EX-10.23



 





Confidential Treatment

Exhibit 10.23



PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO REGISTRANT’S APPLICATION OBJECTING TO
DISCLOSURE AND REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 406. THE OMITTED
PORTIONS HAVE BEEN MARKED WITH BRACKETS.




HEALTH BENEFITS AGREEMENT




FIRST HEALTH LIFE & HEALTH INSURANCE COMPANY,




UNION PLANTERS CORPORATION




AND




STRATEGIC OUTSOURCING, INC.




Effective Date: March 1, 2004










 



 


					
	FHLHIC- 2004
	 	 
	 	Page 2 of 13






FIRST HEALTH LIFE & HEALTH INSURANCE COMPANY

HEALTH BENEFITS AGREEMENT




TABLE OF CONTENTS




	 	 	 	 	 
	SECTION

	 	I
	 	TERMS OF AGREEMENT
	 
	 	 	 	 
	SECTION

	 	II
	 	PRODUCTS
	 
	 	 	 	 
	SECTION

	 	III
	 	RATES
	 
	 	 	 	 
	SECTION

	 	IV
	 	MODIFICATION OF ADMINISTRATION FEES AND INSURANCE PREMIUM RATES
	 
	 	 	 	 
	SECTION

	 	V
	 	THE OFFERING OF FHLHIC PRODUCTS
	 
	 	 	 	 
	SECTION

	 	VI
	 	GROUP REPORTING REQUIREMENTS
	 
	 	 	 	 
	SECTION

	 	VII
	 	FHLHIC REPORTING REQUIREMENTS
	 
	 	 	 	 
	SECTION

	 	VIII
	 	ADMINISTRATIVE POLICIES
	 
	 	 	 	 
	SECTION

	 	IX
	 	RENEWAL
	 
	 	 	 	 
	SECTION

	 	X
	 	EXTENSION
	 
	 	 	 	 
	SECTION

	 	XI
	 	GENERAL
	 
	 	 	 	 
	SECTION

	 	XII
	 	TERMINATION












 



 


					
	FHLHIC- 2004
	 	 
	 	Page 3 of 13






AGREEMENT TO PROVIDE

COMPREHENSIVE HEALTH BENEFITS




          This is an Agreement (hereinafter “Agreement”) between First Health Life & Health
Insurance Company, located at 3200 Highland Avenue, Downers Grove, Illinois 60515 (hereinafter
referred to as “FHLHIC”), Union Planters Corporation, located at 6200 Poplar Avenue, Memphis,
Tennessee 38119 (“UPC”) and Strategic Outsourcing, Inc. located at 5260 Parkway Plaza Boulevard,
Fourteen Parkway Plaza, Suite 140, Charlotte, North Carolina 28217 (“SOI”). FHLHIC, UPC and SOI
may be individually referred to herein as a “party” or collectively referred to herein as the
“parties.”





	 	 	WHEREAS, SOI requests FHLHIC to provide health insurance products (hereinafter referred to
as the “Products”) to SOI’s client group employees and SOI’s corporate employees
(hereinafter collectively referred to as “Covered Employee(s)”) as part of its operation as
a professional employer organization;

and
	 
	 	 	WHEREAS, FHLHIC agrees to provide health insurance products to Covered Employees; and
	 
	 	 	WHEREAS, each of the parties to this Agreement seeks to set forth, in writing, the terms and
conditions

of this Agreement;
	 
	 	 	THEREFORE, the parties agree as follows:
	 
	I.	 	Term of the Agreement
	 
	 	 	This Agreement between the parties is for the period beginning March 1, 2004 (the effective
date) and shall end on February 28, 2009 (the termination date), and will renew
automatically for one year terms, unless otherwise terminated or revised in accordance with
the provisions of this Agreement.
	 
	II.	 	Products






	 	A.	 	FHLHIC will offer a large group preferred provider option (the “Benefits
Contract”), to be administered in a manner compliant with state insurance laws in the
states of California, North Carolina, South Carolina and Texas, as applicable, as
determined by the residence of Covered Employees. In addition, FHLHIC may administer
other mutually agreed upon health benefit options
in a manner compliant with state insurance laws in the states of California, North
Carolina, South Carolina and Texas, as applicable, as determined by the residence of
Covered Employees.
	 
	 	B.	 	The Benefits Contract is offered on a minimum premium insured basis (i.e., this
is not a plan of self-insurance).






	III.	 	Administration Fees and Premium Rates






	 	A.	 	The Administration Fees and Insurance Premium Rates are described in Schedule
A.
	 
	 	B.	 	The Administration Fees and Insurance Premium Rates in Schedule A are valid for
the period of March 1, 2004 through February 28, 2005, subject to CPI increases at each
subsequent annual coverage period.











 



 


					
	FHLHIC- 2004
	 	 
	 	Page 4 of 13







	 	C.	 	FHLHIC will provide SOI with a 120-day renewal notice for the approaching annual
coverage period, including: (a) the actual CPI increase for the Administration Fees and
Insurance Premium Rates set forth in Schedule A for the subsequent annual coverage
period; and (b) any required increase in the amount of the irrevocable letter of credit
for the subsequent annual coverage period. The parties acknowledge that increases in
the amount of the irrevocable letter of credit will be either: (i) connected to the
amount of reserves that are statutorily required by the state of Texas for Covered
Employees; or (ii) as determined by FHLHIC. Notwithstanding the foregoing, FHLHIC
reserves the right to require SOI to contribute additional amounts of money to the
irrevocable letter of credit based upon other factors such as SOI’s financial viability
and SOI’s claims experience. FHLHIC, in its sole discretion, will determine such
additional amounts of money that SOI must contribute to the irrevocable letter of
credit.
	 
