Document:

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                                                                   Exhibit 10.11

                          BLUE SHIELD LICENSE AGREEMENT
   (Includes revisions, if any, adopted by Member Plans through their June 13,
                                 2002 meeting)

     This agreement by and between Blue Cross and Blue Shield Association
("BCBSA") and The Blue Shield Plan, known as            (the "Plan").
                                             ----------

                                    Preamble

     WHEREAS, the Plan and/or its predecessor(s) in interest (collectively the
"Plan") had the right to use the BLUE SHIELD and BLUE SHIELD Design service
marks (collectively the "Licensed Marks") for health care plans in its service
area, which was essentially local in nature;

     WHEREAS, the Plan was desirous of assuring nationwide protection of the
Licensed Marks, maintaining uniform quality controls among Plans, facilitating
the provision of cost effective health care services to the public and otherwise
benefiting the public;

     WHEREAS, to better attain such ends, the Plan and the predecessor of BCBSA
executed the Agreement(s) Relating to the Collective Service Mark "Blue Shield";
and

     WHEREAS, BCBSA and the Plan desire to supercede said Agreement(s) to
reflect their current practices and to assure the continued integrity of the
Licensed Marks and of the BLUE SHIELD system;

     NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:

<PAGE>

                                    Agreement

     1. BCBSA hereby grants to the Plan, upon the terms and conditions of this
License Agreement, the right to use BLUE SHIELD in its trade and/or corporate
name (the "Licensed Name"), and the right to use the Licensed Marks, in the
sale, marketing and administration of health care plans and related services in
the Service Area set forth and defined in paragraph 5 below. As used herein,
health care plans and related services shall include acting as a nonprofit
health care plan, a for-profit health care plan, or mutual health insurer
operating on a not-for-profit or for-profit basis, under state law; financing
access to health care services; providing health care management and
administration; administering, but not underwriting, non-health portions of
Worker's Compensation insurance; and delivering health care services, except
hospital services (as defined in the Guidelines to Membership Standards
Applicable to Regular Members).

     2. The Plan may use the Licensed Marks and Name in connection with the
offering of: a) health care plans and related services in the Service Area
through Controlled Affiliates, provided that each such Controlled Affiliate is
separately licensed to use the Licensed Marks and Name under the terms and
conditions contained in the Agreement attached as Exhibit 1 hereto (the
"Controlled Affiliate License Agreement"); and: b) insurance coverages offered
by life insurers under the applicable law in the Service Area, other than those
which the Plan may offer in its own name, provided through Controlled
Affiliates, provided that each such Controlled Affiliate is separately licensed
to use the Licensed Marks and Name under the terms and conditions contained in
the Agreement attached as Exhibit 1A hereto (the "Controlled Affiliate License
Agreement Applicable to Life Insurance Companies") and further provided that the
offering of such services does not and will not dilute or tarnish the unique
value of the Licensed Marks and Name; and c) administration and underwriting of
Workers' Compensation Insurance Controlled Affiliates, provided that each such
Controlled Affiliate is separately licensed to use the Licensed Marks and Name
under the terms and conditions contained in the Agreement attached as Exhibit 1
hereto (the "Controlled Affiliate License."). As used herein, a Controlled
Affiliate is defined as an entity organized and operated in such a manner that
it is subject to the bona fide control of a Plan or Plans and, if the entity
meets the standards of subparagraph B but not subparagraph A of this paragraph,
the entity, its owners, and persons with authority to select or appoint members
or board members, other than a Plan or Plans, have received written approval of
BCBSA. Absent written approval by BCBSA of an alternative method of control,
bona fide control shall mean that a Plan or Plans authorized to use the Licensed
Marks in the Service Area of the Controlled Affiliate pursuant to this License
Agreement(s) with BCBSA, other than such Controlled Affiliate's License
Agreement(s), (the "Controlling Plan(s)"), must have:

     A.   The legal authority, directly or indirectly through wholly-owned
          subsidiaries: (a) to select members of the Controlled Affiliate's
          governing body having more than 50% voting control thereof; (b) to
          exercise control over the policy and operations of the Controlled
          Affiliate; (c) to prevent any change in the articles of incorporation,
          bylaws or other establishing or governing documents of the Controlled
          Affiliate with which the Controlling Plan(s) do(es) not concur. In
          addition, a Plan or Plans directly or indirectly through wholly-owned
          subsidiaries shall own more than 50% of any for-profit Controlled
          Affiliate; or

                                                    Amended as of March 11, 1999

                                      -2-

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     B.   The legal authority directly or indirectly through wholly-owned
          subsidiaries (a) to select members of the Controlled Affiliate's
          governing body having not less than 50% voting control thereof; (b) to
          prevent any change in the articles of incorporation, bylaws or other
          establishing or governing documents of the Controlled Affiliate with
          which the Controlling Plan(s) do(es) not concur; (c) to exercise
          control over the policy and operations of the Controlled Affiliate at
          least equal to that exercised by persons or entities (jointly or
          individually) other than the Controlling Plan(s). Notwithstanding
          anything to the contrary in (a) through (c) hereof, the Controlled
          Affiliate's establishing or governing documents must also require
          written approval by the Controlling Plan(s) before the Controlled
          Affiliate can:

               1. Change its legal and/or trade name;

               2. Change the geographic area in which it operates;

               3. Change any of the types of businesses in which it engages;

               4. Create, or become liable for by way of guarantee, any
               indebtedness, other than indebtedness arising in the ordinary
               course of business;

               5. Sell any assets, except for sales in the ordinary course of
               business or sales of equipment no longer useful or being
               replaced;

               6. Make any loans or advances except in the ordinary course of
               business;

               7. Enter into any arrangement or agreement with any party
               directly or indirectly affiliated with any of the owners of the
               Controlled Affiliate or persons or entities with the authority to
               select or appoint members or board members of the Controlled
               Affiliate, other than the Plan or Plans (excluding owners of
               stock holdings of under 5% in a publicly traded Controlled
               Affiliate);

               8. Conduct any business other than under the Licensed Marks and
               Name;

               9. Take any action that any Controlling Plan or BCBSA reasonably
               believes will adversely affect the Licensed Marks or Names.

          In addition, a Plan or Plans directly or indirectly through wholly
          owned subsidiaries shall own at least 50% of any for-profit Controlled
          Affiliate.

                                                     Amended as of June 11, 1998

                                                       (The next page is page 3)

                                      -2a-

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     3. The Plan may engage in activities not required by BCBSA to be directly
licensed through Controlled Affiliates and may indicate its relationship thereto
by use of the Licensed Name as a tag line, provided that the engaging in such
activities does not and will not dilute or tarnish the unique value of the
Licensed Marks and Name and further provided that such tag line use is not in a
manner likely to cause confusion or mistake. Consistent with the avoidance of
confusion or mistake, each tag line use of the Plan's Licensed Name: (a) shall
be in the style and manner specified by BCBSA from time-to-time; (b) shall not
include the design service marks; (c) shall not be in a manner to import more
than the Plan's mere ownership of the Controlled Affiliate; and (d) shall be
restricted to the Service Area. No rights are hereby created in any Controlled
Affiliate to use the Licensed Name in its own name or otherwise. At least
annually, the Plan shall provide BCBSA with representative samples of each such
use of its Licensed Name pursuant to the foregoing conditions.

     4. The Plan recognizes the importance of a comprehensive national network
of independent BCBSA licensees which are committed to strengthening the Licensed
Marks and Name. The Plan further recognizes that its actions within its Service
Area may affect the value of the Licensed Marks and Name nationwide. The Plan
agrees (a) to maintain in good standing its membership in BCBSA; (b) promptly to
pay its dues to BCBSA, said dues to represent the royalties for this License
Agreement; (c) materially to comply with all applicable laws; (d) to comply with
the Membership Standards Applicable to Regular Members of BCBSA, a current copy
of which is attached as Exhibit 2 hereto; and (e) reasonably to permit BCBSA,
upon a written, good faith request and during reasonable business hours, to
inspect the Plan's books and records necessary to ascertain compliance herewith.
As to other Plans and third parties, BCBSA shall maintain the confidentiality of
all documents and information furnished by the Plan pursuant hereto, or pursuant
to the Membership Standards, and clearly designated by the Plan as containing
proprietary information of the Plan.

     5. The rights hereby granted are exclusive to the Plan within the
geographical area(s) served by the Plan on June 30, 1972, and/or as to which the
Plan has been granted a subsequent license, which is hereby defined as the
"Service Area," except that BCBSA reserves the right to use the Licensed Marks
in said Service Area, and except to the extent that said Service Area may
overlap areas served by one or more other licensed Blue Shield Plans as of said
date or subsequent license, as to which overlapping areas the rights hereby
granted are nonexclusive as to such other Plan or Plans only.

                                                 Amended as of November 20, 1997

                                      -3-

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     6. Except as expressly provided by BCBSA with respect to National Accounts,
Government Programs and certain other necessary and collateral uses, the current
rules and regulations governing which are attached as Exhibit 3 and Exhibit 4
hereto, or as expressly provided herein, the Plan may not use the Licensed Marks
and Name outside the Service Area or in connection with other goods and
services, nor may the Plan use the Licensed Marks or Name in a manner which is
intended to transfer in the Service Area the goodwill associated therewith to
another mark or name. Nothing herein shall be construed to prevent the Plan from
engaging in lawful activity anywhere under other marks and names not confusingly
similar to the Licensed Marks and Name, provided that engaging in such activity
does and will not dilute or tarnish the unique value of the Licensed Marks and
Name. In addition to any and all remedies available hereunder, BCBSA may impose
monetary fines on the Plan for the Plan's use of the Licensed Marks and Names
outside the Service Area provided that the procedure used in imposing a fine is
consistent with procedures specifically prescribed by BCBSA from time to time in
regulations of general application.

     7. The Plan agrees that it will display the Licensed Marks and Name only in
such form, style and manner as shall be specifically prescribed by BCBSA from
time-to-time in regulations of general application in order to prevent
impairment of the distinctiveness of the Licensed Marks and Name and the
goodwill pertaining thereto. The Plan shall cause to appear on all materials on
or in connection with which the Licensed Marks or Name are used such legends,
markings and notices as BCBSA may reasonably request in order to give
appropriate notice of service mark or other proprietary rights therein or
pertaining thereto.

     8. BCBSA agrees that: (a) it will not grant any other license effective
during the term of this License Agreement for the use of the Licensed Marks or
Name which is inconsistent with the rights granted to the Plan hereunder; and
(b) it will not itself use the Licensed Marks in derogation of the rights of the
Plan or in a manner to deprive the Plan of the full benefits of this License
Agreement. The Plan agrees that it will not attack the title of BCBSA in and to
the Licensed Marks or Name or attack the validity of the Licensed Marks or of
this License Agreement. The Plan further agrees that all use by it of the
Licensed Marks and Name or any similar mark or name shall inure to the benefit
of BCBSA, and the Plan shall cooperate with BCBSA in effectuating the assignment
to BCBSA of any service mark or trademark registrations of the Licensed Marks or
any similar mark or name held by the Plan or a Controlled Affiliate of the Plan,
all or any portion of which registration consists of the Licensed Marks.

                                                       Amended November 18, 1999

                                      -4-

<PAGE>

     9. (a). Should the Plan fail to comply with the provisions of paragraphs
2-4, 6, 7 and/or 12, and not cure such failure within thirty (30) days of
receiving written notice thereof (or commence curing such failure within such
thirty day period and continue diligent efforts to complete the curing of such
failure if such curing cannot reasonably be completed within such thirty day
period), BCBSA shall have the right to issue a notice that the Plan is in a
state of noncompliance. Except as to the termination of a Plan's License
Agreement or the merger of two or more Plans, disputes as to noncompliance, and
all other disputes between or among BCBSA, the Plan, other Plans and/or
Controlled Affiliates, shall be submitted promptly to mediation and mandatory
dispute resolution pursuant to the rules and regulations of BCBSA, a current
copy of which is attached as Exhibit 5 hereto, and shall be timely presented and
resolved. The mandatory dispute resolution panel shall have authority to issue
orders for specific performance and assess monetary penalties. If a state of
noncompliance as aforesaid is undisputed by the Plan or is found to exist by a
mandatory dispute resolution panel and is uncured as provided above, BCBSA shall
have the right to seek judicial enforcement of the License Agreement. Except,
however, as provided in paragraphs 9(d)(iii) and 15(a)(i)-(viii) below, no
Plan's license to use the Licensed Marks and Name may be finally terminated for
any reason without the affirmative vote of three-fourths of the Plans and
three-fourths of the total then current weighted vote of all the Plans.

          (b). Notwithstanding any other provision of this License Agreement, a
Plan's license to use the Licensed Marks and Name may be forthwith terminated by
the affirmative vote of three-fourths of the Plans and three-fourths of the
total then current weighted vote of all the Plans at a special meeting expressly
called by BCBSA for the purpose on ten (10) days written notice to the Plan
advising of the specific matters at issue and granting the Plan an opportunity
to be heard and to present its response to Member Plans for: (i) failure to
comply with any minimum capital or liquidity requirement under the Membership
Standard on Financial Responsibility; or (ii) impending financial insolvency; or
(iii) the pendency of any action instituted against the Plan seeking its
dissolution or liquidation or its assets or seeking appointment of a trustee,
interim trustee, receiver or other custodian for any of its property or business
or seeking the declaration or establishment of a trust for any of its property
of business, unless this License Agreement has been earlier terminated under
paragraph 15(a); or (iv) such other reason as is determined in good faith
immediately and irreparably to threaten the integrity and reputation of BCBSA,
the Plans and/or the Licensed Marks.

          (c). To the extent not otherwise provided therein, neither: (i) the
Membership Standards Applicable to Regular Members of BCBSA; nor (ii) the rules
and regulations governing National Accounts, Government Programs and certain
other uses; nor (iii) the rules and regulations governing mediation and
mandatory dispute resolution, may be amended unless and until each such
amendment is first adopted by the affirmative vote of three-fourths of the Plans
and of three-fourths of the total then current weighted vote of all the Plans.

                                                    Amended as of March 11, 1999

                                      -5-

<PAGE>

          9. (d). The Plan may operate as a for-profit company on the following
conditions:

     (i) The Plan shall discharge all responsibilities which it has to the
Association and to other Plans by virtue of this Agreement and the Plan's
membership in BCBSA.

     (ii) The Plan shall not use the licensed Marks and Name, or any derivative
thereof, as part of its legal name or any symbol used to identify the Plan in
any securities market. The Plan shall use the licensed Marks and Name as part of
its trade name within its service area for the sale, marketing and
administration of health care and related services in the service area.

     (iii) The Plan's license to use the Licensed Marks and Name shall
automatically terminate effective: (a) thirty days after the Plan knows, or
there is an SEC filing indicating that, any Institutional Investor, has become
the Beneficial Owner of securities representing 10% or more of the voting power
of the Plan ("Excess Institutional Voter"), unless such Excess Institutional
Voter shall cease to be an Excess Institutional Voter prior to such automatic
termination becoming effective; (b) thirty days after the Plan knows, or there
is an SEC filing indicating that, any Noninstitutional Investor has become the
Beneficial Owner of securities representing 5% or more of the voting power of
the Plan ("Excess Noninstitutional Voter") unless such Excess Noninstitutional
Voter shall cease to be an Excess Noninstitutional Voter prior to such automatic
termination becoming effective, (c) thirty days after the Plan knows, or there
is an SEC filing indicating that, any Person has become the Beneficial Owner of
20% or more of the Plan's then outstanding common stock or other equity
securities which (either by themselves or in combination) represent an ownership
interest of 20% or more pursuant to determinations made under paragraph 9(d)(iv)
below ("Excess Owner"), unless such Excess Owner shall cease to be an Excess
Owner prior to such automatic termination becoming effective; (d) ten business
days after individuals who at the time the Plan went public constituted the
Board of Directors of the Plan (together with any new directors whose election
to the Board was approved by a vote of 2/3 of the directors then still in office
who were directors at the time the Plan went public or whose election or
nomination was previously so approved) (the "Continuing Directors") cease for
any reason to constitute a majority of the Board of Directors; or (e) ten
business days after the Plan consolidates with or merges with or into any person
or conveys, assigns, transfers or sells all or substantially all of its assets
to any person other than a merger in which the Plan is the surviving entity and
immediately after which merger, no person is an Excess Institutional Voter, an
Excess Noninstitutional Voter or an Excess Owner: provided that, if requested by
the affected Plan in a writing received by BCBSA prior to such automatic
termination becoming effective, the provisions of this paragraph 9(d)(iii) may
be waived, in whole or in part,

                                                Amended as of September 17, 1997

                                      -5a-

<PAGE>

upon the affirmative vote of a majority of the disinterested Plans and a
majority of the total then current weighted vote of the disinterested Plans. Any
waiver so granted may be conditioned upon such additional requirements
(including but not limited to imposing new and independent grounds for
termination of this License) as shall be approved by the affirmative vote of a
majority of the disinterested Plans and a majority of the total then current
weighted vote of the disinterested Plans. If a timely waiver request is
received, no automatic termination shall become effective until the later of:
(1) the conclusion of the applicable time period specified in paragraphs
9(d)(iii)(a)-(d) above, or (2) the conclusion of the first Member Plan meeting
after receipt of such a waiver request.

In the event that the Plan's license to use the Licensed Marks and Name is
terminated pursuant to this Paragraph 9(d)(iii), the license may be reinstated
in BCBSA's sole discretion if, within 30 days of the date of such termination,
the Plan demonstrates that the Person referred to in clause (a), (b) or (c) of
the preceding paragraph is no longer an Excess Institutional Voter, an Excess
Noninstitutional Voter or an Excess Owner.

     (iv) The Plan shall not issue any class or series of security other than
(i) shares of common stock having identical terms or options or derivatives of
such common stock, (ii) non-voting, non-convertible debt securities or (iii)
such other securities as the Plan may approve, provided that BCBSA receives
notice at least thirty days prior to the issuance of such securities, including
a description of the terms for such securities, and BCBSA shall have the
authority to determine how such other securities will be counted in determining
whether any Person is an Excess Institutional Voter, Excess Noninstitutional
Voter or an Excess Owner.

     (v) For purposes of paragraph 9(d)(iii), the following definitions shall
apply:

          (a) "Affiliate" and "Associate" shall have the respective meanings
     ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
     under the Securities Exchange Act of 1934, as amended and in effect on
     November 17, 1993 (the "Exchange Act").

          (b) A Person shall be deemed the "Beneficial Owner" of and shall be
     deemed to "beneficially own" any securities:

               (i) which such Person or any of such Person's Affiliates or
     Associates beneficially owns, directly or indirectly;

                                                Amended as of September 17, 1997

                                      -5b-

<PAGE>

               (ii) which such Person or any of such Person's Affiliates or
     Associates has (A) the right to acquire (whether such right is exercisable
     immediately or only after the passage of time) pursuant to any agreement,
     arrangement or understanding, or upon the exercise of conversion rights,
     exchange rights, warrants or options, or otherwise; or (B) the right to
     vote pursuant to any agreement, arrangement or understanding; provided,
     however, that a Person shall not be deemed the Beneficial Owner of, or to
     beneficially own, any security if the agreement, arrangement or
     understanding to vote such security (1) arises solely from a revocable
     proxy or consent given to such Person in response to a public proxy or
     consent solicitation made pursuant to, and in accordance with, the
     applicable rules and regulations promulgated under the Exchange Act and (2)
     is not also then reportable on Schedule 13D under the Exchange Act (or any
     comparable or successor report); or

               (iii) which are beneficially owned, directly or indirectly, by
     any other Person (or any Affiliate or Associate thereof) with which such
     Person (or any of such Person's Affiliates or Associates) has any
     agreement, arrangement or understanding (other than customary agreements
     with and between underwriters and selling group members with respect to a
     bona fide public offering of securities) relating to the acquisition,
     holding, voting (except to the extent contemplated by the proviso to
     (b)(ii)(B) above) or disposing of any securities of the Plan.

     Notwithstanding anything in this definition of Beneficial Ownership to the
     contrary, the phrase "then outstanding," when used with reference to a
     Person's Beneficial Ownership of securities of the Plan, shall mean the
     number of such securities then issued and outstanding together with the
     number of such securities not then actually issued and outstanding which
     such Person would be deemed to own beneficially hereunder.

          (c) A Person shall be deemed an "Institutional Investor" if (but only
     if) such Person (i) is an entity or group identified in the SEC's Rule
     13d-1(b)(1)(ii) as constituted on June 1, 1997, and (ii) every filing made
     by such Person with the SEC under Regulation 13D-G (or any successor
     Regulation) with respect to such Person's Beneficial Ownership of Plan
     securities shall have contained a certification identical to the one
     required by item 10 of SEC Schedule 13G as constituted on June 1, 1997.

                                                Amended as of September 17, 1997

                                      -5c-

<PAGE>

          (d) "Noninstitutional Investor" means any Person who is not an
     Institutional Investor.

          (e) "Person" shall mean any individual, firm, partnership,
     corporation, trust, association, joint venture or other entity, and shall
     include any successor (by merger or otherwise) of such entity.

                                                Amended as of September 17, 1997

                                      -5d-

                                                       (The next page is page 6)

<PAGE>

     10. This License Agreement shall remain in effect: (a) until terminated as
provided herein; or (b) until this and all such other License Agreements are
terminated by the affirmative vote of three-fourths of the Plans and
three-fourths of the total then current weighted vote of all the Plans; (c)
until terminated by the Plan upon six (6) months written notice to BCBSA.

     11. Except as otherwise provided in paragraph 15 below or by the
affirmative vote of three-fourths of the Plans and three-fourths of the total
then current weighted vote of all the Plans, or unless this and all such other
License Agreements are simultaneously terminated by force of law, the
termination of this License Agreement for any reason whatsoever shall cause the
reversion to BCBSA of all rights in and to the Licensed Marks and Name, and the
Plan agrees that it will promptly discontinue all use of the Licensed Marks and
Name, will not use them thereafter, and will promptly, upon written notice from
BCBSA, change its corporate name so as to eliminate the Licensed Name therefrom.

     12. The license hereby granted to Plan to use the Licensed Marks and Name
is and shall be personal to the Plan so licensed and shall not be assignable by
any act of the Plan, directly or indirectly, without the written consent of
BCBSA. Said license shall not be assignable by operation of law, nor shall Plan
mortgage or part with possession or control of this license or any right
hereunder, and the Plan shall have no right to grant any sublicense to use the
Licensed Marks and Name.

     13. BCBSA shall maintain appropriate service mark registrations of the
Licensed Marks and BCBSA shall take such lawful steps and proceedings as may be
necessary or proper to prevent use of the Licensed Marks by any person who is
not authorized to use the same. Any actions or proceedings undertaken by BCBSA
under the provisions of this paragraph shall be at BCBSA's sole cost and
expense. BCBSA shall have the sole right to determine whether or not any legal
action shall be taken on account of unauthorized use of the Licensed Marks, such
right not to be unreasonably exercised. The Plan shall report any unlawful usage
of the Licensed Marks to BCBSA in writing and agrees, free of charge, to
cooperate fully with BCBSA's program of enforcing and protecting the service
mark rights, trade name rights and other rights in the Licensed Marks.

