical
               condition, or within the timeframes required by applicable law,
               if earlier; and,

          (2)  Documentation to show urgent requests are responded to within 24
               hours, or within the time frame required by applicable law, if
               earlier; and

          (3)  Documentation to show routine requests are responded to within 3
               to 5 working days, or within the time frame required by
               applicable law, if earlier.

     c.   Lifemark shall monitor and analyze its compliance with timeliness
          requirements and take prompt action to meet or improve adherence to
          such requirements.

16.  Lifemark shall maintain a system to track authorizations, to evaluate
     Lifemark's compliance with Lifemark's/LCHP's utilization management
     requirements as set forth in the Administrative Services Agreement, to
     monitor providers for inappropriate utilization, to evaluate member
     satisfaction and provider satisfaction, and other measures of evaluation
     agreed upon by the parties. Lifemark shall submit reports to LHS, in
     mutually agreed formats, at the frequency established in the
<PAGE>   24
     Administrative Services Agreement. Upon request, Lifemark will submit an
     action plan that addresses opportunities for improvement when applicable.

17.  LHS, its designee and any applicable governmental authorities or
     accrediting bodies shall have the right to conduct periodic audits of
     Lifemark's/LCHP's UM Program activities upon reasonable prior notice, and
     Lifemark shall cooperate with any such audits. In addition, Lifemark's
     performance of its utilization management activities hereunder may be
     measured by LHS at least annually. Lifemark shall cooperate with any such
     audits and shall provide any and all information reasonably requested by
     LHS in connection with such audits. Applicable performance measures include
     but are not limited to:

     a.   Member satisfaction survey results which indicate a significant
          overall satisfaction with the service provided and document an
          improvement process for any specific areas identified with
          satisfaction lower than [ ]*;

     b.   Timeliness in responding to Member complaints and grievances; and

     c.   Audits of utilization management activities show compliance with LHS
          requirements.

     LHS will provide Lifemark with a written report detailing its findings with
     respect to any such audits. If such audits reveal any deficiencies,
     Lifemark shall submit a corrective action plan to LHS within 30 days of
     receipt of LHS's findings. Such plan must be acceptable to LHS. Evidence
     that corrective actions have been implemented must be documented and
     submitted to LHS by Lifemark within 90 days of Lifemark's receipt of the
     audit findings. All identified deficiencies shall be corrected as soon as
     possible but no later than 6 months after Lifemark's receipt of the audit
     findings. Failure to correct any identified deficiencies within such 6
     month period may be cause for revocation of the delegation set forth herein
     and LHS's pursuit of other remedies under the Administrative Services
     Agreement.

18.  Lifemark shall prepare and provide such periodic reports or other data as
     is reasonably requested by LHS relating to Lifemark's utilization
     management activities. Lifemark shall participate in utilization management
     oversight activities (i.e., committee meetings, report submission) to the
     extent reasonably required by LHS and at least quarterly.

19.  If LHS determines that Lifemark cannot meet its utilization management
     obligations, LHS may elect to assume responsibility for such activities. If
     LHS elects to assume responsibility for such activities, the parties agree
     to renegotiate the rates set forth in the managed care provider agreement
     to the extent necessary, and Lifemark shall cooperate and provide to LHS
     any information reasonably required to perform such activities.

20.  All referrals shall be to Participating Providers whenever possible, except
     where an Emergency requires otherwise or as otherwise required by law.
     Except in an Emergency, Lifemark shall require all Participating Providers
     to obtain authorization from Lifemark prior to hospital admission of any
     Member or outpatient surgical procedures. Lifemark shall not make a
     referral to a non-Participating Providers without the consent of the
     Medical Director or as stipulated in the LHS out-of-network referral or
     related policy.

21.  All electronic data which Lifemark maintains concerning the detail of all
     utilization management decisions made hereunder shall be made available and
     submitted to LHS, upon request, using ANSI standard transaction formats or
     other mutually agreeable formats. Such data shall be submitted to LHS at
     least monthly. If a non-ANSI format is reasonably agreed upon, Lifemark
     shall cooperate with LHS in the development of the transmission format,
     frequency and protocol.


                        *Confidential Treatment Requested
<PAGE>   25
22.  Lifemark shall distribute a statement to its employees, affirming the
     following:

     a.   UM decision making is based only on appropriateness of care and
          service.

     b.   Lifemark does not compensate practitioners/providers/employees for
          denials.

     c.   Lifemark does not offer incentives to encourage denials.

     d.   The need for special concern about underutilization.