	 	D.	 	Notwithstanding Section III.C above, FHLHIC may require an increase in the
irrevocable letter of credit at any time by giving 30 days advance written notice if
the number of Covered Employees exceeds 2,250. The parties acknowledge that increases
in the amount of the irrevocable letter of credit will be either: (a) connected to the
amount of reserves that are statutorily required by the state of Texas for Covered
Employees; or (b) as determined by FHLHIC. Notwithstanding the foregoing, FHLHIC
reserves the right to require SOI to contribute additional amounts of money to the
irrevocable letter of credit based upon other factors such as SOI’s financial viability
and SOI’s claims experience. FHLHIC, in its sole discretion, will determine such
additional amounts of money that SOI must contribute to the irrevocable letter of
credit.






	IV.	 	Modification of Administration Fees and Insurance Premium Rates
	 
	 	 	Administration Fees and Insurance Premium Rates for the term of this Agreement will remain
in effect, as set forth in Schedule A, provided there is no material change to the
Product(s) or any other risk factors1, as determined by FHLHIC. In the
event there is a change in the total enrollment of 15% or greater during any 90 day period,
FHLHIC reserves the right to review the prospective client group’s experience data. At that
time, FHLHIC will review the in-force Administration Fees and Insurance Premium Rates and
modify them to compensate for changes in the risk factors. In the event a modification is
required due to a single large group of 300 or more Covered Employees the method for such
modification, such as separate contract, or a change in the fees and rates on all plans
under this contract, will be as mutually agreed to by the parties.
	 
	 	 	In the event a modification is required, the modified Administration Fees and Insurance
Premium Rates will be set forth and presented to SOI on a revised Schedule A within 30 days.
All other provisions of this Agreement shall remain in effect without modification.
	 
	V.	 	The Offering of FHLHIC Products






	 	A.	 	FHLHIC and SOI agree that SOI will offer the FHLHIC Products exclusively to its
Covered Employees in California, North Carolina, South Carolina and Texas. No other
SOI sponsored major medical health plan will be offered to Covered Employees in the
above states during the term of this Agreement.
	 
	 	B.	 	SOI will make the Product(s) available to its Covered Employees in the
following manner:







 




			
	1	 	  Risk factors include age, sex, worker
classification, diagnosis, claims experience, or any other demographics of the
Covered Employees or the employees requested to be covered by this Agreement.











 



 


					
	FHLHIC- 2004
	 	 
	 	Page 5 of 13







	 	1.	 	SOI will conduct one open enrollment per year. The open enrollment period
shall not exceed 30 days in duration.
	 
	 	2.	 	FHLHIC’s marketing materials including price, product
designs, network information, and other pertinent information will be
available to SOI to make the selection of the Product(s) available to its
Covered Employees. FHLHIC, in consultation with SOI, shall determine the
appropriate quantity of marketing materials to make available to SOI.
	 
	 	3.	 	An open enrollment will be conducted for 30 days and will
commence approximately 60-90 days before the annual coverage period begins, or
as mutually agreed to by the parties.
	 
	 	4.	 	Individual client groups of SOI will be required to maintain
75% participation and 50% contribution (of the single rate) for their Covered
Employees. SOI will monitor compliance with these requirements and, upon
request by FHLHIC, will provide copies of the monitoring reports to FHLHIC.






	 	C.	 	The Insurance Premium Rates are subject to change with 30 days notice, in the
event premium taxes are assessed on premium exceeding the Insurance Premium Rates. Any
increase in Insurance Premium Rates based upon the foregoing will be limited to the
amount of the actual increase assessed to FHLHIC and relating to the plan.






	VI.	 	Group Reporting Requirements






	 	A.	 	SOI will provide FHLHIC with the necessary reports to ensure compliance with
participation and contribution requirements described in Section V above. These
reports will be provided as requested by FHLHIC.
	 
	 	B.	 	SOI will provide to FHLHIC the industry classification codes (SIC) of the
enrolled client groups as requested by FHLHIC.
	 
	 	C.	 	SOI will provide to FHLHIC enrollment data by county, or other such information
that may be required to adequately evaluate risk and develop appropriate rates, as
requested by FHLHIC.
	 
	 	D.	 	SOI will provide to FHLHIC, as requested by FHLHIC, business practice
information related to the following:






	 	•	 	client acquisition process
	 
	 	•	 	client contracting
	 
	 	•	 	monitoring of participation levels and contribution levels
	 
	 	•	 	business plans
	 
	 	•	 	financial statements
	 
	 	•	 	benefits administration process including enrollment,
premium remittance and reconciliation and new client/Covered Employee
orientation






	VII.	 	FHLHIC Reporting Requirements
	 
	 	 	FHLHIC will provide SOI with its standard monthly utilization reports as requested by SOI in
their role as Plan Administrator. Based on the originally executed Business Associate
Agreement, FHLHIC will provide the following data elements to SOI via monthly diskette.
Covered Employee number, coverage











 



 


					
	FHLHIC- 2004
	 	 
	 	Page 6 of 13







	 	 	code, zip code, state, county, patient, first and last name, DOB, sex code, paid date,
service date, claim type, charge allowed and paid amount.