                                      -6-

<PAGE>

     14. The Plan hereby agrees to save, defend, indemnify and hold BCBSA and
any other Plan(s) harmless from and against all claims, damages, liabilities and
costs of every kind, nature and description which may arise exclusively and
directly as a result of the activities of the Plan. BCBSA hereby agrees to save,
defend, indemnify and hold the Plan and any other Plan(s) harmless from and
against all claims, damages, liabilities and costs of every kind, nature and
description which may arise exclusively and directly as a result of the
activities of BCBSA.

     15. (a). This Agreement shall automatically terminate upon the occurrence
of any of the following events: (i) a voluntary petition shall be filed by the
Plan or by BCBSA seeking bankruptcy, reorganization, arrangement with creditors
or other relief under the bankruptcy laws of the United States or any other law
governing insolvency or debtor relief, or (ii) an involuntary petition or
proceeding shall be filed against the Plan or BCBSA seeking bankruptcy,
reorganization, arrangement with creditors or other relief under the bankruptcy
laws of the United States or any other law governing insolvency or debtor relief
and such petition or proceeding is consented to or acquiesced in by the Plan or
BCBSA or is not dismissed within sixty (60) days of the date upon which the
petition or other document commencing the proceeding is served upon the Plan or
BCBSA respectively, or (iii) an order for relief is entered against the Plan or
BCBSA in any case under the bankruptcy laws of the United States, or the Plan or
BCBSA is adjudged bankrupt or insolvent (as that term is defined in the Uniform
Commercial Code as enacted in the state of Illinois) by any court of competent
jurisdiction, or (iv) the Plan or BCBSA makes a general assignment of its assets
for the benefit of creditors, or (v) the Department of Insurance or other
regulatory agency assumes control of the Plan or delinquency proceedings
(voluntary or involuntary) are instituted, or (vi) an action is brought by the
Plan or BCBSA seeking its dissolution or liquidation of its assets or seeking
the appointment of a trustee, interim trustee, receiver or other custodian for
any of its property or business, or (vii) an action is instituted by any
governmental entity or officer against the Plan or BCBSA seeking its dissolution
or liquidation of its assets or seeking appointment of a trustee, interim
trustee, receiver or other custodian for any of its property or business and
such action is consented to or acquiesced in by the Plan or BCBSA or is not
dismissed within one hundred thirty (130) days of the date upon which the
pleading or other document commencing the action is served upon the Plan or
BCBSA respectively, provided that if the action is stayed or its prosecution is
enjoined, the one hundred thirty (130) day period is tolled for the duration of
the stay or injunction, and provided further, that the Association's Board of
Directors may toll or extend the 130 day period at any time prior to its
expiration, or (viii) a trustee, interim trustee, receiver or other custodian
for any of the Plan's or BCBSA's property or business is appointed, or the Plan
or BCBSA is ordered dissolved or liquidated, or (ix) the Plan shall fail to pay
its dues and shall not cure such failure within thirty (30) days of receiving
written notice thereof. Notwithstanding any other provision of this Agreement, a
declaration or a request for declaration of the existence of a trust over any of
the Plan's or BCBSA's property or business shall not in itself be deemed to
constitute or seek appointment of a trustee, interim trustee, receiver or other
custodian for purposes of subparagraphs 15(a)(vii) and (viii) of this Agreement.

                                                          Amended March 12, 1998

                                      -7-

<PAGE>

     (b). BCBSA, or the Plans (as provided and in addition to the rights
conferred in Paragraph 10(b) above), may terminate this Agreement immediately
upon written notice upon the occurrence of either of the following events: (a)
the Plan or BCBSA becomes insolvent (as that term is defined in the Uniform
Commercial Code enacted in the state of Illinois), or (b) any final judgment
against the Plan or BCBSA remains unsatisfied or unbonded of record for a period
of sixty (60) days or longer.

     (c). If this License Agreement is terminated as to BCBSA for any reason
stated in subparagraphs 15(a) and (b) above, the ownership of the Licensed Marks
shall revert to each of the Plans.

     (d). Upon termination of this License Agreement or any Controlled Affiliate
License Agreement of a Larger Controlled Affiliate, as defined in Exhibit 1 to
this License Agreement:

               (i)  The terminated entity shall send a notice through the U.S.
                    mails, with first class postage affixed, to all individual
                    and group customers, providers, brokers and agents of
                    products or services sold, marketed, underwritten or
                    administered by the terminated entity or its Controlled
                    Affiliates under the Licensed Marks and Name. The form and
                    content of the notice shall be specified by BCBSA and shall,
                    at a minimum, notify the recipient of the termination of the
                    license, the consequences thereof, and instructions for
                    obtaining alternate products or services licensed by BCBSA.
                    This notice shall be mailed within 15 days after termination
                    or, if termination is pursuant to paragraph 10(d) of this
                    Agreement, within 15 days after the written notice to BCBSA
                    described in paragraph 10(d).

               (ii) The terminated entity shall deliver to BCBSA within five
                    days of a request by BCBSA a listing of national accounts in
                    which the terminated entity is involved (in a Control,
                    Participating or Servicing capacity), identifying the
                    national account and the terminated entity's role therein.
                    For those accounts where the terminated entity is the
                    Control Plan, the Plan must also indicate the Participating
                    and Servicing Plans in the national account syndicate.

                                                Amended as of September 19, 1996

                                       -8-

<PAGE>

               (iii)Unless the cause of termination is an event stated in
                    paragraph 15(a) or (b) above respecting BCBSA, the Plan and
                    its Licensed Controlled Affiliates shall be jointly liable
                    for payment to BCBSA of an amount equal to $25 multiplied by
                    the number of Licensed Enrollees of the terminated entity
                    and its Licensed Controlled Affiliates; provided that if any
                    other Plan is permitted by BCBSA to use marks or names
                    licensed by BCBSA in the Service Area established by this
                    Agreement, the payment shall be multiplied by a fraction,
                    the numerator of which is the number of Licensed Enrollees
                    of the terminated entity and its Licensed Controlled
                    Affiliates and the denominator of which is the total number
                    of Licensed Enrollees in the Service Area. Licensed Enrollee
                    means each and every person and covered dependent who is
                    enrolled as an individual or member of a group receiving
                    products or services sold, marketed or administered under
                    marks or names licensed by BCBSA as determined at the
                    earlier of (a) the end of the last fiscal year of the
                    terminated entity which ended prior to termination or (b)
                    the fiscal year which ended before any transactions causing
                    the termination began. Notwithstanding the foregoing, the
                    amount payable pursuant to this subparagraph (d)(iii) shall
                    be due only to the extent that, in BCBSA's opinion, it does
                    not cause the net worth of the Plan to fall below 100% of
                    the capital benchmark formula or its equivalent under any
                    successor formula, as set forth in the applicable financial
                    responsibility standards established by BCBSA (provided such
                    equivalent is approved for purposes of this sub paragraph by
                    the affirmative vote of three-fourths of the Plans and
                    three-fourths of the total then current weighted vote of all
                    the Plans), measured as of the date of termination and
                    adjusted for the value of any transactions not made in the
                    ordinary course of business. This payment shall not be due
                    in connection with transactions exclusively by or among Plan
                    or their affiliates, including reorganizations, combinations
                    or mergers, where the BCBSA Board of Directors determines
                    that the license termination does not result in a material
                    diminution in the number of Licensed Enrollees or the extent
                    of their coverage.

                                                 Amended as of November 19, 1998

                                      -8a-

<PAGE>

               (iv) BCBSA shall have the right to audit the books and records of
                    the terminated entity and its Licensed Controlled Affiliates
                    to verify compliance with this paragraph 15(d).

               (v)  As to a breach of 15 (d) (i), (ii), (iii) or (iv), the
                    parties agree that the obligations are immediately
                    enforceable in a court of competent jurisdiction. As to a
                    breach of 15 (d) (i), (ii) or (iv) by the Plan, the parties
                    agree there is no adequate remedy at law and BCBSA is
                    entitled to obtain specific performance.

          (e). BCBSA shall be entitled to enjoin the Plan or any related party
in a court of competent jurisdiction from entry into any transaction which would
result in a termination of this License Agreement unless the License Agreement
has been terminated pursuant to paragraph 10 (d) of this Agreement upon the
required six (6) month written notice.

          (f). BCBSA acknowledges that it is not the owner of assets of the
Plan.

     16. This Agreement supersedes any and all other agreements between the
parties with respect to the subject matter herein, and contains all of the
covenants and agreements of the parties as to the licensing of the Licensed
Marks and Name. This Agreement may be amended only by the affirmative vote of
three-fourths of the Plans and three-fourths of the total then current weighted
vote of all the Plans as officially recorded by the BCBSA Corporate Secretary.

     17. If any provision or any part of any provision of this Agreement is
judicially declared unlawful, each and every other provision, or any part of any
provision, shall continue in full force and effect notwithstanding such judicial
declaration.

     18. No waiver by BCBSA or the Plan of any breach or default in performance
on the part of BCBSA or the Plan or any other licensee of any of the terms,
covenants or conditions of this Agreement shall constitute a waiver of any
subsequent breach or default in performance of said terms, covenants or
conditions.

     19a. All notices provided for hereunder shall be in writing and shall be
sent in duplicate by regular mail to BCBSA or the Plan at the address currently
published for each by BCBSA and shall be marked respectively to the attention of
the President and, if any, the General Counsel, of BCBSA or the Plan.

                                                 Amended as of November 20, 1997

                                      -8b-

<PAGE>

     19b. Except as provided in paragraphs 9(b), 9(d)(iii), 15(a), and 15(b)
above, this Agreement may be terminated for a breach only upon at least 30 days'
written notice to the Plan advising of the specific matters at issue and
granting the Plan an opportunity to be heard and to present its response to the
Member Plans.

     19c. For all provisions of this Agreement referring to voting, the term
'Plans' shall mean all entities licensed under the Blue Cross License Agreement
and/or the Blue Shield License Agreement, and in all votes of the Plans under
this Agreement the Plans shall vote together. For weighted votes of the Plans,
the Plan shall have a number of votes equal to the number of weighted votes (if
any) that it holds as a Blue Cross Plan plus the number of weighted votes (if
any) that it holds as a Blue Shield Plan. For all other votes of the Plans, the
Plan shall have one vote. For all questions requiring an affirmative
three-fourths weighted vote of the Plans, the requirement shall be deemed
satisfied with a lesser weighted vote unless six (6) or more Plans fail to cast
weighted votes in favor of the question.

                                                     Amended as of June 16, 2000

                                                       (The next page is page 9)

                                      -8c-

<PAGE>

     20. Nothing herein contained shall be construed to constitute the parties
hereto as partners or joint venturers, or either as the agent of the other, and
Plan shall have no right to bind or obligate BCBSA in any way, nor shall it
represent that it has any right to do so. BCBSA shall have no liability to third
parties with respect to any aspect of the business, activities, operations,
products, or services of the Plan.

     21. This Agreement shall be governed, construed and interpreted in
accordance with the laws of the State of Illinois.

IN WITNESS WHEREOF, the parties have caused this License Agreement to be
executed, effective as of the date of last signature written below.

BLUE CROSS AND BLUE SHIELD ASSOCIATION

By
  ---------------------------------

Title
     ------------------------------

Date
    -------------------------------

The Plan:

By
  ---------------------------------

Title
     ------------------------------

Date
    -------------------------------

                                      -9-

<PAGE>

                                                                       EXHIBIT 1

                                   BLUE SHIELD
                     CONTROLLED AFFILIATE LICENSE AGREEMENT
(Includes revisions adopted by Member Plans through their June 13, 2002 meeting)

     This Agreement by and among Blue Cross and Blue Shield Association
("BCBSA") and                 ("Controlled Affiliate"), a Controlled Affiliate
              ---------------
of the Blue Shield Plan(s), known as                 ("Plan"), which is also a
                                     ---------------
Party signatory hereto.

     WHEREAS, BCBSA is the owner of the BLUE SHIELD and BLUE SHIELD Design
service marks;

     WHEREAS, Plan and Controlled Affiliate desire that the latter be entitled
to use the BLUE SHIELD and BLUE SHIELD Design service marks (collectively the
"Licensed Marks") as service marks and be entitled to use the term BLUE SHIELD
in a trade name ("Licensed Name");

     NOW THEREFORE, in consideration of the foregoing and the mutual agreements
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

     1.   GRANT OF LICENSE

     Subject to the terms and conditions of this Agreement, BCBSA hereby grants
to Controlled Affiliate the right to use the Licensed Marks and Name in
connection with, and only in connection with: (i) health care plans and related
services, as defined in BCBSA's License Agreement with Plan, and administering
the non-health portion of workers' compensation insurance, and (ii) underwriting
the indemnity portion of workers' compensation insurance, provided that
Controlled Affiliate's total premium revenue comprises less than 15 percent of
the sponsoring Plan's net subscription revenue.

This grant of rights is non-exclusive and is limited to the Service Area served
by the Plan. Controlled Affiliate may use the Licensed Marks and Name in its
legal name on the following conditions: (i) the legal name must be approved in
advance, in writing, by BCBSA; (ii) Controlled Affiliate shall not do business
outside the Service Area under any name or mark; and (iii) Controlled Affiliate
shall not use the Licensed Marks and Name, or any derivative thereof, as part of
any name or symbol used to identify itself in any securities market. Controlled
Affiliate may use the Licensed Marks and Name in its Trade Name only with the
prior, written, consent of BCBSA.

     2.   QUALITY CONTROL

     A. Controlled Affiliate agrees to use the Licensed Marks and Name only in
connection with the licensed services and further agrees to be bound by the
conditions regarding quality control shown in attached Exhibit A as they may be
amended by BCBSA from time-to-time.

                                                 Amended as of November 16, 2000

<PAGE>

     B. Controlled Affiliate agrees to comply with all applicable federal, state
and local laws.

     C. Controlled Affiliate agrees that it will provide on an annual basis (or
more often if reasonably required by Plan or by BCBSA) a report or reports to
Plan and BCBSA demonstrating Controlled Affiliate's compliance with the
requirements of this Agreement including but not limited to the quality control
provisions of this paragraph and the attached Exhibit A.

     D. Controlled Affiliate agrees that Plan and/or BCBSA may, from
time-to-time, upon reasonable notice, review and inspect the manner and method
of Controlled Affiliate's rendering of service and use of the Licensed Marks and
Name.

     E. As used herein, a Controlled Affiliate is defined as an entity organized
and operated in such a manner, that it meets the following requirements:

(1) A Plan or Plans authorized to use the Licensed Marks in the Service Area of
the Controlled Affiliate pursuant to separate License Agreement(s) with BCBSA,
other than such Controlled Affiliate's License Agreement(s), (the "Controlling
Plan(s)"), must have the legal authority directly or indirectly through
wholly-owned subsidiaries to select members of the Controlled Affiliate's
governing body having not less than 50% voting control thereof and to:

     (a) prevent any change in the articles of incorporation, bylaws or other
establishing or governing documents of the Controlled Affiliate with which the
Controlling Plan(s) do(es) not concur;

     (b) exercise control over the policy and operations of the Controlled
Affiliate at least equal to that exercised by persons or entities (jointly or
individually) other than the Controlling Plan(s); and

Notwithstanding anything to the contrary in (a) through (b) hereof, the
Controlled Affiliate's establishing or governing documents must also require
written approval by the Controlling Plan(s) before the Controlled Affiliate can:

          (i)  change its legal and/or trade names;

          (ii) change the geographic area in which it operates;

          (iii) change any of the type(s) of businesses in which it engages;

                                       2

<PAGE>

          (iv) create, or become liable for by way of guarantee, any
               indebtedness, other than indebtedness arising in the ordinary
               course of business;

          (v)  sell any assets, except for sales in the ordinary course of
               business or sales of equipment no longer useful or being
               replaced;

          (vi) make any loans or advances except in the ordinary course of
               business;

          (vii) enter into any arrangement or agreement with any party directly
               or indirectly affiliated with any of the owners or persons or
               entities with the authority to select or appoint members or board
               members of the Controlled Affiliate, other than the Plan or Plans
               (excluding owners of stock holdings of under 5% in a publicly
               traded Controlled Affiliate);

          (viii) conduct any business other than under the Licensed Marks and
               Name;

          (ix) take any action that any Controlling Plan or BCBSA reasonably
               believes will adversely affect the Licensed Marks and Name.

In addition, a Plan or Plans directly or indirectly through wholly owned
subsidiaries shall own at least 50% of any for-profit Controlled Affiliate.

                                       Or

(2) A Plan or Plans authorized to use the Licensed Marks in the Service Area of
the Controlled Affiliate pursuant to separate License Agreement(s) with BCBSA,
other than such Controlled Affiliate's License Agreement(s), (the "Controlling
Plan(s)"), have the legal authority directly or indirectly through wholly-owned
subsidiaries to select members of the Controlled Affiliate's governing body
having more than 50% voting control thereof and to:

     (a)  prevent any change in the articles of incorporation, bylaws or other
          establishing or governing documents of the Controlled Affiliate with
          which the Controlling Plan(s) do(es) not concur;

     (b)  exercise control over the policy and operations of the Controlled
          Affiliate.

                                       3

<PAGE>

In addition, a Plan or Plans directly or indirectly through wholly-owned
subsidiaries shall own more than 50% of any for-profit Controlled Affiliate.

     3. SERVICE MARK USE

     A. Controlled Affiliate recognizes the importance of a comprehensive
national network of independent BCBSA licensees which are committed to
strengthening the Licensed Marks and Name. The Controlled Affiliate further
recognizes that its actions within its Service Area may affect the value of the
Licensed Marks and Name nationwide.

     B. Controlled Affiliate shall at all times make proper service mark use of
the Licensed Marks and Name, including but not limited to use of such symbols or
words as BCBSA shall specify to protect the Licensed Marks and Name and shall
comply with such rules (generally applicable to Controlled Affiliates licensed
to use the Licensed Marks and Name) relative to service mark use, as are issued
from time-to-time by BCBSA. Controlled Affiliate recognizes and agrees that all
use of the Licensed Marks and Name by Controlled Affiliate shall inure to the
benefit of BCBSA.

     C. Controlled Affiliate may not directly or indirectly use the Licensed
Marks and Name in a manner that transfers or is intended to transfer in the
Service Area the goodwill associated therewith to another mark or name, nor may
Controlled Affiliate engage in activity that may dilute or tarnish the unique
value of the Licensed Marks and Name.

     D. If Controlled Affiliate meets the standards of 2E(1) but not 2E(2) above
and any of Controlled Affiliate's advertising or promotional material is
reasonably determined by BCBSA and/or the Plan to be in contravention of rules
and regulations governing the use of the Licensed Marks and Name, Controlled
Affiliate shall for ninety (90) days thereafter obtain prior approval from BCBSA
of advertising and promotional efforts using the Licensed Marks and Name,
approval or disapproval thereof to be forthcoming within five (5) business days
of receipt of same by BCBSA or its designee. In all advertising and promotional
efforts, Controlled Affiliate shall observe the Service Area limitations
applicable to Plan.

     E. Controlled Affiliate shall use its best efforts in the Service Area to
promote and build the value of the Licensed Marks and Name.

                                       4

<PAGE>

     4.   SUBLICENSING AND ASSIGNMENT

     Controlled Affiliate shall not, directly or indirectly, sublicense,
transfer, hypothecate, sell, encumber or mortgage, by operation of law or
otherwise, the rights granted hereunder and any such act shall be voidable at
the sole option of Plan or BCBSA. This Agreement and all rights and duties
hereunder are personal to Controlled Affiliate.

     5.   INFRINGEMENT

     Controlled Affiliate shall promptly notify Plan and Plan shall promptly
notify BCBSA of any suspected acts of infringement, unfair competition or
passing off that may occur in relation to the Licensed Marks and Name.
Controlled Affiliate shall not be entitled to require Plan or BCBSA to take any
actions or institute any proceedings to prevent infringement, unfair competition
or passing off by third parties. Controlled Affiliate agrees to render to Plan
and BCBSA, without charge, all reasonable assistance in connection with any
matter pertaining to the protection of the Licensed Marks and Name by BCBSA.

     6.   LIABILITY INDEMNIFICATION

     Controlled Affiliate and Plan hereby agree to save, defend, indemnify and
hold BCBSA harmless from and against all claims, damages, liabilities and costs
of every kind, nature and description (except those arising solely as a result
of BCBSA's negligence) that may arise as a result of or related to Controlled
Affiliate's rendering of services under the Licensed Marks and Name.

     7.   LICENSE TERM

     A. Except as otherwise provided herein, the license granted by this
Agreement shall remain in effect for a period of one (1) year and shall be
automatically extended for additional one (1) year periods unless terminated
pursuant to the provisions herein.

     B. This Agreement and all of Controlled Affiliate's rights hereunder shall
immediately terminate without any further action by any party or entity in the
event that Plan ceases to be authorized to use the Licensed Marks and Name.

     C. Notwithstanding any other provision of this Agreement, this license to
use the Licensed Marks and Name may be forthwith terminated by the Plan or the
affirmative vote of the majority of the Board of Directors of BCBSA present and
voting at a special meeting expressly called by BCBSA for the purpose on ten
(10) days written notice to the Plan advising of the specific matters at issue
and granting the Plan an opportunity to be heard and to present its response to

                                       5

<PAGE>

the Board for: (1) failure to comply with any applicable minimum capital or
liquidity requirement under the quality control standards of this Agreement; or
(2) failure to comply with the "Organization and Governance" quality control
standard of this Agreement; or (3) impending financial insolvency; or (4) for a
Smaller Controlled Affiliate (as defined in Exhibit A), failure to comply with
any of the applicable requirements of Standards 2, 3, 4, 5 or 7 of attached
Exhibit A; or (5) the pendency of any action instituted against the Controlled
Affiliate seeking its dissolution or liquidation of its assets or seeking
appointment of a trustee, interim trustee, receiver or other custodian for any
of its property or business or seeking the declaration or establishment of a
trust for any of its property or business, unless this Controlled Affiliate
License Agreement has been earlier terminated under paragraph 7(e); or (6)
failure by a Controlled Affiliate that meets the standards of 2E(1) but not
2E(2) above to obtain BCBSA's written consent to a change in the identity of any
owner, in the extent of ownership, or in the identity of any person or entity
with the authority to select or appoint members or board members, provided that
as to publicly traded Controlled Affiliates this provision shall apply only if
the change affects a person or entity that owns at least 5% of the Controlled
Affiliate's stock before or after the change; or (7) such other reason as is
determined in good faith immediately and irreparably to threaten the integrity
and reputation of BCBSA, the Plans, any other licensee including Controlled
Affiliate and/or the Licensed Marks and Name.