23.  If a subcontractor is used for the purpose of meeting these requirements,
     the subcontractor must agree in writing to meet these standards for
     delegation.

Lifemark acknowledges receipt of LHS's above Standards for Delegation and, in
accordance with the managed care provider agreement between LHS and Lifemark,
will comply with the terms and conditions set forth herein.

Lifemark Corporation

By:   /s/ Rick Jelinek
      -----------------------------
      (Signature)

      -----------------------------
      (Print Name)

Its:
      -----------------------------
      (Title)

Date:
      -----------------------------
<PAGE>   26
                                    EXHIBIT D
        STANDARDS FOR DELEGATION OF SPECIFIC PREVENTIVE HEALTH ACTIVITIES


1.   Lifemark shall maintain written policies and procedures describing in
     detail the performance of each of the Preventive Health Functions delegated
     to Lifemark. Such Policies and Procedures shall meet LHS requirements, the
     requirements set forth in applicable law, requirements of HSD, and the
     requirements of an appropriate accrediting body designated by LHS (i.e.
     NCQA, JCAHO, etc.). Lifemark shall not materially modify or implement such
     written policies and procedures without LHS's prior written approval.

     The following Preventive Health Functions are delegated to Lifemark.

     a.   As directed and approved by LHS: member outreach and education for
          well childcare including but not limited to EPSDT (including the
          behavioral health screening component) and Prenatal Care.

     b.   Provider Education with regards to well childcare, and prenatal care
          guidelines. Such education shall include Lifemark and LHS's
          expectations for provider compliance with well childcare and prenatal
          care guidelines.

2.   Lifemark shall maintain written policies and procedures that protect the
     confidentiality of participant information and records.

3.   Lifemark shall provide the following information to LHS:

     a.   Policies and Procedures describing in detail how each of the
          Preventive Health Functions delegated to Lifemark will be executed.

     b.   An annual work plan describing how Lifemark will satisfy the
          requirements of each of the delegated preventive health functions.

     c.   Any materials used to satisfy the requirements of each of the
          delegated preventive health functions.

     d.   Information necessary for LHS to satisfy HEDIS reporting requirements.

     e.   Evaluation of preventive health initiatives specific to wellchild
          (EPSDT) and prenatal care. Such evaluation shall be reported to LHS no
          less than quarterly.

4.   LHS, its designee and any applicable governmental authorities or
     accrediting bodies shall have the right to conduct periodic audits of the
     performance hereunder upon reasonable prior notice, and Lifemark shall
     cooperate with any such audits. LHS will conduct an onsite visit at least
     annually and will provide a written assessment of findings. If the audit
     reveals any deficiencies, Lifemark shall submit a written corrective action
     plan to LHS within 30 days of receipt of LHS's findings. Such plan must be
     acceptable to LHS. Evidence that corrective actions have been implemented
     must be documented and submitted to LHS by Lifemark within 90 days of
     Lifemark's receipt of the audit findings. All identified deficiencies shall
     be corrected as soon as possible but no later than 6 months after
     Lifemark's receipt of the audit findings.

5.   If LHS determines that Lifemark cannot meet its obligations hereunder, LHS
     may elect to assume responsibility for such activities. If LHS elects to
     assume responsibility for such activities, Lifemark shall cooperate and
     provide to LHS any information necessary to perform such activities.

6.   All electronic data which Lifemark is required to maintain and/or permit
     access to hereunder shall include the century (MMDDCCYY) and, all system
     logic with regard to all of such data shall be
<PAGE>   27
     century compliant (i.e. 19xx can roll correctly to 20xx).

7.   Any other Preventive Health Functions not identified in this Agreement,
     remain the responsibility of LHS.

Lifemark acknowledges receipt of the above standards for the delegation of
specific preventive health activities agrees to comply with the standards set
forth herein.

Lifemark Corporation

By:     /s/ Rick Jelinek
        ------------------------------
        (Signature)

        ------------------------------
        (Print Name)

Its:
        ------------------------------
        (Title)

Date:
        ------------------------------
<PAGE>   28
                                    EXHIBIT E
          STANDARDS FOR DELEGATION OF PAYMENT ADMINISTRATION ACTIVITIES

1.   GENERAL CONSIDERATIONS

     a.   Lifemark shall be responsible for administering payments for all
          Covered Services included within the scope of the Administrative
          Services Agreement. Any Lifemark subcontractor will be required to
          comply with all standards applicable to Lifemark under the
          Administrative Services Agreement with regard to the subcontracted
          services.

