ex-10.9



 





Exhibit
10.9



STRATEGIC AGREEMENT




BY AND AMONG




CONNECTICUT GENERAL LIFE INSURANCE COMPANY




and




UNITED STATES PHARMACEUTICAL GROUP, LLC and

NATIONSHEALTH, INC.




as of




May 4, 2005




 


CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSION.



 









 





     This STRATEGIC AGREEMENT (this “Agreement”), dated as of May 4, 2005 (the “Effective Date”),
is made and entered into by and between Connecticut General Life Insurance Company, a Connecticut
corporation, (“CIGNA”), and UNITED STATES PHARMACEUTICAL GROUP, LLC, a Delaware limited liability
company, (“USPG”) and NATIONSHEALTH, INC., a Delaware corporation and the indirect owner of all of
the membership interest of USPG (“NationsHealth”).



     WHEREAS, the Medicare Prescription Drug Benefit program was established by Section 101 of the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (the “MMA”) and is codified
in Sections 1860D-1 through 1860D-41 of the Social Security Act (the “Act”) and created a new Part
D, known as the Voluntary Prescription Drug Benefit Program (hereinafter referred to as “Part D”);



     WHEREAS, CIGNA has submitted an application to the Centers for Medicare and Medicaid Services
(“CMS”) under Part D to become a Prescription Drug Plan (“PDP”) sponsor in each of the thirty-four
Part D regions designated by CMS;



     WHEREAS, subject to such approvals by CMS as may be necessary, CIGNA, USPG and NationsHealth
desire to enter into an agreement in the nature of a strategic alliance, pursuant to which USPG
would provide certain marketing, distribution, and enrollee service activities and expertise in
connection with CIGNA’s activities as a PDP sponsor and Medicare contractor;



     WHEREAS, in entering into the relationship contemplated herein, CIGNA is desirous of becoming
a shareholder and warrantholder of NationsHealth as contemplated in sections 3.02 and 3.03 of this
Agreement.



     NOW, THEREFORE, in consideration of the covenants set forth in this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:



ARTICLE I

SERVICES AND OBLIGATIONS OF USPG




     SECTION 1.01 General Responsibilities. USPG shall provide to CIGNA the services
(collectively, the “Services”) set forth in this Article I. The Services shall consist of the
activities enumerated in Sections 1.02 through 1.06, below. The Services shall be performed, at a
minimum, consistent with the timeliness, accuracy and quality standards set forth in CMS
instructions and guidelines, provided, however, that the Parties may agree to standards in
addition, or in excess of, those established by CMS.



     SECTION 1.02 Part D Capabilities. USPG will develop the systems and
infrastructure required to perform the Services in conformance with CMS regulations and guidance, as described in
Exhibit 1.02.



     SECTION 1.03 Marketing and Beneficiary Communication. USPG will provide marketing and
beneficiary communication services in conformance with CMS regulations and guidance, as described in Exhibit 1.03 and consistent with the standards of performance
described therein.



 









 





     SECTION 1.04 Enrollment Billing and Premium Collection. USPG will provide Enrollee
billing and collection services, including, but not limited to, Enrollee-specific premium billing,
and collection information in support of financial reporting and reconciliation processes, all in
conformance with CMS regulations and guidance, as described in Exhibit 1.04 and consistent
with the standards of performance described therein.



     SECTION 1.05 Enrollment and Eligibility. USPG will provide Enrollee management entry
point and servicing in conformance with CMS regulations and guidance, as described in Exhibit
1.05 and consistent with the standards of performance described therein. USPG will also
provide disenrollment management in conformance with CMS regulations and guidance, as described in
Exhibit 1.05 and consistent with the standards of performance described therein.



     SECTION 1.06 Enrollee Inquiries and Grievance Processing. USPG will be responsible
for Enrollee inquiries and grievance processing in conformance with CMS regulations and guidance,
as described in Exhibit 1.06 and consistent with the standards of performance described
therein.



     SECTION 1.07. NationsHealth ***. NationsHealth and/or USPG will fund the
NationsHealth *** described in Exhibit 1.07.



ARTICLE II

REPRESENTATIONS AND WARRANTIES OF CIGNA;

*** OF CIGNA




     SECTION 2.01 CIGNA hereby represents and warrants to USPG and NationsHealth as follows:



          (a) Corporate Status; Authorizations. CIGNA is a corporation duly incorporated,
validly existing and in good standing under the Laws of the State of Connecticut. CIGNA has the
corporate power and authority, and all licenses, permits or other authorizations required for CIGNA
to carry on its business as now conducted and as contemplated by this Agreement, except where the
failure to possess any such authority, authorization, licenses, permits or other authorizations
would not have a Material Adverse Effect. The execution, delivery and performance of this
Agreement by CIGNA have been duly authorized by all necessary corporate action of CIGNA and this
Agreement constitutes the valid and binding obligations of CIGNA enforceable against it in
accordance with their terms, except as may be limited by bankruptcy, insolvency, moratorium or
other similar Laws affecting creditors’ rights generally, and subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding in equity or at law).




          (b) Part D Qualification. CIGNA is a risk bearing entity licensed to provide health
insurance benefits in each of the fifty states and the District of Columbia; has, or will develop,
a pharmacy network that meets, or will meet, CMS access standards for a PDP sponsor; and otherwise
qualifies for one or more Part D contracts.




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          (c) Part D Contract Requirements. CIGNA will comply with all of the requirements
imposed by any Part D Contract it executes with CMS, provided, however, that CIGNA’s
failure to comply with any Part D Contract requirements will not be grounds for termination of this
Agreement unless CMS terminates the Part D Contract based on CIGNA’s failure to comply.




          (d) State Licensure. CIGNA will continuously maintain all appropriate state insurance
licenses, permits, or qualifications for the provision of its services to Enrollees under the PDP.




     SECTION 2.02 ***. CIGNA will develop the systems and infrastructure described in
Exhibit 2.02.



ARTICLE III

COMPENSATION AND INVESTMENT




     SECTION 3.01 Determination of Compensation. The compensation to USPG for its Services
as described in this Agreement shall be determined as described in Exhibit 3. 01.



     SECTION 3.02 Common Stock Purchase. Fourteen (14) days after the NationsHealth Funding
Date, CIGNA shall purchase from NationsHealth, and NationsHealth shall issue to CIGNA, 303,030
shares of the common stock of NationsHealth (the “NHRX Common Shares”) at a purchase price of Six
Dollars and Sixty Cents ($6.60) per share, for a total aggregate purchase price of One Million Nine
Hundred Ninety-nine Thousand Nine Hundred Ninety-eight Dollars ($1,999,998.00). The purchase of
the Common Shares and the Warrant (as defined below) shall be governed by a Securities Purchase
Agreement by and between NationsHealth and CIGNA, substantially in the form attached hereto as
Exhibit 3.02, and which is being executed contemporaneously herewith.



     SECTION 3.03 Issuance of Warrants to CIGNA. Fourteen (14) days after the
NationsHealth Funding Date, NationsHealth shall issue to CIGNA a Warrant (the “Warrant”) to
purchase 2,936,450 shares of the common stock of NationsHealth (the “Warrant Shares”) at an
exercise price of Six Dollars and Sixty Cents ($6.60) per share, in accordance with the terms and
conditions of a Warrant Agreement, substantially in the form attached hereto as Exhibit
3.03 (the “Warrant Agreement”), and which is being executed contemporaneously herewith.



     SECTION 3.04 Registration Rights. The NHRX Common Shares and the Warrant Shares (when
issued) shall become subject to a Registration Rights Agreement between NationsHealth and CIGNA,
substantially in the form attached hereto as Exhibit 3.04, which NationsHealth and CIGNA
shall execute upon the purchase and issuance of the NHRX Common Shares.



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ARTICLE IV

ADDITIONAL AGREEMENTS




     SECTION 4.01 Legal and Regulatory Compliance.



     (a) Each Party shall carry out its duties and obligations under this Agreement in material
compliance with all applicable Laws. USPG shall provide Services under this Agreement to Enrollees
in accordance with the terms and conditions of this Agreement and in a manner consistent with the
requirements of the Medicare statutes, regulations, CMS guidance and CIGNA policies, including but
not limited to CIGNA’s CMS-required compliance programs with respect to Medicare Part D, as amended
from time to time, and training thereon, provided, however, that such policies and
compliance programs, as amended, shall have been furnished in writing to USPG which shall have a
reasonable period of time for their implementation. With respect to CIGNA policies other than
CIGNA’s CMS-required compliance program, CIGNA shall not require compliance by NationsHealth in
excess of that required from CIGNA’s other Part D subcontractors. USPG shall maintain all
applicable licenses required to carry out its business activities and shall further comply with
CIGNA policies and procedures and all applicable laws and regulations to ensure that its Services
are provided in a culturally competent manner to Enrollees, including those with limited English
proficiency or reading skills, diverse cultural and ethnic backgrounds, and physical or mental
disabilities.



     (b) In the event that USPG is required by regulatory authorities to obtain additional licenses
necessary to permit it to perform the Services, or USPG determines that it is required to obtain
such licenses, or in the event that CIGNA concludes in good faith after reasonable investigation
that USPG is required to obtain such licenses, and USPG does not possess such licenses, then USPG
shall have a period of ninety (90) days within which to file applications for such licenses. If,
after one hundred twenty (120) days from the last day of such ninety (90) day period USPG does not
possess at least seventy-five (75%) percent of such licenses, then CIGNA shall be entitled to
terminate this Agreement For Cause pursuant to Section 6.05(a), provided, however, that in
such instance the notice requirement and cure period contained in Section 6.05(a) shall not apply.



     (c) In the event that USPG is ordered or otherwise formally requested by regulatory
authorities to cease performing any of the Services, then USPG shall cease performing such Services
in accordance with such order or formal request.



     (d) If either of the events described in subsections (b) or (c), above, occurs, CIGNA may,
pursuant to Section 7.04(a)(iv), directly or through a third party, solicit and/or service Part D
Enrollees in the state(s) or jurisdictions(s) with respect to which USPG is unable to so solicit
and/or service because of its lack of licensure or the application of a governmental order or
formal request that it cease such activities in such state(s) or jurisdiction(s).



     (e) To the extent that USPG seeks to obtain applicable licenses, even if it is uncertain
whether Governmental Authorities require, or will require such licenses, then USPG’s *** in
obtaining such licenses shall be *** under this Agreement.



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     SECTION 4.02 Inspection, Audit and Acceptance.



          (a) CIGNA, its Affiliates, and CMS shall have the right, directly or through their designated
auditors, at all reasonable times to inspect, audit, or otherwise evaluate the work performed or
being performed by USPG, its supporting policies and procedures, including those related to data
security, disaster recovery and back-up, as well as all data supplied, in the performance of this
Agreement. If any inspection or evaluation is made by CIGNA or CMS on the premises of USPG or any
of USPG’s suppliers, USPG or its suppliers shall provide at no additional charge all reasonable
facilities and assistance for the safety and convenience of the personnel conducting the inspection
or evaluation. The Secretary of Health and Human Services, the Comptroller General of the U.S.
Government Accountability Office, or their designees shall have the right during the term of this
Agreement and for a period of ten (10) years after termination of this Agreement or the date of the
audit completion, whichever is later, to audit, evaluate, or inspect any books, contracts, medical
records, documents, papers, enrollee documentation, and other records of USPG, related entity,
subcontractor, or transferee that pertain to any aspect of the Services provided under this
Agreement, or as the Secretary may deem necessary to enforce the applicable Medicare Contract
between CMS and CIGNA. Any audit, evaluation, or inspection covered by this Section 4.02(a) shall
be at no additional charge to CIGNA, but each Party will be responsible for its own labor and out
of pocket expenses. USPG and NationsHealth further represent, warrant, and covenant to CIGNA that,
in connection with the performance of the Services hereunder, USPG and/or NationsHealth will not
hold Enrollees liable for fees that are the responsibility of CIGNA.




          (b) All Services provided by USPG for CIGNA, its Affiliates, and the Enrollees shall be in
accordance with the requirements of this Agreement, including all schedules, annexes, exhibits and
attachments, and shall be subject to rejection if such Services are nonconforming. No inspection
or evaluation performed by CIGNA, its Affiliates, or CMS shall in any way relieve USPG of its
obligation to furnish all required Services in strict accordance with the requirements of this
Agreement. If any of the Services do not conform to the requirements of this Agreement, CIGNA
shall have the right to require USPG to take such steps as are reasonably necessary to bring its
performance into compliance including, but not limited to, requiring USPG to perform the work or
services again in conformity with the applicable requirements at no cost to CIGNA or CMS.




     SECTION 4.03 Representations and Covenants of USPG and NationsHealth.



          (a) Contracting Capacity. USPG and NationsHealth represent, warrant and covenant
that (1) as to themselves and their principals within the last five years, and (2) their employees
and subcontractors that will be assigned to perform Services hereunder within the five-year period
preceding their initial performance hereunder, to USPG and NationsHealth’s Knowledge: (i) are not
debarred, suspended, proposed for debarment or suspension, or otherwise excluded or declared
ineligible for the award of contracts by or participation in any Federal program, department or
agency; (ii) have not been charged with, convicted of or had a civil judgment rendered against them
for: commission of a fraud or a criminal offense in connection with obtaining, attempting to
obtain, or performing a public (Federal, state, or local) contract or subcontract; dishonesty or
breach of trust including but not limited to violation of Federal or state antitrust statutes,
commission of a fraud including but not limited to mail fraud or false repre

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sentations, violation of fiduciary relationship, securities offenses, embezzlement, theft, forgery,
bribery, falsification or destruction of records, making false statements, tax evasion, or
receiving stolen property; (iii) have not been indicted for, or otherwise criminally or civilly
charged by a government entity (Federal, state, or local) with, commission of any of the offenses
enumerated in this Section; (iv) have not had one or more public agreements or transactions
(Federal, state, or local) terminated for cause or default; and (v) have not been excluded from
participation for a federal program, including but not limited to, Medicare, Medicaid, federal
health care programs or federal behavioral health care programs pursuant to Title XI of the Social
Security Act, 42 U.S.C. § 1320a-7 and other applicable federal statutes. USPG and NationsHealth
also represent, warrant, and covenant to CIGNA that USPG and/or NationsHealth have or will duly
obtain all intellectual property rights necessary to perform its obligations under this Agreement.
USPG and NationsHealth’s certification in this Section is a material representation of fact upon
which CIGNA relied when this Agreement was entered into by the Parties. USPG and/or NationsHealth
shall provide immediate written notice to CIGNA if, at any time during the term of this Agreement,
USPG and/or NationsHealth learns that its certification in this Section was erroneous on the
Effective Date of this Agreement or has become erroneous by reason of new or changed circumstances.
If the circumstances causing such certification to be erroneous are curable, then USPG and
NationsHealth shall have forty-five (45) days to cure such circumstances. Furthermore, if the
circumstances causing such certification to be erroneous relate to a non-compliant employee or
subcontractor in connection with Section 4.03(a)(2), above, then USPG and NationsHealth shall be
deemed to have timely cured such circumstances, so long as USPG and/or NationsHealth completely
removes such employee or subcontractor from performing any Services hereunder immediately upon
learning that such employee or subcontractor is non-compliant with this Section. Subject to the
foregoing cure provisions, if it is later determined that USPG’s and/or NationsHealth’s
certification in this Section was erroneous on the Effective Date of this Agreement or has become
erroneous by reason of new or changed circumstances, in addition to other remedies available to
CIGNA, CIGNA may terminate this Agreement for convenience, at its sole discretion.




          (b) Corporate Status; Authorizations. NationsHealth and USPG, respectively, are a
corporation and a limited liability company duly incorporated or organized, validly existing and in
good standing under the Laws of the state of Delaware. NationsHealth and USPG have the corporate
power and authority, and all licenses, permits or other authorizations required to carry on their
businesses as now conducted and as contemplated by this Agreement, except where the failure to
possess any such authority, authorization, licenses, permits or other authorizations would not have
a Material Adverse Effect and except as set forth on Exhibit 4.03(b). The execution,
delivery and performance of this Agreement by NationsHealth and USPG have been duly authorized by
all necessary corporate action and this Agreement constitutes the valid and binding obligations of
NationsHealth and USPG enforceable against them in accordance with their terms, except as may be
limited by bankruptcy, insolvency, moratorium or other similar Laws affecting creditors’ rights
generally, and subject to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).