	VIII.	 	Administrative Policies






	 	A.	 	Enrollment Methodology
	 
	 	 	 	SOI’s human resource staff will enroll each new client group’s Covered Employees via
SOI’s Individual Application. Individual Applications will be provided to SOI’s
Corporate Office for entry. SOI will provide FHLHIC with daily electronic transfer of
full file enrollment data. Enrollment transfers will be processed the night of receipt
as long as the file is transferred prior to 2:00 p.m. Files received after this time
will process the next business day.
	 
	 	B.	 	Identification Cards
	 
	 	 	 	SOI will prepare the identification cards for Covered Employees. Identification cards
prepared by SOI must be reviewed and approved, in writing, by FHLHIC prior to
distribution to Covered Employees, such approval will not be unreasonably withheld.
	 
	 	C.	 	Terminations
	 
	 	 	 	Terminations are removed on the date of termination. If a Covered Employee terminates
during the 1st — 15th of the month, zero (0) premium is paid. If
a Covered Employee terminates during the 15th — 30th of the
month, a full month’s premium is paid to FHLHIC.
	 
	 	D.	 	Billing Process:






	 	1.	 	On March 1, 2004, SOI shall provide FHLHIC an irrevocable
Letter of Credit (“LOC”) and Claims Fund (as defined below) solely in favor of
FHLHIC in the amount set forth in Schedule A. Such LOC shall be available to
FHLHIC, in the event any obligation of SOI under this Agreement is not, in the
opinion of FHLHIC, fully satisfied on a timely basis by SOI. Such LOC must be
acceptable to FHLHIC, and must be for a term which exceeds six (6) months
beyond the term of this Agreement. Additional irrevocable LOC’s which are
acceptable to FHLHIC must be provided to FHLHIC by SOI after quarterly review
of the continued adequacy of the amount of the LOC and/or prior to any
extension of this Agreement. Each such additional LOC must have a term which
extends six (6) months beyond the extended term of this Agreement. In the
event the LOC terminates or expires, then SOI will replace the LOC with no gap
in coverage. “Claims Fund” means the predetermined amount paid by SOI to
FHLHIC to be held for the benefit of claims incurred by SOI. Each year during
the Agreement, FHLHIC may modify the Claims Fund upon giving SOI at least
thirty (30) days written notice prior to March 1st. Such
modification of the Claims Fund will not exceed 11/2 months of expected claims
as determined by FHLHIC. Notwithstanding anything to the contrary in this
Section VIII.D.1, FHLHIC may modify the Claims Fund at any time if the number
of Covered Employees increases by ten percent (10%) or more.











 



 


					
	FHLHIC- 2004
	 	 
	 	Page 7 of 13







	 	2.	 	Administration Fees and Insurance Premium






	 	a.	 	SOI agrees to pay FHLHIC, each month, an
Administrative Fee and Insurance Premium. The Administrative Fees and
Insurance Premium Rates applicable to this Agreement are set forth in
Schedule A, which is hereby, incorporated by reference into and made a
part of this Agreement.
	 
	 	b.	 	These Administrative Fees and Insurance Premium Rates
will be applied to the number of contracts covered at the beginning of
each month and will not be prorated. The due date, for purposes of this
section, is the tenth day of each calendar month. SOI agrees to pay to
FHLHIC, each month, the Administrative Fee and the Insurance Premium, in
full, by the due date.
	 
	 	c.	 	SOI’s monthly invoice for Administrative Fees and
Insurance Premium will be generated on the 1st day of each
month and either Secure E-mailed or Federal Expressed to SOI’s Corporate
Office. The invoice will provide a list of each enrolled Covered
Employee’s social security number, coverage type and rate by division for
insureds reported to FHLHIC and processed by the 1st of each month. The
due date will be the 10th of each month.
	 
	 	 	 	SOI/Division Mapping Structure is as follows:
	 
	 	 	 	     California, North Carolina, South Carolina and Texas.
	 
	 	 	 	Each month’s invoice is due and payable on the 10th of the month. A 10
day grace period will be administered. If full premium payment is not
received by FHLHIC by the end of this grace period, this Agreement will be
immediately canceled for nonpayment of premium.
	 
	 	d.	 	Payment received after ten (10) days after the due
date is considered late and subject to a daily late payment charge of
..00038 times the amount of overdue Administrative Fees and/or Insurance
Premium, or the maximum amount permitted by law, if less.






	 	3.	 	Paid Claims Liability






	 	a.	 	SOI agrees that the LOC and the Claims Fund which are
described in Section VIII.D.l. above are available for all Claims (as
defined below) paid by FHLHIC in accordance with this Agreement, the
Benefits Contract and the applicable provider agreements. “Claims”
includes physician incentives, pharmacy, physician, hospital, other
fee-for- service claims expenditures, and fees paid to contracted entities
necessary to the performance of this Agreement.
	 
	 	b.	 	At the end of each month, FHLHIC will provide SOI
with a detailed printout of the previous month’s Claims payments in its
standard report format.
	 
	 	c.	 	Each business day, SOI will remit funds to FHLHIC or
permit FHLHIC to withdraw funds in an amount equal to the checks issued
for payment of Claims in accordance with











 



 


					
	FHLHIC- 2004
	 	 
	 	Page 8 of 13







	 	 	 	the Agreement or the Benefits Contract. Funding will continue as long as
Claims are eligible for payment under the plans.






	 	d.	 	FHLHIC will adjudicate all Claims incurred during the
term of this Agreement. For purposes of this Agreement, the date of an
incurred claim is the date the particular service was rendered or the
supply was furnished. After the effective date of termination of this
Agreement, SOI will continue to provide FHLHIC with funds to pay claims
incurred prior to the termination date or due to any benefit extension
provision of the Benefits Contract.
	 
	 	e.	 	Payment received after ten (10) days after the due
date is considered late and subject to a daily late payment charge of
..00038 times the amount overdue.