     b.   Lifemark's payment activities shall, at a minimum, satisfy the
          requirements established by LHS herein, the requirements in the
          Administrative Services Agreement between LHS and Lifemark, the
          contract between LHS and HSD, and any requirements set forth in
          applicable laws and regulations, including but not limited to, laws
          relating to fair claims settlement practices, laws and regulations
          related to timely claims processing and notices of determination and
          appeal rights, laws regulations applicable to Members in LCHP.
          Lifemark shall maintain any applicable licensures required to perform
          its payment activities hereunder.

     c.   Lifemark shall submit its payment administration process to LHS upon
          request. If Lifemark materially modifies its documented payment
          processes it will notify LHS not less than 30 days in advance of such
          modification taking effect.

     d.   Lifemark's payment administration processes shall, at a minimum:

          (1)  Administer claims payment under the Program in accordance with
               the terms of the contract between LHS and HSD and applicable laws
               and regulations of the Program; and,

          (2)  Utilize eligibility information furnished by HSD to determine any
               person's right to benefits; and,

          (3)  Promptly process claims and adjustments, determine whether
               requests for payment qualify for reimbursement in accordance with
               the terms of contract between LHS and HSD and applicable laws and
               regulations, and calculate and issue payment due; and

          (4)  Implement a contingency and recovery plan in the event that
               Lifemark's payment processing systems become inoperable.

     e.   LHS, its designee and applicable governmental regulatory authorities
          shall have the right to audit Lifemark's payment activities for the
          purpose of evaluating Lifemark's performance of its payment
          responsibilities hereunder. Reasonable advance notice shall be given
          to Lifemark prior to an audit and LHS shall bear the cost of such
          audit, if any. Lifemark shall cooperate with any such audits. LHS will
          provide Lifemark with a written report detailing the findings with
          respect to any such audits. If such audits reveal any material
          deficiencies, Lifemark shall submit a corrective action plan to LHS
          within 30 days of receipt of such findings. Such plan must be
          acceptable to LHS. Evidence that corrective actions have been
          implemented must be documented and submitted to LHS by Lifemark within
          90 days of Lifemark's receipt of the audit findings. All identified
          deficiencies shall be corrected as soon as possible but no later than
          6 months after Lifemark's receipt of the audit findings. If LHS
          determines that Lifemark cannot adequately satisfy its payment
          responsibilities hereunder, LHS may elect to assume such
          responsibility. If LHS elects to assume such responsibility, the
          parties shall renegotiate the rates set forth in the managed care
          provider agreement to the extent necessary and Lifemark shall
          cooperate and provide to LHS any information necessary to perform such
          activities.

     f.   Lifemark shall be responsible for the production of all applicable tax
          reporting documents (e.g.,
<PAGE>   29
          1099's) for Participating Providers. Such documents shall be produced
          in a format and within time frames set forth in applicable state and
          federal laws and regulations.

     g.   Lifemark shall produce any applicable explanations of benefits and/or
          remittance advises for Participating Providers. Any changes to
          Lifemark's standard Explanation of Benefits or Remittance Advice
          formats must be mutually agreed upon by both parties.

     h.   Lifemark shall develop and deliver training programs for Participating
          Providers, which outline Lifemark's billing and reimbursement
          processes. Lifemark shall make best efforts to ensure that
          Participating Providers avoid submitting requests for payment to LHS
          for those Covered Services rendered for which Lifemark has payment
          responsibility.

2.   SERVICE STANDARDS

     For the purposes of this Agreement, it is understood by both parties that
     Lifemark's ability to satisfy the service standards that follow are based
     on the Provider's responsibility to submit clean claims to Lifemark in a
     prompt manner. Lifemark will not be liable for any provider's failure to
     perform its duties in an acceptable manner.

     a.   With respect to Participating Providers entitled to reimbursement on a
          fee-for-service basis, Lifemark shall pay for Covered Services in
          accordance with the Matrix of Performance Standards set forth in
          Exhibit E, or any more rigorous standard established or required by
          any laws or regulations governing this activity.

     b.   With respect to the Performance Standards set forth in Exhibit E:

          (1)  Financial accuracy shall be measured during routinely conducted
               audits and calculated in accordance with the following formula:
               total value of dollars paid correctly divided by total dollars
               paid.

          (2)  Processing accuracy shall be measured during routinely conducted
               audits and calculated in accordance with the following formula:
               total number of claims processed without data errors, divided by
               the total number of claims audited.

     c.   In addition to the Performance Standards set forth in Exhibit E,
          Lifemark's agrees to the following standards:

          (1)  Lifemark shall ensure that less than [ ]* of remaining
               mail-on-hand are pended claims (excluding newborns) and there are
               no more than five percent [ ]* of pends over [ ]* days old.