     D. Except as otherwise provided in Paragraphs 7(B), 7(C) or 7(E) herein,
should Controlled Affiliate fail to comply with the provisions of this Agreement
and not cure such failure within thirty (30) days of receiving written notice
thereof (or commence a cure within such thirty day period and continue diligent
efforts to complete the cure if such curing cannot reasonably be completed
within such thirty day period) BCBSA or the Plan shall have the right to issue a
notice that the Controlled Affiliate is in a state of noncompliance. If a state
of noncompliance as aforesaid is undisputed by the Controlled Affiliate or is
found to exist by a mandatory dispute resolution panel and is uncured as
provided above, BCBSA shall have the right to seek judicial enforcement of the
Agreement or to issue a notice of termination thereof. Notwithstanding any other
provisions of this Agreement, any disputes as to the termination of this License
pursuant to Paragraphs 7(B), 7(C) or 7(E) of this Agreement shall not be subject
to mediation and mandatory dispute resolution. All other disputes between BCBSA,
the Plan and/or Controlled Affiliate shall be submitted promptly to mediation
and mandatory dispute resolution. The mandatory dispute resolution panel shall
have authority to issue orders for specific performance and assess monetary
penalties. Except, however, as provided in Paragraphs 7(B) and 7(E) of this
Agreement, this license to use the Licensed Marks and Name may not be finally
terminated for any reason without the affirmative vote of a majority of the
present and voting members of the Board of Directors of BCBSA.

                                       6

<PAGE>

     E. This Agreement and all of Controlled Affiliate's rights hereunder shall
immediately terminate without any further action by any party or entity in the
event that:

     (1) Controlled Affiliate shall no longer comply with item 2(E) above;

     (2) Appropriate dues, royalties and other payments for Controlled Affiliate
pursuant to paragraph 9 hereof, which are the royalties for this License
Agreement, are more than sixty (60) days in arrears to BCBSA; or

     (3) Any of the following events occur: (i) a voluntary petition shall be
filed by Controlled Affiliate seeking bankruptcy, reorganization, arrangement
with creditors or other relief under the bankruptcy laws of the United States or
any other law governing insolvency or debtor relief, or (ii) an involuntary
petition or proceeding shall be filed against Controlled Affiliate seeking
bankruptcy, reorganization, arrangement with creditors or other relief under the
bankruptcy laws of the United States or any other law governing insolvency or
debtor relief and such petition or proceeding is consented to or acquiesced in
by Controlled Affiliate or is not dismissed within sixty (60) days of the date
upon which the petition or other document commencing the proceeding is served
upon the Controlled Affiliate, or (iii) an order for relief is entered against
Controlled Affiliate in any case under the bankruptcy laws of the United States,
or Controlled Affiliate is adjudged bankrupt or insolvent as those terms are
defined in the Uniform Commercial Code as enacted in the State of Illinois by
any court of competent jurisdiction, or (iv) Controlled Affiliate makes a
general assignment of its assets for the benefit of creditors, or (v) the
Department of Insurance or other regulatory agency assumes control of Controlled
Affiliate or delinquency proceedings (voluntary or involuntary) are instituted,
or (vi) an action is brought by Controlled Affiliate seeking its dissolution or
liquidation of its assets or seeking the appointment of a trustee, interim
trustee, receiver or other custodian for any of its property or business, or
(vii) an action is instituted by any governmental entity or officer against
Controlled Affiliate seeking its dissolution or liquidation of its assets or
seeking the appointment of a trustee, interim trustee, receiver or other
custodian for any of its property or business and such action is consented to or
acquiesced in by Controlled Affiliate or is not dismissed within one hundred
thirty (130) days of the date upon which the pleading or other document
commencing the action is served upon the Controlled Affiliate, provided that if
the action is stayed or its prosecution is enjoined, the one hundred thirty
(130) day period is tolled for the duration of the stay or injunction, and
provided further, that the Association's Board of Directors may toll or extend
the 130 day period at any time prior to its expiration, or (viii) a trustee,
interim trustee, receiver or other custodian for any of Controlled Affiliate's
property or business is appointed or the Controlled Affiliate is ordered
dissolved or liquidated. Notwithstanding any other provision of this Agreement,

                                       7

<PAGE>

a declaration or a request for declaration of the existence of a trust over any
of the Controlled Affiliate's property or business shall not in itself be deemed
to constitute or seek appointment of a trustee, interim trustee, receiver or
other custodian for purposes of subparagraphs 7(e)(3)(vii) and (viii) of this
Agreement.

     F. Upon termination of this Agreement for cause or otherwise, Controlled
Affiliate agrees that it shall immediately discontinue all use of the Licensed
Marks and Name, including any use in its trade name.

     G. Upon termination of this Agreement, Controlled Affiliate shall
immediately notify all of its customers that it is no longer a licensee of BCBSA
and, if directed by the Association's Board of Directors, shall provide
instruction on how the customer can contact BCBSA or a designated licensee to
obtain further information on securing coverage. The notification required by
this paragraph shall be in writing and in a form approved by BCBSA. The BCBSA
shall have the right to audit the terminated entity's books and records to
verify compliance with this paragraph.

     H. In the event this Agreement terminates pursuant to 7(b) hereof, or in
the event the Controlled Affiliate is a Larger Controlled Affiliate (as defined
in Exhibit A), upon termination of this Agreement, the provisions of Paragraph
7.G. shall not apply and the following provisions shall apply:

     (1) The Controlled Affiliate shall send a notice through the U.S. mails,
with first class postage affixed, to all individual and group customers,
providers, brokers and agents of products or services sold, marketed,
underwritten or administered by the Controlled Affiliate under the Licensed
Marks and Name. The form and content of the notice shall be specified by BCBSA
and shall, at a minimum, notify the recipient of the termination of the license,
the consequences thereof, and instructions for obtaining alternate products or
services licensed by BCBSA. This notice shall be mailed within 15 days after
termination.

     (2) The Controlled Affiliate shall deliver to BCBSA within five days of a
request by BCBSA a listing of national accounts in which the Controlled
Affiliate is involved (in a control, participating or servicing capacity),
identifying the national account and the Controlled Affiliate's role therein.

     (3) Unless the cause of termination is an event respecting BCBSA stated in
paragraph 15(a) or (b) of the Plan's license agreement with BCBSA to use the
Licensed Marks and Name, the Controlled Affiliate, the Plan, and any other
Licensed Controlled Affiliates of the Plan shall be jointly liable for payment
to BCBSA of an amount equal to $25 multiplied by the number of Licensed
Enrollees of the Controlled Affiliate; provided that if any other Plan is
permitted by BCBSA to use marks or names licensed by BCBSA in the Service Area

                                       8

<PAGE>

established by this Agreement, the payment shall be multiplied by a fraction,
the numerator of which is the number of Licensed Enrollees of the Controlled
Affiliate, the Plan, and any other Licensed Controlled Affiliates and the
denominator of which is the total number of Licensed Enrollees in the Service
Area. Licensed Enrollee means each and every person and covered dependent who is
enrolled as an individual or member of a group receiving products or services
sold, marketed or administered under marks or names licensed by BCBSA as
determined at the earlier of (i) the end of the last fiscal year of the
terminated entity which ended prior to termination or (ii) the fiscal year which
ended before any transactions causing the termination began. Notwithstanding the
foregoing, the amount payable pursuant to this subparagraph H. (3) shall be due
only to the extent that, in BCBSA's opinion, it does not cause the net worth of
the Controlled Affiliate, the Plan or any other Licensed Controlled Affiliates
of the Plan to fall below 100% of the capital benchmark formula, or its
equivalent under any successor formula, as set forth in the applicable financial
responsibility standards established by BCBSA (provided such equivalent is
approved for purposes of this sub paragraph by the affirmative vote of
three-fourths of the Plans and three-fourths of the total then current weighted
vote of all the Plans); measured as of the date of termination, and adjusted for
the value of any transactions not made in the ordinary course of business. This
payment shall not be due in connection with transactions exclusively by or among
Plans or their affiliates, including reorganizations, combinations or mergers,
where the BCBSA Board of Directors determines that the license termination does
not result in a material diminution in the number of Licensed Enrollees or the
extent of their coverage.

     (4) BCBSA shall have the right to audit the books and records of the
Controlled Affiliate, the Plan, and any other Licensed Controlled Affiliates of
the Plan to verify compliance with this paragraph 7.H.

     (5) As to a breach of 7.H.(1), (2), (3) or (4), the parties agree that the
obligations are immediately enforceable in a court of competent jurisdiction. As
to a breach of 7.H.(1), (2) or (4) by the Controlled Affiliate, the parties
agree there is no adequate remedy at law and BCBSA is entitled to obtain
specific performance.

     I. In the event the Controlled Affiliate is a Smaller Controlled Affiliate
(as defined in Exhibit A), the Controlled Affiliate agrees to be jointly liable
for the amount described in H.3. hereof upon termination of the BCBSA license
agreement of any Larger Controlled Affiliate of the Plan.

     J. BCBSA shall be entitled to enjoin the Controlled Affiliate or any
related party in a court of competent jurisdiction from entry into any
transaction which would result in a termination of this Agreement unless the
Plan's license from BCBSA to use the Licensed Marks and Names has been
terminated

                                       9

<PAGE>

pursuant to 10(d) of the Plan's license agreement upon the required 6 month
written notice.

     K. BCBSA acknowledges that it is not the owner of assets of the Controlled
Affiliate.

     L. In the event that the Plan has more than 50 percent voting control of
the Controlled Affiliate under Paragraph 2(E)(2) above and is a Larger
Controlled Affiliate (as defined in Exhibit A), then the vote called for in
Paragraphs 7(C) and 7(D) above shall require the affirmative vote of
three-fourths of the Plans and three-fourths of the total then current weighted
vote of all the Plans.

     8.   DISPUTE RESOLUTION

     The parties agree that any disputes between them or between or among either
of them and one or more Plans or Controlled Affiliates of Plans that use in any
manner the Blue Shield and Blue Shield Marks and Name are subject to the
Mediation and Mandatory Dispute Resolution process attached to and made a part
of Plan's License from BCBSA to use the Licensed Marks and Name as Exhibits 5,
5A and 5B as amended from time-to-time, which documents are incorporated herein
by reference as though fully set forth herein.

     9.   LICENSE FEE

     Controlled Affiliate will pay to BCBSA a fee for this License determined
pursuant to the formula(s) set forth in Exhibit B.

     10.  JOINT VENTURE

     Nothing contained in the Agreement shall be construed as creating a joint
venture, partnership, agency or employment relationship between Plan and
Controlled Affiliate or between either and BCBSA.

                                                    Amended as of March 11, 1999

                                       10

<PAGE>

     11.  NOTICES AND CORRESPONDENCE

     Notices regarding the subject matter of this Agreement or breach or
termination thereof shall be in writing and shall be addressed in duplicate to
the last known address of each other party, marked respectively to the attention
of its President and, if any, its General Counsel.

     12.  COMPLETE AGREEMENT

     This Agreement contains the complete understandings of the parties in
relation to the subject matter hereof. This Agreement may only be amended by the
affirmative vote of three-fourths of the Plans and three-fourths of the total
then current weighted vote of all the Plans as officially recorded by the BCBSA
Corporate Secretary.

     13.  SEVERABILITY

     If any term of this Agreement is held to be unlawful by a court of
competent jurisdiction, such findings shall in no way affect the remaining
obligations of the parties hereunder and the court may substitute a lawful term
or condition for any unlawful term or condition so long as the effect of such
substitution is to provide the parties with the benefits of this Agreement.

     14.  NONWAIVER

     No waiver by BCBSA of any breach or default in performance on the part of
Controlled Affiliate or any other licensee of any of the terms, covenants or
conditions of this Agreement shall constitute a waiver of any subsequent breach
or default in performance of said terms, covenants or conditions.

     14A. VOTING

For all provisions of this Agreement referring to voting, the term 'Plans' shall
mean all entities licensed under the Blue Cross License Agreement and/or the
Blue Shield License Agreement, and in all votes of the Plans under this
Agreement the Plans shall vote together. For weighted votes of the Plans, the
Plan shall have a number of votes equal to the number of weighted votes (if any)
that it holds as a Blue Cross Plan plus the number of weighted votes (if any)
that it holds as a Blue Shield Plan. For all other votes of the Plans, the Plan
shall have one vote. For all questions requiring an affirmative three-fourths
weighted vote of the Plans, the requirement shall be deemed satisfied with a
lesser weighted vote unless six (6) or more Plans fail to cast weighted votes in
favor of the question.

                                                     Amended as of June 16, 2000

                                       11

<PAGE>

                       THIS PAGE IS INTENTIONALLY BLANK.

                                       12

<PAGE>

     15.  GOVERNING LAW

     This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Illinois.

     16.  HEADINGS

     The headings inserted in this agreement are for convenience only and shall
have no bearing on the interpretation hereof.

     IN WITNESS WHEREOF, the parties have caused this License Agreement to be
executed and effective as of the date of last signature written below.

Controlled Affiliate:

By:
   ------------------------------------
Date:
     ----------------------------------

Plan:

By:
   ------------------------------------
Date:
     ----------------------------------

BLUE CROSS AND BLUE SHIELD ASSOCIATION

By:
   ------------------------------------
Date:
     ----------------------------------

                                       13

<PAGE>

EXHIBIT A

CONTROLLED AFFILIATE LICENSE STANDARDS
June 2002
PREAMBLE

The standards for licensing Controlled Affiliates are established by BCBSA and
are subject to change from time-to-time upon the affirmative vote of
three-fourths (3/4) of the Plans and three-fourths (3/4) of the total weighted
vote. Each licensed Plan is required to use a standard Controlled Affiliate
license form provided by BCBSA and to cooperate fully in assuring that the
licensed Controlled Affiliate maintains compliance with the license standards.

The Controlled Affiliate License provides a flexible vehicle to accommodate the
potential range of health and workers' compensation related products and
services Plan Controlled Affiliates provide. The Controlled Affiliate License
collapses former health Controlled Affiliate licenses (HCC, HMO, PPO, TPA, and
IDS) into a single license using the following business-based criteria to
provide a framework for license standards:

..    Percent of Controlled Affiliate controlled by parent: Greater than 50
     percent or 50 percent?

..    Risk assumption: yes or no?

..    Medical care delivery: yes or no?

..    Size of the Controlled Affiliate: If the Controlled Affiliate has health or
     workers' compensation administration business, does such business
     constitute 15 percent or more of the parent's and other licensed health
     subsidiaries' contract enrollment?

                                       14

<PAGE>

EXHIBIT A (continued)

For purposes of definition:

..    A "smaller Controlled Affiliate:" (1) comprises less than fifteen percent
     (15%) of Plan's and its licensed Controlled Affiliates' total contract
     enrollment (as reported on the BCBSA Quarterly Enrollment Report, excluding
     rider and freestanding coverage, and treating an entity seeking licensure
     as licensed);* or (2) underwrites the indemnity portion of workers'
     compensation insurance and has total premium revenue less than 15 percent
     of the sponsoring Plan's net subscription revenue.

..    A "larger Controlled Affiliate" comprises fifteen percent (15%) or more of
     Plan's and its licensed Controlled Affiliates' total contract enrollment
     (as reported on the BCBSA Quarterly Enrollment Report, excluding rider and
     freestanding coverage, and treating an entity seeking licensure as
     licensed.)*

Changes in Controlled Affiliate status:

If any Controlled Affiliate's status changes regarding: its Plan ownership
level, its risk acceptance or direct delivery of medical care, the Controlled
Affiliate shall notify BCBSA within thirty (30) days of such occurrence in
writing and come into compliance with the applicable standards within six (6)
months.

If a smaller Controlled Affiliate's health and workers' compensation
administration business reaches or surpasses fifteen percent (15%) of the total
contract enrollment of the Plan and licensed Controlled Affiliates, the
Controlled Affiliate shall:

                                       15

<PAGE>

EXHIBIT A (continued)

1.   Within thirty (30) days, notify BCBSA of this fact in writing, including
     evidence that the Controlled Affiliate meets the minimum liquidity and
     capital (BCBSA "Health Risk-Based Capital (HRBC)" as defined by the NAIC
     and state established minimum reserve) requirements of the larger
     Controlled Affiliate Financial Responsibility standard; and

2.   Within six (6) months after reaching or surpassing the fifteen percent
     (15%) threshold, demonstrate compliance with all license requirements for a
     larger Controlled Affiliate.

If a Controlled Affiliate that underwrites the indemnity portion of workers'
compensation insurance receives a change in rating or proposed change in rating,
the Controlled Affiliate shall notify BCBSA within 30 days of notification by
the external rating agency.

----------

*    For purposes of this calculation,

The numerator equals:

Applicant Controlled Affiliate's contract enrollment, as defined in BCBSA's
Quarterly Enrollment Report (excluding rider and freestanding coverage).

The denominator equals:

Numerator PLUS Plan and all other licensed Controlled Affiliates' contract
enrollment, as reported in BCBSA's Quarterly Enrollment Report (excluding rider
and freestanding coverage).

                                                       Amended November 15, 2001

                                       16

<PAGE>

EXHIBIT A (continued)

                  STANDARDS FOR LICENSED CONTROLLED AFFILIATES

As described in Preamble section of Exhibit A to the Affiliate License
Agreement, each controlled affiliate seeking licensure must answer four
questions. Depending on the controlled affiliate's answers, certain standards
apply:

1. What percent of the controlled affiliate is controlled by the parent Plan?

--------------------------------------------------------------
More than 50%        50%          100% and Primary Business is
                                       Government Non-Risk

Standard 1A, 4   Standard 1B, 4          Standard 4*, 10A
--------------------------------------------------------------
* Applicable only if using the names and marks.

                                  IN ADDITION,

2. Is risk being assumed?

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
                               Yes                                                                   No
<S>                    <C>                    <C>                    <C>                    <C>                    <C>
Controlled Affiliate   Controlled Affiliate   Controlled Affiliate   Controlled Affiliate   Controlled Affiliate   Controlled
underwrites any        comprises *** 15%      comprises **= 15%      comprises *** 15%      comprises **= 15%      Affiliate's
indemnity portion      of total contract      of total contract      of total contract      of total contract      Primary
of workers'            enrollment of Plan     enrollment of Plan     enrollment of Plan     enrollment of Plan     Business is
compensation           and its licensed       and its licensed       and its licensed       and its licensed       Government
insurance              affiliates, and does   affiliates, and does   affiliates             affiliates             Non-Risk
                       not underwrite the     not underwrite the
Standards 7A-7E        indemnity portion      indemnity portion                             Standard 6H            Standard 10B
                       of workers'            of workers'
                       compensation           compensation
                       insurance              insurance

                       Standard 2             Standard 6H            Standard 2
                       (Guidelines 1.1,1.2)                          (Guidelines 1.1,1.3)
                       and Standard 11                               and Standard 11
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                  IN ADDITION,

3. Is medical care being directly provided?

-------------------------
    Yes           No

Standard 3A   Standard 3B
-------------------------

                                   IN ADDITION,

4. If the controlled affiliate has health or workers' compensation
administration business, does such business comprise 15% or more of the total
contract enrollment of Plan and its licensed controlled affiliates?

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
     Yes                                                                   No
<S>               <C>                       <C>                   <C>                           <C>
Standards 6A-6J   Controlled Affiliate is   Controlled            Controlled Affiliate is       Controlled Affiliate's
                  not a former primary      Affiliate is a        not a former primary          Primary Business is
                  licensee and elects to    former primary        licensee and does not elect   Government Non-Risk
                  participate in BCBSA      licensee              to participate in BCBSA
                  national programs                               national programs

                  Standards 5,8,9B          Standards 5,8,9A,11   Standards 5,8                 Standards 8, 10(C)
----------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       17

<PAGE>

EXHIBIT A (continued)

Standard 1 - Organization and Governance

1A.) The Standard for more than 50% Plan control is:

A Controlled Affiliate shall be organized and operated in such a manner that a
licensed Plan or Plans authorized to use the Licensed Marks in the Service Area
of the Controlled Affiliate pursuant to separate License Agreement(s) with
BCBSA, other than such Controlled Affiliate's License Agreement(s), (the
"Controlling Plan(s)"), have the legal authority, directly or indirectly through
wholly-owned subsidiaries: 1) to select members of the Controlled Affiliate's
governing body having more than 50% voting control thereof; and 2) to prevent
any change in the articles of incorporation, bylaws or other establishing or
governing documents of the Controlled Affiliate with which the Controlling
Plan(s) do(es) not concur; and 3) to exercise control over the policy and
operations of the Controlled Affiliate. In addition, a Plan or Plans directly or
indirectly through wholly-owned subsidiaries shall own more than 50% of any
for-profit Controlled Affiliate.

1B.) The Standard for 50% Plan control is:

A Controlled Affiliate shall be organized and operated in such a manner that a
licensed Plan or Plans authorized to use the Licensed Marks in the Service Area
of the Controlled Affiliate pursuant to separate License Agreement(s) with
BCBSA, other than such Controlled Affiliate's License Agreement(s), (the
"Controlling Plan(s)"), have the legal authority, directly or indirectly through
wholly-owned subsidiaries:

1)   to select members of the Controlled Affiliate's governing body having not
     less than 50% voting control thereof; and

2)   to prevent any change in the articles of incorporation, bylaws or other
     establishing or governing documents of the Controlled Affiliate with which
     the Controlling Plan(s) do(es) not concur; and

3)   to exercise control over the policy and operations of the Controlled
     Affiliate at least equal to that exercised by persons or entities (jointly
     or individually) other than the Controlling Plan(s).

                                       18

<PAGE>

EXHIBIT A (continued)

Notwithstanding anything to the contrary in 1) through 3) hereof, the Controlled
Affiliate's establishing or governing documents must also require written
approval by the Controlling Plan(s) before the Controlled Affiliate can:

     .    change the geographic area in which it operates

     .    change its legal and/or trade names

     .    change any of the types of businesses in which it engages

     .    create, or become liable for by way of guarantee, any indebtedness,
          other than indebtedness arising in the ordinary course of business

     .    sell any assets, except for sales in the ordinary course of business
          or sales of equipment no longer useful or being replaced

     .    make any loans or advances except in the ordinary course of business

     .    enter into any arrangement or agreement with any party directly or
          indirectly affiliated with any of the owners or persons or entities
          with the authority to select or appoint members or board members of
          the Controlled Affiliate, other than the Plan or Plans (excluding
          owners of stock holdings of under 5% in a publicly traded Controlled
          Affiliate)

     .    conduct any business other than under the Licensed Marks and Name

     .    take any action that any Controlling Plan or BCBSA reasonably believes
          will adversely affect the Licensed Marks and Name.

In addition, a Plan or Plans directly or indirectly through wholly-owned
subsidiaries shall own at least 50% of any for-profit Controlled Affiliate.

                                       19

<PAGE>

EXHIBIT A (continued)

Standard 2 - Financial Responsibility

A Controlled Affiliate shall be operated in a manner that provides reasonable
financial assurance that it can fulfill all of its contractual obligations to
its customers. If a risk-assuming Controlled Affiliate ceases operations for any
reason, Blue Cross and/or Blue Cross Plan coverage will be offered to all
Controlled Affiliate subscribers without exclusions, limitations or conditions
based on health status. If a nonrisk-assuming Controlled Affiliate ceases
operations for any reason, sponsoring Plan(s) will provide for services to its
(their) customers.

Standard 3 - State Licensure/Certification

3A.) The Standard for a Controlled Affiliate that employs, owns or contracts on
     a substantially exclusive basis for medical services is:

A Controlled Affiliate shall maintain unimpaired licensure or certification for
its medical care providers to operate under applicable state laws.