	 	4.	 	UPC acknowledges and agrees that it is the guarantor of the
financial obligations of SOI under this Agreement.






	 	E.	Retroactive Terminations (Max 60 days)






	 	 	Retroactive terminations will not be accepted past 60 days from the actual
termination date. FHLHIC will provide premium credits for these retroactive
terminations up to but not exceeding 60 days. For example, FHLHIC receives a
request on March 31st to terminate a Covered Employee’s coverage
effective December 31st. FHLHIC will terminate the Covered Employee’s
coverage effective January 31st and collect premium for the month of
January. Reports will reflect the actual termination date.






	 	F.	Retroactive Additions






	 	 	Retroactive additions will not be accepted past 60 days from the actual effective
date. FHLHIC will bill full premium payment for retroactive additions.






	 	G.	Eligibility






	 	 	FHLHIC and SOI have agreed upon 90 days waiting period. The applicable waiting
period will be determined by SOI.






	 	H.	Membership Forms






	 	1.	 	SOI Individual Insurance/Membership






	 	 	 	Each Covered Employee applying for coverage must complete an Individual Application.






	 	2.	 	Covered Employee Status Change Form






	 	 	 	Any Covered Employee status change, i.e., marriage, divorce, addition of newborns,
etc. will require completion of a Covered Employee Status Change form. The change
data must be received by FHLHIC as follows:






	 	 	 	Marriage — within 60 days of event

Divorce — within 60 days of event











 



 


					
	FHLHIC- 2004
	 	 
	 	Page 9 of 13







	 	 	 	Newborn — within 60 days of event






	 	 	 	If changes are not submitted within the specified time frames, the Covered Employee must
wait until the next annual open enrollment to make changes except under HIPAA
requirements for special enrollment.
	 
	 	I.	 	COBRA
	 
	 	 	 	SOI will retain sole responsibility for COBRA administration as evidenced by the signing
of the attached Exhibit A, COBRA Waiver.
	 
	 	J.	 	Health Insurance Portability and Accountability Act (HIPAA) Pre-Ex Compliance
	 
	 	 	 	SOI has elected electronic enrollment and therefore, SOI retains accountability for
calculating and reporting to the Covered Employee and FHLHIC, the amount of creditable
time to be applied to satisfy the pre-existing exclusion limitation.






	IX.	 	Renewal
	 
	 	 	This Agreement shall automatically renew/extend for a one year period, after the termination
date. Either party may elect not to renew this Agreement and in that event shall give
written notice to the other party at least ninety (90) days prior to the expiration of the
then current term. Renewal rates will be provided to SOI at least one hundred twenty (120)
days prior to the expiration of the then current term. The proposed Administrative Fees and
Insurance Premium Rates provided to SOI will apply for the renewal period.
	 
	X.	 	Extension
	 
	 	 	In the event an agreement cannot be reached or no action is taken on FHLHIC’s annual rate
adjustment, either party may elect not to renew provided that said party shall give written
notice to the other party of its intent not to extend this Agreement at least ninety (90)
days prior to the applicable Anniversary Date. In the event SOI needs additional time to
secure a new agreement, FHLHIC agrees to extend the then current agreement at the FHLHIC
proposed Administrative Fees and Insurance Premium Rates for the renewal period, for a
period not to exceed six (6) months beyond the effective termination/expiration date for
then current term.
	 
	XI.	 	Termination






	 	A.	 	This Agreement may be terminated by written notice thereof given by SOI to
FHLHIC if any one of the following occurs:






	 	1.	 	Failure of FHLHIC to meet any material covenant, agreement,
or obligation provided for in this Agreement if it has not commenced to cure
any such default within 20 days and has not cured such default within 90 days
after written notice thereof to FHLHIC by SOI. FHLHIC acknowledges that
termination of this Agreement for material breach is not SOIs sole and
exclusive remedy.











 



 


					
	FHLHIC- 2004
	 	 
	 	Page 10 of 13







	 	2.	 	FHLHIC becomes insolvent or is adjudicated as a bankrupt entity, or its
business comes into possession or control, even temporarily, of any trustee in
bankruptcy, or a receiver is appointed for it, or it makes a general
assignment for the benefit of creditors. If any of these events occurs: (a)
no interest in this Agreement may be deemed an asset of creditors; (b) no
interest in this Agreement may be deemed an asset or liability of FHLHIC; and
(c) no interest in this Agreement may pass by the operation of law without the
consent of SOI.






	 	B.	 	This Agreement may be terminated by written notice thereof given by FHLHIC to
SOI and UPC if any one of the following occurs:






	 	1.	 	Failure of SOI and/or UPC to meet any material covenant,
agreement, or obligation provided for in this Agreement if it has not
commenced to cure any such default within twenty (20) days and has not cured
such default within ninety (90) days after written notice thereof to SOI and
UPC by FHLHIC. SOI and UPC acknowledge that termination of this Agreement for
material breach is not FHLHIC’s sole and exclusive remedy.
	 