          (2)  Lifemark shall establish and maintain a process to inventory,
               store and track incoming mail to ensure that mail on hand is less
               than 5 days old.

     d.   Lifemark shall establish and maintain a process acceptable to LHS,
          which tracks and audits the financial accuracy, data accuracy,
          timeliness and productivity of its payment administration activities.
          Lifemark shall report to LHS the results of any such audits in a
          format and in time frames acceptable to LHS and shall promptly correct
          any deficiencies identified.

     e.   Lifemark shall respond to general inquiries or claim adjustments in a
          timely manner and shall provide LHS with a contact person who will
          oversee the handling of these situations.

     f.   Lifemark shall maintain appropriate levels of telephone line staffing
          for the inquiry of claims status, claims payment and administration
          activities required to be performed hereunder and shall satisfy the
          following standards: (a) the overall abandonment rate shall be less
          than [ ]*; and (b) [ ]* of all calls shall be answered in less than
          [ ]* seconds. Some claims inquiry calls may be taken within the
          Provider Relations Department of Lifemark.


                        *Confidential Treatment Requested
<PAGE>   30
3.   DENIALS, REQUESTS FOR APPEALS AND MEMBER INQUIRIES AND COMPLAINTS

     a.   Lifemark's form payment denial letters shall be submitted to LHS for
          approval upon request, and the approved forms shall not be materially
          modified without LHS's prior written consent. All such denial letters
          shall contain the information required by applicable law .

     b.   LHS shall administer the final appeal process with respect to all
          appeals of payment determinations made hereunder. In connection with
          any such appeal, Lifemark shall assist and cooperate with LHS and
          shall promptly provide all documentation reasonably requested by LHS.
          LHS, or the applicable governmental authority (e.g. HSD), as
          applicable, shall have final decision making authority with respect to
          all appeals of payment determinations hereunder.

4.   SYSTEMS

     Lifemark's system must be capable of administering appropriate payment,
     adjustments and coordination of benefits in a timely manner and to perform
     all of Lifemark's other obligations under the Administrative Services
     Agreement related to payment administration activities.

5.   RECORDS AND REPORTING REQUIREMENTS

     a.   Lifemark shall maintain appropriate records with respect to all
          payment determinations made hereunder for the duration of the
          Administrative Services Agreement and for six years thereafter, or for
          any greater duration required by any applicable law or regulation. All
          requests for payment shall be maintained in the original form or on
          electronic media.

     b.   Lifemark shall comply with all applicable laws and regulations
          relating to the confidentiality of medical records and other
          individually identifiable information. In addition, this exhibit, all
          information provided by LHS to Lifemark pertaining to LHS's delegation
          of payment responsibility to Lifemark and all data or information made
          known to Lifemark relating to the services rendered to Members is
          confidential and proprietary information subject to the protections
          set forth in the confidentiality provision contained in the
          Administrative Services Agreement, the contract between LHS and HSD,
          and any applicable law or regulation. In the event that Lifemark
          receives a subpoena, civil investigative demand or other similar
          process requesting disclosure of such confidential and proprietary
          information, Lifemark shall immediately notify LHS of such subpoena,
          demand or process so as to afford LHS with an adequate opportunity to
          seek an appropriate protective order should it choose to do so.

     c.   Lifemark shall provide LHS with processed encounter data with respect
          to all services rendered by all providers to LCHP Members. Such
          encounter data shall be submitted electronically or by using magnetic
          or optical media. The format of the data shall be the
          industry-standard ANSI X.12 837 submission record layout or a format
          mutually acceptable to all parties. Data shall made available monthly.
          The contents of the data submission shall include all data items,
          which appear on the HCFA approved 1500 or 1450 (UB-92) forms, as
          determined by the type of service reported.

     d.   Lifemark shall provide any additional reports, which are reasonably
          requested by LHS and relate to Lifemark's performance of its payment
          responsibilities hereunder.

6.   QUALITY AND TRAINING

     a.   Lifemark shall maintain a quality program acceptable to LHS, which
          ensures that processing errors are identified, trended and used to
          provide feedback to payment analysts for corrective action.

     b.   Lifemark will maintain a training program acceptable to LHS to ensure
          adequate training for payment analysts on medical coding, benefits,
          provider reimbursement and system functionality.
<PAGE>   31
     c.   Lifemark shall implement a hiring process for hiring appropriately
          qualified payment analysts. Lifemark shall only utilize appropriately
          qualified trainers, quality reviewers and payment analysts.