3B.) The Standard for a Controlled Affiliate that does not employ, own or
     contract on a substantially exclusive basis for medical services is:

A Controlled Affiliate shall maintain unimpaired licensure or certification to
operate under applicable state laws.

Standard 4 - Certain Disclosures

A Controlled Affiliate shall make adequate disclosure in contracting with third
parties and in disseminating public statements of 1) the structure of the Blue
Cross and Blue Shield System; and 2) the independent nature of every licensee;
and 3) the Controlled Affiliate's financial condition.

Standard 5 - Reports and Records for Certain Smaller Controlled Affiliates

For a smaller Controlled Affiliate that does not underwrite the indemnity
portion of workers' compensation insurance, the Standard is:

                                       20

<PAGE>

EXHIBIT A (continued)

A Controlled Affiliate and/or its licensed Plan(s) shall furnish, on a timely
and accurate basis, reports and records relating to these Standards and the
License Agreements between BCBSA and Controlled Affiliate.

Standard 6 - Other Standards for Larger Controlled Affiliates

Standards 6(A) - (I) that follow apply to larger Controlled Affiliates.

Standard 6(A): Board of Directors

A Controlled Affiliate Governing Board shall act in the interest of its
Corporation in providing cost-effective health care services to its customers. A
Controlled Affiliate shall maintain a governing Board, which shall control the
Controlled Affiliate, composed of a majority of persons other than providers of
health care services, who shall be known as public members. A public member
shall not be an employee of or have a financial interest in a health care
provider, nor be a member of a profession which provides health care services.

Standard 6(B): Responsiveness to Customers

A Controlled Affiliate shall be operated in a manner responsive to customer
needs and requirements.

Standard 6(C): Participation in National Programs

A Controlled Affiliate shall effectively and efficiently participate in each
national program as from time to time may be adopted by the Member Plans for the
purposes of providing portability of membership between the licensees and ease
of claims processing for customers receiving benefits outside of the Controlled
Affiliate's Service Area.

Such programs are applicable to licensees, and include:

1. Transfer Program;

2. BlueCard Program;

                                       21

<PAGE>

EXHIBIT A (continued)

3. Inter-Plan Teleprocessing System (ITS)

4. Electronic Claims Routing Process; and

5. National Account Programs, effective January 1, 2002.

Standard 6(D): Financial Performance Requirements

In addition to requirements under the national programs listed in Standard 6C:
Participation in National Programs, a Controlled Affiliate shall take such
action as required to ensure its financial performance in programs and contracts
of an inter-licensee nature or where BCBSA is a party.

Standard 6(E): Cooperation with Plan Performance Response Process

A Controlled Affiliate shall cooperate with BCBSA's Board of Directors and its
Plan Performance and Financial Standards Committee in the administration of the
Plan Performance Response Process and in addressing Controlled Affiliate
performance problems identified thereunder.

Standard 6(F): Independent Financial Rating

A Controlled Affiliate shall obtain a rating of its financial strength from an
independent rating agency approved by BCBSA's Board of Directors for such
purpose.

Standard 6(G): Best Efforts

During each year, a Controlled Affiliate shall use its best efforts in the
designated Service Area to promote and build the value of the Blue Cross Mark.

Standard 6(H): Financial Responsibility

A Controlled Affiliate shall be operated in a manner that provides reasonable
financial assurance that it can fulfill all of its contractual obligations to
its customers.

                                                       Amended November 15, 2001

                                       22

<PAGE>

EXHIBIT A (continued)

Standard 6(I): Reports and Records

A Controlled Affiliate shall furnish to BCBSA on a timely and accurate basis
reports and records relating to compliance with these Standards and the License
Agreements between BCBSA and Controlled Affiliate. Such reports and records are
the following:

A)   BCBSA Controlled Affiliate Licensure Information Request; and

B)   Biennial trade name and service mark usage material, including disclosure
     material; and

C)   Changes in the ownership and governance of the Controlled Affiliate,
     including changes in its charter, articles of incorporation, or bylaws,
     changes in a Controlled Affiliate's Board composition, or changes in the
     identity of the Controlled Affiliate's Principal Officers, and changes in
     risk acceptance, contract growth, or direct delivery of medical care; and

D)   Quarterly Financial Report, Semi-annual "Health Risk-Based Capital (HRBC)
     Report" as defined by the NAIC, Annual Financial Forecast, Annual Certified
     Audit Report, Insurance Department Examination Report, Annual Statement
     filed with State Insurance Department (with all attachments), and

E)   Quarterly Enrollment Report.

                                                          Amended March 14, 2002

                                       23

<PAGE>

EXHIBIT A (continued)

Standard 6(J): Control by Unlicensed Entities Prohibited

No Controlled Affiliate shall cause or permit an entity other than a Plan or a
Licensed Controlled Affiliate thereof to obtain control of the Controlled
Affiliate or to acquire a substantial portion of its assets related to
licensable services.

Standard 7 - Other Standards for Risk-Assuming Workers' Compensation Controlled
Affiliates

Standards 7(A) - (E) that follow apply to Controlled Affiliates that underwrite
the indemnity portion of workers' compensation insurance.

Standard 7 (A): Financial Responsibility

A Controlled Affiliate shall be operated in a manner that provides reasonable
financial assurance that it can fulfill all of its contractual obligations to
its customers.

Standard 7(B): Reports and Records

A Controlled Affiliate shall furnish, on a timely and accurate basis, reports
and records relating to compliance with these Standards and the License
Agreements between BCBSA and the Controlled Affiliate. Such reports and records
are the following:

A.   BCBSA Controlled Affiliate Licensure Information Request; and

B.   Biennial trade name and service mark usage materials, including disclosure
     materials; and

C.   Annual Certified Audit Report, Annual Statement as filed with the State
     Insurance Department (with all attachments), Annual NAIC's Risk-Based
     Capital Worksheets for Property and Casualty Insurers, Annual Financial
     Forecast; and

                                                           Amended June 16, 2000

                                       24

<PAGE>

EXHIBIT A (continued)

     Quarterly Financial Report, Quarterly Estimated Risk-Based Capital for
     Property and Casualty Insurers, Insurance Department Examination Report.

D.   Notification of all changes and proposed changes to independent ratings
     within 30 days of receipt and submission of a copy of all rating reports;
     and

E.   Changes in the ownership and governance of the Controlled Affiliate
     including changes in its charter, articles of incorporation, or bylaws,
     changes in a Controlled Affiliate's Board composition, Plan control, state
     license status, operating area, the Controlled Affiliate's Principal
     Officers or direct delivery of medical care.

Standard 7(C): Loss Prevention

A Controlled Affiliate shall apply loss prevention protocol to both new and
existing business.

Standard 7(D): Claims Administration

A Controlled Affiliate shall maintain an effective claims administration process
that includes all the necessary functions to assure prompt and proper resolution
of medical and indemnity claims.

Standard 7(E): Disability and Provider Management

A Controlled Affiliate shall arrange for the provision of appropriate and
necessary medical and rehabilitative services to facilitate early intervention
by medical professionals and timely and appropriate return to work.

                                                       Amended November 16, 2000

                                       25

<PAGE>

EXHIBIT A (continued)

Standard 8 - Cooperation with Controlled Affiliate License Performance Response
Process Protocol

A Controlled Affiliate and its Sponsoring Plan(s) shall cooperate with BCBSA's
Board of Directors and its Plan Performance and Financial Standards Committee in
the administration of the Controlled Affiliate License Performance Response
Process Protocol (ALPRPP) and in addressing Controlled Affiliate compliance
problems identified thereunder.

Standard 9(A) - Participation in National Programs by Smaller Controlled
Affiliates that were former Primary Licensees

A smaller controlled affiliate that formerly was a Primary Licensee shall
effectively and efficiently participate in certain national programs from time
to time as may be adopted by Member Plans for the purposes of providing ease of
claims processing for customers receiving benefits outside of the Controlled
Affiliate's service area and be subject to certain relevant financial and
reporting requirements.

A.   National program requirements include:

     .    BlueCard Program;

     .    Inter-Plan Teleprocessing System (ITS);

     .    Transfer Program;

     .    Electronic Claims Routing Process, effective until October 16, 2003;
          and

     .    National Account Programs, effective January 1, 2002.

B.   Financial Requirements include:

     .    Standard 6(D): Financial Performance Requirements and Standard 6(H):
          Financial Responsibility; or

     .    A financial guarantee covering the Controlled Affiliate's BlueCard
          Program obligations in a form, and from a guarantor, acceptable to
          BCBSA.

EXHIBIT A (continued)

                                       26

<PAGE>

Standard 9(A) - Participation in National Programs by Smaller Controlled
Affiliates that were former Primary Licensees

C.   Reporting requirements include:

     .    The Semi-annual Health Risk-Based Capital (HRBC) Report.

                                                           Amended June 13, 2002

                                       27

<PAGE>

Exhibit A (continued)

Standard 9(B) - Participation in National Programs by Smaller Controlled
Affiliates

A smaller controlled affiliate that voluntarily elects to participate in
national programs in accordance with BlueCard and other relevant Policies and
Provisions shall effectively and efficiently participate in national programs
from time to time as may be adopted by Member Plans for the purposes of
providing ease of claims processing for customers receiving benefits outside of
the controlled affiliate's service area and be subject to certain relevant
financial and reporting requirements.

A.   National program requirements include:

     .    BlueCard Program;

     .    Inter-Plan Teleprocessing System (ITS);

     .    Electronic Claims Routing Process, effective until October 16, 2003;
          and

     .    National Account Programs, effective January 1, 2002.

B.   Financial Requirements include:

     .    Standard 6(D): Financial Performance Requirements and Standard 6(H):
          Financial Responsibility; or

     .    A financial guarantee covering the Controlled Affiliate's BlueCard
          Program obligations in a form, and from a guarantor, acceptable to
          BCBSA.

                                                           Amended June 13, 2002

                                       28

<PAGE>

EXHIBIT A (continued)

Standard 10 - Other Standards for Controlled Affiliates Whose Primary Business
is Government Non-Risk

Standards 10(A) - (C) that follow apply to Controlled Affiliates whose primary
business is government non-risk.

Standard 10(A) - Organization and Governance

A Controlled Affiliate shall be organized and operated in such a manner that it
is 1) wholly owned by a licensed Plan or Plans and 2) the sponsoring licensed
Plan or Plans have the legal ability to prevent any change in the articles of
incorporation, bylaws or other establishing or governing documents of the
Controlled Affiliate with which it does not concur.

                                       29

<PAGE>

EXHIBIT A (continued)

Standard 10(B) - Financial Responsibility

A Controlled Affiliate shall be operated in a manner that provides reasonable
financial assurance that it can fulfill all of its contractual obligations to
its customers.

Standard 10(C):- Reports and Records

A Controlled Affiliate shall furnish, on a timely and accurate basis, reports
and records relating to compliance with these Standards and the License
Agreements between BCBSA and the Controlled Affiliate. Such reports and records
are the following:

A.   BCBSA Affiliate Licensure Information Request; and

B.   Biennial trade name and service mark usage materials, including disclosure
     material; and

C.   Annual Certified Audit Report, Annual Statement (if required) as filed with
     the State Insurance Department (with all attachments), Annual NAIC
     Risk-Based Capital Worksheets (if required) as filed with the State
     Insurance Department (with all attachments), and Insurance Department
     Examination Report (if applicable)*; and

D.   Changes in the ownership and governance of the Controlled Affiliate,
     including changes in its charter, articles of incorporation, or bylaws,
     changes in the Controlled Affiliate's Board composition, Plan control,
     state license status, operating area, the Controlled Affiliate's Principal
     Officers or direct delivery of medical care.

                                       30

<PAGE>

EXHIBIT A (continued)

Standard 11- Participation in Electronic Claims Routing Process

A smaller controlled affiliate for which this standard applies pursuant to the
Preamble section of Exihibit A of the Controlled Affiliate License Agreement
shall effectively and efficiently participate in certain national programs from
time to time as may be adopted by Member Plans for the purposes of providing
ease of claims processing for customers receiving benefits outside of the
controlled affiliate's service area.

National program requirements include:

     A.   Electronic Claims Routing Process effective upon October 16, 2003.

                                                           Amended June 13, 2002

                                       31

<PAGE>

EXHIBIT B
ROYALTY FORMULA FOR SECTION 9 OF THE
CONTROLLED AFFILIATE LICENSE AGREEMENT

Controlled Affiliate will pay BCBSA a fee for this license in accordance with
the following formula:

FOR RISK AND GOVERNMENT NON-RISK PRODUCTS:

For Controlled Affiliates not underwriting the indemnity portion of workers'
compensation insurance:

An amount equal to its pro rata share of each sponsoring Plan's dues payable to
BCBSA computed with the addition of the Controlled Affiliate's subscription
revenue and contracts arising from products using the marks. The payment by each
sponsoring Plan of its dues to BCBSA, including that portion described in this
paragraph, will satisfy the requirement of this paragraph, and no separate
payment will be necessary.

For Controlled Affiliates underwriting the indemnity portion of workers'
compensation insurance:

An amount equal to 0.35 percent of the gross revenue per annum of Controlled
Affiliate arising from products using the marks; plus, an annual fee of $5,000
per license for a Controlled Affiliate subject to Standard 7.

For Controlled Affiliates whose primary business is government non-risk:

An amount equal to its pro-rata share of each sponsoring Plan's dues payable to
BCBSA computed with the addition of the Controlled Affiliate's government
non-risk beneficiaries.

                                       32

<PAGE>

EXHIBIT B (continued)

FOR NONRISK PRODUCTS:

An amount equal to 0.24 percent of the gross revenue per annum of Controlled
Affiliate arising from products using the marks; plus:

1)   An annual fee of $5,000 per license for a Controlled Affiliate subject to
     Standard 6 D.

2)   An annual fee of $2,000 per license for all other Controlled Affiliates.

The foregoing shall be reduced by one-half where both a BLUE CROSS(R) and BLUE
SHIELD(R) License are issued to the same Controlled Affiliate. In the event that
any license period is greater or less than one (1) year, any amounts due shall
be prorated. Royalties under this formula will be calculated, billed and paid in
arrears.

                                       33

<PAGE>

                                                                      EXHIBIT 1A

                     CONTROLLED AFFILIATE LICENSE AGREEMENT
                     APPLICABLE TO LIFE INSURANCE COMPANIES
(Includes revisions adopted by Member Plans through their June 13, 2002 meeting)

     This agreement by and among Blue Cross and Blue Shield Association
("BCBSA")                            ("Controlled Affiliate"), a Controlled
          --------------------------
Affiliate of the Blue Shield Plan(s), known as                         ("Plan").
                                               -----------------------

WHEREAS, BCBSA is the owner of the BLUE SHIELD and BLUE SHIELD Design service
marks;

WHEREAS, the Plan and the Controlled Affiliate desire that the latter be
entitled to use the BLUE SHIELD and BLUE SHIELD Design service marks
(collectively the "Licensed Marks") as service marks and be entitled to use the
term BLUE SHIELD in a trade name ("Licensed Name");

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

     1.   GRANT OF LICENSE

          Subject to the terms and conditions of this Agreement, BCBSA hereby
grants to the Controlled Affiliate the exclusive right to use the licensed Marks
and Names in connection with and only in connection with those life insurance
and related services authorized by applicable state law, other than health care
plans and related services (as defined in the Plan's License Agreements with
BCBSA) which services are not separately licensed to Controlled Affiliate by
BCBSA, in the Service Area served by the Plan, except that BCBSA reserves the
right to use the Licensed Marks and Name in said Service Area, and except to the
extent that said Service Area may overlap the area or areas served by one or
more other licensed Blue Shield Plans as of the date of this License as to which
overlapping areas the rights hereby granted are non-exclusive as to such other
Plan or Plans and their respective Licensed Controlled Affiliates only.
Controlled Affiliate cannot use the Licensed Marks or Name outside the Service
Area or, anything in any other license to Controlled Affiliate notwithstanding,
in its legal or trade name.

     2.   QUALITY CONTROL

          A. Controlled Affiliate agrees to use the Licensed Marks and Name only
in relation to the sale, marketing and rendering of authorized products and
further agrees to be bound by the conditions regarding quality control shown in
Exhibit A as it may be amended by BCBSA from time-to-time.

                                                 Amended as of November 17, 1994

                                      -1-

<PAGE>

          B. Controlled Affiliate agrees that Plan and/or BCBSA may, from
time-to-time, upon reasonable notice, review and inspect the manner and method
of Controlled Affiliate's rendering of service and use of the Licensed Marks and
Name.

          C. Controlled Affiliate agrees that it will provide on an annual basis
(or more often if reasonably required by Plan or by BCBSA) a report to Plan and
BCBSA demonstrating Controlled Affiliate's compliance with the requirements of
this Agreement including but not limited to the quality control provisions of
Exhibit A.

          D. As used herein, a Controlled Affiliate is defined as an entity
organized and operated in such a manner that it is subject to the bona fide
control of a Plan or Plans. Absent written approval by BCBSA of an alternative
method of control, bona fide control shall mean the legal authority, directly or
indirectly through wholly-owned subsidiaries: (a) to select members of the
Controlled Affiliate's governing body having not less than 51% voting control
thereof; (b) to exercise operational control with respect to the governance
thereof; and (c) to prevent any change in its articles of incorporation, bylaws
or other governing documents deemed inappropriate. In addition, a Plan or Plans
shall own at least 51% of any for-profit Controlled Affiliate. If the Controlled
Affiliate is a mutual company, the Plan or its designee(s) shall have and
maintain, in lieu of the requirements of items (a) and (c) above, proxies
representing 51% of the votes at any meeting of the policyholders and shall
demonstrate that there is no reason to believe this such proxies shall be
revoked by sufficient policyholders to reduce such percentage below 51%.

     3.   SERVICE MARK USE

          Controlled Affiliate shall at all times make proper service mark use
of the Licensed Marks, including but not limited to use of such symbols or words
as BCBSA shall specify to protect the Licensed Marks, and shall comply with such
rules (applicable to all Controlled Affiliates licensed to use the Marks)
relative to service mark use, as are issued from time-to-time by BCBSA. If there
is any public reference to the affiliation between the Plan and the Controlled
Affiliate, all of the Controlled Affiliate's licensed services in the Service
Area of the Plan shall be rendered under the Licensed Marks. Controlled
Affiliate recognizes and agrees that all use of the Licensed Marks by Controlled
Affiliate shall inure to the benefit of BCBSA.

                                      -2-

<PAGE>

     4.   SUBLICENSING AND ASSIGNMENT

          Controlled Affiliate shall not sublicense, transfer, hypothecate,
sell, encumber or mortgage, by operation of law or otherwise, the rights granted
hereunder and any such act shall be voidable at the option of Plan or BCBSA.
This Agreement and all rights and duties hereunder are personal to Controlled
Affiliate.

     5.   INFRINGEMENTS

          Controlled Affiliate shall promptly notify Plan and BCBSA of any
suspected acts of infringement, unfair competition or passing off which may
occur in relation to the Licensed Marks. Controlled Affiliate shall not be
entitled to require Plan or BCBSA to take any actions or institute any
proceedings to prevent infringement, unfair competition or passing off by third
parties. Controlled Affiliate agrees to render to Plan and BCBSA, free of
charge, all reasonable assistance in connection with any matter pertaining to
the protection of the Licensed Marks by BCBSA.

     6.   LIABILITY INDEMNIFICATION

          Controlled Affiliate hereby agrees to save, defend, indemnify and hold
Plan and BCBSA harmless from and against all claims, damages, liabilities and
costs of every kind, nature and description which may arise as a result of
Controlled Affiliate's rendering of health care services under the Licensed
Marks.

     7.   LICENSE TERM

          The license granted by this Agreement shall remain in effect for a
period of one (1) year and shall be automatically extended for additional one
(1) year periods upon evidence satisfactory to the Plan and BCBSA that
Controlled Affiliate meets the then applicable quality control standards, unless
one of the parties hereto notifies the other party of the termination hereof at
least sixty (60) days prior to expiration of any license period.

          This Agreement may be terminated by the Plan or by BCBSA for cause at
any time provided that Controlled Affiliate has been given a reasonable
opportunity to cure and shall not effect such a cure within thirty (30) days of
receiving written notice of the intent to terminate (or commence a cure within
such thirty day period and continue diligent efforts to complete the cure if
such curing cannot reasonably be completed within such thirty day period). By
way of example and not for purposes of limitation, Controlled Affiliate's
failure to abide by the quality control provisions of Paragraph 2, above, shall
be considered a proper ground for cancellation of this Agreement.

                                      -3-

<PAGE>

     A. Controlled Affiliate shall no longer comply with Standard No. 1
(Organization and Governance) of Exhibit A or, following an opportunity to cure,
with the remaining quality control provisions of Exhibit A, as it may be amended
from time-to-time; or

     B. Plan ceases to be authorized to use the Licensed Marks; or

     C. Appropriate dues for Controlled Affiliate pursuant to item 8 hereof,
which are the royalties for this License Agreement are more than sixty (60) days
in arrears to BCBSA.

     Upon termination of this Agreement for cause or otherwise, Controlled
Affiliate agrees that it shall immediately discontinue all use of the Licensed
Marks including any use in its trade name.

     In the event of any disagreement between Plan and BCBSA as to whether
grounds exist for termination or as to any other term or condition hereof, the
decision of BCBSA shall control, subject to provisions for mediation or
mandatory dispute resolution in effect between the parties.

     Upon termination of this Agreement, Licensed Controlled Affiliate shall
immediately notify all of its customers that it is no longer a licensee of the
Blue Cross and Blue Shield Association and provide instruction on how the
customer can contact the Blue Cross and Blue Shield Association or a designated
licensee to obtain further information on securing coverage. The written
notification required by this paragraph shall be in writing and in a form
approved by the Association. The Association shall have the right to audit the
terminated entity's books and records to verify compliance with this paragraph.

     8.   DUES

     Controlled Affiliate will pay to BCBSA a fee for this license in accordance
with the following formula:

     . An annual fee of five thousand dollars ($5,000) per license, plus

     . .05% of gross revenue per year from branded group products, plus

     . .5% of gross revenue per year from branded individual products plus

     . .14% of gross revenue per year from branded individual annuity products.

                                                 Amended as of November 20, 1997

                                      -4-

<PAGE>

The foregoing percentages shall be reduced by one-half where both a BLUE
CROSS(R) and BLUE SHIELD(R) license are issued to the same entity. In the event
that any License period is greater or less than one (1) year, any amounts due
shall be prorated. Royalties under this formula will be calculated, billed and
paid in arrears.

     Plan will promptly and timely transmit to BCBSA all dues owed by Controlled
Affiliate as determined by the above formula and if Plan shall fail to do so,
Controlled Affiliate shall pay such dues directly.

     9.   JOINT VENTURE

     Nothing contained in this Agreement shall be construed as creating a joint
venture, partnership, agency or employment relationship between Plan and
Controlled Affiliate or between either and BCBSA.