     SECTION 4.04 Warranting and Certification of Data. Certain of the data (the “CMS
data”) furnished by USPG or NationsHealth in connection with its performance of its obligations
under this Agreement will be used by CIGNA to obtain payments from CMS, to support



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CIGNA’s bids for Medicare Program renewals and contracts with CMS in future years, or both. CIGNA
and CMS will be acting in reliance on the accuracy, completeness, and truthfulness of any CMS data
USPG or NationsHealth provides. USPG and NationsHealth agree to warrant the accuracy, completeness,
and truthfulness of the CMS data it furnishes pursuant to this Agreement to CMS and to indemnify
and hold CIGNA harmless for any payments made by CIGNA and any damages or liabilities caused by the
negligence or willful misconduct of USPG or NationsHealth or that of their employees or agents in
connection with providing inaccurate, incomplete, or untruthful CMS data. Any CMS data that are
provided pursuant to this Agreement on a monthly, quarterly, or annual basis shall be certified by
the duly authorized Chief Executive Officer, the Chief Financial Officer or other officer of USPG
who reports directly to NationsHealth’s Chief Executive Officer or Chief Financial Officer. With
respect to any data furnished by USPG and/or NationsHealth that CIGNA or its Affiliates will
incorporate into data certified to CMS such certification shall state:





“I hereby certify that the data, information and statements set forth herein are
accurate, complete, truthful and current to the best of my knowledge, information, and
belief after reasonable investigation with respect thereto, and are made in good faith.



	 	 	 	 	 
	 	Signed:





Certifying Officer”

 	 
	 	 	 
	 	 	 
	 	 	 
	 




     SECTION 4.05 Compliance with Grievance Requirements. If and to the extent that USPG
processes Enrollee grievances, then USPG shall cooperate and comply with all requirements of
Medicare and CIGNA regarding the processing of Enrollee grievances as defined under Part D and
accompanying CMS regulations, including the obligation to provide information (including medical
records and other pertinent information) to CIGNA within the time frame reasonably requested for
such purpose, and shall process such grievances in accordance with Exhibit 1.06.



     SECTION 4.06 Privacy and Security of Certain Data.



     (a) The Parties expect to be responsible for obtaining, analyzing, storing, transmitting, and
reporting Protected Health Information, as defined in regulations, 45 CFR Parts 160 and 164,
implementing the Health Insurance Portability and Accountability Act of 1996, Pub. L. 104-191
(“HIPAA”). The Parties agree to comply with all applicable Federal and State privacy and security
laws including but not limited to the requirements of HIPAA and its implementing regulations and 42
CFR § 423.136 as more fully described in the Business Associate Agreement in the form attached as
Exhibit 4.06 to be executed by the Parties with respect to Enrollee data and other
protected information.



     (b) The parties recognize that USPG and NationsHealth are able to provide important
health-related products and services that may add value for Enrollees, but which may not be part of
CIGNA’s plan of benefits, that may be part of an Enrollee’s treatment, or provide a kind of
alternative treatment or therapy that may be helpful to Enrollees. Accordingly, and in a manner
consistent with applicable state and federal law, including HIPAA, CIGNA agrees that it will work
with USPG and NationsHealth over the next one hundred twenty (120) days to develop a plan that: (i)
directly provides Enrollees with information concerning USPG and NationsHealth



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Part B Supplies in a form approved by USPG and NationsHealth, and (ii) seeks to obtain appropriate
authorizations from Enrollees authorizing CIGNA to share Protected Health Information with USPG and
NationsHealth such that USPG and NationsHealth may provide appropriate information to Enrollees
regarding USPG and NationsHealth Part B Supplies. Any plan to directly provide Enrollees with
information concerning USPG and NationsHealth products shall be subject to any applicable
regulatory and marketing requirements, including but not limited to those set forth in 42 C.F.R. §
423.50 that may require the approval of CMS, as determined in the reasonable discretion of CIGNA.
In the event that CMS disapproves any plan to directly provide Enrollees with information
concerning USPG and NationsHealth products, such disapproval shall not affect or change any of the
Parties’ respective rights and obligations under the Agreement, and such disapproval shall not
constitute a breach of the Agreement by CIGNA, or give rise to any right of termination or
rescission or amendment of the Agreement in any manner by any Party.




     SECTION 4.07 Assignment and Subcontracting. Except as described on Exhibit
4.07, USPG and NationsHealth are solely responsible for the provision of the Services and their
other obligations under this Agreement. Neither USPG nor NationsHealth may assign or transfer, in
whole or in part, these obligations, any interest in this Agreement or any claim under this
Agreement. Neither the entirety nor any part of this Agreement or any task order may be further
subcontracted by USPG or NationsHealth without the prior written consent of CIGNA.



     SECTION 4.08 Advance Consent to Assignment Among Affiliates of CIGNA. USPG and
NationsHealth consent in advance to CIGNA’s assignment or transfer of all or part of its rights and
obligations of under this Agreement to any CIGNA subsidiary or Affiliate (including any successor
company of CIGNA pursuant to a reorganization by CIGNA and one or more of its Affiliates). Any
such assignment and transfer shall be effective upon delivery of a written notice of assignment by
CIGNA to USPG or NationsHealth and shall be subject to Section 11.05 of this Agreement.



     SECTION 4.09 Delegation of Duties. The parties acknowledge that CIGNA oversees and is
accountable to CMS for any functions or responsibilities described in CMS’ Medicare Program
regulations and, upon becoming a sponsor of the PDP, will monitor the performance of USPG on an
ongoing basis. USPG and NationsHealth shall perform their obligations under this Agreement in a
manner consistent with and in compliance with CIGNA’s contractual obligations under CIGNA’s
Medicare contract with CMS. In the event that CIGNA delegates to USPG or NationsHealth any function
or responsibility imposed pursuant to CIGNA’s contract with CMS, such delegation shall be subject
to the requirements set forth in 42 C.F.R.§ 423.505(i)(4), as they may be amended over time. In
addition, any delegation by USPG or NationsHealth of functions or responsibilities imposed pursuant
to this Agreement shall be subject to the prior written approval of CIGNA and shall also be subject
to the requirements set forth in 42 C.F.R. § 423.505(i)(4), as they may be amended over time. USPG
and NationsHealth shall promptly supplement and amend their permitted subcontracts to include CMS’
requirements applicable to subcontractors. USPG and NationsHealth agree that CIGNA or its
Affiliates may, at their option, outsource various functions of its Medicare contract with CMS.



     SECTION 4.10 Document Retention, Audit Rights. Each Party shall retain, in accordance
with standard and accepted practices, such financial, accounting, and administrative re



8









 




cords related to the services it is obligated to provide under this Agreement for such period
as is necessary to comply with applicable Law, but in no event less than ten (10) years after the
date such documents and information are created or obtained, or longer under the conditions
enumerated in 42 CFR§ 423.505(e)(4). Subject to applicable Law, during the term of this Agreement
CIGNA, on one hand, and USPG and NationsHealth, on the other hand, may reasonably conduct (or have
conducted on its behalf), at its own expense, one audit each year of the other Party with respect
to relevant documents and data in the possession of such other Party and with reasonable access to
relevant personnel of such other Party upon reasonable notice solely for the purposes of confirming
compliance with obligations undertaken pursuant to this Agreement including those that are required
to be reported to an applicable government agency; provided, however, that such
audits may be performed more frequently to the extent necessary to respond to a request by CMS or
another government agency. The terms of the confidentiality provisions set forth in Article VII
hereof shall apply to any such audits. Such audit rights will be available following termination of
this Agreement to the extent necessary to respond to a request by a customer, Governmental
Authority, provider or other relevant party and for a Party’s need to manage litigation and to
determine compliance with this Agreement or applicable Laws.




     SECTION 4.11 Ownership of Assets. Notwithstanding any other provision of this
Agreement, each Party shall maintain ownership of its own assets.



     SECTION 4.12 Organization of Committee. The parties shall organize the Committee
to facilitate the implementation and operating efficiency of the activities described in this
Agreement, which Committee shall meet monthly or at such intervals as the Parties may agree.



ARTICLE V

SEPARATE PRODUCT OFFERINGS: FUTURE ENDEAVORS




     SECTION 5.01 Sale of Other Products and Services by USPG or NationsHealth. CIGNA
acknowledges that NationsHealth and USPG are in the business of selling other services and supplies
including, but not limited to, Part B Supplies reimbursable by the Medicare Program. Nothing in
this Agreement is intended to foreclose USPG or NationsHealth from conducting such other businesses
or offering such products and services, including, but not limited to, Part B Supplies.
Notwithstanding the foregoing in no event shall NationsHealth or USPG market any service or supply
on a targeted basis directly to Enrollees of CIGNA Employer Groups. Notwithstanding anything in
this Agreement to the contrary, except as provided for in Section 5.03, in no event shall
NationsHealth or USPG, in the course of providing services under this Agreement or in connection
with an Enrollee interaction initiated with or by NationsHealth or USPG concerning coverage or
services under the PDP, solicit, refer, recommend or direct Enrollees to utilize NationsHealth or
USPG for any Medicare Part B goods or services or other goods or services. Nothing contained in
this Agreement shall apply to current or prospective enrollees in the CIGNA Healthcare of Arizona
Medicare Advantage Prescription Drug Plan or to any other Medicare Advantage Prescription Drug Plan
that CIGNA or its Affiliates, or NationsHealth and USPG, may acquire, offer, administer, insure or
otherwise provide, or to non-Part D products or services offered by CIGNA or NationsHealth and/or
USPG, provided, however, that CIGNA agrees that it will not directly, or through a contract
on CIGNA’s behalf, market the Part B Supplies of a Part B supplier other than NationsHealth to
Persons who are enrolled in Medicare Part B, except as such activities are conducted by CIGNA as of
the Effective Date.



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     SECTION 5.02 Prohibition on Discount Card Marketing to Part D-Eligible Enrollees.
From *** through *** NationsHealth and USPG shall not market any drug discount card directly to
Part D-eligible individuals.



     SECTION 5.03 Future Endeavors. The Parties agree that there may be additional
opportunities to jointly offer products and services *** such products and services, in a manner
that capitalizes on the strengths and efficiencies of each Party. In connection with potential
future endeavors, the Parties agree to the undertakings described in Exhibit 5.03.



ARTICLE VI

AGREEMENT CONTINGENT;

TERM AND TERMINATION




     SECTION 6.01 Agreement Contingent on CMS Acceptance of CIGNA Applications. This
Agreement is expressly contingent upon CMS’ acceptance of the applications submitted by CIGNA and
the award of Part D contracts to CIGNA.



     SECTION 6.02 Agreement Contingent on NationsHealth Funding of *** and NationsHealth
***.



     (a) Required NationsHealth Funding. By the later of (i) the date that is *** after
the Effective Date or (ii) the date that is *** after CMS approves the PDP (the “NationsHealth
Funding Date”) NationsHealth and/or USPG will have received *** in funds available to support the
Services, or NationsHealth and/or USPG will have entered into a binding credit agreement or loan
agreement with a term of at least twelve (12) months with a lender or other financial institution
providing NationsHealth and/or USPG with total proceeds or borrowing availability, together with
any funds realized from the sale of equity or from other sources, of at least *** (exclusive of
financing expenses) to fund the *** and the NationsHealth *** as necessary to make the PDP fully
operational. The proceeds of such loan agreement or credit agreement shall be available to be
drawn down by USPG and/or NationsHealth on the NationsHealth Funding Date. The *** to be provided
by NationsHealth and/or USPG on the NationsHealth Funding Date shall be evidenced by either of the
following:




     (i) the deposit by NationsHealth or USPG of the sum of at least *** in an escrow
account subject to an escrow agreement, control agreement, or similar arrangement
limiting withdrawals to the funding of *** and/or NationsHealth ***; or




     (ii) the execution by NationsHealth and/or USPG of a binding credit agreement or
loan agreement with MHR Capital Partners LP, or any of its Affiliates, or a financial
institution rated “A” or better by Standard and Poor’s, or by another financing source
reasonably acceptable to CIGNA, which credit agreement or loan agreement shall expressly
permit the draw down of proceeds of at least *** (less any proceeds realized by
NationsHealth or USPG from the sale of equity or from other sources) to pay for the ***
and the NationsHealth ***.



     (b) Elections Available to CIGNA in the Absence of Funding by NationsHealth. If, on
the NationsHealth Funding Date, NationsHealth and/or USPG, for any reason, have not obtained



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cash proceeds or borrowing availability, together with any funds realized from the sale of equity
or from other sources, of at least *** (exclusive of financing expenses) or are not able to
commence actual payment of the *** and the NationsHealth *** as necessary to make the PDP fully
operational, then CIGNA shall be entitled to, in its sole discretion, elect one or more of the
following items (i), (ii), (iii) or (iv):





     (i) terminate this Agreement pursuant to Section 6.05(a), below, provided,
however, that the notice requirement and cure period contained therein shall
not apply;




     (ii) remove all exclusivity obligations by CIGNA to NationsHealth and/or USPG,
including, without limitation, the commitment described in Section 7.04(a), below;




     (iii) terminate, without any liability to CIGNA, that certain Securities
Purchase Agreement dated May 4, 2005, by and between NationsHealth and CIGNA, which
termination shall not affect the Warrant Agreement dated May 4, 2005 executed by
NationsHealth for the benefit of CIGNA or the Warrants issued by NationsHealth to
CIGNA pursuant thereto; or,




     (iv) modify the terms of this Agreement to provide all of the following:




	 	(A)	 	CIGNA shall be responsible for *** of the first
*** of the *** for 2005.
	 
	 	(B)	 	CIGNA may reduce the monthly settlement payment
due to NationsHealth as described in Exhibit 3.01 by a fee
reduction equal to *** until such time as NationsHealth and/or USPG’s
portion of the 2005 *** is recovered, and for an additional ***
thereafter. Such fee reduction shall be applied until the earlier of
the date described in the preceding sentence or the termination of this
Agreement.
	 
	 	(C)	 	The Advanced Expense Payment to NationsHealth
shall increase from *** of the estimated *** for the month in question
to *** of the estimated *** for such month.





     SECTION 6.03 Term of this Agreement. The initial term of this Agreement shall be
from the Effective Date until December 31, 2009.



     SECTION 6.04 Termination. Each Party may terminate this Agreement For Cause by
providing written notice to the other Party, provided, however, that neither of USPG or
NationsHealth may cause a termination of this Agreement by providing a notice of termination to the
other. If For Cause notice is given regarding any of the events set forth in Section 6.05(a), (b),
(c), (d), and (h) the effective date of termination shall be either (i) the expiration of the
applicable cure period, or (ii) if there is no applicable cure period, forty-five (45) days after
the date written notice of termination is received by the other Party. In the event a For Cause
notice is given regarding any of the events set forth in Section 6.05(e), (f) or (g), the effective date of
termination will be the date that such notice is received by the other Party.



11









 





          SECTION 6.05 For Cause. “For Cause” termination shall mean the following:




          (a) As to a nonbreaching Party, the other Party’s breach of any of
the terms




          and conditions of this Agreement that causes a Material Adverse Effect on the non-breaching Party,
and remains uncured following written notice and a reasonable opportunity to cure, which shall not
be less than ninety (90) days from the date of written notice of such breach.




          (b) As to any Party, if the PDP, at the end of then most recent CMS contract year, has fewer
than *** Enrollees (excluding CIGNA Employer Group members and Dual Eligibles).




          (c) As to any Party, if the then-most recently completed two CMS contract years cumulative
experience results in a Net Loss.




          (d) As to a nonbreaching Party, if a default occurs on a payment
required to




          be made by the breaching Party relating to the PDP.




          (e) As to a nonbreaching Party, if a Party is adjudicated to have committed fraud in a civil
proceeding or otherwise settles a civil fraud action involving the United States for a material
amount, or a criminal action is filed by a governmental agency against a Party arising out of, or
relating to, the PDP, or a Party is excluded or debarred from participation in any federal or state
health care program pursuant to 42 U.S.C. § 1320a-7.