Lifemark acknowledges receipt of LHS's above Standards for Delegation and, in
accordance with the managed care provider agreement between LHS and Lifemark,
will comply with the terms and conditions set forth herein.

Lifemark Corporation

By:      Rick Jelinek
         --------------------------------------------
         (Signature)


         --------------------------------------------
         (Print Name)

Its:
         --------------------------------------------
         (Title)

Date:
         --------------------------------------------
<PAGE>   32
                                    EXHIBIT F
                  MATRIX OF PERFORMANCE STANDARDS AND PENALTIES

<TABLE>
<CAPTION>
                                PERFORMANCE STANDARD                                     PENALTY                    COMMENTS
<S>                                                                                   <C>            <C>
MEMBER SERVICES CALL ABANDONMENT RATE:                                                [ ]* OF FEE
-        [ ]* or less of all calls abandoned (excluding the first 20 sec.) or         FOR PERIOD
-        [ ]* or less of all calls abandoned (including the first 20 sec.)

MEMBER SERVICES TIME TO ANSWER CALLS:                                                 [ ]* OF FEE
-        [  ]* of all calls answered within 30 seconds                                FOR PERIOD

REFERRAL PROCESSING TIMELINESS:                                                       [ ]* OF FEE
All referrals processed within two (2) Business Days                                  FOR PERIOD

AUTHORIZATION PROCESSING TIMELINESS:                                                  [ ]* OF FEE
-        [ ]* of all routine authorizations processed within two (2) business days    FOR PERIOD
-        All urgent authorizations processed within one (1) Business Day

HEALTH SERVICES CALL ABANDONMENT RATE:                                                [ ]* OF FEE
-        [ ]* or less of all calls abandoned (excluding the first 20 sec.) or         FOR PERIOD
-        [ ]* or less of all calls abandoned (including the first 20 sec.)

CLAIMS PROCESSING TIMELINESS:                                                         [ ]* OF FEE    ALL CLAIMS MEASURES TO INCLUDE
-        [ ]* of Clean Claims processed within 60 days                                FOR PERIOD     ALL (INCL. RESUBMISSIONS)
-        [ ]* of all Clean Claims processed with 90 days                                             CLAIMS LDS, HH, ETC

CLAIMS PROCESSING FINANCIAL ACCURACY:                                                 [ ]* OF FEE    ALL CLAIMS MEASURES TO INCLUDE
-        [  ]* of all claims paid error free                                          FOR PERIOD     ALL (INCL. RESUBMISSIONS)
                                                                                                     CLAIMS LDS, HH, ETC
PENDED CLAIMS:                                                                        [ ]* OF FEE    ALL CLAIMS MEASURES TO INCLUDE
-        Participating Providers: no more than [ ]* over [ ]* days                    FOR PERIOD     ALL (INCL. RESUBMISSIONS)
-        Non-Participating providers: no more than [ ]* over [ ]* days                               CLAIMS EXCLUDE NEWBORNS

PROVIDER RELATIONS ACTIVITIES:                                                        [ ]* OF FEE
-        Conduct orientation of new provider within [ ]* days                         FOR PERIOD
-        Visit PCP & hospitals [ ]* times/ year
-        Visit other high volume providers [ ]* times/ year
-        Participate in LHP sponsored workshops not less than [ ]*times/year
-        Publish/distribute Provider newsletter not less than [ ]* times/year

ENROLLMENT AND ELIGIBILITY DATA ENTRY TIMELINESS:                                     [ ]* OF FEE
-        All enrollments data entered into Lifemark Systems and available to          FOR PERIOD
         subcontractors within [ ]* working days of receipt of data from HSD
</TABLE>


          For purposes of this exhibit:

          1.   "Clean Claim" will mean a claim received on appropriate HCFA-1500
               or UB-92 claim form, complete, no additional documentation
               needed, and does not meet pend code criteria; and,

          2.   "Business Day" will mean the day(s) of the week that the Lifemark
               is conducting business, which excludes Saturdays, Sundays and
               holidays observed by Lifemark.