     9A.  VOTING

     For all provisions of this Agreement referring to voting, the term 'Plans'
shall mean all entities licensed under the Blue Cross License Agreement and/or
the Blue Shield License Agreement, and in all votes of the Plans under this
Agreement the Plans shall vote together. For weighted votes of the Plans, the
Plan shall have a number of votes equal to the number of weighted votes (if any)
that it holds as a Blue Cross Plan plus the number of weighted votes (if any)
that it holds as a Blue Shield Plan. For all other votes of the Plans, the Plan
shall have one vote. For all questions requiring an affirmative three-fourths
weighted vote of the Plans, the requirement shall be deemed satisfied with a
lesser weighted vote unless six (6) or more Plans fail to cast weighted votes in
favor of the question.

     10.  NOTICES AND CORRESPONDENCE

     Notices regarding the subject matter of this Agreement or breach or
termination thereof shall be in writing and shall be addressed in duplicate to
the last known address of each other party, marked respectively to the attention
of its President and, if any, its General Counsel.

                                                     Amended as of June 16, 2000

                                       -4a-

                                                       (The next page is page 5)

<PAGE>

     11.  COMPLETE AGREEMENT

     This Agreement contains the complete understandings of the parties in
relation to the subject matter hereof. This Agreement may only be amended by a
writing executed by all parties.

     12.  SEVERABILITY

     If any term of this Agreement is held to be unlawful by a court of
competent jurisdiction, such finding shall in no way effect the remaining
obligations of the parties hereunder and the court may substitute a lawful term
or condition for any unlawful term or condition so long as the effect of such
substitution is to provide the parties with the benefits of this Agreement.

     13.  NONWAIVER

     No waiver by BCBSA of any breach or default in performance on the part of
the Controlled Affiliate or any other licensee of any of the terms, covenants or
conditions of this Agreement shall constitute a waiver of any subsequent breach
or default in performance of said terms, covenants or conditions.

     14.  GOVERNING LAW

     This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Illinois.

                                      -5-

<PAGE>

IN WITNESS WHEREOF, the parties have caused this License Agreement to be
executed, effective as of the date of last signature written below.

BLUE CROSS AND BLUE SHIELD ASSOCIATION

By:
   ------------------------------------
Date:
     ----------------------------------

Controlled Affiliate

By:
   ------------------------------------
Date:
     ----------------------------------

Plan

By:
   ------------------------------------
Date:
     ----------------------------------

                                      -6-

<PAGE>

EXHIBIT A

CONTROLLED AFFILIATE LICENSE STANDARDS
LIFE INSURANCE COMPANIES

Page 1 of 2

PREAMBLE

The standards for licensing Life Insurance Companies (Life and Health Insurance
companies, as defined by state statute) are established by BCBSA and are subject
to change from time-to-time upon the affirmative vote of three-fourths (3/4) of
the Plans and three-fourths (3/4) of the total weighted vote of all Plans. Each
Licensed Plan is required to use a standard controlled affiliate license form
provided by BCBSA and to cooperate fully in assuring that the licensed Life
Insurance Company maintains compliance with the license standards.

An organization meeting the following standards shall be eligible for a license
to use the Licensed Marks within the service area of its sponsoring Licensed
Plan to the extent and the manner authorized under the Controlled Affiliate
License applicable to Life Insurance Companies and the principal license to the
Plan.

Standard 1 - Organization and Governance

The LIC shall be organized and operated in such a manner that it is controlled
by a licensed Plan or Plans which have, directly or indirectly: 1) not less than
51% of the voting control of the LIC; and 2) the legal ability to prevent any
change in the articles of incorporation, bylaws or other establishing or
governing documents of the LIC with which it does not concur; and 3) operational
control of the LIC.

If the LIC is a mutual company, the Plan or its designee(s) shall have and
maintain, in lieu of the requirements of items 1 and 2 above, proxies
representing at least 51% of the votes at any policyholder meeting and shall
demonstrate that there is no reason to believe such proxies shall be revoked by
sufficient policyholders to reduce such percentage below 51%.

Standard 2 - State Licensure

The LIC must maintain unimpaired licensure or certificate of authority to
operate under applicable state laws as a life and health insurance company in
each state in which the LIC does business.

Standard 3 - Records and Examination

The LIC and its sponsoring licensed Plan(s) shall maintain and furnish, on a
timely and accurate basis, such records and reports regarding the LIC as may be
required in order to establish compliance with the license agreement. The

                                      -1-

<PAGE>

CONTROLLED AFFILIATE LICENSE STANDARDS
LIFE INSURANCE COMPANIES

Page 2 of 2

LIC and its sponsoring licensed Plan(s) shall permit BCBSA to examine the
affairs of the LIC and shall agree that BCBSA's board may submit a written
report to the chief executive officer(s) and the board(s) of directors of the
sponsoring Plan(s).

Standard 4 - Mediation

The LIC and its sponsoring Plan(s) shall agree to use the then-current BCBSA
mediation and mandatory dispute resolution processes, in lieu of a legal action
between or among another licensed controlled affiliate, a licensed Plan or
BCBSA.

Standard 5 - Financial Responsibility

The LIC shall maintain adequate financial resources to protect its customers and
meet its business obligations.

Standard 6 - Cooperation with Affiliate License Performance Response Process
Protocol

The LIC and its Sponsoring Plan(s) shall cooperate with BCBSA's Board of
Directors and its Plan Performance and Financial Standards Committee in the
administration of the Affiliate License Performance Response Process Protocol
(ALPRPP) and in addressing LIC compliance problems identified thereunder.

                                      -2-

<PAGE>

EXHIBIT 2

Membership Standards

Page 1 of 4

Preamble

The Membership Standards apply to all organizations seeking to become or to
continue as Regular Members of the Blue Cross and Blue Shield Association. Any
organization seeking to become a Regular Member must be found to be in
substantial compliance with all Membership Standards at the time membership is
granted and the organization must be found to be in substantial compliance with
all Membership Standards for a period of two (2) years preceding the date of its
application. If Membership is sought by an entity which controls or is
controlled by one or more Plans, such compliance shall be determined on the
basis of compliance by such Plan or Plans.

The Regular Member Plans shall have authority to interpret these Standards.
Compliance with any Membership Standard may be excused, at the Plans'
discretion, if the Plans agree that compliance with such Standard would require
the Plan to violate a law or governmental regulation governing its operation or
activities.

A Regular Member Plan that operates as a "Shell Holding Company" is defined as
an entity that assumes no underwriting risk and has less than 1% of the
consolidated enterprise assets (excludes investments in subsidiaries) and less
than 5% of the consolidated enterprise general and administrative expenses.

A Regular Member Plan that operates as a "Hybrid Holding Company" is defined as
an entity that assumes no underwriting risk and has either more than 1% of the
consolidated enterprise assets (excludes investments in subsidiaries) or more
than 5% of the consolidated enterprise general and administrative expenses.

Standard 1:    A Plan's Board shall not be controlled by any special interest
               group, and shall act in the interest of its Corporation in
               providing cost-effective health care services to its customers. A
               Plan shall maintain a governing Board, which shall control the
               Plan, composed of a majority of persons other than providers of
               health care services, who shall be known as public members. A
               public member shall not be an employee of or have a financial
               interest in a health care provider, nor be a member of a
               profession which provides health care services.

                                                 Amended as of November 19, 1998

<PAGE>

EXHIBIT 2

Membership Standards

Page 2 of 4

Standard 2:    A Plan shall furnish to the Association on a timely and accurate
               basis reports and records relating to compliance with these
               Standards and the License Agreements between the Association and
               the Plans. Such reports and records are the following:

               A.   BCBSA Membership Information Request;

               B.   Biennial trade name and service mark usage material,
                    including disclosure material under Standard 7;

               C.   Changes in the governance of the Plan, including changes in
                    a Plan's Charter, Articles of Incorporation, or Bylaws,
                    changes in a Plan's Board composition, or changes in the
                    identity of the Plan's Principal Officers;

               D.   Quarterly Financial Report, Semi-annual "Health Risk-Based
                    Capital (HRBC) Report" as defined by the NAIC, Annual
                    Financial Forecast, Annual Certified Audit Report, Insurance
                    Department Examination Report, Annual Statement filed with
                    State Insurance Department (with all attachments), Plan,
                    Subsidiary and Affiliate Report; and

                    .    Plans that are a Shell Holding Company as defined in
                         the Preamble hereto are required to furnish only a
                         calendar year-end "Health Risk-Based Capital (HRBC)
                         Report" as defined by the NAIC.

                                                 Amended as of November 15, 2001

<PAGE>

EXHIBIT 2

Membership Standards

Page 3 of 4

               E.   Quarterly Enrollment Report, and Member Touchpoint Measures
                    Index (MTM) starting 12/31/00 and semiannually thereafter;
                    and

                    .    Plans that are a Shell Holding Company as defined in
                         the Preamble hereto are not required to furnish any
                         items identified in Paragraph E.

0Standard 3:    A Plan shall be operated in a manner that provides reasonable
               financial assurance that it can fulfill its contractual
               obligations to its customers.

Standard 4:    A Plan shall be operated in a manner responsive to customer needs
               and requirements.

Standard 5:    A Plan shall effectively and efficiently participate in each
               national program as from time to time may be adopted by the
               Member Plans for the purposes of providing portability of
               membership between the Plans and ease of claims processing for
               customers receiving benefits outside of the Plan's Service Area.

               Such programs are applicable to Blue Cross and Blue Shield Plans,
               and include:

               A.   Transfer Program;
               B.   Inter-Plan Teleprocessing System (ITS);
               C.   BlueCard Program;
               D.   Electronic Claims Routing Process; and
               E.   National Account Programs, effective January 1, 2002

                                                    Amended as of March 14, 2002

<PAGE>

EXHIBIT 2

Membership Standards

Page 4 of 4

Standard 6:    In addition to requirements under the national programs listed in
               Standard 5: Participation in National Programs, a Plan shall take
               such action as required to ensure its financial performance in
               programs and contracts of an inter-Plan nature or where the
               Association is a party.

Standard 7:    A Plan shall make adequate disclosure in contracting with third
               parties and in disseminating public statements of (i) the
               structure of the Blue Cross and Blue Shield System, (ii) the
               independent nature of every Plan, and (iii) the Plan's financial
               condition.

Standard 8:    A Plan shall cooperate with the Association's Board of
               Directors and its Plan Performance and Financial Standards
               Committee in the administration of the Plan Performance Response
               Process and in addressing Plan performance problems identified
               thereunder.

Standard 9:    A Plan shall obtain a rating of its financial strength from an
               independent rating agency approved by the Association's Board of
               Directors for such purpose.

Standard 10:   During each year, a Plan and its Controlled Affiliate(s) engaged
               in providing licensable services (excluding Life Insurance and
               Charitable Foundation Services) shall use their best efforts in
               the designated Service Area to promote and build the value of the
               Blue Cross and Blue Shield Marks.

Standard 11:   Neither a Plan nor any Larger Controlled Affiliate shall cause or
               permit an entity other than a Plan or a Licensed Controlled
               Affiliate thereof to obtain control of the Plan or Larger
               Controlled Affiliate or to acquire a substantial portion of its
               assets related to licensable services.

                                                     Amended as of June 18, 1999

<PAGE>

EXHIBIT 3

GUIDELINES WITH RESPECT TO USE OF
LICENSED NAME AND MARKS IN CONNECTION WITH NATIONAL
ACCOUNTS

Page 1 of 3

1. The strength of the Blue Cross/Blue Shield National Accounts mechanism, and
the continued provision of cost effective, quality health care benefits to
National Accounts, are predicated on locally managed provider networks
coordinated on a national scale in a manner consistent with effective service to
National Account customers and consistent with the preservation of the integrity
of the Blue Cross/Blue Shield system and the Licensed Marks. These guidelines
shall be interpreted in keeping with such ends.

2. A National Account is an entity with employee and/or retiree locations in
more than one Plan's Service Area. Unless otherwise agreed, a National Account
is deemed located in the Service Area in which the corporate headquarters of the
National Account is located. A local plant, office or division headquarters of
an entity may be deemed a separate National Account when that local plant,
office or division headquarters 1) has employee locations in more than one
Service Area, and 2) has independent health benefit decision-making authority
for the employees working at such local plant, office or division headquarters
and for employees working at other locations outside the Service Area. In such a
case, the local plant, office or division headquarters is a National Account
that is deemed located in the Service Area in which such local plant, office or
division headquarters is located. The Control Plan of a National Account is the
Plan in whose Service Area the National Account is located. A participating
("Par") Plan is a Plan in whose Service Area the National Account has employee
and/or retiree locations, but in which the National Account is not located.

3. The National Account Guidelines enunciated herein below shall be applicable
only with respect to the business of new National Accounts acquired after
January 1, 1991.

4. Control Plans shall utilize National Account identification cards complying
with then currently effective BCBSA graphic standards in connection with all
National Accounts business to facilitate administration thereof, to minimize
subscriber and provider confusion, and to reflect a commitment to cooperation
among Plans.

                                                           Amended June 15, 2001

<PAGE>

Exhibit 3

Page 2 of 3

5. Disputes among Plans and/or BCBSA as to the interpretation or implementation
of these Guidelines or as to other National Accounts issues shall be submitted
to mediation and mandatory dispute resolution as provided in the License
Agreement. For two years from the effective date of the License Agreement,
however, such disputes shall be subject to mediation only, with the results of
such mediation to be collected and reported in order to establish more
definitive operating parameters for National Accounts business and to serve as
ground rules for future binding dispute resolution.

6. The Control Plan may use the BlueCard Program (as defined by IPPC) to deliver
benefits to employees and non-Medicare eligible retirees in a Participating
Plan's service area if an alternative arrangement with the Participating Plan
cannot be negotiated. The Participating Plan's minimum servicing requirement for
those employees and non-Medicare retirees in its service area is to deliver
benefits using the BlueCard Program. Account delivery is subject to the
policies, provisions and procedures of the BlueCard Program.

7. For provider payments in a Participating Plan's area (on non-BlueCard
claims), payment to the provider may be made by the Participating Plan or the
Control Plan at the Participating Plan's option. If the Participating Plan
elects to pay the provider, it may not withhold payment of a claim verified by
the Control Plan or its designated processor, and payment must be in conformity
with service criteria established by the Board of Directors of BCBSA (or an
authorized committee thereof) to assure prompt payment, good service and minimum
confusion with providers and subscribers. The Control Plan, at the Participating
Plan's request, will also assure that measures are taken to protect the
confidentiality of the data pertaining to provider reimbursement levels and
profiles.

                                                     Amended as of June 14, 1996

<PAGE>

Exhibit 3

Page 3 of 3

8. For claim payments in a Participating Plan's area (on non-BlueCard claims),
Participating Plans are strongly encouraged, but not required, to pass along to
the Control Plan part or all of local provider discounts and differentials for
use by the Control Plan in negotiating financial arrangements with National
Accounts. However, since the size, basis, form and use of local differentials
can vary substantially among Plans and also by individual National Account
characteristics, the degree and form of any discount or differential passed
along to the Control Plan shall be strictly a matter of negotiated contractual
agreement between a Participating Plan and the Control Plan and may also vary
from one National Account to another. In order to facilitate the quotation of
national account pricing and the offering of a variety of National Account
delivery systems, all Plans are strongly encouraged to periodically publish to
other Plans and the BCBSA their National Account contracting policies with
respect to the handling of differentials.

     The Control Plan, in its financial agreements with a National Account, is
expected to reasonably reflect the aggregate amount of differentials passed
along to the Control Plan by all Participating Plans in a National Account. The
exact form and substance of this may vary from one National Account to another
and shall be a matter of explicit negotiation and contractual relationship
between the National Account and the Control Plan. The specifics in an agreement
between the Control Plan and the National Account may vary in form (e.g., a
guaranteed offset against retentions, or a direct pass through, or a guaranteed
aggregate percentage discount, or no pass back at all, etc.), and the Control
Plan has the responsibility and the Authority to negotiate precise arrangements.
However, irrespective of the final arrangements between the Control Plan and the
National Account, a Participating Plan's liability for passing along
differentials shall be limited to the contractual agreement the Participating
Plan has with the Control Plan on a specific National Account.

9. Other than in contracting with health care providers or soliciting such
contracts in areas contiguous to a Plan's Service Area in order to serve its
subscribers or those of its licensed Controlled Affiliate residing or working in
its Service Area, a Control Plan may not use the Licensed Marks and/or Name, as
a tag line or otherwise, to negotiate directly with providers outside its
Service Area.

<PAGE>

EXHIBIT 4
GOVERNMENT PROGRAMS AND CERTAIN OTHER USES

Page 1 of 2

1. A Plan and its licensed Controlled Affiliate may use the Licensed Marks and
Name in bidding on and executing a contract to serve a Government Program, and
in thereafter communicating with the Government concerning the Program. With
respect, however, to such contracts entered into after the 1st day of January,
1991, the Licensed Marks and Name will not be used in communications or
transactions with beneficiaries or providers in the Government Program located
outside a Plan's Service Area, unless the Plan can demonstrate to the
satisfaction of BCBSA's governing body that such a restriction on use of the
Licensed Marks and Name will jeopardize its ability to procure the contract for
the Government Program. As to both existing and future contracts for Government
Programs, Plans will discontinue use of the Licensed Marks and Name as to
beneficiaries and Providers outside their Service Area as expenditiously as
circumstances reasonably permit. Effective January 1, 1995, except as provided
in the first sentence above, all use by a Plan of the Licensed Marks and Name in
Government Programs outside of the Plan's Service Area shall be discontinued.
Incidental communications outside a Plan's Service Area with resident or former
resident beneficiaries of the Plan, and other categories of necessary incidental
communications approved by BCBSA, are not prohibited.

2. In connection with activity otherwise in furtherance of the License
Agreement, a Plan may use the Licensed Marks and Name outside its Service Area
in the following circumstances which are deemed legitimate and necessary and not
likely to cause consumer confusion:

     a.   sending letterhead, envelopes, and similar items solely for
          administrative purposes (e.g., not for purposes of marketing,
          advertising, promoting, selling or soliciting the sale of health care
          plans and related services);

     b.   distributing business cards other than in marketing and selling;

     c.   contracting with health care providers or soliciting such contracts in
          areas contiguous to a Plan's Service Area in order to serve its
          subscribers or those of its licensed Controlled Affiliate residing or
          working in its service area;

     d.   issuing a small sign containing the legal name or trade name of the
          Plan or its licensed Controlled Affiliate for display by a provider to
          identify the latter as a participating provider of the Plan or
          Controlled Affiliate;

                                                          Amended March 16, 2001

<PAGE>

EXHIBIT 4

Page 2 of 2

     e.   advertising in publications or electronic media solely to persons for
          employment;

     f.   advertising in print, electronic or other media which serve, as a
          substantial market, the Service Area of the Plan or licensed
          Controlled Affiliate, provided that no Plan may advertise outside its
          Service Area on the national broadcast and cable networks and that
          advertisements in national print media are limited to the smallest
          regional edition encompassing the Service Area;

     g.   advertising by direct mail where the addressee's zip code plus 4
          includes, at least in part, the Plan's Service Area or that of a
          licensed Controlled Affiliate.

     h.   negotiating rates with a health care provider for services to a
          specific member in case management, provided that:

          (1) the health care provider does not contract with the Licensee (or
          any of the Licensees in the case of overlapping Service Areas) in
          whose Service Area the health care provider is located; and

          (2) the Licensee(s) in whose Service Area the health care provider is
          located consent(s) in advance.

                                                       Amended November 15, 2001

<PAGE>

EXHIBIT 5

MEDIATION AND MANDATORY DISPUTE RESOLUTION (MMDR) RULES

     The Blue Cross and Blue Shield Plans ("Plans") and the Blue Cross Blue
Shield Association ("BCBSA") recognize and acknowledge that the Blue Cross and
Blue Shield system is a unique nonprofit and for-profit system offering cost
effective health care financing and services. The Plans and BCBSA desire to
utilize Mediation and Mandatory Dispute Resolution ("MMDR") to avoid expensive
and time-consuming litigation that may otherwise occur in the federal and state
judicial systems. Even MMDR should be viewed, however, as methods of last
resort, all other procedures for dispute resolution having failed. Except as
otherwise provided in the License Agreements, the Plans, their Controlled
Affiliates and BCBSA agree to submit all disputes to MMDR pursuant to these
Rules and in lieu of litigation.

1.   Initiation of Proceedings

     A.   Pre-MMDR Efforts

     Before filing a Complaint to invoke the MMDR process, the CEO of a
complaining party, or his/her designated representative, shall undertake good
faith efforts with the other side(s) to try to resolve any dispute.

     B.   Complaint

     To commence a proceeding, the complaining party (or parties) shall provide
by certified mail, return receipt requested, a written Complaint to the BCBSA
Corporate Secretary (which shall also constitute service on BCBSA if it is a
respondent) and to any Plan(s) and/or Controlled Affiliate(s) named therein. The
Complaint shall contain:

          i.   identification of the complaining party (or parties) requesting
               the proceeding;

          ii.  identification of the respondent(s);

          iii. identification of any other persons or entities who are
               interested in a resolution of the dispute;

          iv.  a full statement describing the nature of the dispute;

          v.   identification of all of the issues that are being submitted for
               resolution;

                                                 Amended as of November 21, 1996

<PAGE>

          vi.  the remedy sought;

          vii. a statement as to whether the complaining party (or parties)
               elect(s) first to pursue Mediation;

          viii. any request, if applicable, that one or more members of the
               Mediation Committee be disqualified from the proceeding and the
               grounds for such request;

          ix.  any request, if applicable, that the matter be handled on an
               expedited basis and the reasons therefor; and

          x.   a statement signed by the CEO of the complaining party affirming
               that the CEO has undertaken efforts, or has directed efforts to
               be undertaken, to resolve the dispute before resorting to the
               MMDR process.

The complaining party (or parties) shall file and serve with the Complaint
copies of all documents which the party (or parties) intend(s) to offer at the
Arbitration Hearing and a statement identifying the witnesses the party (or
parties) intend(s) to present at the Hearing, along with a summary of each
witness' expected testimony.

     C.   Answer

     Within twenty (20) days after receipt of the Complaint, each respondent
shall serve on the BCBSA and on the complaining party (or parties) and on the
Chairman of the Mediation Committee;

          i.   a full Answer to the aforesaid Complaint;

          ii.  a statement of any Counterclaims against the complaining party
               (or parties), providing with respect thereto the information
               specified in Paragraph 1.B., above;

          iii. a statement as to whether the respondent elects to first pursue
               Mediation;

          iv.  any request, if applicable, that one or more members of the
               Mediation Committee be disqualified from the proceeding and the
               grounds for such request; and

          v.   any request, if applicable, that the matter be handled on an
               expedited basis and the reasons therefor.

<PAGE>

The respondent(s) shall file and serve with the Answer or by the date of the
Initial Conference set forth in Paragraph 3.B., below, copies of all documents
which the respondent(s) intend(s) to offer at the Arbitration Hearing and a
statement identifying the witnesses the party (or parties) intend(s) to present
at the Hearing, along with a summary of each witness' expected testimony.