          (f) As to a nonbreaching Party, if a Party: (i) is unable to pay its debts generally as
they become due; (ii) makes a voluntary assignment for the benefit of creditors; (iii) is declared
insolvent in any proceeding; (iv) commences a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself, any of its property, assets or
debts under any bankruptcy, insolvency or other similar laws now or hereafter in effect or
petitions or applies to any tribunal for the appointment of a receiver, liquidator, custodian or
trustee for such Party under any bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, liquidation, or dissolution law of any jurisdiction now or hereafter in effect; or (v) is
named as a debtor party in such petition, application, case or proceeding and it indicates its
approval thereof, consents thereto, acquiesces therein or acts in furtherance thereof, or if such
petition, application, case or proceeding is not dismissed or stayed for a period of sixty (60)
days after it is commenced, or is the subject of any order appointing any such receiver,
liquidator, custodian or trustee or approving the petition in any such case or proceeding.




          (g) If a Party undergoes a change in control which shall be defined as a transfer of all,
or substantially all, of the Party’s assets, or a transfer of more than (i) *** as to CIGNA, or
(ii) *** as to NationsHealth or USPG, of the voting control of their respective securities, in a
single transaction or a series of transactions intended to effect a change in control of such Party
then the Party not undergoing such change in control may deem a For Cause termination to have
occurred, provided, however that a reorganization by a Party and one or more of its
Affiliates for administrative or similar purposes shall not be deemed a change in control and
provided further that as to USPG and/or NationsHealth this provision shall be limited to a
change in control such

12









 








that USPG and/or NationsHealth would be substantially controlled by a health plan or pharmacy
benefit provider or another entity that substantially competes with, or operates a business that
substantially conflicts with, CIGNA.




          (h) As to any Party, as to which any existing Law governing the Part D program is changed,
or if a new Law relating to Part D is enacted or promulgated, and the effect of such changed or new
Law would cause a Material Adverse Effect on such Party.




     SECTION 6.06 Optional Extension of Counter-Party Performance in Connection With Early
Termination.



          (a) Early Termination for Failure to Meet Enrollee Threshold, Net Loss. Following
the termination of this Agreement prior to the initial term described in Section 6.03 pursuant to
Section 6.05 (b) or (c) above, either party shall, at the election of the other party, agree to
honor the terms and conditions of this Agreement through December 31 of the year following the year
in which the termination is effective, or such shorter time as the party requesting performance may
specify, provided however, that if such a continuation of performance creates a substantial
financial hardship to USPG, then the parties shall meet and confer in good faith concerning
potential compensation to ***.




          (b) Early Termination for Other Reasons. Following the termination of this
Agreement prior to the initial term described in Section 6.03 pursuant to Section 6.05 (a),
(d),(e), (f),(g) and (h), above, the party subject to a termination For Cause shall, at the
election of the other party, agree to honor the terms and conditions of this Agreement through
December 31 of the year following the year in which the termination is effective, or such shorter
time as the party requesting performance may specify, provided however, that if such a
continuation of performance creates a substantial financial hardship to USPG, then the parties
shall meet and confer in good faith concerning potential compensation to ***.




     SECTION 6.07 Effect of Termination or Expiration of Agreement Upon Enrollees; Contingent
Financial Settlement; Option to Acquire Servicing Assets; No Loss of Rights in Cardholder Data; No
Preclusion on Marketing by USPG and NationsHealth.



          (a) Post-Termination Re-Enrollment. Upon termination or expiration of this
Agreement other than with respect to a termination by CIGNA of NationsHealth and/or USPG pursuant
to Sections 6.05(a),(d), (e) (except that for purposes of this Subsection 6.07(a) the criminal
action referred to in (e) must result in a conviction of NationsHealth) and (f), if NationsHealth
or USPG (or NationsHealth or USPG and a third party or parties) is the sponsor or is a contractor,
in a material capacity, for a CMS-approved PDP (the “NationsHealth PDP”) and *** within thirty
(30) days of termination of this Agreement (or such longer period as the Parties may agree) ***
that otherwise would be automatically *** for the then-next open ***, then the Parties will effect
such *** and any other activities necessary to support such *** in accordance with terms of such
approval and applicable Law, including, without limitation, HIPAA, pursuant to which, CIGNA shall
provide NationsHealth and/or USPG with *** to the extent necessary to enable NationsHealth and/or
USPG to *** the NationsHealth PDP *** as of the date of termination of this Agreement. ***:




13









 









     (i) *** a prescription card program offered or operated by NationsHealth
and/or USPG prior to October 1, 2005, or *** Part B Supplies from NationsHealth
prior to October 1, 2005, *** of the Parties no later than June 30, 2006.




     (ii) *** (*** through a procedure agreed upon by the Parties, except where ***
is impracticable or inappropriate, such as where it would result in *** Part D
plans) *** of CIGNA Employer Groups.



          (b) Contingent Financial Settlement. If the NationsHealth PDP is precluded by
CMS or by applicable Law from ***, above, or CMS does not grant its express authorization or
approval as described in (a), above, then, at the end of each calendar quarter *** following the
termination of ***:





     (i) NationsHealth shall pay CIGNA *** of CIGNA’s Employer Groups *** in any
NationsHealth PDP.




     (ii) CIGNA shall pay NationsHealth or USPG ***:




     (1) *** otherwise would have been *** the NationsHealth PDP under
subsection ***, above;




     (2) *** where USPG and/or NationsHealth *** pursuant to Section
4.01(b), above; and,




     (3) *** in the CIGNA PDP for ***.




     (iii) For (A) *** not identified in subsections *** and ***, above,(for
example, *** as a consequence of ***) and (B) excluding CIGNA Employer Group ***
NationsHealth shall consist of *** for those *** (as to which CIGNA shall exercise
reasonable diligence, but no less effort than it would with respect to ***) in
CIGNA’s PDP for such plan year, less *** (as to which NationsHealth and/or USPG
shall exercise reasonable diligence, but no less effort than it would with respect
to ***) in the NationsHealth PDP. In the event that *** in the NationsHealth PDP
*** in CIGNA’s PDP, then NationsHealth shall ***.


          (c) Option to Acquire Servicing Assets. In the event of a termination of this
Agreement by CIGNA For Cause pursuant to subsections (a), (d), (e), (f) and (g) of Section 6.05,
above, or in the event that USPG and NationsHealth change their business operations such that they
no longer offer the Services, then CIGNA shall have the option to acquire, which option must be
exercised within thirty (30) days of the final date on which USPG renders Services pursuant to this
Agreement, the assets required to deliver all or part of the Services described in Exhibits
1.02, 1.03, 1.04, 1.05, and 1.06 . CIGNA shall have the option
to acquire such physical assets from USPG and/or NationsHealth at their fair market value.
NationsHealth may decline to sell such physical assets to CIGNA, in which instance CIGNA may
acquire similar assets from third party vendors. NationsHealth and/or USPG will provide know how,
expertise, and personnel resources to assist CIGNA, without cost to CIGNA, in replicating the
functionality of such assets. Prior to the effective date of such termination, CIGNA may notify
USPG or NationsHealth of CIGNA’s intent to exercise such option so that the transfer of such assets
will occur




14









 







simultaneously with the termination. Further, in the event of such termination, CIGNA shall
have the option to acquire from USPG and/or NationsHealth, without cost to CIGNA, the intangible
assets required to deliver all or part of the Services, including system specifications and
configurations, software code, training and policy manuals, marketing plans and other information
used by USPG or NationsHealth in the performance of the Services described in the foregoing
exhibits through a grant by USPG and/or NationsHealth to CIGNA of a royalty-free perpetual license
for such intangible assets to the extent of the authority of USPG and/or NationsHealth to grant
such a license.




          (d) No Loss of Rights in Cardholder Data; No Preclusion on Marketing by USPG and
NationsHealth. No termination of this Agreement shall be deemed by CIGNA to constitute a
transfer or assignment by USPG or NationsHealth to CIGNA of data developed by USPG or NationsHealth
concerning participants in NationsHealth’s prescription card program or to constitute a prohibition
on marketing activities by NationsHealth or USPG with respect to such participants.




          (e) Inapplicability of Post-Termination *** Arrangements and
Contingent Financial Settlement to CIGNA as a Result of a Termination For Cause by
NationsHealth. Upon the termination of this Agreement by NationsHealth pursuant to Sections
6.05(a), (d), (e) (except that for purposes of this Subsection 6.07(e) the criminal action referred
to in (e) must result in a conviction of CIGNA) and (f), then those provisions of subsections 6.07
(a) and (b), above, entitling CIGNA to post-termination *** and a contingent financial settlement,
shall not apply to CIGNA.




ARTICLE VII

CONFIDENTIALITY; USE OF INTELLECTUAL PROPERTY;

ENROLLEE DATA; EXCLUSIVITY




     SECTION 7.01 Confidentiality. Prior to entering into this Agreement the Parties have
each committed substantial resources to developing the arrangements described in this Agreement.
The Parties specifically acknowledge that to induce each other to enter into this Agreement each
Party specifically confirms that all Confidential Information received from the other party at any
time shall remain confidential during the term of this Agreement and shall be used only in
furtherance of the business relationships contemplated by the provisions of this Agreement. In
this regard, each Party agrees that any Confidential Information provided to it will only be
provided to its employees on a “need to know” basis, and will be treated with at least as much care
as the receiving party provides for its own Confidential Information (and in no event treated with
any less than a high degree of confidentiality.)



     SECTION 7.02 Use of Proprietary Information.



          (a) Notwithstanding anything to the contrary in this Agreement, NationsHealth and USPG
reserves all right, title and interest in and to, and all control of the use of NationsHealth or
USPG’s copyrights, patents, service marks, trademarks, designs, logos, brand names, Internet “URL”
addresses, World Wide Web sites and all right, title and interest in and to any trade names,
fictitious business names, and all other intellectual property rights (collectively,
“NationsHealth/USPG Intellectual Property”), including all right, title and interest, including any




15









 







license rights it has, in and to the name of NationsHealth or USPG, and any derivation thereof
and including NationsHealth/USPG New Intellectual Property (as defined below). CIGNA shall not,
and shall ensure that CIGNA’s Affiliates do not, use any of NationsHealth/USPG Intellectual
Property in materials supplied to Employer Groups, prospective Employer Groups, Enrollees or
otherwise without NationsHealth’s and USPG’s express and specific prior written consent. To the
extent applicable, CIGNA hereby assigns, transfers and conveys irrevocably and perpetually to
NationsHealth or USPG all of its worldwide right, title and interest in and to any and all
NationsHealth/USPG Intellectual Property. “NationsHealth/USPG New Intellectual Property” means all
developed materials and other intellectual property that (a) are conceived, created or developed in
connection with or in the course of providing the Services and are modifications, enhancements,
adaptations or derivative works of or derived from or based on the NationsHealth Data or any
NationsHealth/USPG Intellectual Property in all cases, regardless of who makes such modifications,
enhancements, adaptations and derivative works but specifically excluding modifications,
enhancements, adaptations or derivative works of or derived from or based on the CIGNA Data or any
CIGNA Intellectual Property, or (b) are conceived, created or developed to address, execute or
embody a NationsHealth/USPG-specific product, service, business process, including any
modifications, enhancements, adaptations and/or derivative works of or based on any of the
foregoing, in all cases, regardless of who conceives, creates, develops or makes any of the
foregoing. For the avoidance of doubt, “NationsHealth/USPG New Intellectual Property” does not
include CIGNA Intellectual Property generally applicable to CIGNA’s business.




          (b) Notwithstanding anything to the contrary in this Agreement, CIGNA and its Affiliates
reserve all right, title and interest in and to, and all control of the use of, CIGNA’s copyrights,
patents, service marks, trademarks, designs, logos, brand names, Internet “URL” addresses, World
Wide Web sites and all right, title and interest in and to any trade names, fictious business names
and all other intellectual property rights (collectively “CIGNA Intellectual Property”) including
all right, title and interest, including any license rights it has, in and to the names “CIGNA,”
“CIGNA HealthCare,” “CIGNA Companies,” “Connecticut General Life Insurance Company,” and any
derivation thereof and including CIGNA New Intellectual Property. USPG and NationsHealth shall not,
and shall ensure that USPG’s and NationsHealth’s Affiliates do not, use any CIGNA Proprietary
Information in materials supplied to Employer Groups, prospective Employer Groups, Enrollees or
otherwise without CIGNA’s prior express and specific prior written consent. To the extent
applicable, USPG and NationsHealth hereby assign, transfer and convey irrevocably and perpetually
to CIGNA all of their worldwide right, title and interest in and to any and all CIGNA Intellectual
Property. “CIGNA New Intellectual Property” means all developed materials and other intellectual
property that (a) are conceived, created or developed in connection with or in the course of
providing the Services and are modifications, enhancements, adaptations or derivative works or
derived from or based on the CIGNA Data or CIGNA Confidential Information or any CIGNA Intellectual
Property in all cases, regardless of who makes such modifications, enhancements, adaptations and
derivative works of or derived from or based on the CIGNA Data or any CIGNA Intellectual Property
but specifically excluding modifications, enhancements, adaptations and derivative works derived
from or based on the NationsHealth Data or any NationsHealth /USPG Intellectual Property, or (b)
are conceived, created or developed to address, execute or embody a CIGNA-specific product,
service, business process, including any modifications, enhancements, adaptations and/or derivative
works of or based on any of the foregoing, in all cases, regardless of who conceives, creates,
develops or makes any of

16









 








the foregoing. For the avoidance of doubt, “CIGNA New Intellectual Property” does not include
NationsHealth/USPG Intellectual Property generally applicable to USPG’s or NationsHealth’s
business.




     SECTION 7.03 Data. The use and management of CIGNA Data by USPG and/or NationsHealth
shall be as described in Exhibit 7.03. The use and management of NationsHealth Data by
CIGNA shall be as described in Exhibit 7.03.



     SECTION 7.04 Exclusivity.



          (a) Exclusive Rights of USPG. USPG shall be CIGNA’s exclusive provider of the
Services described in Article I of this Agreement that pertain to Part D Enrollees, provided,
however, that this shall not prevent CIGNA from engaging in, or acquiring capabilities, to
engage in the following:




               (i) CIGNA shall have the option to service its Part D Enrollees in CIGNA’s Employer Groups
through its own servicing operations or through servicing operations provided by a third party;




               (ii) CIGNA may provide its pharmacy benefit management capability to third parties on a
“leased” or fee basis;




               (iii) CIGNA may provide its pharmacy benefit management capability and risk taking capacity
to third parties who market and service products within discrete local markets and which may
include a direct-to-consumer Part D program as described under Section 101 the MMA; and




               (iv) CIGNA may, directly or through a third party, solicit and/or service Part D
Enrollees if USPG is legally prohibited from marketing the PDP to enrollees of its non-endorsed
prescription card and Medicare Part B programs, or is unable to perform the Services described in
Article I of this Agreement, or experiences (or NationsHealth experiences) a change in control as
described in Section 6.05(g), or in connection with circumstances described in Section 4.01(d)
(relating to USPG’s failure to possess certain licenses or the issuance to USPG of a cease and
desist order or similar formal regulatory request.)




               (v) CIGNA may use a third party to market the CIGNA PDP to prospective Enrollees provided
that CIGNA offers to USPG the opportunity to perform, and USPG agrees to perform, all Services
under this Agreement with respect to such prospective Enrollees except for the marketing services
that are provided by such third party. If USPG agrees to perform the Services, then such
prospective Enrollees, to the extent that they become Enrollees, will be counted in the Parties’
calculations as described in Exhibit 3.01. If USPG rejects CIGNA’s offer as described
above, then USPG shall not perform Services for CIGNA with respect to such Enrollees and such
Enrollees shall not be counted in the Parties’ calculations as described in Exhibit 3.01.




          (b) Exclusive Rights of CIGNA CIGNA shall be the exclusive PDP sponsor for which
USPG or NationsHealth provides any Services as described in Article I of this Agreement.




17







 








ARTICLE VIII

SURVIVAL; INDEMNIFICATION




     SECTION 8.01 Survival of Representations and Warranties. Notwithstanding any
investigation made by or on behalf of the Parties hereto, the results of any such investigation, or
the Knowledge of USPG or NationsHealth or Knowledge of CIGNA (regardless of how obtained), the
representations and warranties contained in Articles II and IV hereof and the indemnification
obligations of the Parties with respect thereto, and the provisions of Article IX, shall survive
the expiration or termination of this Agreement for a period of one (1) year following such
expiration or termination, subject to the terms and conditions of this Article VIII.