                        *Confidential Treatment Requested
<PAGE>   33
                      MEASUREMENT OF PERFORMANCE STANDARDS

MEMBER SERVICES CALL ABANDONMENT RATE:
          -    Reporting Period Monthly
          -    The Lifemark Automatic Call Distribution (ACD) System will
               monitor calls received by the Member Services call center and
               abandoned.
          -    Abandonment Rate will be measured by:
               Dividing the total number of calls received by the call center
               during the reporting period that result in the caller terminating
               the call before speaking to a Member Services representative by
               the total number of telephone calls received by the call center
               during the reporting period, and expressing that number as a
               percent; or,
               Dividing the total number of calls received by the call center
               during the reporting period that result in the caller terminating
               the call before speaking to a Member Services representative
               (excluding those calls that are abandoned within twenty seconds)
               by the total number of telephone calls received by the call
               center during the reporting period, and expressing that number as
               a percent.

MEMBER SERVICES TIME TO ANSWER CALLS:
          -    Reporting Period Monthly
          -    The Lifemark Automatic Call Distribution (ACD) System will
               monitor the elapsed time between the time calls come into the
               call center and the time calls are connected to a Member Services
               representative.
          -    The Time to Answer Calls will be determined by measuring the
               total elapsed time between the moment when callers select to
               speak Member Services representative and the time the callers are
               connected with a Member Services representative during the
               reporting period.

REFERRAL PROCESSING TIMELINESS:
          -    Reporting Period Monthly
          -    Referral Processing Timeliness will be determined by counting the
               number of Business Days from the Business Day that a Referral is
               received by Lifemark to and including the Business Day the
               Approved Referral is entered into the Lifemark system. - Lifemark
               will systematically select [ ]* of the total number of referrals
               processed during the reporting period to determine the percentage
               processed within [ ]* working days.

AUTHORIZATION PROCESSING TIMELINESS:
          -    Reporting Period Monthly
          -    Authorization Processing Timeliness will be determined by
               counting the number of Business Days from the Business Day that
               an Authorization request is received by Lifemark to and including
               the Business Day the Approved Authorization is entered into the
               Lifemark system.
          -    Lifemark will systematically select [ ]* of the total number of
               routine authorizations processed during the reporting period to
               determine the percentage processed within [ ]* working days.

HEALTH SERVICES CALL ABANDONMENT RATE:
          -    Reporting Period Monthly
          -    The Lifemark Automatic Call Distribution (ACD) System will
               monitor calls received by the Health Services call center and
               abandoned.
          -    Abandonment Rate will be measured by: Dividing the total number
               of calls received by the call center during the reporting period
               that result in the caller terminating the call before speaking to
               a Member Services representative by the total number of telephone
               calls received by the call center during the reporting period,
               and expressing that number as a percent; or,


                        *Confidential Treatment Requested

<PAGE>   34
          -    Dividing the total number of calls received by the call center
               during the reporting period that result in the caller terminating
               the call before speaking to a Member Services representative
               (excluding those calls that are abandoned within twenty seconds)
               by the total number of telephone calls received by the call
               center during the reporting period, and expressing that number as
               a percent.

CLAIMS PROCESSING TIMELINESS:
          -    Reporting Period Monthly
          -    Claims Processing Timeliness will be determined by counting the
               number of Business Days from the Business Day that a claim is
               received by Lifemark to and including the Business Day the claim
               is paid.
          -    Lifemark will systematically select three hundred (300) claims
               (150 HCFA -1500 claims, and 150 UB92 claims) processed during the
               reporting period for audit of Claims Processing Timeliness.
               Audits will be completed within [ ]* days after the end of a
               period being audited.

CLAIMS PROCESSING FINANCIAL ACCURACY:
          -    Reporting Period Monthly
          -    Claims Processing Financial Accuracy will be measured by
               subtracting the sum of the total dollars overpaid and the total
               dollars underpaid (without offsetting one against the other) from
               the total dollars paid and dividing that amount by the total
               dollars paid.
          -    Lifemark will systematically select three hundred (300) claims
               (150 HCFA -1500 claims, and 150 UB92 claims) processed during the
               reporting period for audit of Claims Processing Financial
               Accuracy. Audits will be completed within [ ]* days after the end
               of a period being audited.

PENDED CLAIMS:
          -    Reporting Period Monthly
          -    Lifemark will maintain an aged inventory of Pended Claims for
               Participating Providers and non-Participating provider.
          -    Lifemark will divide the number of pended claims for each
               category of provider by the total number of claims received
               during the reporting period (excluding newborns) and will provide
               a report of the of the current percent of Pended Claims by age in
               inventory.