     D.   Reply To Counterclaim

     Within ten (10) days after receipt of any Counterclaim, the complaining
party (or parties) shall serve on BCBSA and on the responding party (or parties)
and on the Chairman of the Mediation Committee, a Reply to the Counterclaim.
Such Reply must provide the same information required by Paragraph 1.C.

2.   Mediation

     A.   Mediation Committee

     To facilitate the mediation of disputes between or among BCBSA, the Plans
and/or their Controlled Affiliates, the BCBSA Board has established a Mediation
Committee. Mediation may be pursued in lieu of or in an effort to obviate the
Mandatory Dispute Resolution process, and all parties are strongly urged to
exhaust the mediation procedure.

     B.   Election To Mediate

     If any party elects first to pursue Mediation, and if it appears to the
Corporate Secretary that the dispute falls within the jurisdiction of the
Mediation Committee, as set forth in Exhibit 5-A hereto, then the Corporate
Secretary will promptly furnish the Mediation Committee with copies of the
Complaint, Answer, Counterclaim and Reply to Counterclaim, and other documents
referenced in Paragraph 1, above.

     C.   Selection of Mediators

     The parties shall promptly attempt to agree upon: (i) the number of
mediators desired, not to exceed three mediators; and (ii) the selection of the
mediator(s) who may include members of the Mediation Committee and/or
experienced mediators from an independent entity to mediate all disputes set
forth in the Complaint and Answer (and Counterclaim and Reply, if any). In the
event the parties cannot agree upon the number of mediators desired, that number
shall default to three. In the event the parties cannot agree upon the selection
of mediator(s), the Chairman will select the mediator(s), at least one of which
shall be an experienced mediator from an independent entity, consistent with the
provisions set forth in this Paragraph. No member of the Mediation Committee who
is a representative of any party to the Mediation may be

<PAGE>

selected to mediate the dispute. The Chairman shall also endeavor not to select
as a mediator any member of the Mediation Committee whom a party has requested
to be disqualified. If, after due regard for availability, expertise, and such
other considerations as may best promote an expeditious Mediation, the Chairman
believes that he or she must consider for selection a member of the Mediation
Committee whom a party has requested to be disqualified, the other members of
the Committee eligible to be selected to mediate the dispute shall decide the
request for disqualification. By agreeing to participate in the Mediation of a
dispute, a member of the Mediation Committee represents to the party (or
parties) thereto that he or she knows of no grounds which would require his or
her disqualification.

     D.   Binding Decision

     Before the date of the Mediation Hearing described below, the Corporate
Secretary will contact the party (or parties) to determine whether they wish to
be bound by any recommendation of the selected mediators for resolution of the
disputes. If all wish to be bound, the Corporate Secretary will send appropriate
documentation to them for their signatures before the Mediation Hearing begins.

     E.   Mediation Procedure

     The Chairman shall promptly advise the parties of a scheduled Mediation
Hearing date. Unless a party requests an expedited procedure, or unless all
parties to the proceeding agree to one or more extensions of time, the Mediation
Hearing set forth below shall be completed within forty (40) days of BCBSA's
receipt of the Complaint. The selected mediators, unless the parties otherwise
agree, shall adhere to the following procedure:

          i.   Each party must be represented by its CEO or other representative
               who has been delegated full authority to resolve the dispute.
               However, parties may send additional representatives as they see
               fit.

          ii.  By no later than five (5) days prior to the date designated for
               the Mediation Hearing, each party shall supply and serve a list
               of all persons who will be attending the Mediation Hearing, and
               indicate who will have the authority to resolve the dispute.

          iii. Each party will be given one-half hour to present its case,
               beginning with the complaining party (or parties), followed by
               the other party or parties. The parties are free to structure
               their presentations as they see fit, using oral statements or
               direct examination of witnesses. However, neither
               cross-examination nor questioning of opposing representatives
               will be

<PAGE>

               permitted. At the close of each presentation, the selected
               mediators will be given an opportunity to ask questions of the
               presenters and witnesses. All parties must be present throughout
               the Mediation Hearing. The selected mediators may extend the time
               allowed for each party's presentation at the Mediation Hearing.
               The selected mediators may meet in executive session, outside the
               presence of the parties, or may meet with the parties separately,
               to discuss the controversy.

          iv.  After the close of the presentations, the parties will attempt to
               negotiate a settlement of the dispute. If the parties desire, the
               selected mediators, or any one or more of the selected mediators,
               will sit in on the negotiations.

          v.   After the close of the presentations, the selected mediators may
               meet privately to agree upon a recommendation for resolution of
               the dispute which would be submitted to the parties for their
               consideration and approval. If the parties have previously agreed
               to be bound by the results of this procedure, this recommendation
               shall be binding upon the parties.

          vi.  The purpose of the Mediation Hearing is to assist the parties to
               settle their grievances short of mandatory dispute resolution. As
               a result, the Mediation Hearing has been designed to be as
               informal as possible. Rules of evidence shall not apply. There
               will be no transcript of the proceedings, and no party may make a
               tape recording of the Mediation Hearing.

          vii. In order to facilitate a free and open discussion, the Mediation
               proceeding shall remain confidential. A "Stipulation to
               Confidentiality" which prohibits future use of settlement offers,
               all position papers or other statements furnished to the selected
               mediators, and decisions or recommendations in any Mediation
               proceeding shall be executed by each party.

          viii. Upon request of the selected mediators, or one of the parties,
               BCBSA staff may also submit documentation at any time during the
               proceedings.

<PAGE>

     F.   Notice Of Termination Of Mediation

     If the Mediation cannot be completed within the prescribed or agreed time
period due to the lack of cooperation of any party, as determined by the
selected mediators, or if the Mediation does not result in a final resolution of
all disputes at the Mediation Hearing or within forty (40) days after the
Complaint was served, whichever comes first, any party or any one of the
selected mediators may so notify the Corporate Secretary, who shall promptly
issue a Notice of termination of mediation to all parties, to the selected
mediators, and to the MDR Administrator, defined below. Such notice shall serve
to bring the Mediation to an end and to initiate Mandatory Dispute Resolution.
Upon agreement of all parties and the selected mediators, the Mediation process
may continue at the same time the MDR process is invoked. The Notice described
above would serve to initiate the MDR proceeding and would not terminate the
proceedings.

3.   Mandatory Dispute Resolution (MDR)

     If all parties elect not to first pursue Mediation, or if a notice of
termination of Mediation is issued as set forth in Paragraph 2.F., above, then
the unresolved disputes set forth in any Complaint and Answer (and Counterclaim
and Reply, if any) shall be subject to MDR.

     A.   MDR Administrator

     The Administrator shall be an independent entity such as the Center for
Public Resources, Inc. or Endispute, Inc., specializing in alternative dispute
resolution. The Administrator shall be designated initially, and may be changed
from time to time, by the affirmative vote of a majority of the Plans present
and voting and a majority of the total then current weighted vote of all the
Plans present and voting.

     B.   Initial Conference

     Within five (5) days after a Notice of Termination has issued, or within
five (5) days after the time for filing and serving the Reply to any
Counterclaim if the parties elect first not to mediate, the parties shall confer
with the Administrator to discuss selecting a dispute resolution panel ("the
Panel"). This Initial Conference may be by telephone. The parties are encouraged
to agree to the composition of the Panel and to present that agreement to the
Administrator at the Initial Conference. If the parties do not agree on the
composition of the Panel by the time of the Initial Conference, or by any
extension thereof agreed to by all parties and the Administrator, then the Panel
Selection Process set forth in subparagraph C shall be followed.

                                                      Amended September 21, 2000

<PAGE>

     C.   Panel Selection Process

     The Administrator shall designate at least seven potential arbitrators. The
exact number designated shall be sufficient to give each party at least two
peremptory strikes. Each party shall be permitted to strike any designee for
cause and the Administrator shall determine the sufficiency thereof in its sole
discretion. The Administrator will designate a replacement for any designee so
stricken. Each party shall then be permitted two peremptory strikes. From the
remaining designees, the Administrator shall select a three member Panel. The
Administrator shall set the dates for exercising all strikes and shall complete
the Panel Selection Process within fifteen (15) days of the Initial Conference.
Each Arbitrator shall be compensated at his or her normal hourly rate or, in the
absence of an established rate, at a reasonable hourly rate to be promptly fixed
by the Administrator for all time spent in connection with the proceedings and
shall be reimbursed for any travel and other reasonable expenses.

     D.   Duties Of The Arbitrators

     The Panel shall promptly designate a Presiding Arbitrator for the purposes
reflected below, but shall retain the power to review and modify any ruling or
other action of said Presiding Arbitrator. Each Arbitrator shall be an
independent Arbitrator, shall be governed by the Code of Ethics for Arbitrators
in Commercial Disputes, appended as Exhibit "5-B" hereto, and shall at or prior
to the commencement of any Arbitration Hearing take an oath to that effect. Each
Arbitrator shall promptly disclose in writing to the Panel and to the parties
any circumstances, whenever arising, that might cause doubt as to such
Arbitrator's compliance, or ability to comply, with said Code of Ethics, and,
absent resignation by such Arbitrator, the remaining Arbitrators shall determine
in their sole discretion whether the circumstances so disclosed constitute
grounds for disqualification and for replacement. With respect to such
circumstances arising or coming to the attention of a party after an
Arbitrator's selection, a party may likewise request the Arbitrator's
resignation or a determination as to disqualification by the remaining
Arbitrators. With respect to a sole Arbitrator, the determination as to
disqualification shall be made by the Administrator.

     There shall be no ex parte communication between the parties or their
counsel and any member of the Panel.

     E.   Panel's Jurisdiction And Author

     The Panel's jurisdiction and authority shall extend to all disputes between
or among the Plans, their Controlled Affiliates, and/or BCBSA, except for those
disputes excepted from these MMDR procedures as set forth in the License
Agreements.

<PAGE>

     With the exception of punitive or treble damages, the Panel shall have full
authority to award the relief it deems appropriate to resolve the parties'
disputes, including monetary awards and injunctions, mandatory or prohibitory.
The Panel has no authority to award punitive or treble damages except that the
Panel may allocate or assess responsibility for punitive or treble damages
assessed by another tribunal. Subject to the above limitations, the Panel may,
by way of example, but not of limitation:

          i.   interpret or construe the meaning of any terms, phrase or
               provision in any license between BCBSA and a Plan or a Controlled
               Affiliate relating to the use of the BLUE CROSS(R) or BLUE
               SHIELD(R) service marks.

          ii.  determine whether BCBSA, a Plan or a Controlled Affiliate has
               violated the terms or conditions of any license between the BCBSA
               and a Plan or a Controlled Affiliate relating to the use of the
               BLUE CROSS(R) or BLUE SHIELD(R) service marks.

          iii. decide challenges as to its own jurisdiction.

          iv.  issue such orders for interim relief as it deems appropriate
               pending Hearing and Award in any Arbitration.

     It is understood that the Panel is expected to resolve issues based on
governing principles of law, preserving to the maximum extent legally possible
the continued integrity of the Licensed Marks and the BLUE CROSS/BLUE SHIELD
system. The Panel shall apply federal law to all issues which, if asserted in
the United States District Court, would give rise to federal question
jurisdiction, 28 U.S.C. (S) 1331. The Panel shall apply Illinois law to all
issues involving interpretation, performance or construction of any License
Agreement or Controlled Affiliate License Agreement unless the agreement
otherwise provides. As to other issues, the Panel shall choose the applicable
law based on conflicts of law principles of the State of Illinois.

<PAGE>

     F.   Administrative Conference And Preliminary Arbitration Hearing

     Within ten (10) days of the Panel being selected, the Presiding Arbitrator
will schedule an Administrative Conference to discuss scheduling of the
Arbitration Hearing and any other matter appropriate to be considered including:
any written discovery in the form of requests for production of documents or
requests to admit facts; the identity of any witness whose deposition a party
may desire and a showing of exceptional good cause for the taking of any such
deposition; the desirability of bifurcation or other separation of the issues;
the need for and the type of record of conferences and hearings, including the
need for transcripts; the need for expert witnesses and how expert testimony
should be presented; the appropriateness of motions to dismiss and/or for full
or partial summary judgment; consideration of stipulations; the desirability of
presenting any direct testimony in writing; and the necessity for any on-site
inspection by the Panel.

     G.   Discover

          i.   Requests for Production of Documents: All requests for the
               production of documents must be served as of the date of the
               Administrative Conference as set forth in Paragraph 3.F., above.
               Within twenty (20) days after receipt of a request for documents,
               a party shall produce all relevant and non-privileged documents
               to the requesting party. In his or her discretion, the Presiding
               Arbitrator may require the parties to provide lists in such
               detail as is deemed appropriate of all documents as to which
               privilege is claimed and may further require in-camera inspection
               of the same.

          ii.  Requests for Admissions: Requests for Admissions may be served up
               to 21 days prior to the Arbitration Hearing. A party served with
               Requests For Admissions must respond within twenty (20) days of
               receipt of said request. The good faith use of and response to
               Requests for Admissions is encouraged, and the Panel shall have
               full discretion, with reference to the Federal Rules of Civil
               Procedure, in awarding appropriate sanctions with respect to
               abuse of the procedure.

<PAGE>

          iii. Depositions As a general rule, the parties will not be permitted
               to take deposition testimony for discovery purposes. The
               Presiding Arbitrator, in his or her sole discretion, shall have
               the authority to permit a party to take such deposition testimony
               upon a showing of exceptional good cause, provided that no
               deposition, for discovery purposes or otherwise, shall exceed
               three (3) hours, excluding objections and colloquy of counsel.

          iv.  Expert witness(es): If a party intends to present the testimony
               of an expert witness during the oral hearing, it shall provide
               all other parties with a written statement setting forth the
               information required to be provided by Fed. R. Civ. P.
               26(b)(4)(A)(i) prior to the expiration of the discovery period.

          v.   Discovery cut-off. The Presiding Arbitrator shall determine the
               date on which the discovery period will end, but the discovery
               period shall not exceed forty-five (45) days from its
               commencement, without the agreement of all parties.

          vi.  Additional discovery. Any additional discovery will be at the
               discretion of the Presiding Arbitrator. The Presiding Arbitrator
               is authorized to resolve all discovery disputes, which resolution
               will be binding on the parties unless modified by the Arbitration
               Panel. If a party refuses to comply with a decision resolving a
               discovery dispute, the Panel, in keeping with Fed. R. Civ. P. 37,
               may refuse to allow that party to support or oppose designated
               claims or defenses, prohibit that party from introducing
               designated matters into evidence or, in extreme cases, decide an
               issue submitted for resolution adversely to that party.

     H.   Panel Suggested Settlement/Mediation

     At any point during the proceedings, the Panel at the request of any party
or on its own initiative, may suggest that the parties explore settlement and
that they do so at or before the conclusion of the Arbitration Hearing, and the
Panel shall give such assistance in settlement negotiations as the parties may
request and the Panel may deem appropriate. Alternatively, the Panel may direct
the parties to endeavor to mediate their disputes as provided above, or to
explore a mini-trial proceeding, or to have an independent party render a
neutral evaluation of the parties' respective positions. The Panel shall enter
such sanctions as it deems appropriate with respect to any party failing to
pursue in good faith such Mediation or other alternate dispute resolution
methods.

<PAGE>

     I.   Subpoenas On Third Parties

     Pursuant to, and consistent with, the Federal Arbitration Act, 9 U.S.C. (S)
9 et seq., a party may request the issuance of a subpoena on a third party, to
compel testimony or documents, and, if good and sufficient cause is shown, the
Panel shall issue such a subpoena.

     J.   Arbitration Hearing

     An Arbitration Hearing will be held within thirty (30) days after the
Administrative Conference if no discovery is taken, or within thirty (30) days
after the close of discovery, unless all parties and the Panel agree to extend
the Arbitration Hearing date, or unless the parties agree in writing to waive
the Arbitration Hearing. The parties may mutually agree on the location of the
Arbitration Hearing. If the parties fail to agree, the Arbitration Hearing shall
be held in Chicago, Illinois, or at such other location determined by the
Presiding Arbitrator to be most convenient to the participants. The Panel will
determine the date(s) and time(s) of the Arbitration Hearing(s) after
consultation with all parties and shall provide reasonable notice thereof to all
parties or their representatives.

     K.   Arbitration Hearing Memoranda

     Twenty (20) days prior to the Arbitration Hearing, each party shall submit
to the other party (or parties) and to the Panel an Arbitration Hearing
Memorandum which sets forth the applicable law and any argument as to any
relevant issue. The Arbitration Hearing Memorandum will supplement, and not
repeat, the allegations, information and documents contained in or with the
Complaint, Answer, Counterclaim and Reply, if any. Ten (10) days prior to the
Arbitration Hearing, each party may submit to the other party (or parties) and
to the Panel a Response Arbitration Hearing Memorandum which sets forth any
response to another party's Arbitration Hearing Memorandum.

<PAGE>

     L.   Notice For Testimony

     Ten (10) days prior to the Arbitration Hearing, any party may serve a
Notice on any other party (or parties) requesting the attendance at the
Arbitration Hearing of any officer, employee or director of the other party (or
parties) for the purpose of providing noncumulative testimony. If a party fails
to produce one of its officers, employees or directors whose noncumulative
testimony during the Arbitration Hearing is reasonably requested by an adverse
party, the Panel may refuse to allow that party to support or oppose designated
claims or defenses, prohibit that party from introducing designated matters into
evidence or, in extreme cases, decide an issue submitted for mandatory dispute
resolution adversely to that party. This Rule may not be used for the purpose of
burdening or harassing any party, and the Presiding Arbitrator may impose such
orders as are appropriate so as to prevent or remedy any such burden or
harassment.

     M.   Arbitration Hearing Procedures

          i.   Attendance at Arbitration Hearing: Any person having a direct
               interest in the proceeding is entitled to attend the Arbitration
               Hearing. The Presiding Arbitrator shall otherwise have the power
               to require the exclusion of any witness, other than a party or
               other essential person, during the testimony of any other
               witness. It shall be discretionary with the Presiding Arbitrator
               to determine the propriety of the attendance of any other person.

          ii.  Confidentiality. The Panel and all parties shall maintain the
               privacy of the Arbitration Proceeding. The parties and the Panel
               shall treat the Arbitration Hearing and any discovery or other
               proceedings or events related thereto, including any award
               resulting therefrom, as confidential except as otherwise
               necessary in connection with a judicial challenge to or
               enforcement of an award or unless otherwise required by law.

          iii. Stenographic Record: Any party, or if the parties do not object,
               the Panel, may request that a stenographic or other record be
               made of any Arbitration Hearing or portion thereof. The costs of
               the recording and/or of preparing the transcript shall be borne
               by the requesting party and by any party who receives a copy
               thereof. If the Panel requests a recording and/or a transcript,
               the costs thereof shall be borne equally by the parties.

<PAGE>

          iv.  Oaths: The Panel may require witnesses to testify under oath or
               affirmation administered by any duly qualified person and, if
               requested by any party, shall do so.

          v.   Order of Arbitration Hearing: An Arbitration Hearing shall be
               opened by the recording of the date, time, and place of the
               Arbitration Hearing, and the presence of the Panel, the parties,
               and their representatives, if any. The Panel may, at the
               beginning of the Arbitration Hearing, ask for statements
               clarifying the issues involved.

               Unless otherwise agreed, the complaining party (or parties) shall
               then present evidence to support their claim(s). The
               respondent(S) shall then present evidence supporting their
               defenses and Counterclaims, if any. The complaining party (or
               parties) shall then present evidence supporting defenses to the
               Counterclaims, if any, and rebuttal.

               Witnesses for each party shall submit to questions by adverse
               parties and/or the Panel.

               The Panel has the discretion to vary these procedures, but shall
               afford a full and equal opportunity to all parties for the
               presentation of any material and relevant evidence.

          vi.  Evidence: The parties may offer such evidence as is relevant and
               material to the dispute and shall produce such evidence as the
               Panel may deem necessary to an understanding and resolution of
               the dispute. Unless good cause is shown, as determined by the
               Panel or agreed to by all other parties, no party shall be
               permitted to offer evidence at the Arbitration Hearing which was
               not disclosed prior to the Arbitration Hearing by that party. The
               Panel may receive and consider the evidence of witnesses by
               affidavit upon such terms as the Panel deems appropriate.

<PAGE>

               The Panel shall be the judge of the relevance and materiality of
               the evidence offered, and conformity to legal rules of evidence,
               other than enforcement of the attorney-client privilege and the
               work product protection, shall not be necessary. The Federal
               Rules of Evidence shall be considered by the Panel in conducting
               the Arbitration Hearing but those rules shall not be controlling.
               All evidence shall be taken in the presence of the Panel and all
               of the parties, except where any party is in default or has
               waived the right to be present.

               Settlement offers by any party in connection with Mediation or
               MDR proceedings, decisions or recommendations of the selected
               mediators, and a party's position papers or statements furnished
               to the selected mediators shall not be admissible evidence or
               considered by the Panel without the consent of all parties.

          vii. Closing of Arbitration Hearing: The Presiding Arbitrator shall
               specifically inquire of all parties whether they have any further
               proofs to offer or witnesses to be heard. Upon receiving negative
               replies or if he or she is satisfied that the record is complete,
               the Presiding Arbitrator shall declare the Arbitration Hearing
               closed with an appropriate notation made on the record. Subject
               to being reopened as provided below, the time within which the
               Panel is required to make the award shall commence to run, in the
               absence of contrary agreement by the parties, upon the closing of
               the Arbitration Hearing.

               With respect to complex disputes, the Panel may, in its sole
               discretion, defer the closing of the Arbitration Hearing for a
               period of up to thirty (30) days after the presentation of proofs
               in order to permit the parties to submit post-hearing briefs and
               argument, as the Panel deems appropriate, prior to making an
               award.

               For good cause, the Arbitration Hearing may be reopened for up to
               thirty (30) days on the Panel's initiative, or upon application
               of a party, at any time before the award is made

<PAGE>

     N.   Awards

     An Award must be in writing and shall be made promptly by the Panel and,
unless otherwise agreed by the parties or specified by law, no later than thirty
(30) days from the date of closing the Arbitration Hearing. If all parties so
request, the Award shall contain findings of fact and conclusions of law. The
Award, and all other rulings and determinations by the Panel, may be by a
majority vote.

     Parties shall accept as legal delivery of the Award the placing of the
Award or a true copy thereof in the mail addressed to a party or its
representative at its last known address or personal service of the Award on a
party or its representative.

     Awards are binding only on the parties to the Arbitration and are not
binding on any non-parties to the Arbitration and may not be used or cited as
precedent in any other proceeding.

     After the expiration of twenty (20) days from initial delivery, the Award
(with corrections, if any) shall be final and binding on the parties, and the
parties shall undertake to carry out the Award without delay.

     Proceedings to confirm, modify or vacate an Award shall be conducted in
conformity with and controlled by the Federal Arbitration Act. 9 U.S.C. (S) 1,
et seq.

     O.   Return Of Documents

     Within sixty (60) days after the Award and the conclusion of any judicial
proceedings with respect thereto, each party and the Panel shall return any
documents produced by any other party, including all copies thereof. If a party
receives a discovery request in any other proceeding which would require it to
produce any documents produced to it by any other party in a proceeding
hereunder, it shall not produce such documents without first notifying the
producing party and giving said party reasonable time to respond, if
appropriate, to the discovery request.