     SECTION 8.02 Mutual Indemnification.



          (a) Subject to the terms and conditions of this Article VIII, USPG and NationsHealth shall
hold harmless and indemnify CIGNA and its Affiliates from any claims, losses, damages, liabilities,
costs, expenses or obligations, including reasonable attorney’s fees and expenses related to the
performance of this Agreement (collectively, “Losses”) that arise out of or result from (i) the
breach of any representation or warranty of USPG under this Agreement, or (ii) the negligence or
willful misconduct of USPG, its officers, employees and agents in the performance of USPG’s
obligations under this Agreement.




          (b) Subject to the terms and conditions of this Article VIII, CIGNA shall hold harmless and
indemnify USPG and NationsHealth from any Losses that arise out of or result from (i) the breach of
any representation or warranty of CIGNA under this Agreement, or (ii) the negligence or willful
misconduct of CIGNA, its officers, employees and agents in the performance of CIGNA’s obligations
under this Agreement.




     SECTION 8.03 Method of Asserting Third-Party Claims.



          (a) As used in this Agreement, “Notifying Party” refers to any Party who claims entitlement to
indemnification under Section 8.02 for losses resulting from a third-party claim. The
“Indemnifying Party” refers to the Party obligated to indemnify the Notifying Party under Section
8.02.




          (b) In the event any Notifying Party is made a defendant in or party to any claim instituted
by any third party for which the Notifying Party may be entitled to indemnification under Section
8.02, the Notifying Party shall give the Indemnifying Party prompt notice thereof. The failure to
give such notice shall not affect any Notifying Party’s ability to seek reimbursement unless, and
only to the extent that, such failure has a detrimental effect on the Indemnifying Party’s ability
to defend successfully the claim. The Indemnifying Party shall be entitled to contest and defend
such claim, provided that the Indemnifying Party: (i) has a reasonable basis for concluding that
such defense may be successful; and (ii) diligently contests and defends such claim.




          (c) Notice of the intention so to contest and defend shall be given by the Indemnifying Party
to the Notifying Party within fifteen (15) business days after the Notifying Party’s notice of such
claim. The Indemnifying Party shall use reputable attorneys of its choosing

18









 








to conduct such contest and defense. The Notifying Party shall be entitled at any time, at its
own cost and expense (which expense shall not constitute a Loss for which the Notifying Party can
be indemnified under Section 8.02), to participate in such contest and defense and to be
represented by attorneys of its own choosing. The Notifying Party shall give the Indemnifying
Party notice that it intends to participate in such contest and defense.




          (d) If the Notifying Party elects to participate in such defense, the Notifying Party shall
cooperate with the Indemnifying Party in the conduct of the defense. Whether or not the Notifying
Party elects to participate in such defense, neither the Notifying Party nor the Indemnifying Party
may concede, settle or compromise any claim without notifying the other Party and without the
Indemnifying Party’s consent if the settling party is the Notifying Party, which consent shall not
be unreasonably withheld.




          (e) Notwithstanding any provision in this Agreement to the contrary, if: (i) a claim from a
third party seeks relief in the form of a material obligation of the Notifying Party other than an
obligation to pay monetary damages; (ii) the subject matter of a claim relates to the ongoing
business of the Notifying Party, which claim, if decided against the Notifying Party, would
adversely effect the ongoing business (including, without limitation, requiring any material change
in the business practices of the Notifying Party) of the Notifying Party; or (iii) the Notifying
Party would not be fully indemnified under Section 8.02 or released with respect to such claim,
then, in each such case, the Notifying Party shall be entitled to contest and defend such claim,
the expense of which shall constitute a Loss for which the Notifying Party can be indemnified under
Section 8.02 (and the Indemnifying Party may participate); provided, however, that
any settlement or compromise shall require the consent of the Indemnifying Party, which consent
shall not be unreasonably withheld, and, if the Notifying Party does not contest and defend such
claim, the Indemnifying Party shall then have the right to contest and defend (but not settle) such
third party claim.




          (f) Any dispute between the Parties about the applicability of any Party’s indemnification
rights or obligations under Section 8.02 or the method of asserting claims under this Section 8.03
shall be resolved in accordance with the dispute resolution provisions set forth in Article IX.




     SECTION 8.04 Limitations on Indemnification. Except as set forth in Article IX, the
rights set forth in Section 8.02 shall be each Party’s sole and exclusive remedies against the
other Party hereto for any Losses. No Party shall be entitled to any recovery under this Agreement
for its own special, consequential, incidental or punitive damages. The limitations set forth in
this Section 8.04 shall not apply to any Losses that have resulted proximately from any fraudulent
act of the Indemnifying Party or its directors, officers, employees, agents or representatives.



     SECTION 8.05 Insurance. During the term of this Agreement, the Parties shall each
maintain adequate insurance related to the operation of their respective businesses and their
respective obligations under this Agreement.



19









 





ARTICLE IX

DISPUTE RESOLUTION




     SECTION 9.01 Disputes. This Article IX sets forth the sole source of remedies
available to the Parties with regard to any and all disputes between them arising in connection
with this Agreement (hereinafter referred to as “Disputes”) including all questions of
arbitrability, the existence, validity, scope or termination of this Agreement or any term thereof;
provided, however, that the Parties agree that money damages may not be an adequate
remedy for any breach of the provisions of this Agreement and that a Party may, in its discretion,
apply to a court of law or equity of competent jurisdiction located in a venue set forth in Section
11.09 for specific performance and injunctive relief in order to enforce or prevent any violations
of this Agreement and any Party against whom such proceeding is brought hereby waives the claim or
defense that such Party has an adequate remedy at law and agrees not to raise the defense that the
other Party has an adequate remedy at law. The Parties shall work together in good faith to resolve
any and all Disputes. Any Disputes that the Parties are unable to satisfactorily resolve by
discussion and negotiation between themselves in good faith and within a thirty (30) day period
from the time notice of the Dispute is provided to the other Party shall be referred to the
Committee. The Committee shall use reasonable business efforts to resolve the Dispute within
thirty (30) days of receiving written notice of the Dispute, or such other period of time as
mutually agreed between the Parties. The Committee acting by unanimous consent shall have the
authority to waive the Dispute; designate specific corrective or alternative action; set a time
period for certain performance; take other mutually agreeable action or submit the matter to
arbitration, provided, however, that the Committee shall have no authority to amend the
terms of this Agreement, which may only be accomplished in accordance with the provisions of this
Agreement.



     SECTION 9.02 Commencing Arbitration. If the Committee is unable to resolve any such
Dispute or agree upon appropriate action within thirty (30) days following the date one Party sent
written notice of the Dispute to the Committee, or such other period of time as mutually agreed
between the Parties, and if a Party wishes to pursue the Dispute, such Party may thereafter submit
the Dispute to binding arbitration in accordance with the American Arbitration Association’s
Procedures for Large, Complex Commercial Disputes, as they may be amended from time to time (see
http://www.adr.org). Unless otherwise agreed to in writing by the Parties, the Party wishing to
pursue the Dispute must initiate the arbitration within one year after the date on which the
Dispute was submitted to the Committee or shall be deemed to have waived its right to pursue the
Dispute in any forum. Any arbitration proceeding under this Agreement shall be conducted in
Hartford, Connecticut. The arbitrator(s) may construe or interpret but shall not vary or ignore the
terms of this Agreement and shall be bound by controlling Law. The arbitrator(s) shall have no
authority to award special, consequential, incidental or punitive damages.



     SECTION 9.03 Decision Binding; Federal Arbitration Act. The decision of the
arbitrator(s) regarding the Dispute will be binding, and judgment on the award may be entered in
any court having jurisdiction thereof. The Parties acknowledge that because this Agreement affects
interstate commerce, the Federal Arbitration Act applies.



     SECTION 9.04 Waiver; Survival. In the event any court determines that this
arbitration procedure is not binding or otherwise allows litigation involving a Dispute to proceed,
the Parties hereby waive any and all right to trial by jury in, or with respect to, such
litigation. This Article IX shall survive any termination of this Agreement.



20









 





ARTICLE X

DEFINITIONS




     SECTION 10.01 Defined Terms.



     When each of the following terms is used in this Agreement it shall have the meaning stated
below:



     “Affiliate” with respect to any Person means a Person that directly or indirectly, through one
or more intermediaries, Controls, is controlled by, or is under common control with, the first
mentioned Person.



     “CIGNA Data” means, collectively, all data and information (a) relating to providers,
enrollees, and customers of CIGNA, or (b) CIGNA’s Confidential Information, or (c) CIGNA’s
Intellectual Property, or (d) to which USPG or NationsHealth have access by or through CIGNA in
connection with the provision of the Services, or (e) any and all knowledge, experience or know-how
gained by CIGNA during the course of this Agreement.



     “Committee” means a committee composed of up to three (3) representatives from each of USPG
and CIGNA that is charged with coordinating activities under this Agreement, adopting an operating
budget, approving business strategies and marketing plans, developing pricing strategies (subject
to CIGNA’s final approval), dispute resolution, the use of branded materials pertaining to any
Party, and such other matters as the Parties may agree are appropriate for oversight or
implementation by the Committee.



     “Confidential Information” means information about a Party’s customers, business practices and
procedures, and the proprietary business information of a Party.



     “Contract” means any written or oral contract, agreement, commitment, insurance policy,
arrangement or understanding.



     “Control” (including the terms “controlled by” and “under common control with”) means the
possession, directly or indirectly or as member or trustee, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ownership of stock or as
member or trustee, by Contract or credit arrangement or otherwise.



     “Domiciled” means the locality in which an Employer Group’s principal executive offices are
located.



     “Dual Eligibles” means persons who are eligible for both Medicare and Medicaid.



     “Employer Group” means any employer, labor union, Governmental Authority or other legally
organized group of individuals, and the covered dependents of the persons associated therewith, or
an entity which directly or indirectly contracts to provide a prescription drug benefit, including
an employer-sponsored nonstatutory customized Medicare “wrap” or PDP program.



21









 





     “Enrollee” or “Part D Enrollee” means each eligible persons enrolled directly, or indirectly,
in a CIGNA-sponsored PDP.



     “Governmental Authority” means any government or political subdivision thereof, whether
federal, state or local (including counties and cities), or any court, agency, commission,
department, district, or other instrumentality of any such government or political subdivision.



     “Knowledge of USPG and NationsHealth” means the actual knowledge of the individuals set forth
on Exhibit 10.01(a) as such knowledge has been obtained in the normal conduct of the
business.



     “Knowledge of CIGNA” means the actual knowledge of the individuals set forth on Exhibit
10.01(b). as such knowledge has been obtained in the normal conduct of the business.



     “Law” means the common law and any statute, ordinance, code or other law, rule, regulation,
order, standard, requirement or procedure enacted, adopted, promulgated, applied or followed by any
Governmental Authority with proper jurisdiction over the Parties, or the activities of the Parties.



     “Material Adverse Effect” means any change, effect, fact, event or circumstance that,
individually or when taken together with all such other changes, effects, facts, events or
circumstances is or may reasonably be expected to be materially adverse to the condition (financial
or otherwise), results of operations, business, properties, prospects, assets, liabilities, or
operations of a Party’s business, as the case may be, or to the ability of a Party to consummate
the transactions contemplated by this Agreement.



     “Medicare Program” means, collectively, the programs created by Congress in the Act, including
without limitation, the implementation of the Medicare Part D Prescription Drug Benefit Program,
including any regulations or CMS pronouncements and any future amendments.



     “NationsHealth Data” means, collectively, (a) all data and information concerning customers,
participants, and prospects of USPG or NationsHealth, excluding Part D-specific Data developed in
connection with this Agreement, or (b) NationsHealth’s or USPG’s Confidential Information, or (c)
NationsHealth/USPG Intellectual Property, or (d) any and all knowledge, experience or know-how
gained by NationsHealth or USPG during the course of this Agreement.



     “Net Loss” means ***.



     “Part B Supplies” means medical supplies consisting of, but not limited to, prescription
drugs, durable medical equipment, diabetes supplies, oxygen or other respiratory supplies, and
ostomy supplies and any related services that are furnished by the supplier to Medicare
beneficiaries on an outpatient basis and that are reimbursed under Part B of the Medicare program.



     “Parties” means USPG, NationsHealth, and CIGNA and its Affiliates.



     “Person” means an individual, corporation, partnership, association, limited liability
company, trust, unincorporated organization, Governmental Authority or other entity or group (as
defined in Section 13(d) of the Securities Exchange Act of 1934, as amended).



22









 





     “Tax” means any federal, state, county, local, foreign or other tax (including, without
limitation, income taxes, premium taxes, excise taxes, sales taxes, use taxes, gross receipts
taxes, franchise taxes, ad valorem taxes, severance taxes, capital levy taxes, transfer taxes,
withholding, employment and payroll-related taxes, property taxes and import duties), and includes
interest, additions to tax assessments, fines and penalties with respect thereto.



ARTICLE XI

GENERAL PROVISIONS




     SECTION 11.01 Notices. All notices and other communications given or made pursuant
to this Agreement shall be in writing and shall be deemed to have been duly given or made as of the
date delivered, mailed or transmitted to the other party’s facsimile number, and shall be effective
upon receipt, if delivered personally, the next business day if sent by reputable overnight express
courier, charges prepaid, or, if mailed, three (3) days after deposit with the United States Postal
Service, certified mail, return receipt requested, postage prepaid, to the Parties at the following
addresses (or at such other address for a Party as shall be specified by like changes of address)
or upon receipt if sent by electronic transmission to the facsimile number specified below
(provided a confirmation copy is sent by reputable overnight express courier, charges prepaid):



If to USPG or NationsHealth:



Glenn Parker, M.D.

NationsHealth, Inc.

13650 NW 8th Street

Suite 109

Sunrise, Florida 33325

Facsimile: 954-903-5008



With a copy to:



Ira J. Coleman, P.A.

McDermott Will & Emery

201 South Biscayne Boulevard

Suite 2200

Miami, Florida 33131-4336

Facsimile: 305-347-6500



Tracy M. Schmidt

General Counsel/EVP Regulatory Operations

NationsHealth, Inc.

13650 NW 8th Street, #109

Sunrise, Florida 33325

Facsimile 954-903-5252



23









 





If to CIGNA:



Mr. David Russell

CIGNA HealthCare, S-330

900 Cottage Grove Road

Hartford, Connecticut 06152—2202

Facsimile: 860-226-5683



With a copy to:



Rhonda M. Karlin, Esquire

Senior Counsel

CIGNA HealthCare, S-201

900 Cottage Grove Road

Hartford, Connecticut 06152—2202

Facsimile: 860-226-7222



     SECTION 11.02 Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of this Agreement.



     SECTION 11.03 Severability. If any term or other provision of this Agreement is
finally adjudicated by a court of competent jurisdiction to be invalid, illegal or incapable of
being enforced by any Law, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to
modify this Agreement , as the case may be, so as to effect the original intent of the Parties as
closely as possible in an acceptable manner to the end that transactions contemplated hereby are
fulfilled to the extent possible.



     SECTION 11.04 Entire Agreement. This Agreement (together with any Exhibits and
Schedules hereto and thereto) constitute the entire agreement of the Parties and supersede all
prior agreements and undertakings, both written and oral, between the Parties with respect to the
subject matter hereof. Each Party acknowledges that nothing in this Agreement or any other
materials presented to such Party in connection with the transaction contemplated by this Agreement
constitutes legal or tax advice to such Party. The Parties have consulted such legal and tax
advisors as they, in their sole discretion, have deemed necessary or appropriate in connection with
this Agreement.



     SECTION 11.05 Assignment. Any Party may assign its rights and duties hereunder only
to a wholly-owned or wholly-controlled subsidiary or Affiliate; provided, however,
that as a condition to any assignment, the assignor shall remain liable to perform, or to cause its
assignee to perform, all of the assignor’s obligations under this Agreement.



     SECTION 11.06 Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each Party and their respective successors and permitted assigns, and
nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person
any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.



     SECTION 11.07 Construction of Terms. Whenever used in this Agreement, a singular
number shall include the plural and a plural the singular. Pronouns of one gender shall include



24









 




all genders. References herein to articles, sections, paragraphs, subparagraphs or the like
shall refer to the corresponding articles, sections, paragraphs, subparagraphs or the like of this
Agreement, as the case may be. The words “hereof,” “herein,” and terms of similar import shall
refer to this entire Agreement. Whenever used in this Agreement, the use of the terms “including,”
“included,” “such as,” or terms of similar meaning, shall not be construed to imply the exclusion
of any other particular elements.