	 	2.	 	Failure of SOI and/or UPC to make payment under this
Agreement when due, and if payment is not made within twenty (20) days
following written notice of non-payment sent by FHLHIC to SOI and UPC.
	 
	 	3.	 	Termination of the agreement between SOI, UPC, First Health
Group Corp. and First Health Benefits Administrators Corp.
	 
	 	4.	 	Failure of SOI to properly fund a benefits account or
otherwise provide for allowed claims within ten (10) days following written
notice of inadequate funding sent by FHLHIC to SOI. Such accounts will be
established, maintained and reconciled by SOI, which will be responsible for
any applicable account fees and will ensure that the accounts contain
sufficient funds at all times for the continuous and timely payment of claims
processed by FHLHIC. In those states where FHLHIC pays for claims, FHLHIC
will own the accounts. If FHLHIC determines that the accounts do not contain
sufficient funds, FHLHIC may so notify SOI and immediately suspend further
performance of services under this Agreement pending termination under this
Section.
	 
	 	5.	 	SOI and/or UPC become insolvent, or is adjudicated as a
bankrupt entity, or its business comes into possession or control, even
temporarily, of any trustee in bankruptcy, or a receiver is appointed for it,
or it makes a general assignment for the benefit of creditors. If any of
these events occurs: (a) no interest in this Agreement may be deemed an asset
of creditors: (b) no interest in this Agreement may be deemed an asset or
liability of SOI and/or UPC; and (c) no interest in this Agreement may pass by
operation of law without the consent of FHLHIC.






	 	C.	 	Upon the effective date of the termination of this Agreement, in whole or in
part, as applicable:






	 	1.	 	If FHLHIC owes SOI any moneys due to an adjustment, FHLHIC
will pay SOI the balance of any amount due SOI, less any amount SOI owes
FHLHIC, within 30 days of the completion of any adjustment calculation; or (b)
if SOI owes FHLHIC any moneys, SOI will pay FHLHIC the balance of any amount
due FHLHIC, less any amount FHLHIC owes SOI, within 30 days of the termination
of this Agreement or, if applicable, the completion of any











 



 


					
	FHLHIC- 2004
	 	 
	 	Page 11 of 13







	 	 	 	adjustment calculation. Moneys not so paid under the terms of this Agreement
will accrue interest at a rate of 1.5% per month or, if less, the maximum
amount permitted by law until such obligations are satisfied.






	 	2.	 	Upon termination, SOI further agrees that any accounts owned
by FHLHIC for the benefit of SOI’s Covered Employees will: (a) be used to
continue to pay the claims incurred prior to the termination date of the
contract; and (b) contain funds, subject to the current funding arrangement,
sufficient to ensure payment for all checks written by FHLHIC on behalf of SOI
and its Covered Employees pursuant to this Agreement, and such account will
remain active after the termination of this Agreement for the time period
necessary to ensure such payment. In those states where FHLHIC pays for
claims, FHLHIC will own such accounts.
	 
	 	3.	 	SOI will immediately cease to represent that FHLHIC is its
provider of the health benefits services terminated and will cease to use the
respective FHLHIC’s documents, systems, logos, service marks, trademarks,
trade names, methods and techniques in any form.
	 
	 	4.	 	Any plan records may be delivered to SOI in the format in
which they are maintained by FHLHIC.






	XII.	 	Confidentiality of Information






	 	A.	 	The parties agree that all Confidential Information (as defined below) of each
party may not be disclosed, except as provided below, without the express written
approval of the other party. Further, Confidential Information may be disclosed only
to those persons who need to know, and only to the extent necessary, in order to carry
out the terms of this Agreement. Confidential Information may not be used in any way
not specifically allowed under this Agreement, including in each party’s own business,
whether or not competitive with the other party. Each party will notify the others of
any loss or accidental or unauthorized disclosure of Confidential Information.
“Confidential Information” means any non-public proprietary information, including, but
not limited to, the terms of this Agreement, information about fees, computer software,
business procedures and manuals, data review criteria, and information provided by SOI
to FHLHIC pursuant to Section VI of this Agreement. For purposes of this Agreement,
Confidential Information does not include: (a) information publicly available by means
other than wrongful disclosure or lawfully obtained from third parties without any
confidentiality obligations; (b) information which is required by law or by a
government agency to be disclosed by a party, provided that such party immediately
notifies the other party of the requirements for such disclosure and reasonably
cooperates in obtaining any protective order desired by the other party with regard to
such information; (c) information independently developed by the other party; or (d)
information provided to the other party with the intention that it be published,
disseminated, released or distributed by such other party to Covered Employees or to
the general public.
	 
	 	B.	 	The parties recognize that no remedy of law may be adequate to compensate a
party for a breach of the provisions of this Section; therefore, all parties agree that
a party may seek temporary and permanent injunctive relief against the breaching party,
in addition to all other remedies which either is otherwise entitled, and this Section
in no way limits such other remedies of the parties. Such temporary or permanent
injunctive relief may be granted without bond which each party does hereby waive.











 



 


					
	FHLHIC- 2004
	 	 
	 	Page 12 of 13







	XIII.	 	General






	 	A.	 	Inconsistencies






	 	 	 	If the provisions of this Agreement are, in any way, inconsistent with the
provisions of the Products, then the provisions of the Agreement shall prevail, and
the other provisions shall be deemed modified but only to the extent necessary to
implement the intent of the parties herein.