PROVIDER RELATIONS ACTIVITIES:
          -    Reporting Period Quarterly
          -    Lifemark will maintain a log of the orientations given to new
               Participating Providers, including their effective date of
               Participation and the date on which the orientation was given.
               Lifemark will report the number of new providers and the number
               of orientations given in the reporting period.
          -    Lifemark will maintain a log of the Providers and the dates on
               which they receive a provider relations visit. Lifemark will
               report the number of visits to each PCP, hospital, and high
               volume providers during the reporting period . (High volume
               providers will be identified by the parties within [ ]* days of
               the effective date of the Administrative Services Agreement.)

ENROLLMENT AND ELIGIBILITY DATA ENTRY TIMELINESS:
          -    Reporting Period Monthly
          -    Lifemark will maintain a log of receipt of all enrollment files
               from HSD, date processed, date files posted to bulletin board for
               access by subcontractors and LHS. Lifemark will furnish the log
               to LHS within [ ]* days of end of the reporting period.


                        *Confidential Treatment Requested
<PAGE>   35
                                   EXHIBIT G:
              MATRIX OF REQUIRED REPORTS AND REPORTING FREQUENCIES
                      PART 1: HSD QUALITY ASSURANCE REPORTS
<PAGE>   36
                                   EXHIBIT G:
              MATRIX OF REQUIRED REPORTS AND REPORTING FREQUENCIES
                  PART 2: MONTHLY FINANCIAL/OPERATIONAL REPORT

THE FOLLOWING REPORTS ARE DUE TO LHS BY THE 3RD BUSINESS DAY OF EACH MONTH:
-        Pended Claims Report - Lovelace & Non-Lovelace
-        Shock Loss Report (Cases over $50,000)
-        Lag Schedule Reports
         -        Total Payments
         -        Payments to LHS Providers/Lovelace & Non-Lovelace
         -        Payments to Non-LHS Providers/ Lovelace & Non-Lovelace
         -        Non-LHS providers for all members by COS
         -        Payments to Non-LHS providers for Non-Lovelace Members by COS
         -        Payments to Non-LHS providers for Lovelace Members by COS
         -        Payments for IHS Members
                  (For purposes of penalties as described in Paragraph 7.C of
                  this Agreement, all Lag Schedule Reports shall be treated as
                  one)

THE FOLLOWING REPORTS ARE DUE TO LHS BY THE 4TH BUSINESS DAY OF EACH MONTH:
-        Membership/Revenue Report (age/sex adjusted)
-        Cash Report
-        Reinsurance Receivable Report - Lovelace & Non-Lovelace
-        Inpatient Days
-        A/R Reconciliation - IHS Deferred Revenue; Recoveries Receivable;
         Capitation Acute Receivable; Risk Pool Payable
-        Admits

THE FOLLOWING REPORTS ARE DUE TO LHS BY THE 10TH BUSINESS DAY OF EACH MONTH:
-        ACD Reporting (Provider, Member, Medical)
-        QI  indicators
-        Member Roster to Hotline
-        Member Enrollment report by region

THE FOLLOWING REPORTS ARE DUE TO LHS BY THE 10TH BUSINESS DAY OF A END OF A
QUARTER:
-         Denied Claims Report - Lovelace & Non-Lovelace

Monthly reports will be submitted by the due date, as shown above, of the month
following the activity.
<PAGE>   37
                                    EXHIBIT H
                            CONFIDENTIALITY AGREEMENT

     This agreement is entered into this day ____ of __________, 200__ by and
between LIFEMARK CORPORATION, its affiliated companies including but not limited
to Arizona Health Concepts, Inc. and Ventana Health Systems, Inc., or any other
company or activity managed by Lifemark Corporation (hereinafter referred to as
"COMPANY") and ________________ (hereinafter referred to as "EMPLOYEE").

RECITALS:

1.   COMPANY desires to protect its investment in confidential information,
     trade secrets, and in its other property.

2.   COMPANY considers the protection of its confidential information, trade
     secrets and its property to be critical and is therefore unwilling to hire
     anyone to work for it unless such person is willing to agree to the terms
     of this Agreement.

3.   The EMPLOYEE understands the importance this Confidentiality Agreement
     plays in his or her employment and is therefore willing to work for COMPANY
     under the terms of this Agreement.