     SECTION 11.08 No Strict Construction. The language used in this Agreement shall be
deemed to be the language chosen by the Parties to express their mutual intent, and no rule of
strict construction shall be applied against any Party.



     SECTION 11.09 Governing Law; Jurisdiction; Waiver of Jury Trial.



          (a) Except to the extent that each of the Parties is governed by the Laws of its domiciliary
state, this Agreement shall be construed and enforced in accordance with the internal Laws of the
State of Connecticut.




          (b) The jurisdiction and venue for any request, motion or other action for injunctive relief,
specific performance and other equitable relief brought by any Party hereto pursuant to this
Agreement shall properly lie in any federal court of competent jurisdiction located in Hartford,
Connecticut. By execution and delivery of this Agreement, each Party hereto irrevocably submits to
the exclusive jurisdiction of such courts for itself and in respect of its property with respect to
such action. The Parties irrevocably agree that venue would be proper in such court, and hereby
waive any objection that such court is an improper or inconvenient forum for the resolution of such
action. The Parties further agree that the mailing by certified or registered mail, return receipt
requested, of any process required by any such court shall constitute valid and lawful service of
process against them, without necessity for service by any other means provided by statute or rule
of court.




     SECTION 11.10 Amendment. This Agreement may not be amended except by an instrument in
writing signed by the Parties, except that in the event that this Agreement or any Exhibit does not
contain a particular provision required by the Laws governing the Part D program, or any provision
of this Agreement or an Exhibit conflicts with such Laws or regulations, then this Agreement and
any Exhibits, as applicable, shall be deemed amended to comply with the Laws governing the Part D
program and any conflicting provision shall be deemed stricken and such amendment shall be
effective immediately upon the date that such Law becomes effective.



     SECTION 11.11 Waiver. At any time a Party may (a) extend the time for the performance
of any of the obligations or other acts of another Party, (b) waive any inaccuracies in the
representations and warranties of another Party contained in this Agreement or in any document
delivered pursuant to this Agreement and (c) waive compliance by another Party with any of the
agreements or conditions contained in this Agreement. Any such extension or waiver shall be valid
only if set forth in an instrument in writing signed by the Party or Parties to be bound thereby.
It is agreed that no delay or omission to exercise any right, power or remedy accruing to any
Party, upon any breach, default or noncompliance by any other Party under this Agreement shall
impair any such right, power or remedy, nor shall it be construed to be a waiver of any such
breach, default or noncompliance, or any acquiescence therein, or of or in any similar breach,



25









 




default or noncompliance thereafter occurring. It is further agreed that any waiver, permit,
consent or approval of any kind or character on any Party’s part of any breach, default or
noncompliance under this Agreement or any waiver on such Party’s part of any provisions or
conditions of this Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this Agreement afforded to any
Party shall be cumulative and not alternative.




     SECTION 11.12 Counterparts. This Agreement may be executed via facsimile in one or
more counterparts, and by the different Parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall constitute one and
the same agreement.



     IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date first
written above by their respective officers duly authorized.



SIGNATURES APPEAR ON FOLLOWING PAGE




26









 








	 	 	 	 	 
	 	UNITED STATES PHARMACEUTICAL GROUP, LLC

 	 
	 	By /s/ Glenn M. Parker
 	 
	 	Its Chief Executive Officer	 
	 	 	 
	 
	 	NATIONSHEALTH, INC.

 	 
	 	By /s/ Glenn M. Parker
 	 
	 	Its Chief Executive Officer	 
	 	 	 
	 
	 	CONNECTICUT GENERAL LIFE INSURANCE COMPANY

 	 
	 	By /s/ Jonathan N. Ruben
 	 
	 	Its Chief Financial Officer	 
	 	 	 
	 



27









 






	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 



EXHIBIT 1.02




PART D CAPABILITIES



USPG shall establish and maintain throughout the term of this Agreement the necessary systems and
infrastructure in order to perform its obligations under this Agreement in accordance with CMS and
CIGNA requirements reasonably necessary to support the PDP. Specifically, USPG shall establish and
maintain:





	A.	 	Connectivity:






	 	1.	 	to CMS via the *** to send and receive enrollment information to and from CMS for
processing;
	 
	 	2.	 	to CIGNA or its designee to send and receive eligibility information linked to benefit
design for point-of-service claim processing (protocol, format, and content to be agreed by
the Parties);
	 
	 	3.	 	to CIGNA to send and receive enrollment, financial, reporting, and other information as
necessary (protocols, formats, and contents to be agreed by the Parties).






	B.	 	Systems:






	 	1.	 	to accept applications from prospective Enrollees, interact with CMS systems to verify
Part D eligibility, make enrollments and disenrollments effective, issue enrollee membership
cards, interact with CIGNA or its designee to make eligibility information linked to benefit
design available for point-of-service pharmacy claim processing as further described in
Exhibit 1.05;
	 
	 	2.	 	to track and monitor inbound and outbound member calls and to collect and report
statistics on response times and accuracy and call abandonment rates;
	 
	 	3.	 	to track and respond to enrollee correspondence whether received by regular mail,
telecopy, or e-mail;
	 
	 	4.	 	to provide prospective Enrollees with information about the PDP over the Internet as
further described in Exhibit 1.03;
	 
	 	5.	 	to perform Enrollee premium billing and collections as further described in Exhibit
1.04;
	 
	 	6.	 	to track, manage, and report on member grievances as further described in Exhibit
1.06;
	 
	 	7.	 	to monitor and audit each area of service to determine compliance with quality, service
levels, and accuracy standards agreed-upon by the parties.






	C.	 	Data Management and Reporting Processes:






	 	1.	 	to enable CIGNA to fulfill its reporting obligations to CMS as a PDP Sponsor. CMS
reporting requirements include but are not limited to statistics regarding enrollment,
disenrollment, grievances, and call center measures.
	 
	 	2.	 	to enable management and monitoring of the services and systems described in
Exhibits 1.03 – 1.05 and this Exhibit 1.02. The format, content, and
timing of management reports are to be agreed upon by the Parties.






	D.	 	Sufficient personnel (employed and contracted) to ensure the timely performance of USPG’s
obligations hereunder in a manner that provides Medicare beneficiaries and their representa





28









 











	 	 	tives convenient, accessible and accurate service in a courteous, professional manner, as well
as being responsive to diverse groups. All such personnel shall be trained in accordance with
applicable CMS guidance.






	E.	 	Systems and infrastructure *** on or before ***, or such other date as CMS requires for
testing or otherwise.






	F.	 	A detailed Service Level Agreement (“SLA”) mutually agreed to with CIGNA within *** after the
Effective Date. The SLA shall specify standards of timeliness, accuracy, and quality in
addition to, or in excess of, the standards that are set forth in CMS instructions and
guidelines and agreed upon monetary penalties and incentives for, respectively, failing to
meet or exceeding, service levels with respect to the services to be provided by USPG.






	G.	 	A detailed disaster recovery and business continuation plan within *** after the Effective
Date as further described in Exhibit 7.03.




29









 











EXHIBIT 1.03




MARKETING AND BENEFICIARY COMMUNICATIONS





	A.	 	USPG shall market CIGNA’s PDP in accordance with applicable CMS requirements set forth at 42
C.F.R. § 423.50 and the CMS marketing guidelines applicable to the PDP, and the marketing
program agreed to by USPG, NationsHealth and CIGNA. Until such time as CMS issues guidance
specific to PDPs, if any, the parties shall rely on Chapter 3 of CMS’s Managed Care Manual.






	 	1.	 	USPG shall create marketing and beneficiary communications materials and facilitate the
approval process with CMS.
	 
	 	2.	 	CIGNA shall review and approve marketing and beneficiary communications materials and
provide plan-specific content as required.
	 
	 	3.	 	The parties shall develop a schedule for the preparation of all marketing materials for
submittal to CMS no later than August 1, 2005, or earlier if so required by CMS.
	 
	 	4.	 	The name of CIGNA (or a CIGNA Affiliate) and the name of NationsHealth or USPG will be
displayed on the identification card distributed to Enrollees.






	B.	 	USPG shall provide the following marketing and distribution services:






	 	1.	 	For purposes of this Exhibit 1.03, “marketing materials” include any informational
materials targeted to Medicare beneficiaries which (i) promote the PDP; (ii) inform
Medicare beneficiaries that they may enroll, or remain enrolled in the PDP; (iii) explain
the benefits of enrollment in the PDP, or the rules that apply to Enrollees; and (iv)
explain how Medicare services are covered under the PDP, including conditions that apply to
such coverage.
	 
	 	2.	 	USPG shall market the PDP using *** agreed to by USPG, NationsHealth, and CIGNA, which
shall include *** and ***.
	 
	 	3.	 	USPG shall distribute to prospective Enrollees and employers written marketing
materials regarding the PDP in accordance with the distribution plan agreed to by USPG,
NationsHealth, and CIGNA.
	 
	 	4.	 	USPG shall allocate its marketing resources to include the disabled Medicare
population, Dual Eligibles, as well as beneficiaries age 65 and over, and shall establish
and maintain a system for confirming that enrolled beneficiaries have in fact enrolled in
the PDP and understand the rules applicable to and benefits available under the PDP.
	 
	 	5.	 	Annually and at the time of enrollment, USPG agrees to provide Enrollees information on
the following features of the PDP:






	 	•	 	Enrollment Procedures;
	 
	 	•	 	Enrollee Procedural Rights;




30









 












	 	•	 	Potential for Contract Termination;
	 
	 	•	 	PDP Benefits for standard Part D benefits;
	 
	 	•	 	Types of Pharmacies in the Pharmacy Network;
	 
	 	•	 	Out-of-network Pharmacy Access;
	 
	 	•	 	Premiums;
	 
	 	•	 	Service Area;
	 
	 	•	 	Current PDP Formularies;
	 
	 	•	 	60-days notice to potential and current Enrollees of the removal or change in the
their placement of any drug on the plan’s formulary;
	 
	 	•	 	Information about quality and performance indicators;
	 
	 	•	 	Information about utilization management procedures;
	 
	 	•	 	Information about the frequency of Enrollee grievances and appeals; and
	 
	 	•	 	Information on CIGNA’s financial condition.






	 	6.	 	USPG will operate an Internet website the content of which shall be jointly developed
by the parties. The website shall contain the information listed in 5 above as well as all
marketing materials for the PDP. For information held in the control of CIGNA or its
designee, the parties shall agree to the form, format and schedule for CIGNA to provide
such information. The website shall be available for pre-enrollment and for Enrollees
post-enrollment. CIGNA and USPG may agree to provide enhanced functionality for
post-enrollment support by, for example, using myCIGNA.com functionality and frameworks.
	 
	 	7.	 	USPG will maintain a toll-free customer service call center that is open during usual
business hours and provides customer telephone service for potential and current Enrollees
in compliance with standard business practices. USPG agrees to operate the call center in
accordance with the following:






	 	•	 	The call center shall operate Monday through Friday from no less than 8:00 AM – 4:30
PM local time for those time zones where the PDP is offered, including the continental
United States, Hawaii, and Alaska, unless the parties agree otherwise;
	 
	 	•	 	*** of all incoming customer calls shall be answered within ***;
	 
	 	•	 	The *** rate of all incoming customer calls shall not exceed ***;
	 
	 	•	 	The *** rate shall be set forth in the SLA;
	 
	 	•	 	The call center shall provide thorough information about the PDP’s benefit plans,
including co-payments, deductibles, and network pharmacies;
	 
	 	•	 	The call center shall incorporate procedures for handling customer complaints;
	 
	 	•	 	The call center shall provide service to non-English speaking and hearing impaired
Enrollees;
	 
	 	•	 	The call center shall provide the information described in 5 above. CIGNA will
provide the information within its, or its designee’s, possession to USPG or provide
the requisite tools to enable USPG’s access to such information.
	 
	 	•	 	The call center shall refer appeals and coverage determination issues, provider
inquiries, and potential fraud and abuse matters to CIGNA.




31









 












	 	8.	 	USPG shall distribute to Enrollees information jointly developed by the parties
regarding the PDP formularies and tiers, step therapy, PA and dose limits.
	 
	 	9.	 	USPG shall distribute to Enrollees information regarding the coverage determination,
exceptions, grievance and appeals process, which information shall be included in the PDP’s
Evidence of Coverage and outreach materials jointly developed by the parties.
	 
	 	10.	 	USPG shall provide to CIGNA the information necessary for CIGNA’s submissions to CMS
for the CMS comparative website in accordance with the requirements set forth at 42 C.F.R.
§ 423.48.






	C.	 	Additional Obligations of USPG and NationsHealth






	 	1.	 	USPG shall require its employees, agents, and representatives engaged in marketing
CIGNA’s PDP to receive training in CMS’ Medicare marketing instructions and guidelines
before they are permitted to talk with prospective Enrollees. Each such employee, agent,
and representative shall sign a form acknowledging that he or she has received such
training. CIGNA shall have a reasonable period of time within which to review, and comment
on, any training materials.
	 
	 	2.	 	USPG will make available to prospective and current Enrollees only those marketing
materials that have been approved by CIGNA and CMS in accordance with 42 C.F.R. § 423.50.
	 
	 	3.	 	USPG shall report to CIGNA the ***. The form, content and frequency of such reports
shall be agreed to by the parties.
	 
	 	4.	 	USPG shall monitor and/or record for later review no less than ***. The parties shall
agree upon standards against which the quality and accuracy of such monitored or
review/call will be assessed. USPG shall report the results of its call center monitoring
and review on a quarterly basis, together with any corrective actions taken with respect to
call center personnel who fail to meet the parties’ agreed-upon acceptable quality levels.
	 
	 	5.	 	USPG shall report to CIGNA the *** for calls, *** rates, and related statistics. The
form, content and frequency of such reports shall be agreed to by the parties.
	 
	 	6.	 	USPG shall provide call center statistics as specified in CMS’s Final Medicare Part D
Reporting Requirements in sufficient time for CIGNA to provide them to CMS at the times set
forth in Section VIII thereof.
	 
	 	7.	 	USPG shall maintain records and provide support for any CMS or HHS OIG audits of
marketing and call center operations.




32









 











EXHIBIT 1.04




ENROLLEE BILLING AND PREMIUM COLLECTION



USPG shall perform the following premium billing and collection services on behalf of CIGNA for
Enrollees in accordance with CMS requirements set forth at 42 C.F.R. § 423.293 and any CMS
guidance, when issued.



1. By the monthly date established in CMS guidelines, USPG shall bill each Enrollee the monthly
premium due under the PDP as communicated by CIGNA to USPG. USPG shall bill for each individual
enrolled in the PDP for that month according to USPG’s enrollment records.



2. USPG shall permit each Enrollee, at the Enrollee’s option, to make premium payment through an
electronic funds transfer mechanism or other means established by CMS.



3. USPG shall be able to allow Enrollees to pay their premium via automatic deductions pursuant to
42 C.F.R. § 422.262(f)(1) and accept such premium payments. USPG shall not bill the Social
Security Administration or the Railroad Retirement Board for such amounts.



4. USPG shall be able to support any supplemental premium billing to and collection from Enrollees.



5. USPG shall instruct Enrollees to submit premiums directly to CIGNA, whether by mail to a post
office box maintained by CIGNA or, if payments are made electronically, to a CIGNA lockbox account.
All premiums otherwise collected by USPG on behalf of CIGNA shall be deposited into a lockbox
account maintained by CIGNA *** by USPG.



6. USPG shall update its enrollee records of all premium payments received *** of USPG’s receipt of
notice from CIGNA that the premium payment has been deposited.



7. USPG shall administer the policies and procedures jointly developed by the parties in accordance
with any applicable CMS guidance regarding the collection of delinquent premium payments and
disenrollment of Enrollees for nonpayment. In no event shall an Enrollee be disenrolled without
CMS prior approval.



8. USPG shall be able to identify, collect and remit to CMS any late enrollment penalty amount due
from or on behalf of an Enrollee that is identified by CMS.