	 	B.	 	Survival






	 	 	 	The rights and obligations of the parties, as set forth herein, shall survive the
termination of this Agreement to the extent necessary to effectuate the intent of
the parties as expressed herein.






	 	C.	 	Waiver of Breach






	 	 	 	The failure by either party, at any time, to enforce or to require the strict
adherence to any provision of this Agreement shall not be deemed to be a waiver of
such provision or any other provision of this Agreement.






	 	D.	 	Governing Law






	 	 	 	This Agreement, and the rights of the parties hereunder, shall be construed
according to the laws of the State of Illinois.






	 	E.	 	Severance






	 	 	 	In the event any provision of this Agreement is deemed to be invalid or
unenforceable, all other provisions shall remain in full force and effect.






	 	F.	 	Amendment






	 	 	 	This Agreement may be amended at any time upon mutual written agreement of the
parties, except that FHLHIC may make changes necessary to comply with state and
federal laws. In the event such changes are necessary, FHLHIC will provide
appropriate written notice to SOI and UPC.






	 	G.	 	Entire Agreement






	 	 	 	This Agreement, which includes the Schedules, Individual Applications for Group
Insurance, Group Application(s) for coverage, and the Products, which are hereby
incorporated by reference, constitute the entire Agreement between SOI, UPC and
FHLHIC. Any prior agreements, promises, or representations, either oral or written,
relating to the subject matter of this Agreement, and not expressly set forth in
this Agreement, are of no force or effect.






	 	H.	 	Notices






	 	 	 	Any notice, required or permitted under this Agreement, shall be deemed given if
hand delivered or if mailed by United States mail, or an overnight mail service
(e.g. Federal Express), postage











 



 


					
	FHLHIC — 2004
	 	 
	 	Page 13 of 13







	 	 	 	prepaid, to the applicable address as set forth above or to such other address as a
party may designate, in writing, to the other party. Such notice shall be deemed
effective as of the date so deposited or delivered.






	 	I.	 	Provider Networks
	 
	 	 	 	FHLHIC’s health care provider networks are subject to change and may be modified at any
time during the term of this Agreement without notice to or consent of SOI or UPC.




IN WITNESS WHEREOF the parties have executed this Agreement as of the 1st day of March,
2004 by their duly authorized officers for and on behalf of said entity.




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	First Health Life & Health Insurance Company
	 

	 	 
	 	 	 	 	 	 	 	 	 	 
	  /s/ Sharon Bradel	 	 	 	Signature:	 	  /s/ Jane Hannabach	 	 
	 	 	 	 	 	 	 	 	 	 	 
	  Witness	 	 	 	Print Name:	 	  Jane Hannabach	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Title:	 	  President	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Date:	 	  11/1/04	 	 
	 	 	 	 	 	 	 	 	 





	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Strategic Outsourcing, Inc.
	 

	 	 
	 	 	 	 	 	 	 	 	 	 
	/s/ Sarah M. Smith	 	 	 	Signature:	 	  /s/ Carl Guidice	 	 
	 	 	 	 	 	 	 	 	 	 	 
	  Witness	 	 	 	Print Name:	 	  Carl Guidice	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Title:	 	  Chief Operating Officer	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Date:	 	  10/25/04	 	 
	 	 	 	 	 	 	 	 	 





	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Union Planters Corporation
	 

	 	 
	 	 	 	 	 	 	 	 	 	 
	/s/ Sarah M. Smith	 	 	 	Signature:	 	  /s/ Carl Guidice	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Witness	 	 	 	Print Name:	 	  Carl Guidice	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Title:	 	  Divisional CEO	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Date:	 	  10/25/04	 	 
	 	 	 	 	 	 	 	 	 












 



 




					
	FHLHIC- 2004
	 	 
	 	Schedule A






Schedule A




	 	 	 
	Fees:
	 	 
	 
	 	 
	Initial Implementation Fee:

	 	$[     ] (includes California, North Carolina, South Carolina and
Texas)
	 
	 	 
	Insurance Premium:

	 	$[     ] per Covered Employee per Month, with annual CPI increases
	 
	 	 
	Minimum Insurance Premium:

	 	1,500 Covered Employees or $[     ] Per Month, with annual CPI

Increases
	 
	 	 
	Irrevocable Letter of Credit:

	 	$[     ], adjusted at the end of the term or if number of Covered
Employees meets or exceeds 2,250
	 
	 	 
	Additional State Implementation:

	 	$[     ], at FHLHIC’s discretion
	 
	 	 
	State Assessments:

	 	All per member per month state assessments will be passed
through to SOI.
	 
	 	 
	Claims Fund:

	 	$[     ] (this amount may be modified as specified in Section
VIII.D.1. of the Agreement)













 



 




					
	FHLHIC- 2004
	 	 
	 	Exhibit A






EXHIBIT A




COBRA WAIVER



SOI hereby acknowledges and agrees that it is: (1) retaining sole responsibility for COBRA



administration; and (2) waiving FHLHIC’s offer to provide COBRA administration services.




IN WITNESS WHEREOF, the parties have executed this COBRA Waiver as of the 1st day of



March, 2004 by their duly authorized officers for and on behalf of said entity.