NOW THEREFORE, IN CONSIDERATION of the mutual promises and conditions set forth
herein, the parties do hereby agree as follows:

1.   Confidential Information. The EMPLOYEE acknowledges that in the course of
     his or her employment, he or she will become acquainted with and will have
     access to trade secrets, confidential information, files, records, manuals,
     lists, forms, WAGE INFORMATION, COMPUTER PASSWORDS, and computer programs
     (collectively "Confidential Information"). Confidential Information shall
     include but is not limited to, any information or materials related to
     COMPANY's organizational structure, internal policy and procedure manuals,
     case management protocols and tools, utilization review/quality management
     protocols and tools, advertising/sales programs, financial results,
     anticipated premium capitation rates, computer system design, software
     source and/or object code, customer lists, provider lists, member/provider
     specific medical information, and any other information or materials which
     will give COMPANY an opportunity to obtain an advantage over its
     competitors or which COMPANY is ethically obligated to protect from
     unauthorized sources. None of the Confidential Information shall be deemed
     to be in the public domain.

2.   Agreement is Condition of Employment. The parties agree that the terms and
     conditions of this Agreement and the protection of COMPANY's Confidential
     Information is a condition of the EMPLOYEE's future and/or continued
     employment. The EMPLOYEE is not to reveal any of COMPANY's Confidential
     Information to any third party, within or outside COMPANY except to the
     extent required by his or her normal job duties. The EMPLOYEE agrees not to
     discuss or provide Confidential Information to anyone outside COMPANY or
     its affiliated entities including, without limitation, at conferences,
     seminars, meetings of professional or governmental organizations, or by
     publication in journals, or granting of interviews to journalists or other
     members of the news media.

3.   Protection of COMPANY's Property. All records, files, manuals, lists of
     customers, lists of accounts, blanks, forms, materials, supplies, computer
     programs, and other materials furnished to the EMPLOYEE by COMPANY or an
     affiliate of COMPANY, used by EMPLOYEE on behalf of COMPANY or an affiliate
     of COMPANY, or generated or obtained by EMPLOYEE during the course of his
     or her employment or any other work product produced or developed by the
     EMPLOYEE in the performance of his or her employment duties shall be and
     remain the property of the COMPANY. The EMPLOYEE acknowledges that this
     property is confidential and is not readily accessible to COMPANY's
     competitors. Upon termination of employment hereunder, the EMPLOYEE shall
     immediately deliver to COMPANY or its authorized representative, all
     property,
<PAGE>   38
     including all copies, remaining in the EMPLOYEE's possession or control.

4.   Enforcement of this Agreement. If the EMPLOYEE breaches or threatens to
     breach the provisions of this Agreement, COMPANY shall be entitled to an
     injunction restraining the EMPLOYEE from disclosing in whole or in part the
     Confidential Information, or from using any of COMPANY's property or the
     property of COMPANY's affiliates. Nothing herein shall be construed as
     prohibiting company from pursuing any other remedies available to it due to
     the breach or threatened breach by the EMPLOYEE, including the recovery of
     damages from the EMPLOYEE.

5.   Counterparts. The Agreement may be executed in one or more parts, all of
     which taken together shall constitute one instrument.

6.   Interpretation. Whenever any word is used in the Agreement in the masculine
     gender, it shall also be construed as being used in the feminine and neuter
     genders, and singular usage shall include the plural and vice versa, all as
     the context shall require.

7.   Marginal Headings. The marginal headings of the paragraphs of this
     Agreement are for convenience only, and are not to be considered a part of
     the Agreement or used in determining its content or context.

8.   Modification. Any modification or amendment of the Agreement shall be in
     writing and shall be executed by all parties.

9.   Partial Invalidity. If any provision of the Agreement is held to be invalid
     or unenforceable, all the remaining provisions shall nevertheless continue
     in full force and effect.

10.  Secession of Benefits. The provisions of the Agreement shall inure to the
     benefit of and be binding upon the parties hereto, their heirs, executors,
     administrators and assignees.

11.  Waiver. Any waiver by any party of a breach of any provision of the
     Agreement shall not operate as or be construed as a waiver of any
     subsequent breach thereof.

12.  Good Faith - Attorney's Fees and Costs. The parties desire that each raise
     only good faith disputes for arbitration and litigation. In the event of
     any action initiated by EMPLOYEE or COMPANY in connection with a breach of
     the terms of the Agreement, the prevailing party shall be entitled to
     recover from the losing party all of the prevailing party's court costs and
     reasonable attorney's fees.

13.  Applicable Law. The Agreement shall be subject to and governed by the laws
     of the State of Arizona, regardless of the fact that one or more of the
     parties now is or may become a resident of a different state. All lawsuits
     under this Agreement shall be filed in Maricopa County, Arizona.

In witness whereof, the parties have hereunto set their hand.

LIFEMARK CORPORATION                       EMPLOYEE

By:
      ---------------------------------    --------------------------------

Its:
      ---------------------------------