9. USPG shall modify the billing for any Enrollee who becomes eligible for or loses eligibility for
Medicaid.



10. USPG shall be able to apply *** for *** categories of Enrollees ***.




33









 








EXHIBIT 1.05




ENROLLMENT AND ELIGIBILITY





	A.	 	Systems Capability. USPG shall establish and maintain an eligibility system that
satisfies CMS requirements and has the following features and capabilities:






	 	1.	 	Accept low income status data from CMS;
	 
	 	2.	 	Generate eligibility data for low income status Enrollees that identifies their
separate benefit design;
	 
	 	3.	 	Notify CIGNA or CIGNA’s designee when low income status changes occur to support
co-payment and coinsurance refunds and State Pharmaceutical Assistance Program (“SPAP”)
payments *** of its receipt of such information;
	 
	 	4.	 	Generate eligibility information for Enrollees that identifies their low income status
in support of point-of-service claim processing;
	 
	 	5.	 	Provide confirmation to long-term care and other special populations of their status;
	 
	 	6.	 	Accept individual and batch enrollments in any form, including online, paper, and
electronic feeds;
	 
	 	7.	 	Administer an annual enrollment period at the following times: (a) for contract year
2006: November 15, 2005 through May 15, 2006; and (b) for contract year 2007 and
thereafter: November 15 through December 31 of each year for the upcoming contract year;
	 
	 	8.	 	Support special enrollment periods for age-ins, enrollees of other Part D plans who
move out of the service areas of such other Part D plans, and other circumstances set forth
in 42 CFR § 423.38(c);
	 
	 	9.	 	Collect and exchange information for coordination of benefits purposes information
regarding other coverage that an Enrollee has for prescription drugs in support of
coordination of benefits services required of CIGNA by CMS; and,
	 
	 	10.	 	Collect and transmit data elements specified by CMS for the purposes of enrolling and
disenrolling beneficiaries in accordance with timeframes specified in CMS instructions and
any standards agreed upon in the SLA.






	B.	 	Enrollment Forms and Materials. USPG shall:






	 	1.	 	Jointly develop with CIGNA enrollment forms that satisfy CMS requirements and are
approved by CMS;
	 
	 	2.	 	Within the time period required by CMS after USPG’s receipt of notice from CMS of an
Enrollee’s acceptance, mail identification cards to Enrollees with the following features:




34









 












	 	•	 	include the Enrollees’ drug co-payments,
	 
	 	•	 	exclude the Enrollees’ Social Security Number and HIC, and utilize an enrollee’s ID
number, and
	 
	 	•	 	include the contract number of CIGNA’s contract with CMS;






	C.	 	Enrollment Process. USPG shall:






	 	1.	 	Administer an enrollment process jointly developed with CIGNA that satisfies CMS
guidelines and that includes:






	 	•	 	communicating with beneficiaries who are applying for enrollment in the PDP within
timeframes specified by CMS or otherwise agreed upon by the parties;
	 
	 	•	 	initiating appropriate follow up with beneficiaries who have incomplete enrollment
applications within *** calendar days of receipt of such applications or such period
specified in the SLA; and
	 
	 	•	 	making enrollments effective according to the effective date policy associated with
the enrollment period in which the enrollment is received.






	 	2.	 	Within *** of its receipt of a complete application, transmit the application to CMS in
the CMS-required format. Notify applicants of the acceptance or denial of their enrollment
application within *** days of USPG’s receipt of notification of such acceptance or denial.
	 
	 	3.	 	Notify each Enrollee prior to or at the time of enrollment, of expected uses and
disclosures of the Enrollee’s protected health information, and the Enrollee’s rights and
CIGNA’s duties with respect to such information.
	 
	 	4.	 	Administer a process to confirm that beneficiaries have enrolled in the PDP and
understand the PDP’s rules. Such process shall involve a signed attestation by the
Enrollee and, upon receipt of notice of enrollment acceptance, *** as jointly developed by
the Parties. As the Parties may so agree, USPG shall make a *** within such time and using
such script as jointly agreed to by the Parties.
	 
	 	5.	 	Accept enrollments from beneficiaries beginning November 15, 2005.
	 
	 	6.	 	Enroll Medicare beneficiaries who are eligible for Part D and reside in the PDP’s
Service Area during allowable enrollment periods according to CMS requirements with no
underwriting;
	 
	 	7.	 	***.
	 
	 	8.	 	Not enroll beneficiaries except during allowable enrollment periods specified by CMS.
	 
	 	9.	 	Accept and process any automatic enrollment by CMS of full-benefit dual eligible
individuals and low income subsidy beneficiaries who fail to enroll in a Part D plan.




35









 












	 	10.	 	Develop policies and procedures for addressing beneficiary requests for a Special
Enrollment Periods under 42 CFR § 423.38(c) and verifying a beneficiary’s eligibility for
a Special Enrollment Period.
	 
	 	11.	 	Receive enrollment forms from Enrollees and retain such forms in paper form.
	 
	 	12.	 	Certify the enrollment data in accordance with Section 9(b) of this Agreement.
	 
	 	13.	 	Agree in the SLA to timeliness and upon high accuracy standards for the foregoing
functions.






	D.	 	Maintenance of Enrollment. An Enrollee shall remain enrolled in the PDP until one of
the following occurs:






	 	•	 	The individual enrolls in another Part D plan or MA-PD plan;
	 
	 	•	 	The individual voluntarily disenrolls from the PDP;
	 
	 	•	 	The individual is involuntary disenrolled from the PDP in accordance with 42 C.F.R. §
423.44(b)(2);
	 
	 	•	 	The PDP is discontinued within the Service Area in which the individual resides; or
	 
	 	•	 	CMS enrolls a Dual Eligible Enrollee in another Part D Plan in accordance with
42 C.F.R. § 423.34(c).






	E.	 	Disenrollment Management. USPG shall administer the PDP’s disenrollment process in
accordance with policies and procedures jointly developed by the parties and in accordance
with CMS disenrollment procedure requirements.






	 	1.	 	Voluntary Disenrollments. USPG will accept and process voluntary
disenrollments requests from Enrollees only during allowable periods as specified by CMS.
USPG will:






	 	(i)	 	Submit a disenrollment notice to CMS within timeframes CMS specifies;
	 
	 	(ii)	 	Provide the Enrollee with a notice of disenrollment as CMS determines and
approves; and
	 
	 	(iii)	 	File and retain disenrollment requests for the period specified in CMS
instructions.






	 	2.	 	Involuntary Disenrollments.






	 	(i)	 	USPG shall initiate and process involuntary disenrollments of Enrollees in
accordance with applicable CMS requirements. Except as permitted by CMS regulations,
USPG shall not involuntarily disenroll an individual from the PDP, or orally or in
writing, or by any action or inaction, request or encourage an Enrollee to disenroll.
	 
	 	(ii)	 	Optional Involuntary Disenrollment. USPG shall disenroll an Enrollee
from the PDP in any of the following circumstances: (a) ***; or (b) ***.
	 
	 	(iii)	 	Required Involuntary Disenrollment. USPG shall disenroll an Enrollee
from the PDP in any of the following circumstances: (a) The Enrollee no longer resides
in the





36









 











	 	 	 	PDP’s Service Area; (b) The Enrollee loses eligibility for Part D; (c) Death of the
Enrollee; (d) CIGNA’s contract is terminated by CMS or by CIGNA or through mutual
consent; and (e) The individual materially misrepresents information, as determined by
CMS, to the CIGNA or USPG that the individual has or expects to receive reimbursement
for third-party coverage. USPG shall disenroll affected Enrollees in accordance with
the procedures for disenrollment set forth at 42 C.F.R. § 423.507 through § 423.510.
	 
	 	(iv)	 	Monthly Reconciliations. USPG shall prepare a monthly reconciliation
of involuntary disenrollments to ensure prompt crediting of premiums collected from CMS
for involuntarily disenrolled enrollees.






	 	3.	 	Notice Requirement.






	 	(i)	 	If the disenrollment is for any of the reasons specified in Sections B, C(i) or
(iv) of this section (that is, other than death or loss of Part D eligibility) USPG
shall give the individual timely notice of the disenrollment with an explanation of why
CIGNA is planning to disenroll the individual pursuant to 42 CFR § 423.44 and any CMS
guidance.
	 
	 	(ii)	 	Notices for reasons specified in Sections B, C(i) and (iii) shall:






	 	•	 	Be provided to the individual before submission of the disenrollment notice to
CMS; and
	 
	 	•	 	Include an explanation of the individual’s right to file a grievance under the
PDP’s grievance procedures.






	 	4.	 	Termination of CMS Contract. USPG will notify Enrollees in the event of a
contract termination of the termination and alternatives for obtaining prescription drug
coverage under Part D in accordance with Part 423 regulations.
	 
	 	5.	 	Agree in the SLA to timeliness and accuracy standards for selected disenrollment
functions.






	F.	 	Maintenance and Reporting of Data. USPG shall provide the data required in Section 1
of the Final Medicare Part D Reporting Requirements in the formats and at the times specified
therein. USPG shall maintain sufficient records to support the accuracy of such reported data
in the event of an audit by CMS or the HHS OIG.




37









 











EXHIBIT 1.06




ENROLLEE INQUIRIES AND GRIEVANCE PROCESSING



USPG shall be responsible for communications from Enrollees as set forth herein. USPG shall
administer the PDP’s enrollee inquiries grievance procedures in accordance with CMS requirements
set forth at 42 C.F.R. § 423.564 and any other guidelines established by CMS. For purposes of this
Section E, a “grievance” is any complaint or dispute, other than one that involves a coverage
determination, expressing dissatisfaction with any aspect of CIGNA’s or any of its subcontractors’
and providers’ operations, activities, or behavior, regardless of whether remedial action is
requested. The grievance procedure is separate and distinct from the appeal procedure. The PDP’s
appeal procedure shall be the sole responsibility of CIGNA. An “inquiry” is any communication from
an Enrollee that is not a grievance or an appeal. An “Enrollee” includes an Enrollee’s
representative. All communications from providers shall be directed to CIGNA.





	A.	 	General Requirements






	 	1.	 	USPG will develop protocols and definitions sufficient to enable its Customer Service
Representatives (“CSRs”) accurately to distinguish and classify Enrollee inquiries,
grievances (including types of grievances), and appeals. Such protocols and definitions
are subject to review and comment by CIGNA.
	 
	 	2.	 	USPG will maintain an accuracy rate to be determined in the SLA in its identification
and classification of inquiries, grievances, and appeals.
	 
	 	3.	 	USPG will audit for the accuracy of its identification and classification of inquiries,
grievances, and appeals based on audit frequencies and sample sizes agreed upon by the
parties.
	 
	 	4.	 	CIGNA will provide, or provide access to, any information within its, or its
designee’s, control necessary to USPG to perform the services described herein.
	 
	 	5.	 	The Parties shall develop processes which will enable USPG to refer all communications
from providers to CIGNA and all Enrollee communications about *** to CIGNA.






	B.	 	Enrollee Inquiries






	 	1.	 	Telephone Inquiries. USPG shall handle all telephonic inquiries by Enrollees
or Enrollee representatives in a timely, courteous, professional, and culturally competent
manner.






	 	(a)	 	The service levels for timeliness and accuracy in responding to such inquiries
shall be the same as set forth in Exhibit 1.03 of this Agreement.
	 
	 	(b)	 	USPG shall maintain and report data on telephonic inquiries in the formats and
at the times set forth in Section VIII of CMS’s Final Medicare Part D Reporting
Requirements. USPG shall maintain sufficient records to support the accuracy of such
reported data in the event of an audit by CMS or the HHS OIG.




38









 












	 	2.	 	Written Inquiries. USPG shall be responsible for responding to all written
inquiries from Enrollees or Enrollee representatives in a timely, accurate, professional,
and culturally competent manner. Written inquiries include any correspondence that has
been mailed, telecopied, or e-mailed.






	 	(a)	 	USPG will implement procedures for date stamping, marking for identification,
and tracking all written Enrollee inquiries. Date stamping of a percentage specified
in the SLA of such inquiries will be accomplished ***; *** of inquiries shall be date
stamped within *** of their receipt.
	 
	 	(b)	 	Written acknowledgement of a written inquiry shall be mailed within *** of
USPG’s receipt of the inquiry unless a different period is established in the SLA.
	 
	 	(c)	 	The SLA shall specify written disposition of a specific percentage of all
written inquiries shall be mailed within *** of USPG’s receipt of the inquiry; written
disposition of *** of all written inquiries shall be mailed within *** of USPG’s
receipt of the inquiry.
	 
	 	(d)	 	The minimum acceptable accuracy rate of USPG’s written dispositions shall be
identified as a percentage specified in the SLA.
	 
	 	(e)	 	USPG will implement a process for auditing and monitoring the timeliness and
accuracy of USPG disposition of written inquiries based on audit frequencies and sample
sizes to be agreed upon by the parties. USPG will provide, on a quarterly basis,
reports to CIGNA of USPG’s audits, together with any corrective action taken to remedy
any non-compliance with the timeliness and accuracy levels set forth herein.






	C.	 	Grievances






	 	1.	 	USPG will administer a process jointly developed with CIGNA that is designed to track
and address Enrollees’ grievances that includes appropriate timelines, policies and
procedures, as well as definitions and protocols for identifying the different types of
grievances identified in 42 CFR § 423.564 and Section V of the Final Medicare Part D
Reporting Requirements.
	 
	 	2.	 	USPG will train its staff and any subcontractors involved in the grievance procedure on
such policies and procedures in accordance with 42 C.F.R. § 423.564.
	 
	 	3.	 	USPG will accept grievances from Enrollees by telephone and in writing (including
facsimile and in whatever other form CMS requires CIGNA to accept grievances, and reject
any that are untimely under 42 CFR § 423.524(d)(2).
	 
	 	4.	 	Fraud and Abuse grievances, as defined in Section V of the Final Medicare Part D
Reporting Requirements, shall be referred to CIGNA for disposition.
	 
	 	5.	 	USPG shall notify the Enrollee of the grievance decision as expeditiously as the case
requires, based on the Enrollee’s health status, but no later than 30 days after the date
USPG receives the oral or written grievance; provided that USPG may extend the 30-day




39









 












	 	 	 	timeframe by up to 14 days if the Enrollee requests the extension or if USPG justifies a
need for additional information and documents how the delay is in the interest of the
Enrollee. When USPG extends the deadline, it shall immediately notify the Enrollee in
writing of the reason(s) for the delay.
	 
	 	6.	 	USPG shall inform the Enrollee of the disposition of the grievance in accordance with
the following procedures:






	 	•	 	All grievances submitted in writing must be responded to in writing.
	 
	 	•	 	Grievances submitted orally may be responded to either orally or in writing, unless
the Enrollee requests a written response.
	 
	 	•	 	Quality of care grievances must be responded to in writing.






	 	7.	 	USPG shall respond to an Enrollee’s grievance within *** if the complaint involves a
refusal by CIGNA to grant an Enrollee’s request for an expedited coverage determination
under 42 C.F.R. § 423.570 or an expedited redetermination under 42 C.F.R. § 423.584, and
the Enrollee has not yet purchased or received the drug that is in dispute.
	 
	 	8.	 	USPG will maintain, and provide upon request by CIGNA or CMS, access to records on all
grievances received both orally and in writing, that includes:






	 	•	 	Date of receipt of the grievance
	 
	 	•	 	Mode of receipt of grievance (i.e. fax, telephone, letter, etc.)
	 
	 	•	 	Person or entity that filed the grievance
	 
	 	•	 	Subject of the grievance
	 
	 	•	 	Final disposition of the grievance
	 
	 	•	 	Date the Enrollee was notified of the disposition.






	 	9.	 	USPG shall maintain and report data or grievances required in Section V of the Final
Medicare Part D Reporting Requirements in the formats and at the times specified therein.
USPG shall maintain sufficient records to support the accuracy of such data in the event of
an audit by CMS or the HHS Office of Inspector General.






	D.	 	Appeals





     The parties shall jointly develop procedures for transmitting to CIGNA, as expeditiously as
possible, any appeals received by USPG.



40









 





EXHIBIT 1.07




NATIONSHEALTH ***



NationsHealth *** are currently *** to be ***, which *** represents the *** for NationsHealth or
USPG *** the systems, capabilities and functionalities *** and to otherwise satisfy the ***
including, but not limited to, the following:





	 	•	 	The *** described in Exhibit ***, except for item (E).
	 