	 	 	 	 	 
	Strategic Outsourcing, Inc.	 	 
	By:

	 	  /s/ Carl Guidice	 	 
	 

	 	 	 	 
	Name:

	 	  Carl Guidice	 	 
	 

	 	 	 	 
	Title:

	 	  Chief Operating Officer
	 	 
	 

	 	 	 	 
	Date:

	 	  10/25/04	 	 
	 

	 	 	 	 












 



 




FIRST AMENDMENT TO THE

HEALTH BENEFITS AGREEMENT

DATED MARCH 1, 2004

BY AND BETWEEN

FIRST HEALTH LIFE & HEALTH INSURANCE COMPANY,

UNION PLANTERS CORPORATION

AND

STRATEGIC OUTSOURCING, INC.



THIS FIRST AMENDMENT (the “Amendment”) is entered into as of June 1, 2004 (the “Effective Date”),
between First Health Life & Health Insurance Company (“FHLHIC”), Union Planters Corporation (“UPC”)
and Strategic Outsourcing, Inc. (“SOI”). FHLHIC, UPC and SOI may be individually referred to
herein as a “party” or collectively referred to herein as the “parties.”



WHEREAS, FHLHIC, UPC and SOI previously entered into that certain Health Benefits Agreement dated
March 1, 2004 (the “Agreement”), under which the FHLHIC provides certain health insurance products
(hereinafter referred to as the “Products”) to SOI’s client group employees and SOI’s corporate
employees (hereinafter collectively referred to as “Covered Employee(s)”) as part of SOI’s
operation as a professional employer organization; and



WHEREAS, FHLHIC, UPC and SOI desire to amend the Agreement to: (i) add Nevada as one of the states
in which FHLHIC will provide Products to Covered Employees; and (ii) include FHLHIC’s fees for
providing such Products to Covered Employees in the state of Nevada.



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





	1.	 	Section II.A of the Agreement is hereby deleted in its entirety and replaced with the
following:






	 	A.	 	FHLHIC will offer a large group preferred provider option (the “Benefits
Contract”), to
be administered in a manner compliant with state insurance laws in the states of
California, Nevada, North Carolina, South Carolina and Texas, as applicable, as
determined by the residence of Covered Employees. In addition, FHLHIC may
administer other mutually agreed upon health benefit options in a manner compliant with
state insurance laws in the states of California, Nevada, North Carolina, South Carolina
and Texas, as applicable, as determined by the residence of Covered Employees.






	2.	 	Section V.A of the Agreement is hereby deleted in its entirety and replaced with the
following:






	 	A.	 	FHLHIC and SOI agree that SOI will offer the FHLHIC Products exclusively to its
Covered Employees in California, Nevada, North Carolina, South Carolina and Texas.
No other SOI sponsored major medical health plan will be offered to Covered Employees
in the above states during the term of this Agreement.






	3.	 	The fourth sentence in Section VIII.D.2.c. of the Agreement is hereby deleted in its entirety
and replaced with the following:
	 
	 	 	SOI/Division Mapping Structure is as follows:
	 
	 	 	     California, Nevada, North Carolina, South Carolina and Texas.











 




 



					
	Union Planters Corporation/SOI — First Amendment
	 	Page 2 of 3






	4.	 	The following shall be added to the end of Schedule A of the Agreement:

Nevada Implementation Fee:    $[     ]
	 
	5.	 	The parties ratify and affirm the Agreement and agree that it is in full force as modified by
this Amendment. This Amendment will prevail in the event of a conflict between it and the
Agreement.




IN WITNESS WHEREOF, the duly authorized officers for and on behalf of the parties have executed

this Amendment as of the Effective Date.




	 	 	 	 	 	 	 
	 	 	 	 	First Health Life & Health Insurance Company
	 
	  /s/ Sharon Bradel

	 	 	 	By:
	 	  /s/ Jane Hannabach
	 

	 	 	 	 	 	 
	  Witness

	 	 	 	Name:
	 	  Jane Hannabach
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:
	 	  President
	 

	 	 	 	 	 	 
	 

	 	 	 	Date:
	 	  11/1/04
	 

	 	 	 	 	 	 





	 	 	 	 	 	 	 
	 	 	 	 	Strategic Outsourcing, Inc.
	 
	/s/ Sarah M. Smith

	 	 	 	By:
	 	  /s/ Carl Guidice
	 

	 	 	 	 	 	 
	  Witness

	 	 	 	Name:
	 	  Carl Guidice
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:
	 	  Chief Operating Officer
	 

	 	 	 	 	 	 
	 

	 	 	 	Date:
	 	  10/25/04
	 

	 	 	 	 	 	 





	 	 	 	 	 	 	 
	 	 	 	 	Union Planters Corporation
	 
	/s/ Sarah M. Smith

	 	 	 	By:
	 	  /s/ Carl Guidice
	 

	 	 	 	 	 	 
	Witness

	 	 	 	Name:
	 	  Carl Guidice
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:
	 	  Divisional CEO
	 

	 	 	 	 	 	 
	 

	 	 	 	Date:
	 	  10/25/04
	 

	 	 	 	 	 	 











 



 


SECOND AMENDMENT TO THE

HEALTH BENEFITS AGREEMENT

DATED MARCH 1, 2004

BY AND BETWEEN

FIRST HEALTH LIFE & HEALTH INSURANCE COMPANY,

REGIONS FINANCIAL CORP. (FORMERLY UNION PLANTERS CORPORATION)

AND

STRATEGIC OUTSOURCING, INC.