<PAGE>

4.   Miscellaneous

     A.   Expedited Procedures

     Any party to a Mediation may direct a request for an expedited Mediation
Hearing to the Chairman of the Mediation Committee, to the selected Mediators,
and to all other parties at any time. The Chairman of the Mediation Committee,
or at his or her direction, the then selected Mediators, shall grant any request
which is supported by good and sufficient reasons. If such a request is granted,
the Mediation shall be completed within as short a period as practicable, as
determined by the Chairman of the Mediation Committee or, at his or her
direction, the then selected Mediators.

     Any party to an Arbitration may direct a request for expedited proceedings
to the Administrator, to the Panel, and to all other parties at any time. The
Administrator, or the Presiding Arbitrator if the Panel has been selected, shall
grant any such request which is supported by good and sufficient reasons. If
such a request is granted, the Arbitration shall be completed within as short a
time as practicable, as determined by the Administrator and/or the Presiding
Arbitrator.

     B.   Temporary Or Preliminary Injunctive Relief

     Any party may seek temporary or preliminary injunctive relief with the
filing of a Complaint or at any time thereafter. If such relief is sought prior
to the time that an Arbitration Panel has been selected, then the Administrator
shall select a single Arbitrator who is a lawyer who has no interest in the
subject matter of the dispute, and no connection to any of the parties, to hear
and determine the request for temporary or preliminary injunction. If such
relief is sought after the time that an Arbitration Panel has been selected,
then the Arbitration Panel will hear and determine the request. The request for
temporary or preliminary injunctive relief will be determined with reference to
the temporary or preliminary injunction standards set forth in Fed. R. Civ. P.
65.

     C.   Defaults And Proceedings In The Absence Of A Party

     Whenever a party fails to comply with the MDR Rules in a manner deemed
material by the Panel, the Panel shall fix a reasonable time for compliance and,
if the party does not comply within said period, the Panel may enter an Order of
default or afford such other relief as it deems appropriate. Arbitration may
proceed in the event of a default or in the absence of any party who, after due
notice, fails to be present or fails to obtain an extension. An Award shall not
be made solely on the default or absence of a party, but the Panel shall require
the party who is present to submit such evidence as the

<PAGE>

Panel may require for the making of findings, determinations, conclusions, and
Awards.

     D.   Notice

     Each party shall be deemed to have consented that any papers, notices, or
process necessary or proper for the initiation or continuation of a proceeding
under these rules or for any court action in connection therewith may be served
on a party by mail addressed to the party or its representative at its last
known address or by personal service, in or outside the state where the MDR
proceeding is to be held.

     The Corporate Secretary and the parties may also use facsimile
transmission, telex, telegram, or other written forms of electronic
communication to give the notices required by these rules.

     E.   Expenses

     The expenses of witnesses shall be paid by the party causing or requesting
the appearance of such witnesses. All expenses of the MDR proceeding, including
compensation, required travel and other reasonable expenses of the Panel, and
the cost of any proof produced at the direct request of the Panel, shall be
borne equally by the parties and shall be paid periodically on a timely basis,
unless they agree otherwise or unless the Panel in the Award assesses such
expenses, or any part thereof against any party (or parties). In exceptional
cases, the Panel may award reasonable attorneys' fees as an item of expense, and
the Panel shall promptly determine the amount of such fees based on affidavits
or such other proofs as the Panel deems sufficient.

     F.   Disqualification Or Disability Of A Panel Member

     In the event that any Arbitrator of a Panel with more than one Arbitrator
should become disqualified, resign, die, or refuse or be unable to perform or
discharge his or her duties after the commencement of MDR but prior to the
rendition of an Award, and the parties are unable to agree upon a replacement,
the remaining Panel member(s):

          i.   shall designate a replacement, subject to the right of any party
               to challenge such replacement for cause.

          ii.  shall decide the extent to which previously held hearings shall
               be repeated.

<PAGE>

     If the remaining Panel members consider the proceedings to have progressed
to a stage as to make replacement impracticable, the parties may agree, as an
alternative to the recommencement of the Mandatory Dispute Resolution process,
to resolution of the dispute by the remaining Panel members.

     In the event that a single Arbitrator should become disqualified, resign,
die, or refuse or be unable to perform or discharge his or her duties after the
commencement of MDR but prior to the rendition of an Award, and the parties are
unable to agree upon a replacement, the Administrator shall appoint a successor,
subject to the right of any party to challenge such successor for cause, and the
successor shall decide the extent to which previously held proceedings shall be
repeated.

     G.   Extensions of Time

     Any time limit set forth in these Rules may be extended upon agreement of
the parties and approval of: (i) the Chairman of the Mediation Committee if the
proceeding is then in Mediation; (ii) the Administrator if the proceeding is in
Arbitration, but no Arbitration Panel has been selected; or (iii) the
Arbitration Panel, if the proceeding is in Arbitration and the Arbitration Panel
has been selected.

     H.   Intervention

     The Plans, their Controlled Affiliates, and BCBSA, to the extent subject to
MMDR pursuant to their License Agreements, shall have the right to move to
intervene in any pending Arbitration. A written motion for intervention shall be
made to: (i) the Administrator, if the proceeding is in Arbitration, but no
Arbitration Panel has been selected; or (ii) the Arbitration Panel, if the
proceeding is in Arbitration and the Arbitration Panel has been selected. The
written motion for intervention shall be delivered to the BCBSA Corporate
Secretary (which shall also constitute service on the BCBSA if it is a
respondent) and to any Plan(s) and/or Controlled Affiliate(s) which are parties
to the proceeding. Any party to the proceeding can submit written objections to
the motion to intervene. The motion for intervention shall be granted upon good
cause shown. Intervention also may be allowed by stipulation of the parties to
the Arbitration proceeding. Intervention shall be allowed upon such terms as the
Arbitration Panel decides.

     I.   BCBSA Assistance In Resolution of Disputes

     The resources and personnel of the BCBSA may be requested by any member
Plan at any time to try to resolve disputes with another Plan.

                                                      Amended September 21, 2000

<PAGE>

     J.   Neutral Evaluation

     The parties can voluntarily agree at any time to have an independent party
render a neutral evaluation of the parties' respective positions.

     K.   Recovery of Attorney Fees and Expenses

          Motions to Compel

     Nothwithstanding any other provisions of these Rules, any Party subject to
     the License Agreements (for purposes of this Section K and all of its
     sub-sections only hereinafter referred to collectively and individually as
     a "Party") that initiates a court action or administrative proceeding
     solely to compel adherence to these Rules shall not be determined to have
     violated these Rules by initiating such action or proceeding.

          Recovery of Fees, Expenses and Costs

     The Arbitration Panel may, in its sole discretion, award a Party its
     reasonable attorneys' fees, expenses and costs associated with a filing to
     compel adherence to these Rules and/or reasonable attorneys' fees, expenses
     and costs incurred in responding to an action filed in violation of these
     Rules; provided, however, that neither fees, expenses, nor costs shall be
     awarded by the Arbitration Panel if the Party from which the award is
     sought can demonstrate to the Arbitration panel, in its sole discretion,
     that it did not violate these Rules or that it had reasonable grounds for
     believing that its action did not violate these Rules.

          Requests for Reimbursement

     For purposes of this Section K, any Party may request reimbursement of
     fees, expenses and/or costs by submitting said request in writing to the
     Arbitration Panel at any time before an award is delivered pursuant to
     Section 3-N hereof, with a copy to the Party from which reimbursement is
     sought, explaining why it is entitled to such reimbursement. The Party from
     which reimbursement is sought shall have 20 days to submit a response to
     such request to the Arbitration Panel with a copy to the Party seeking
     reimbursement.

                                                      Amended September 21, 2000

<PAGE>

                                                                     EXHIBIT 5-A

                               MEDIATION COMMITTEE

REPORTS TO: Board of Directors

CHARGE:   1. Develop and implement processes for resolving misunderstandings or
          disagreements between Plans or between Plans and the Association under
          the following circumstances:

               a.   Matters at issue regarding relationships between Plans or
                    between Plans and the Association.

               b.   Matters at issue regarding relationships between Plans or
                    between Plans and the Association.

               c.   Matters at issue under the Inter-Plan Bank, Reciprocity, and
                    Transfer Programs.

               d.   Matters at issue regarding contractor selection or
                    performance under the Medicare Part A Program.

          2. Determination of equalization allowances and/or cost allowances
          under FEP shall not be considered by this Committee.

MEMBERSHIP: Six to Eight

STAFF: Senior Vice President and General Counsel<PAGE>

                                                                   EXHIBIT 10.13

EMPIRE/IBM CONFIDENTIAL                                         FINAL Version 13

                     SOFTWARE LICENSE AND SUPPORT AGREEMENT

                                     BETWEEN

                            EMPIRE HEALTHCHOICE, INC.

                                       AND

                   INTERNATIONAL BUSINESS MACHINES CORPORATION

                                      DATED

                                  JUNE 1, 2002

<PAGE>

EMPIRE/IBM CONFIDENTIAL                                         FINAL Version 13

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                            <C>
1. BACKGROUND ................................................................  1

   1.1   Background ..........................................................  1
   1.2   Construction ........................................................  1

2. DEFINITIONS ...............................................................  1

   2.1   Certain Definitions .................................................  1
   2.2   Other Terms .........................................................  5

3. SOFTWARE DEVELOPMENT AND SYSTEMS INTEGRATION ..............................  5

   3.1   Overview ............................................................  5
   3.2   Development Responsibilities ........................................  5
   3.3   Project Management ..................................................  7
   3.4   Testing and Initial Approval of the Licensed Works ..................  7
   3.5   Migration Planning; Implementation and Systems Integration ..........  8
   3.6   Completion of Development and Systems Integration ...................  8
   3.7   Acceptance of the Licensed Works ....................................  8
   3.8   "Grace Period"; Remedy for Delayed Completion of the
             Development and Systems Integration .............................  9
   3.9   Training ............................................................ 10
   3.10  Financial Commitment to Complete the Licensed Software .............. 11
   3.11  Users Group ......................................................... 11
   3.12  Subcontracting ...................................................... 11
   3.13  IBM Contract Executive .............................................. 12

4. LICENSES AND RESTRICTIONS ................................................. 12

   4.1   License Grant ....................................................... 12
   4.2   Copies .............................................................. 12
   4.3   Sublicenses ......................................................... 13
   4.4   Usage Parameters .................................................... 13
   4.5   Certain Restrictions ................................................ 13
   4.6   Access to Systems                                                     13
   4.7   Patent Rights ....................................................... 14

5. OWNERSHIP; INTELLECTUAL PROPERTY RIGHTS ................................... 14

   5.1   Ownership of Intellectual Property .................................. 14
   5.2   Third Party Products ................................................ 14
   5.3   Reporting ........................................................... 14
   5.4   Residual Knowledge .................................................. 14

6. SUPPORT AND MAINTENANCE ................................................... 15

7. FEES; PAYMENT; AND TAXES .................................................. 15

   7.1   Fees ................................................................ 15
   7.2   Organic Growth; Growth by Merger .................................... 16
   7.3   Future Discussion of Maintenance Fees ............................... 16
</TABLE>

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<PAGE>

EMPIRE/IBM CONFIDENTIAL                                         FINAL Version 13

<TABLE>
<S>                                                                            <C>
    7.4    Invoices .......................................................... 16
    7.5    Payment Due ....................................................... 16
    7.6    Set Off ........................................................... 17
    7.7    Disputed Charges .................................................. 17
    7.8    Taxes ............................................................. 18
    7.9    Audit of Empire ................................................... 19
    7.10   Audit of IBM (and deNovis) ........................................ 20

8.  NO OTHER SERVICES ........................................................ 22

9.  ESCROW OF SOURCE CODE .................................................... 22

10. LIMITED WARRANTIES AND DISCLAIMERS ....................................... 23

    10.1   IBM represents and warrants to Empire that: ....................... 23
    10.2   DISCLAIMER OF WARRANTIES .......................................... 24

11. LIABILITY ................................................................ 24

    11.1   General Intent .................................................... 24
    11.2   Liability Restrictions ............................................ 24

12. INDEMNIFICATION .......................................................... 26

    12.1   Intellectual Property Indemnification ............................. 26
    12.2   Subcontractor Indemnity ........................................... 26
    12.3   Additional Indemnities ............................................ 26
    12.4   Infringement: Injunctive Relief ................................... 26
    12.5   Procedures With Respect to Indemnities ............................ 27
    12.6   Indemnification Procedures ........................................ 27
    12.7   Subrogation ....................................................... 28

13. SAFEGUARDING OF DATA; CONFIDENTIALITY .................................... 28

    13.1   Empire Information ................................................ 28
    13.2   Safeguarding Empire Data .......................................... 29
    13.3   Confidentiality ................................................... 29
    13.4   HIPAA Privacy and Security Requirements ........................... 31
    13.5   HIPAA Transactions Rule ........................................... 34
    13.6   HIPAA Security Rule ............................................... 34
    13.7   Other HIPAA Administrative Simplification Regulations ............. 34

14. TERM AND TERMINATION ..................................................... 34

    14.1   Term .............................................................. 34
    14.2   Termination For Cause by Empire ................................... 34
    14.3   Additional Termination Rights ..................................... 35
    14.4   Termination Prior To The Acceptance Date .......................... 35
    14.5   Termination of Maintenance and Support Services by Empire ......... 35
    14.6   Termination Upon Change of Control ................................ 35
    14.7   Due To IBM's Financial Inability To Perform ....................... 36
    14.8   Termination by Empire Due To Force Majeure Event .................. 36
    14.9   Termination by Empire for Convenience ............................. 36
</TABLE>
                                      -ii-

<PAGE>

EMPIRE/IBM CONFIDENTIAL                                         FINAL Version 13

<TABLE>
<S>                                                                            <C>
    14.10  Termination related to Staten Island Sublease ..................... 36
    14.11  Effect of Termination ............................................. 37
    14.12  Survival .......................................................... 37

15. DISPUTE RESOLUTION ....................................................... 37

    15.1   Informal Dispute Resolution ....................................... 37
    15.2   Litigation ........................................................ 38
    15.3   Continued Performance ............................................. 38
    15.4   Waiver of Right to Jury Trial ..................................... 38

16. GENERAL PROVISIONS ....................................................... 38

    16.1   Governing Law; Jurisdiction ....................................... 38
    16.2   Assignment ........................................................ 38
    16.3   Amendments; Waivers ............................................... 39
    16.4   Complete Agreement ................................................ 39
    16.5   Suspension of Performance ......................................... 39
    16.6   Notices ........................................................... 40
    16.7   Compliance with Laws .............................................. 40
    16.8   No Third Party Beneficiaries ...................................... 41
    16.9   Counterpart and Facsimile Signatures .............................. 41
    16.10  Force Majeure ..................................................... 41
    16.11  Revenue Sharing for Sales of the Licensed Software ................ 42
    16.12  Most Favored Customer ............................................. 45
    16.13  Public Disclosures ................................................ 45
    16.14  Service Marks ..................................................... 45
    16.15  Nonsolicitation of Employees ...................................... 46
    16.16  Covenant of Good Faith ............................................ 46
    16.17  Consents and Approval ............................................. 46
    16.18  Severability ...................................................... 46
    16.19  Relationship of the Parties ....................................... 46
    16.20  Mutually Negotiated ............................................... 47
    16.21  Effect of Headings ................................................ 47
</TABLE>

                                      -iii-

<PAGE>

EMPIRE/IBM CONFIDENTIAL                                         FINAL Version 13

                                   ATTACHMENTS

Attachment A:       Description of Licensed Works and Software Requirements
                    Document

      Attachment A-1:     Description of Licensed Software

      Attachment A-2:     Empire's Business Features and Function Requirements

      Attachment A-3:     Description of Licensed Software Features and
                          Functions

      Attachment A-4:     Empire's Technical Requirements (Including Specific
                          "Scalability" Requirements)

            Attachment A-4-1:    Empire's Technical Requirements for the
                                 Licensed Software

            Attachment A-4-2:    Empire's "Scalability" Requirements for the
                                 Licensed Software

      Attachment A-5:     Information Resource Management Requirements (Data
                          Access and Integration Requirements

Attachment B:       Support and Maintenance

Attachment C:       Development and License Fee and Maintenance Fees

Attachment D:       Identification of Escrow Agreement

      Attachment D-1:     Preferred Escrow Agreement

Attachment E:       Third Party Products

Attachment F:       Development Project Management Guidelines

      Attachment F-1:     Project Management Process

Attachment G:       Development Project Testing Procedures

Attachment H:       [Not Used.]

Attachment I:       Development Project Software Engineering Process

      Attachment I-1:     Details of Development Project Software Engineering
                          Process

Attachment J:       Overall Project Plan

Attachment K:       Development Project Plan

Attachment L:       Development Project Disaster Recovery Plan Outline

Attachment M:       DeNovis Statement Regarding Back-Up of Licensed Software

Attachment N:       Empire Competitors

                                      -iv-

<PAGE>

EMPIRE/IBM CONFIDENTIAL                                         FINAL Version 13

                     SOFTWARE LICENSE AND SUPPORT AGREEMENT

     This Software License and Support Agreement, effective as of June 1, 2002
(the "Effective Date"), is entered into by and between International Business
Machines Corp., a New York corporation, having a place of business at Route 100,
Somers, New York 10589 ("IBM"), and Empire HealthChoice, Inc. doing business as
Empire Blue Cross and Blue Shield, a New York corporation with its corporate
headquarters located at 11 W. 42/nd/ Street, New York, New York 10036 ("Empire")
an independent licensee of the Blue Cross and Blue Shield Association.

1.   BACKGROUND

1.1  Background.

     This Agreement is being made and entered into with reference to the
following:

     (a)  Empire desires to outsource to IBM certain services currently
          performed by Empire, in order to generate savings, which savings (a
          key element of generating these savings to Empire is the utilization
          of IBM Personnel in India) will be used in part in connection with the
          Licensed Software, and modernization of Empire's other core
          applications.

     (b)  IBM desires to license the new Claims Engine to Empire, and Empire
          desires to utilize such Claims Engine as its primary insurance claims
          processing product.

     (c)  Empire desires to license the Portal Toolkits and Framework Software
          to IBM, in return for credits earned from IBM's sale of such software
          and related products based on such software.

     (d)  The Parties desire to mutually enter into a structure allowing future
          joint development of health care products.

     (e)  Having reached agreement on contract terms, the Parties are entering
          into the following agreements to memorialize the terms and conditions
          under which the foregoing shall be consummated and provided: (i) this
          Agreement, (ii) the Licensing and Joint Development Agreement, and
          (iii) the Master Services Agreement.

1.2  Construction.

     The provisions of this Section 1 are intended to be a general introduction
     to this Agreement and are not intended to expand the scope of the Parties'
     obligations under this Agreement or to alter the plain meaning of the terms
     and conditions of this Agreement. However, to the extent the terms and
     conditions of this Agreement do not address a particular circumstance or
     are otherwise unclear or ambiguous, such terms and conditions are to be
     interpreted and construed so as to give full effect to the provisions in
     this Section 1.

2.   DEFINITIONS

2.1  Certain Definitions.

     (a)  "Acceptance Date" has the meaning specified in Section 3.7(d).

     (b)  "Affiliate" means, with respect to any entity, any other entity
          Controlling, Controlled by or under common Control with such entity.

                                       -1-

<PAGE>

EMPIRE/IBM CONFIDENTIAL                                         FINAL Version 13

     (c)  "Administrative Services Only Processing" or "ASO Processing" means
          any processing for self-insured accounts of Empire for which Empire
          administers, in whole or in part, health benefits and for which Empire
          has no liability for the payment of claims (IBM is an example of an
          ASO customer as of the Effective Date).

     (d)  "Agreement" means this Software License and Support Agreement,
          including its schedules, exhibits, and appendices, as the same may be
          amended by the Parties from time to time in accordance with Section
          16.3.

     (e)  "Applicable Auditee" has the meaning specified in Section 7.10(a).

     (f)  "Commercially Reasonable Efforts" means taking such steps and
          performing in such a manner as a well managed software development
          company, in the case of IBM, or a well managed health insurance
          company, in the case of Empire, would undertake under similar
          circumstances where such company was acting in a determined, prudent
          and reasonable manner to achieve a particular desired result.

     (g)  "Confidential Information" has the meaning specified in Section
          13.3(a).

     (h)  "Control" and its derivatives means possessing, directly or
          indirectly, the power to direct or cause the direction of the
          management policies or operations of an entity, whether through
          ownership of voting securities, by contract or otherwise.

     (i)  "CS-90" has the meaning specified in Section 3.2(f).

     (j)  "Deficiency Notice" has the meaning specified in Section 3.4(a).

     (k)  "Deliverables" has the meaning specified in Section 3.2.

     (l)  "deNovis" means deNovis, Inc., the entity from which IBM is licensing
          the Licensed Works.

     (m)  "deNovis Revenue Sharing Credits" has the meaning specified in Section
          16.11(d)(ii).

     (n)  "Development and License Fee" has the meaning specified in Section
          7.1.

     (o)  "Development Project Plan" has the meaning specified in Section
          3.2(a).

     (p)  "Disabling Code" means any code which would have the effect of
          disabling or otherwise shutting down all or any portion of the
          Licensed Software.

     (q)  "Dispute Date" has the meaning specified in Section 15.1(a)(i).

     (r)  "Divested Entity" means a divested line of business or entity of
          Empire (no longer Controlled by Empire) acting either as an
          independent entity or a part of another entity.

     (s)  "Documentation" means all written or electronic documentation
          pertaining to the Licensed Software including manuals, user guides,
          help screens which are provided by or for IBM to Empire hereunder.

     (t)  "Earned" has the meaning specified in Section 16.11(d)(iii).

     (u)  "Empire Auditors" has the meaning specified in Section 7.10(a).

     (v)  "Empire Confidential Information" has the meaning specified in Section
          13.3(a).

     (w)  "Empire Data" has the meaning specified in Section 5.1(b).

     (x)  "Empire Information" means all information, in any form, furnished or
          made available directly or indirectly to IBM by Empire or otherwise
          obtained by IBM from Empire. Such information first provided by IBM or
          its suppliers to Empire hereunder shall not be deemed to be Empire
          Information.

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EMPIRE/IBM CONFIDENTIAL                                         FINAL Version 13

     (y)    "Empire's Processing" means the use of the Licensed Works for
            Empire's business purposes, including processing being performed by
            Empire as of the Effective Date and, in the case of Empire business
            currently being processed by NASCO for Empire, to the extent such
            processing is subsequently performed by Empire, but excluding
            Empire's use of the Licensed Works as a Service Bureau. "Empire's
            Processing" also includes (i) permitting third parties to access or
            to interact with the Licensed Works in connection with Empire's
            business, but excludes use of the Licensed Software by third party
            service providers (such access is described in Section 4.3); and
            (ii) the use of the Licensed Works by Empire to process work for
            Divested Entities (to the same extent that such Divested Entity was
            permitted to benefit from the License hereunder as an Affiliate of
            Empire) for a period up to twelve (12) months after the date such
            Divested Entity ceases to be an Affiliate. For the avoidance of
            doubt the term "Empire's Processing" shall not limit the number of
            users, number of locations, sites or instances of the Licensed Works
            maintained by Empire.