	 	•	 	The *** described in Exhibits *** through *** including necessary *** and ***.
	 
	 	•	 	Necessary enhancements to NationsHealth and/or USPG *** in order to comply with *** that
are reasonably necessary to support the PDP that have not been *** to NationsHealth or USPG
as of the Effective Date of this Agreement.
	 
	 	•	 	Obtaining *** pursuant to Section ***.




The above ***. NationsHealth will *** required for the purposes described in the first paragraph
above, provided, however, that NationsHealth’s *** shall not exceed *** without the prior written
consent of CIGNA.




41









 








EXHIBIT 2.02




CIGNA ***




     CIGNA *** include:




	•	 	CIGNA *** required to support the PDP currently estimated at ***.






	•	 	*** (***) of *** required to support the PDP currently estimated at ***.






	•	 	*** (***) of *** required to support the PDP currently estimated at ***.




***. CIGNA will *** develop PDP capabilities, provided, however, that CIGNA’s *** shall
not exceed *** without the prior written consent of NationsHealth.




42









 








EXHIBIT 3.01




COMPENSATION




     General Principles



     The Parties, meaning CIGNA on one hand and USPG and/or NationsHealth on the other hand, intend
to account for the activities described in this Agreement as if such activities constituted a
separate line of business for purposes of *** the financial effects of certain PDP-associated
expense variances.



     No Intent to Create Reinsurance



     In agreeing to this arrangement, both parties have independently formed a belief that, in the
event of a loss under any of CIGNA’s Part D contracts covered by this Agreement, this provision
does not give rise to a contract for reinsurance against an underwriting loss by CIGNA. ***. The
parties acknowledge that the unprecedented nature of the Medicare Part D product makes it
impossible to predict the profitability of the Part D contracts with any certainty. If CMS, or any
other Governmental Authority, *** constituted a form of reinsurance, the parties agree to
negotiate, in good faith, an alternative *** that approximates the *** of the Parties that will
arise under this arrangement.



A. Definitions




     Each of the following shall be as finally determined by CIGNA for applicable periods:



     ***



     “Aggregate Actual Premium” means the total premiums received from Enrollees and from CMS.



     ***



     “Aggregate CIGNA *** Recovery” means the product of actual Enrollee months multiplied by the
CIGNA *** Recovery Rate.



     “Aggregate CIGNA Target Margin” means the CIGNA Target Margin multiplied by the actual number
of Enrollee months.



     ***



     "*** Recovery Rate” means a PEPM amount, calculated as the sum of *** actually incurred by
CIGNA *** divided by ***, plus, if additional *** are incurred in any month ***, an additional PEPM
amount calculated as the additional *** divided by *** (i.e., the *** Recovery Rate represents the
rate at which *** would be fully recovered over *** at the ***; provided however,
the Parties understand and agree that the time frame within which CIGNA will recoup



43









 




the *** based on the *** Recovery Rate will be shorter or longer than *** depending ***. Once
CIGNA has recouped the ***, the *** Recovery Rate will be zero.




     ***



     “CMS Contract Year Month” means a month within a CMS contract year.



     ***



     “PEPM” means per Enrollee per month.



     ***



     “Start-Up Month” means each of the months from *** through ***.



***





	B.	 	Establishment of Target Margin and *** Levels; Year-End ***.





     1.) Annual Identification of CIGNA Target Margin and *** Levels



     By *** for the 2006 CMS contract year and not less than *** prior to required bid submission
date (which the Parties anticipate will be the ***) for *** for every subsequent CMS contract year
CIGNA shall specify its required CIGNA Target Margin. *** shall be determined by CIGNA.



     2.) Year-End *** 



     No later than *** following the end of each CMS contract year, CIGNA shall perform a *** of
*** under this Agreement. As part of such *** CIGNA will *** to NationsHealth the ***, if any,
due to NationsHealth for the expiring CMS contract year including the *** of all ***.



     3.) Termination



     A final settlement will be made within *** upon termination or expiration of the Agreement to
capture any late reporting of the components used in the Monthly Settlement Process. No additional
adjustment will be made for ***.




	C.	 	NationsHealth *** Process





     1.) Start-Up Months. Not later than *** prior to each Start-Up Month CIGNA and
Nations Health will mutually agree to the expected level of *** for the upcoming Start-Up Month.
CIGNA will make *** to NationsHealth in *** equal payments of *** of this amount by *** of the
corresponding ***.



44









 





     2.) CMS Contract Year Months. Not later than *** prior to the start of a CMS
contract year CIGNA and NationsHealth will mutually agree to the ***. Not later than *** following
CIGNA’s receipt of the monthly premium amount from CMS, CIGNA will make *** to NationsHealth of the
*** of the *** multiplied by the *** actually received.




	D.	 	Monthly Settlement Process





     1.) Information Deliveries. Not later than *** after the last day of the preceding
month NationsHealth shall furnish to CIGNA the *** and the NationsHealth *** for the preceding
month. Not later than *** after the last day of the preceding month CIGNA shall furnish to
NationsHealth the ***, the CIGNA ***, and ***. NationsHealth shall furnish to CIGNA the ***.
After a review period of not more than *** after the date of CIGNA’s delivery of the information
described above, CIGNA shall*** to NationsHealth in accordance with*** Exhibit ***.



     2. ) Calculation of Monthly Amount due to NationsHealth



     CIGNA shall calculate the amount due to NationsHealth as the sum of the following
for the prior month:



          a.) ***;




          b.) plus ***% of the ***;




          c.) plus ***;




          d.) plus ***;




          e.) minus the *** made by *** for *** and ***;




          f.) minus any *** pursuant to Section ***.




     3.) Determination of ***. CIGNA shall determine the *** for each month as follows:



     *** shall be determined subtracting from *** all of the following as calculated for the ***:



          a.) ***;




          b.) ***;




          c.) ***;




          d.) ***;




          e.) ***;




          f.) ***; and,




          g.) ***.




Attachment: ***




45









 








EXHIBIT 3.02




FORM OF SECURITIES PURCHASE AGREEMENT




46









 








EXHIBIT 3.03




FORM OF WARRANT AGREEMENT




47









 








EXHIBIT 3.04




FORM OF REGISTRATION RIGHTS AGREEMENT




48









 








EXHIBIT 4.03(b)




EXCEPTION TO LICENSURE REPRESENTATION




     The Parties acknowledge and agree that on the Effective Date NationsHealth and USPG do not
hold, under any state laws, any licenses to act as insurance producers or third-party
administrators. The Parties acknowledge and agree that regulatory authorities may require
NationsHealth and/or USPG to obtain such licenses in connection with providing the Services
hereunder.



49









 





EXHIBIT 4.06




BUSINESS ASSOCIATE AGREEMENT



This
Agreement, effective _____________ , is by and between ______________ Insert name of
specific CIGNA Covered Entity], its subsidiaries and
affiliates, (“CIGNA”) and ___________
[Insert name of vendor] (“Vendor”).



WHEREAS, CIGNA and Vendor have entered into certain agreements, including but not limited to those
agreements referred to in Appendix “A”, under which Vendor provides certain services to CIGNA; and



WHEREAS, the parties are entering into this Agreement to comply with the Privacy Standards and the
Security Standards as those terms are defined in this Agreement.



NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which the
parties hereby acknowledge, and in affirmation of the existing agreements referred to in Appendix
“A”, intending to be legally bound, the parties hereto agree as follows:



I. DEFINITIONS



Capitalized terms used herein without definition shall have the respective meanings assigned to
such terms herein, including Part III of this Agreement. Such defined terms shall supercede
similar defined terms as set forth in the applicable Vendor Agreements.



II. OBLIGATIONS OF VENDOR



Section 1. Use and Disclosure of Protected Health Information.



Vendor may use and disclose Protected Health Information only to carry out the obligations of
Vendor set forth in this Agreement, the applicable Vendor Agreement or as required by law, subject
to the provisions set forth in this Agreement. Vendor shall neither use nor disclose Protected
Health Information for the purpose of creating de-identified information that will be used for any
purpose other than to carry out the obligations of Vendor set forth in this Agreement or the
applicable Vendor Agreement, or as required by law.



Section 2. Safeguards Against Misuse of Information.



Vendor agrees that it will implement appropriate safeguards to prevent the use or disclosure of
Protected Health Information in any manner other than pursuant to the terms and conditions of this
Agreement. Vendor shall implement administrative, physical, and technical safeguards that
reasonably and appropriately protect the confidentiality, integrity, and availability of the Elec


50









 






tronic Protected Health Information that it creates, receives, maintains, or transmits on behalf of
CIGNA as required by the Security Standards.



Section 3. Reporting of Disclosures of Protected Health Information; Reporting of Security
Incidents.



 



Upon becoming aware of a use or disclosure of Protected Health Information in violation of this
Agreement or upon becoming aware of any Security Incident, Vendor shall promptly report such use or
disclosure or Security Incident to CIGNA in the following time and manner: (i) any actual,
successful Security Incident will be reported to CIGNA in writing within 3 business days of the
date on which Vendor first becomes aware of such actual, successful Security Incident and (ii) any
attempted, unsuccessful Security Incident of which Vendor becomes aware will reported to CIGNA in
writing on a reasonable basis. If the Security Standards are amended to remove the requirement to
report unsuccessful attempts of unauthorized access, this requirement shall no longer apply as of
the effective date of that amendment.



Section 4. Agreements with Third Parties.



Vendor shall ensure that any agent or subcontractor of Vendor to whom Vendor provides Protected
Health Information that is received from CIGNA, or created or received by Vendor on behalf of
CIGNA, agrees to be bound by the same restrictions and conditions that apply to Vendor pursuant to
this Agreement with respect to such Protected Health Information. Vendor warrants and represents
that in the event of a disclosure of Protected Health Information to any third party, Vendor will
make reasonable efforts to limit the information disclosed to the minimum that is necessary to
accomplish the intended purpose of the disclosure. Vendor shall ensure that any agent or
subcontractor of Vendor to whom Vendor provides Electronic Protected Health Information agrees to
implement reasonable and appropriate safeguards to protect such information.



Section 5. Access to Information.



In the event Vendor maintains Protected Health Information in a Designated Record Set, Vendor
shall, within five (5) business days of receipt of a request from CIGNA, provide to CIGNA Protected
Health Information in Vendor’s possession that is required for CIGNA to respond to an individual’s
request for access to Protected Health Information made pursuant to 45 C.F.R. § 164.524 or other
applicable law. In the event any individual requests access to Protected Health Information
directly from Vendor, whether or not Vendor is in possession of Protected Health Information,
Vendor may not approve or deny access to the Protected Health Information requested. Rather,
Vendor shall, within two (2) business days, forward such request to CIGNA.



Section 6. Availability of Protected Health Information for Amendment.



In the event Vendor maintains Protected Health Information in a Designated Record Set, Vendor
shall, within five (5) business days of receipt of a request from CIGNA, provide to CIGNA Protected
Health Information in Vendor’s possession that is required for CIGNA to respond to an individual’s
request to amend Protected Health Information made pursuant to 45 C.F.R. §164.526




51









 







or other applicable law. If the request is approved, Vendor shall incorporate any such
amendments to the Protected Health Information as required by 45 C.F.R. §164.526 or other
applicable law. In the event that the request for the amendment of Protected Health Information is
made directly to the Vendor, whether or not Vendor is in possession of Protected Health
Information, Vendor may not approve or deny the requested amendment. Rather, Vendor shall, within
two (2) business days forward such request to CIGNA.



Section 7. Accounting of Disclosures.



Vendor shall, within ten (10) business days of receipt of a request from CIGNA, provide to CIGNA
such information as is in Vendor’s possession and is required for CIGNA to respond to a request for
an accounting made in accordance with 45 C.F.R. § 164.528 or other applicable law. In the event
the request for an accounting is delivered directly to Vendor, Vendor shall, within ten (10)
business days, forward such request to CIGNA and any such information as is in Vendor’s possession
and is required for CIGNA to respond to a request for an accounting made in accordance with 45
C.F.R. § 164.528 or other applicable law. It shall be CIGNA’s responsibility to prepare and
deliver any such accounting requested.



Section 8. Availability of Books and Records.



Vendor hereby agrees to make its applicable internal practices, books and records available to the
Secretary for purposes of determining CIGNA’s compliance with the Privacy Standards and the
Security Standards. The practices, books and records subject to this Section shall include those
practices, books and records that relate to the use and disclosure of Protected Health Information
that is created by Vendor on behalf of CIGNA, received by Vendor from CIGNA, or received by Vendor
from a third party on behalf of CIGNA.



Section 9. Return of Records.



Upon the termination of each Vendor Agreement, Vendor shall, if feasible, return or destroy all
Protected Health Information received from, created or received on behalf of CIGNA that Vendor
maintains in any form under such Vendor Agreement, and shall not retain any copies of such
Protected Health Information, or if such return or destruction is not feasible, extend the
protections in this Agreement to such Protected Health Information and limit further uses and
disclosures to those purposes that make the return or destruction of such Protected Health
Information infeasible.



Section 10. Authorization to Terminate.



Vendor hereby authorizes CIGNA to terminate the applicable Vendor Agreement and this Agreement if
it determines that Vendor has violated a material term of this Agreement in accordance with the
terms of the Vendor Agreement.




52









 







Section 11. Liability



Any and all matters concerning indemnification and/or limitations as set forth on liability shall
be as set forth in the Vendor Agreement.



III. DEFINITIONS FOR USE IN THIS AGREEMENT



“Designated Record Set” shall mean a group of records maintained by or for CIGNA that is (i) the
medical records and billing records about individuals maintained by or for CIGNA, (ii) the
enrollment, payment, claims adjudication, and case or medical management record systems maintained
by or for a health plan; or (iii) used, in whole or in part, by or for CIGNA to make decisions
about individuals. As used herein, the term “Record” means any item, collection, or grouping of
information that includes Protected Health Information and is maintained, collected, used, or
disseminated by or for CIGNA.



“Electronic Media” shall mean (1) electronic storage media including memory devices in computers
(hard drives) and any removable/transportable digital memory medium, such as magnetic tape or disk,
optical disk, or digital memory card; or (2) transmission media used to exchange information
already in electronic storage media. Transmission media include, for example, the internet
(wide-open), extranet (using internet technology to link a business with information accessible
only to collaborating parties), leased lines, dial-up lines, private networks, and the physical
movement of removable/transportable electronic storage media. Certain transmissions, including
paper, via facsimile, and of voice, via telephone, are not considered to be transmissions via
electronic media, because the information being exchanged did not exist in electronic form before
transmission.



“Electronic Protected Health Information” shall mean Protected Health Information that is
transmitted by or maintained in Electronic Media.



“Individually Identifiable Health Information” shall mean information that is a subset of health
information, including demographic information collected from an individual, and





	 	(i)	 	is created or received by a health care provider, health plan, employer, or
health care clearinghouse; and
	 
	 	(ii)	 	relates to the past, present, or future physical or mental health or condition
of an individual; the provision of health care to an individual; or the past, present
or future payment for the provision of health care to an individual; and (a) identifies
the individual, or (b) with respect to which there is a reasonable basis to believe the
information can be used to identify the individual; and
	 
	 	(iii)	 	relates to identifiable non-health information including but not limited to an
individual’s address, phone number and/or Social Security number.




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“Privacy Standards” shall mean the Health Insurance Portability and Accountability Act of 1996 and
the regulations promulgated thereunder, including the Standards for Privacy of Individually
Identifiable Health Information, 45 C.F.R. Parts 160 and 164.



“Protected Health Information” shall mean Individually Identifiable Health Information transmitted
or maintained in any form or medium that Vendor creates or receives from or on behalf of CIGNA in
the course of fulfilling its obligations under this Agreement. “Protected Health Information” shall
not include (i) education records covered by the Family Educational Rights and Privacy Act, as
amended, 20 U.S.C. §1232g, (ii) records described in 20 U.S.C. §1232g(a)(4)(B)(iv), and (iii)
employment records held by CIGNA in its role as employer.



“Secretary” shall mean the Secretary of the Department of Health and Human Services.



“Security
Incident”, as defined in 45 C.F.R. §164.304, shall mean the attempted or successful
unauthorized access, use, disclosure, modification, or destruction of information or interference
with systems operations in an information system.



“Security Standards” shall mean the Security Standards, 45 C.F.R. Parts 160 and 164, Subpart C.