THIS SECOND AMENDMENT (the “Amendment”) is entered into as of March 1, 2005 (the “Effective
Date”), between First Health Life & Health Insurance Company (“FHLHIC”), Regions Financial Corp.
(Formerly, Union Planters Corporation (“RFC”) and Strategic Outsourcing, Inc. (“SOI”). FHLHIC, RFC
and SOI may be individually referred to herein as a “party” or collectively referred to herein as
the “parties.”



WHEREAS, FHLHIC, RFC and SOI previously entered into that certain Health Benefits Agreement
dated March 1, 2004 (the “Agreement”), under which the FHLHIC provides certain health insurance
products (hereinafter referred to as the “Products”) to SOI’s client group employees and SOI’s
corporate employees (hereinafter collectively referred to as “Covered Employee(s)”) as part of SOI’s
operation as a professional employer organization; and



WHEREAS, FHLHIC, RFC and SOI desire to amend the Agreement to: (i) add Virginia as one of the
states in which FHLHIC will provide Products to Covered Employees; (ii) include FHLHIC’s fees for
providing such Products to Covered Employees in the state of Virginia; (iii) add dental coverage
for Virginia and Nevada; and (iv) include FHLHIC’s fees for providing dental coverage to Covered
Employees in these states;



NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and in

the Agreement, the parties agree as follows:





	1.	 	Section II.A of the Agreement is hereby deleted in its entirety and replaced with the
following:






	 	A.	 	FHLHIC will offer a large group preferred provider option (the “Benefits
Contract”), to be administered in a manner compliant with state insurance laws in the states of
California, Nevada, North Carolina, South Carolina, Texas and Virginia, as applicable,
as determined by the residence of Covered Employees. In addition, FHLHIC may
administer other mutually agreed upon health benefit options in a manner compliant with
state insurance laws in the states of California, Nevada, North Carolina, South
Carolina, Texas and Virginia, as applicable, as determined by the residence of Covered Employees.






	2.	 	Section V.A of the Agreement is hereby deleted in its entirety and replaced with the
following:






	 	A.	 	FHLHIC and SOI agree that SOI will offer the FHLHIC Products exclusively to its
Covered Employees in California, Nevada, North Carolina, South Carolina, Texas and
Virginia. No other SOI sponsored major medical health plan will be offered to Covered
Employees in the above states during the term of this Agreement, except the following
HMO plans may be offered: Kaiser HMO of California in California; Coventry HMO of
GA; and Humana Medicare Advantage Plan to Medicare eligible employees.











 



 



					
	Union Planters Corporation/SOI — First Amendment
	 	Page 2 of 3







	3.	 	The fourth sentence in Section VIII.D.2.c of the Agreement is hereby deleted in its entirety
and replaced with the following:
	 
	 	 	SOI/Division Mapping Structure is as follows:
	 
	 	 	     California, Nevada, North Carolina, South Carolina, Texas and Virginia.
	 
	4.	 	Schedule A of the Agreement shall be amended as follows:






	 	 	The Irrevocable Letter of Credit is hereby deleted and replaced with the following:





	 	 	 	 	 
	 

	 	Irrevocable Letter(s) of Credit:
	 	$[     ], adjusted annually or if the number of covered
lives meets or exceeds 2,500 by more than 10%.







	 	 	The following is added at the end of Schedule A:





	 	 	 	 	 
	 

	 	Virginia Implementation Fee:
	 	$[     ]
	 
	 	 	 	 
	 

	 	Dental Insurance Premium:
	 	$[     ] per Covered Employee per Month, with annual CPI increases







	5.	 	The parties ratify and affirm the Agreement and agree that it is in full force as modified by
this Amendment. This Amendment will prevail in the event of a conflict between it and the
Agreement.




IN WITNESS WHEREOF, the duly authorized officers for and on behalf of the parties have executed

this Amendment as of the Effective Date.




	 	 	 	 	 	 	 
	 	 	 	 	First Health Life & Health Insurance Company
	 
	  /s/ Sharon Bradel

	 	 	 	By:
	 	  /s/ Karyn Glogowski
	 

	 	 	 	 	 	 
	  Witness

	 	 	 	Name:
	 	  Karyn Glogowski
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:
	 	  Vice President
	 

	 	 	 	 	 	 
	 

	 	 	 	Date:
	 	  11/1/05
	 

	 	 	 	 	 	 





	 	 	 	 	 	 	 
	 	 	 	 	Strategic Outsourcing, Inc.
	 
	/s/ Sarah M. Smith

	 	 	 	By:
	 	  /s/ Carl Guidice
	 

	 	 	 	 	 	 
	  Witness

	 	 	 	Name:
	 	  Carl Guidice
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:
	 	  Chief Operating Officer
	 

	 	 	 	 	 	 
	 

	 	 	 	Date:
	 	  10/12/05
	 

	 	 	 	 	 	 











 



 



					
	Union Planters Corporation/SOI — First Amendment
	 	Page 3 of 3






	 	 	 	 	 	 	 
	 	 	 	 	Union Planters Corporation
	 
	/s/ Sarah M. Smith

	 	 	 	By:
	 	  /s/ Carl Guidice
	 

	 	 	 	 	 	 
	Witness

	 	 	 	Name:
	 	  Carl Guidice
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:
	 	  Divisional CEO
	 

	 	 	 	 	 	 
	 

	 	 	 	Date:
	 	  10/12/05