“Vendor Agreements” shall mean the agreement(s) in Appendix “A”, and any other agreement under
which CIGNA may (a) disclose to Vendor Protected Health Information or (b) Vendor may use Protected
Health Information.



IV. EFFECT OF AGREEMENT



To the extent that this Agreement conflicts with the terms of the applicable Vendor Agreement or
any other agreement between CIGNA and Vendor relating to the confidentiality of Protected Health
Information received or created by Vendor on behalf of CIGNA.



IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate and
signed by their respective officers duly authorized to do so.




	 	 	 	 	 
	Date __________              	[NAME OF VENDOR]

 	 
	 	By:  	/s/
 	 
	 	 	Duly Authorized 	 
	 	 	 	 
	 
	Date __________              	[NAME OF CIGNA
COMPANY]

 	 
	 	By:  	/s/
 	 
	 	 	Duly Authorized 	 
	 	 	 	 



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EXHIBIT 4.07




PERMITTED SUBCONTRACTS




***




***




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EXHIBIT 5.03




FUTURE ENDEAVORS



In connection with the Parties’ respective business capacities and strengths, the Parties hereby
agree as follows with respect to future business endeavors:






1. ***. The Parties shall negotiate in good faith to determine the *** feasibility
of developing a model for jointly offering *** to ***, and shall enter into a separate
agreement to carry out the terms of such an undertaking on the basis of a *** consisting of
*** NationsHealth and *** CIGNA (or the economic equivalent thereof) if such agreement is
mutually determined by the Parties to be feasible. If the Parties comply with their
obligations set forth above in this paragraph but an agreement is not effectuated, and if
subsequently the Law related to a possible model is changed or the interpretation thereof is
changed, or if new Law related to such a model is enacted, then the Parties shall again be
required to comply with the obligations set forth above in this paragraph.




2. ***. The Parties shall use *** to determine whether there is a model consistent
with *** that will allow each Party to ***. In connection with making such determination,
each Party agrees that, in collaboration with the other Party, it shall use *** to develop
such a model, to prepare a joint written proposal regarding such model, and to deliver such
written proposal, on a date mutually determined by the Parties, to the ***, as mutually
identified by the Parties. Furthermore, if the Parties so deliver such written proposal,
then the Parties shall use *** to obtain the *** of such ***, to amend the Agreement in a
manner consistent with such proposal, and to implement and effectuate such proposal. If the
Parties comply with their obligations set forth above in this paragraph but such proposal is
not effectuated, and if subsequently the Law related to such proposal is changed or the
interpretation thereof is changed, or if new Law related to such proposal is enacted, then
the Parties shall again be required to comply with the obligations set forth above in this
paragraph. For purposes of this paragraph, the Parties agree that the obligation to use
“***” shall not in any way require either Party to pursue a claim or suit against, or
participate in a claim or suit against, any ***.




3. ***. The Parties shall use *** to develop a proposal (such as a proposal for the
operation of a demonstration project) for delivery to CMS that combines both *** with the
*** and/or offering of ***, under which NationsHealth or USPG would, to the extent ***, be
the *** of such ***. Each Party agrees that, in collaboration with the other Party, it
shall use *** to prepare such a joint written proposal and to deliver such written proposal,
on a date mutually determined by the Parties, to the ***, as mutually identified by the
Parties. Furthermore, if the Parties so deliver such written proposal, then the Parties
shall use *** to obtain the *** of such **, to amend the Agreement in a manner consistent
with such proposal, and to implement and effectuate such proposal, including, without
limitation, mutually agreeable compensation arrangements pertaining thereto. If the Parties
comply with their obligations set forth above in this paragraph but such proposal



56









 






is not effectuated, and if subsequently the Law related to such proposal is changed or the
interpretation thereof is changed, or if new Law related to such proposal is enacted, then
the Parties shall again be required to comply with the obligations set forth above in this
paragraph. For purposes of this paragraph, the Parties agree that the obligation to use
“***” shall not in any way require either Party to pursue a claim or suit against, or
participate in a claim or suit against, ***.


So long as each Party complies with its obligations set forth above, failure to achieve or
effectuate any of the future business endeavors described above shall not constitute a breach of
the Agreement, and shall not give rise to any right of termination or rescission or amendment of
the Agreement in any manner by any Party.




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EXHIBIT 7.03




DATA



1.0 Ownership of CIGNA Data. All CIGNA Data is, or shall be, and shall remain the property of
CIGNA and shall be deemed CIGNA Confidential Information. Other than as necessary for USPG’s or
NationsHealth’s performance under this Agreement, without CIGNA’s approval (in its sole
discretion), the CIGNA Data shall not be (a) used by USPG or NationsHealth, (b) disclosed, sold,
assigned, leased or otherwise provided to third parties by USPG or NationsHealth or to other third
parties or (c) commercially exploited by or on behalf of USPG or NationsHealth. USPG and
NationsHealth shall not possess or assert liens or other rights in or to CIGNA Data. To the extent
applicable, USPG and NationsHealth hereby irrevocably and perpetually assign, transfer and convey
to CIGNA without further consideration all of its and their right, title and interest in and to the
CIGNA Data. Upon request by CIGNA, and at CIGNA’s expense, USPG and/or NationsHealth shall execute
and deliver any financing statements or other documents that may be necessary or desirable under
any Law to preserve, or enable CIGNA to enforce, its rights hereunder with respect to the CIGNA
Data




          1.1 Correction of Errors. USPG and or NationsHealth shall promptly correct any errors or
inaccuracies in the CIGNA Data and the reports delivered to CIGNA under this Agreement, to the
extent caused by USPG or NationsHealth. If requested, and at CIGNA’s request expense, USPG and or
NationsHealth shall promptly correct any other errors or inaccuracies in the CIGNA Data or such
reports.




          1.2 Return of Data. Upon request by CIGNA at any time during the term of this Agreement and
upon expiration or termination of this Agreement (or at the end of the Termination Assistance
Period if directed by CIGNA), USPG and or NationsHealth shall (a) promptly return to CIGNA, in the
format and on the media requested by CIGNA, all or any part of the CIGNA Data and (b) erase or
destroy all or any part of the CIGNA Data in USPG’s or NationsHealth’s possession, in each case to
the extent so requested by CIGNA. Any archival tapes containing CIGNA Data shall be used by USPG
or NationsHealth solely for back-up purposes.




          1.3 Reconstruction. USPG and NationsHealth shall be responsible for developing and
maintaining procedures for the reconstruction of lost CIGNA Data to the extent the storage of such
CIGNA Data is under USPG’s or NationsHealth’s control. USPG and/or NationsHealth shall correct, at
CIGNA’s request and sole discretion and at no charge to CIGNA, any destruction, loss or alteration
of any CIGNA Data caused by USPG, NationsHealth, or any of their while in USPG’s possession or
under USPG’s control.




          1.4 Data Safeguards. USPG and NationsHealth shall establish and maintain safeguards against
the destruction, loss, or alteration of CIGNA Data in the possession of USPG or NationsHealth.



2.0 Ownership of NationsHealth Data.. All NationsHealth Data is, or shall be, and shall remain
the property of NationsHealth and/or USPG. Other than as necessary for CIGNA’s performance under
this Agreement, the NationsHealth Data shall not, without NationsHealth’s or USPG’s approval (in
their sole discretion), be (a) used by CIGNA, (b) disclosed, sold, assigned,




58









 







leased or otherwise provided to third parties by CIGNA or to other third parties or (c)
commercially exploited by or on behalf of CIGNA. CIGNA shall not possess or assert liens or other
rights in or to NationsHealth Data. To the extent applicable, CIGNA hereby irrevocably and
perpetually assigns, transfer and conveys to NationsHealth and/or USPG without further
consideration all of its right, title and interest in and to the NationsHealth Data. Upon request
by NationsHealth or USPG and at NationsHealth and/or USPG’s expense, CIGNA shall execute and
deliver any financing statements or other documents that may be necessary or desirable under any
Law to preserve, or enable NationsHealth or USPG to enforce, their rights hereunder with respect to
the NationsHealth Data.




          2.1 Return of Data. Upon request by NationsHealth or USPG, at any time during the term of
this Agreement and upon expiration or termination of this Agreement (or at the end of the
Termination Assistance Period if directed by NationsHealth or USPG), CIGNA shall (a) promptly
return to NationsHealth or USPG, in the format and on the media requested by NationsHealth or USPG,
all or any part of the NationsHealth Data or (b) erase or destroy all or any party of the
NationsHealth Data in CIGNA’s possession, in each case to the extent to requested by NationsHealth
or USPG. Any archival tapes containing NationsHealth Data shall be used by CIGNA solely for
back-up purposes.



3.0 Duplicative Data Fields. The Parties agree that there may be duplicative data fields in
the CIGNA Data and the NationsHealth Data.



4.0 Intellectual Property




          4. 1 During the term of this Agreement, USPG and NationsHealth shall assist CIGNA or its
designee, at CIGNA’s expense, in every reasonable way to secure all of CIGNA’s worldwide rights,
title and interest in CIGNA Intellectual Property in any and all countries, including the
disclosure to CIGNA of all pertinent information and data with respect thereto, the execution of
all applications, registrations, filings, specifications, oaths, assignments, confirmation of
assignments and all other instruments which CIGNA shall deem reasonably necessary or appropriate in
order to apply for and obtain such rights, title and interest and in order to assign and convey to
CIGNA, its successors, assigns and nominees the sole and exclusive rights, title and interests in
and to CIGNA Intellectual Property. USPG and NationsHealth further agree that their obligation to
execute or cause to be executed any such instrument or papers shall continue after the expiration
or termination of this Agreement. If testimony or information relative to any of said matters or
related to any interference or litigation is requested by CIGNA either during the term of this
Agreement or following its expiration or termination, USPG and NationsHealth agree to give all
information and testimony and do all things reasonably requested by CIGNA and at CIGNA’s expense.
If CIGNA is unable because of USPG’ s and/or NationsHealth refusal or dissolution to secure a
signature by or on behalf of USPG to apply for or to pursue any application, registration, filing
or other instrument for any United States or foreign intellectual property rights covering the
CIGNA Intellectual Property, then USPG hereby irrevocably designates and appoints CIGNA and its
duly authorized officers and agents as USPG’s agent and attorney in fact, to act for and on USPG’ s
and NationsHealth’s behalf and stead to execute and file any such application, registration, filing
or other instrument, and to do all other lawfully permitted acts to further the prosecution and
issuance of such intellectual property rights, with the same legal force and effect as if executed
by USPG or NationsHealth.




59









 








          4.2 During the term of this Agreement, CIGNA shall assist NationsHealth, USPG or its or
their designee, at NationsHealth or USPG’s expense, in every reasonable way to secure all of
NastionsHealth’s or USPG’s worldwide rights, title and interest in NationsHealth/USPG Intellectual
Property in any and all countries, including the disclosure to NationsHealth or USPG of all
pertinent information and data with respect thereto, the execution of all applications,
registrations, filings, specifications, oaths, assignments, confirmation of assignments and all
other instruments which NationsHealth or USPG shall deem reasonably necessary or appropriate in
order to apply for and obtain such rights, title and interest and in order to assign and convey to
NationsHealth, USPG, its or their successors, assigns and nominees the sole and exclusive rights,
title and interests in and to the NationsHealth/USPG Intellectual Property. CIGNA further agree
that their obligation to execute or cause to be executed any such instrument or papers shall
continue after the expiration or termination of this Agreement. If testimony or information
relative to any of said matters or related to any interference or litigation is requested by
NationsHealth or USPG either during the term of this Agreement or following its expiration or
termination, CIGNA agrees to give all information and testimony and do all things reasonably
requested by NationsHealth or USPG and at NationsHealth’s or USPG’s expense. If NationsHealth or
USPG is unable because of CIGNA’s refusal or dissolution to secure a signature by or on behalf of
NationsHealth or USPG to apply for or to pursue any application, registration, filing or other
instrument for any United States or foreign intellectual property rights covering the
NationsHealth/USPG Intellectual Property, then CIGNA hereby irrevocably designates and appoints
NationsHealth and USPG and their duly authorized officers and agents as CIGNA’s agent and attorney
in fact, to act for and on CIGNA’s behalf and stead to execute and file any such application,
registration, filing or other instrument, and to do all other lawfully permitted acts to further
the prosecution and issuance of such intellectual property rights, with the same legal force and
effect as if executed by CIGNA.




5.0 Continued Provision of Services




          5.1 Business Continuation.. USPG and NationsHealth shall (a) *** after the Effective
Date, develop a detailed disaster recovery and business continuation plan, including resource and
infrastructure requirements that shall enable USPG and NationsHealth to provide the Services in
accordance with this Agreement, (b) during the term of this Agreement, implement and comply with
the disaster recovery and business continuation services described in this Exhibit 7.03 and
the plans developed pursuant to sub-section (a) above and (c) test and successfully verify to CIGNA
that the disaster recovery and business continuation plan is fully operational and capable of
restoring operations so that USPG or NationsHealth is providing the Services as contemplated in
this Agreement. Upon the discovery by USPG or NationsHealth of a disaster or business interruption,
USPG or NationsHealth shall promptly provide CIGNA and the impacted CIGNA entities with a notice of
a disaster or business interruption or otherwise affecting the provision or receipt of the
Services.




          5.2 Implementation of Plan and Restoration of Services. In the event of a disaster
or business interruption (including a Force Majeure Event, as defined below), USPG and
NationsHealth shall implement or cause to be implemented the disaster recovery and business
continuation plan. In the event USPG and NationsHealth do not implement, or cause to be
implemented, the disaster recovery and business continuation plan and restore the Services in
accordance with such plan as set forth in this Exhibit CIGNA may terminate this Agreement in whole
or in part,




60









 







for cause upon notice to USPG and NationsHealth without regard to any cure period and CIGNA may
pursue any and all available rights and remedies. In the event of a disaster, USPG shall not
increase its charges under this Agreement or charge any CIGNA entity usage fees in addition to the
fees to be paid under this Agreement.




          5.3 Force Majeure. If and to the extent that the performance by CIGNA or USPG
or NationsHealth (an “Affected Party”) of any of its obligations pursuant to this
Agreement, as applicable, is prevented, hindered or delayed directly by an act of God, riot, war,
earthquake, acts of terrorism by public enemy, strikes, lockouts or labor disputes or any other
similar cause beyond the reasonable control of such Affected Party (excluding labor disputes or
strikes involving a Party’s own personnel) (each, a “Force Majeure Event”), and such
non-performance, hindrance or delay could not have been prevented by reasonable precautions, then
the Affected Party shall be excused for such hindrance, delay or non-performance, as applicable, of
those obligations affected by the Force Majeure Event for as long as such Force Majeure Event
continues and the Affected Party continues to use commercially diligent efforts to recommence
performance whenever and to whatever extent reasonably possible without delay, including through
the use of alternate sources, workaround plans or other means; provided, however, that the use of
such alternate sources, workaround plans or other means shall cease, upon the cessation of the
Force Majeure Event. For so long as a Force Majeure Event continues, the non-Affected Party shall,
upon the Affected Party’s reasonable request cooperate with the Affected Party. The Affected Party
shall immediately notify the other Party of the occurrence of the Force Majeure Event and describe
in reasonable detail the nature of the Force Majeure Event. The occurrence of a Force Majeure
Event does not excuse, limit or otherwise affect USPG’s obligation to provide either normal
recovery procedures or any other disaster recovery services, except to the extent that such
procedures or services are directly affected by such Force Majeure Event. For the avoidance of
doubt but without limiting the foregoing, each party shall be deemed in breach of this Agreement
for failures to perform its obligations other than failures due to Force Majeure Events.




          5.4 Alternate Source. If and for so long as any Force Majeure Event prevents, or
substantially hinders or delays, the performance of any critical Service for longer than the
recovery period specified in the applicable disaster recovery and business continuation plan, CIGNA
may procure part or all of the Services from an alternate source (after consultation with USPG) in
which case CIGNA shall have no obligation to compensate USPG for the Services for time period that
the Services, or part of them, are procured from an alternate source.




61









 








EXHIBIT 10.01 (a)




KNOWLEDGE OF USPG and NATIONSHEALTH




***




***




***




***




***




62









 








EXHIBIT 10.01(b)




KNOWLEDGE OF CIGNA




***




***




***




***





63