     (z)    "Escrow Agent" has the meaning specified in Section 9.

     (aa)   "Escrow Agreement" has the meaning specified in Section 9.

     (bb)   "Escrow Cap" has the meaning specified in Section 7.7(b).

     (cc)   "Escrow Threshold" has the meaning specified in Section 7.7(b).

     (dd)   "Errors" has the meaning specified in Section 10.1(f).

     (ee)   "Export Act" has the meaning specified in Section 16.7(b).

     (ff)   "Grace Period" has the meaning specified in Section 3.8(a).

     (gg)   "Gross Revenues" has the meaning specified in Section 16.11(b).

     (hh)   "Harmful Code" means (i) program code or programming instruction or
            set of instructions intentionally designed to disrupt, disable,
            harm, interfere with or otherwise adversely affect computer
            programs, data files or operations; or (ii) other code typically
            described as a virus or by similar terms, including Trojan horse,
            worm or backdoor. "Harmful Code" does not include Disabling Code.

     (ii)   "IBM Contract Executive" has the meaning specified in Section 3.13.

     (jj)   "Including" and its derivatives (such as "include" and "includes")
            mean including without limitation. This term is as defined, whether
            or not capitalized in this Agreement.

     (kk)   "Initial Approval Date" has the meaning specified in Section 3.4(c).

     (ll)   "License" has the meaning specified in Section 4.1.

     (mm)   "Licensed Software" means deNovis' eHD enterprise software platform
            (including the Third Party Products) as described in Attachment A
            and summarized in Attachment A-1 thereto, together with all
            Modifications thereto. The Licensed Software is also referred to as
            the "Claims Engine".

     (nn)   "Licensed Works" means collectively, the Licensed Software and the
            Documentation.

     (oo)   "Licensing and Joint Development Agreement" means that certain
            Licensing and Joint Development Agreement by and between the Parties
            executed concurrently with this Agreement.

     (pp)   "Life" ("Lives") means any individual(s) covered by a benefit plan
            insured or administered by Empire (including insurance companies,
            self-insured employees, buying cooperatives, and unions) or any
            Empire Affiliate.

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EMPIRE/IBM CONFIDENTIAL                                         FINAL Version 13

     (qq)   "Losses" means all losses, liabilities, damages and claims, and all
            related costs and expenses (including reasonable legal fees and
            disbursements and costs of investigation, litigation, settlement,
            judgment, interest and penalties).

     (rr)   "Maintenance Fees" has the meaning specified in Section 7.1.

     (ss)   "Master Services Agreement" means that certain Master Services
            Agreement by and between the Parties executed concurrently with this
            Agreement.

     (tt)   "Merger Growth" has the meaning specified in Section 7.2(b).

     (uu)   "Modification" means any error correction, workaround, update,
            revision, enhancement, modification or derivative work of the
            Licensed Software (including Updates and Upgrades (as defined in
            Attachment B)) which is provided by or on behalf of IBM to Empire
            hereunder.

     (vv)   "NASCO" means National Accounts Services Company, LLC.

     (ww)   "Notice of Election" has the meaning specified in Section 12.6(a).

     (xx)   "Object Code Form" means a form of software code resulting from the
            translation or processing of software in Source Code Form by a
            computer into machine language, which thus is in a form that would
            not be convenient to human understanding of the software.

     (yy)   "Organic Growth" has the meaning specified in Section 7.2(a).

     (zz)   "Out-of-Pocket Expenses" means reasonable, demonstrable and actual
            out-of-pocket expenses incurred by IBM for equipment, materials,
            supplies or services provided to or for Empire as identified in this
            Agreement, but not including IBM's overhead costs (or allocations
            thereof), administrative expenses or other mark-ups.

     (aaa)  "Overall Project Plan" means a high-level project plan attached
            hereto as Attachment K describing the plan for completing the
            development of the Licensed Works and the Systems Integration
            Effort, which includes major milestones and dates by which such
            milestones will be completed.

     (bbb)  "Party" means either Empire or IBM, as applicable; "Parties" means
            both Empire and IBM.

     (ccc)  "Permitted Users" has the meaning specified in Section 12.4.

     (ddd)  "Project Plan" means, collectively, the Overall Project Plan, the
            Development Project Plan and the Systems Integration Project Plan.

     (eee)  "Residuals" means those ideas, concepts, know-how, and techniques
            related to information in non-tangible form which is retained in the
            unaided memories of the employees of a Party and which such Party
            individually or jointly, develops, learns or discloses under this
            Agreement.

     (fff)  "Revenue Sharing" has the meaning specified in Section 16.11(a).

     (ggg)  "Revenue Sharing Escrow Threshold" has the meaning specified in
            Section 16.11(f)(ii).

     (hhh)  "Security Rule" has the meaning specified in Section 13.6.

     (iii)  "Service Bureau" means a business offering whereby Empire or its
            Affiliates processes health insurance claims utilizing the Licensed
            Software for insurance companies or health plans without including a
            material business offering other than such processing. Service
            Bureau shall not include ASO Processing.

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EMPIRE/IBM CONFIDENTIAL                                         FINAL Version 13

     (jjj)  "Source Code Form" means a form of software code in which a computer
            program's logic is easily deduced by a human being with reasonable
            skill in the art.

     (kkk)  "Software Specifications" mean the specifications and use cases for
            the Licensed Software developed (following the software engineering
            process attached hereto as Attachment I) pursuant to the Development
            Project Plan based on the software description, business and
            technical requirements attached hereto as Attachment A (and the
            related schedules thereto).

     (lll)  "Systems Integration Effort" has the meaning specified in Section
            3.5.

     (mmm)  "Systems Integration Project Plan" has the meaning specified in
            Section 3.5.

     (nnn)  "Term" has the meaning specified in Section 14.1.

     (ooo)  "Testing Period" has the meaning specified in Section 3.4(a).

     (ppp)  "Testing Procedures" has the meaning specified in Section 3.4(a).

     (qqq)  "Third Party Products" means those third party software programs,
            data and databases that are embedded or included within the Licensed
            Works. The Third Party Products are listed on Attachment E.

     (rrr)  "Transactions Rule" has the meaning specified in Section 13.5.

     (sss)  "Usage Parameters" has the meaning specified in Section 4.4.

     (ttt)  "Users Group" has the meaning specified in Section 3.11(a).

     (uuu)  "Warranty Period" has the meaning specified in Section 10.1(f).

2.2  Other Terms.

     Other terms used in this Agreement are defined where they are used and have
     the meanings there indicated. Those terms, acronyms and phrases utilized in
     the IT services industry or other pertinent business context shall be
     interpreted in accordance with their generally understood meaning in such
     industry or business context.

3.   SOFTWARE DEVELOPMENT AND SYSTEMS INTEGRATION

3.1  Overview.

     As of the Effective Date the Licensed Works are under development. IBM will
     complete development of the Licensed Works as further described in this
     Section 3. During such development effort and continuing thereafter IBM
     will perform the Systems Integration Effort (as defined below) to
     implement, migrate and fully systems integrate the Licensed Works into
     Empire's environment. As further described in Section 3.5, such Systems
     Integration Effort will be performed by IBM as a "Project" under Schedule
     A-5 of the Master Services Agreement.

3.2  Development Responsibilities.

     IBM will use Commercially Reasonable Efforts to complete the development of
     the Licensed Works and provide to Empire all deliverables identified in the
     Development Project Plan ("Deliverables") in accordance with the
     Development Project Plan by the times set forth in the Development Project
     Plan and in accordance with other attachments attached hereto and as
     described in Sections 3.2(a) through 3.2(e), below:

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     (a)  The Licensed Works development effort will be performed by IBM in
          accordance with the Overall Project Plan and the development project
          plan described in Attachment K, which shall be consistent in all
          respects with the Overall Project Plan as updated from time to time by
          the mutual agreement of the Parties (the "Development Project Plan"),
          which includes major milestones and dates by which the milestones will
          be completed.

     (b)  The Licensed Software will satisfy the description of the Licensed
          Software and the business and technical requirements (including
          hardware/third party software environments) for the Licensed Software
          as described in Attachment A. As described in the Development Project
          Plan, the business and technical requirements will be used by IBM to
          develop the Software Specifications. The business and technical
          requirements are comprised of several components:

          (i)   Attachment A-1: Description of Licensed Software.

          (ii)  Attachment A-2: Empire's Business Features and Functions
                Requirements.

          (iii) Attachment A-3: Description of Licensed Software features and
                functions.

          (iv)  Attachment A-4: Empire's Technical Requirements (Including
                Specific "Scalability" Requirements).

          (v)   Attachment A-5: Information Resource Management Requirements
                (Data Access and Integration Requirements).

          (vi)  In addition, Empire will have the right to collaborate with IBM
                (and deNovis), as part of the Development Project Plan, with
                respect to the "HICL Editor" and "HICL Testing Tools and
                Environment" and will have the right to approve the design of
                such Editor and Testing and Tools Environment that is intended
                for implementation at Empire. The HICL Editor and HICL Testing
                Tools and Environment will have to pass Empire's acceptance
                criteria (as part of the requirements) before implementation of
                the Licensed Software begins.

          (vii) In addition, IBM will "port" the Licensed Software, in
                accordance with the Development Project Plan from a Sun Solaris
                environment to an AIX environment, then from an AIX environment
                to a "System 390" (z/OS operating system) environment. As part
                of the "port" from AIX to System 390, IBM will ensure that the
                Licensed Software includes the ability to take advantage of a
                "parallel sysplex enabled" environment.

          The following order of precedence shall govern in the event of
          inconsistencies between the above requirements: (1) subsections (vi)
          and (vii); (2) Attachment A-5; (3) Attachment A-2; (4) Attachment A-4;
          (5) Attachment A-3; and (6) Attachment A-1.

     (c)  The Licensed Software will be developed using the software engineering
          process described in Attachment I.

     (d)  The interim testing, acceptance testing and quality assurance
          processes and criteria for the development of the Licensed Software
          are described in Attachment G.

     (e)  IBM and deNovis will establish and maintain a disaster recovery
          process to protect the development of the Licensed Works within thirty
          (30) days of the Effective Date and such disaster recovery process
          shall be consistent with the draft disaster recovery process attached
          hereto as Attachment L. In addition, deNovis has provided
          representation to Empire (attached hereto as Attachment M) regarding
          its current practice (as of the Effective Date) regarding back-up of
          the Licensed Software and shall perform such back-ups in a manner
          consistent with such current practice.

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     (f)  For the avoidance of doubt, as a requirement of the Licensed Software
          (and included within the Development and License Fee and Maintenance
          Fee), the Licensed Software will include all customization work to
          make necessary Modifications to the Licensed Software to move all of
          Empire's business from Empire's legacy CS-90 system ("CS-90") to the
          Licensed Software, including all business that my be added to the
          CS-90 system (whether from new business or conversion of NASCO
          Processing to CS-90) after the Effective Date and prior to the
          completion of the Systems Integration Effort. After completion of the
          Systems Integration Effort, if new customizations to the Licensed
          Software are required that are Empire-specific (e.g. not required for
          other licensees of the Licensed Software), and not envisioned by IBM
          to be included in the ongoing evolution of the Licensed Software and
          such customizations cannot be developed from (i.e. requires the coding
          of new "OPS") the existing features and functions of the Licensed
          Software (e.g.: "CVC", "OPS" and "Data Model"), such customizations
          shall be performed as part of the "Modernization" efforts under the
          Master Services Agreement and will not be "Modifications" under this
          Agreement.

     (g)  In addition, IBM shall, during the development process to complete the
          Licensed Software under this Agreement, modify the Portal Toolkits (as
          defined in the Licensing and Joint Development Agreement): (i) to
          enable the Portal Toolkits to run on IBM's z/OS operating system; and
          (ii) to achieve full integration with the Claims Engine, which shall
          be completed no later than the Initial Approval Date of the Licensed
          Software (and such modifications will be tested by Empire as part of
          such testing of the Licensed Software). Such modifications to the
          Portal Toolkits shall be included in the Development and License Fee.

     Empire acknowledges that the success of the development effort being
     undertaken by IBM pursuant to this Agreement is dependent (in part) upon
     Empire's reasonable cooperation and interaction with deNovis and IBM,
     including as specified in the Development Project Plan. Empire will make
     its personnel reasonably available to respond to IBM's inquiries and to
     consult with IBM during the development of the Licensed Software to clarify
     requirements. IBM shall not be responsible for any delays in the
     development schedule if and only to the extent caused directly or
     indirectly by Empire or its respective Affiliates or its or their
     unreasonable refusal or delay in cooperating or responding in a timely
     manner to IBM's inquiries or requests for information; provided IBM has
     promptly notified Empire of all such Empire delays as they occur at the
     next bi-weekly SMT Process meeting (as further described in Attachment F)
     and in writing. The validity and impact of such delays on the Development
     Project Plan schedule will be fully and finally resolved through the SMT
     Process.

3.3  Project Management.

     The Parties agree to comply with the development project management
     guidelines set forth in Attachment F. The development project management
     guidelines will include a detailed change order and bug tracking process.

3.4  Testing and Initial Approval of the Licensed Works.

     (a)  The testing procedures to evaluate the Licensed Works' compliance with
          Attachment A and the Software Specifications (the "Testing
          Procedures") are attached to this Agreement as Attachment G and shall
          include, at a minimum, a process to convert the use cases in the
          Software Specifications to test cases, a process to confirm that the
          Licensed Software conforms to the requirements set forth in Attachment
          A and a process for testing and certifying the proper performance of
          the Licensed Software in a

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          mainframe environment. After completion and delivery of the final
          Licensed Works in accordance with the Development Project Plan
          schedule, Empire will have a period of ninety (90) days in which it
          shall evaluate and test the Licensed Software and review the
          Documentation in accordance with the Testing Procedures to determine
          its compliance with Attachment A and the Software Specifications (the
          "Testing Period"). Throughout the Testing Period, the Parties shall
          work together as part of an iterative process to review the progress
          of the development effort to complete the Licensed Works. In the event
          that the Licensed Software does not comply with Attachment A and the
          Software Specifications, Empire shall deliver to IBM written reports
          detailing instances in which Licensed Software fails to so comply,
          together with all relevant diagnostic and testing output and history
          generated by Empire (each, a "Deficiency Notice"). IBM shall use
          Commercially Reasonable Efforts to correct the identified deficiencies
          promptly and in any case within thirty (30) days from receipt of
          Deficiency Notice and make corrected version(s) of the Licensed Works
          available to Empire for re-evaluation.

     (b)  During the testing process, the Parties will regularly assess the
          Development Project Plan in light of the development process to
          mutually determine any changes to the Development Project Plan
          schedule.

     (c)  The date on which the Parties mutually agree that all Licensed
          Software conforms in all material respects with Attachment A and the
          Software Specifications shall be termed the "Initial Approval Date".
          IBM will continue to use Commercially Reasonable Efforts to promptly
          correct any identified non-material nonconformities. Notwithstanding
          the foregoing, the Initial Approval Date shall not be deemed to
          constitute the Acceptance Date as defined in Section 3.7(d).

3.5  Migration Planning; Implementation and Systems Integration.

     Following the Initial Approval Date (as specified in the Systems
     Integration Project Plan (defined below)), IBM shall install and implement
     the Licensed Software; systems integrate the Licensed Software to
     surrounding systems, both existing and new, into Empire's environment (so
     that Empire will be able to process and pay claims in live production
     operations); and migrate Empire's core processing operations from Empire's
     legacy CS-90 system to the Licensed Software (collectively, the "Systems
     Integration Effort"). IBM will perform such Systems Integration Effort (if
     any) as a "Project" under the Master Services Agreement, pursuant to
     Schedule A-5 for Systems Integration and Modernization. The details of this
     Systems Integration Effort will be described in the "Systems Integration
     Project Plan" (as defined in Schedule A-5 to the Master Services Agreement)
     for the Claims Engine, which shall be consistent in all respects with the
     Overall Project Plan, unless otherwise mutually agreed by the Parties.

3.6  Completion of Development and Systems Integration.

     IBM agrees to use Commercially Reasonable Efforts to complete the
     development of the Licensed Works and achieve Empire's acceptance of the
     completed Systems Integration Effort by the respective dates set forth in
     the Development Project Plan and the Systems Integration Project Plan.

3.7  Acceptance of the Licensed Works.

     (a)  Empire's acceptance testing of the Licensed Works as part of the
          Systems Integration Effort into Empire's environment will be as
          described in the applicable Testing Procedures developed pursuant to
          Schedule A-5 to the Master Services Agreement and will include a test
          of the Licensed Works as integrated into Empire's environment

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          (targeted to be ninety (90) days); parallel operation of two systems
          (CS-90 and the Licensed Software) for Empire's first lines of business
          (i.e., PPO/EPO/NEPO, as identified in the Overall Project Plan) to be
          converted to the Licensed Works (targeted to be ninety (90) days); and
          will be concluded upon Empire's commencement of paying claims in live
          production operations using the Licensed Software.

     (b)  The Parties shall commence and will perform such acceptance testing
          upon IBM's completion of the Systems Integration Effort for Empire's
          first lines of business.

     (c)  Upon the successful completion of Empire's testing of the Licensed
          Works pursuant to the applicable Testing Procedures as integrated into
          Empire's environment (including the "scalability" requirements set
          forth in Attachment A-4) and such parallel operation with CS-90 for
          ninety (90) continuous days (or less time at Empire's option) and the
          Licensed Works produce the same results as the CS-90 system (except to
          the extent that CS-90 is producing incorrect results and excluding
          testing of the "scalability" requirements of the Licensed Works in
          comparison to CS-90), Empire shall accept the Licensed Works by (a)
          providing written notice to IBM; or (b) utilizing the Licensed
          Software to pay actual claims for members in live production
          operations, at which time Empire shall notify IBM of its acceptance in
          writing.

     (d)  The earlier of the date of either of such occurrences set forth in
          Section 3.7(c) shall be the "Acceptance Date" of the Licensed
          Software. In the event that an unauthorized person at Empire begins to
          utilize the License Software to pay actual claims, Empire may, by
          written notice to IBM, withdraw its acceptance of the Licensed Works;
          provided that (i) such withdrawal is within three (3) business days of
          the start of such utilization; and (ii) Empire immediately ceases use
          of the Licensed Software to pay actual claims.

3.8  "Grace Period"; Remedy for Delayed Completion of the Development and
Systems Integration.

     (a)  Provided that IBM is continuing to work in good faith toward
          completion of the development effort and Systems Integration Effort,
          Empire agrees that, subject to this Section 3.8, IBM will have an
          eight (8) month (two hundred and forty four (244) day) grace period in
          which to complete the development effort for the Licensed Software and
          achieve Empire's acceptance of the completed Systems Integration
          Effort for Empire's first lines of business to be converted to the
          Licensed Works (the "Grace Period"). The Grace Period will be added to
          the applicable date (the date to achieve Empire's commencement of
          paying claims in live production operations using the Licensed
          Software (called "Go Live (PPO/EPO/NEPO)" in the Overall Project Plan)
          set forth in the Overall Project Plan. Such date shall initially be
          July 16, 2004 and may be extended due to Empire's delays pursuant to
          the last paragraph of Section 3.2.

     (b)  Notwithstanding Section 3.8(a), Empire shall have the right to
          terminate the Grace Period as of July 16, 2004, (which date may be
          extended due to Empire's delays pursuant to the last paragraph of
          Section 3.2), if by such date IBM has not yet successfully completed
          both the "IBM Accepts eHD R2 (Empire R1) System on System 390" and the
          "deNovis/IBM completes eHD R2 (Empire R1) Scalability Test" milestones
          identified in the Overall Project Plan.

     (c)  If (A) IBM terminates the development effort or the Systems
          Integration Effort for convenience (pursuant to Section 14.4); (B) IBM
          fails to complete the development of the Licensed Software and achieve
          Empire's acceptance of the completed Systems Integration Effort by the
          date set forth in the Overall Project Plan as extended by the Grace
          Period; (C) IBM fails to complete the development of the Licensed
          Software and

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          achieve Empire's acceptance of the completed Systems Integration
          Effort by the date set forth in the Overall Project Plan and Empire
          terminates the remaining portion of the Grace Period pursuant to
          Section 3.8(b); or (D) if Empire terminates this Agreement pursuant to
          Section 14.2, 14.3, 14.6(a), 14.7 or 14.8, then Empire may, upon
          written notice to IBM, as its sole remedy with respect to such failed
          delivery under this Agreement:

          (i)   Terminate this Agreement upon written notice and have no
                liability to pay the Development and License Fees or Maintenance
                Fees hereunder;

          (ii)  Within five (5) business days of the effective date of Empire's
                written request following such termination, receive a refund
                from IBM (which IBM shall provide) of (A) all Development and
                License Fees prepaid by Empire (as of the Effective Date)
                pursuant to Attachment C; and (B) all amounts spent by Empire on
                the implementation and systems integration services provided by
                IBM under the Master Services Agreement related to the Licensed
                Software (if any), not to exceed thirty million U.S. dollars
                ($30,000,000);

          (iii) To the extent that the amount refunded under section
                3.8(c)(ii)(B) is less than thirty million U.S. dollars
                ($30,000,000), IBM will also, within five (5) business days of
                the effective date of such termination, pay Empire the
                difference between such amount and thirty million U.S. dollars
                ($30,000,000). But, such difference shall be reduced (not below
                $0) by the amount that IBM demonstrates to Empire that IBM has
                spent on its own (not paid by Empire) or with deNovis on the
                Licensed Software development (starting on the Effective Date)
                through the effective date of such termination. By way of
                example, but not limitation, if Empire had spent $5,000,000 on
                systems integration with IBM and IBM had spent $10,000,000 with
                deNovis, the amount refunded would be $20,000,000: [$5,000,000
                spent on systems integration] + [[$25,000,000 (difference
                between $30MM and $5MM)] - [$10,000,000 spent with deNovis]] =
                $20,000,000;

          (iv)  Terminate any and all remaining obligations of Empire under
                Section 4.2 of Schedule C to the Master Services Agreement; and

          (v)   Terminate the Limited Exclusivity under the Licensing and Joint
                Development Agreement.

3.9  Training.

     IBM agrees to provide the following training services to Empire as part of
     the Development and Licensing Fee:

     (a)  IBM will provide three (3) four (4) week classes reasonably adequate
          to train Empire designated "super users" (as defined in Section
          3.9(c)) with regard to the Licensed Software at a location specified
          by Empire. Empire shall be responsible for providing appropriate space
          for IBM to provide the classes. Each class will include a minimum of
          two (2) trainers.

     (b)  IBM will provide detailed training materials to support the classes.

     (c)  The intended audience for such classes will be Empire "super users,"
          which shall be those Empire personnel who will be involved in the
          configuration of the Licensed Software, those involved in the
          configuration of HICL, and those who will train the Empire End-Users.
          The classes will include instruction on (i) "train the trainer" with
          regard to the use of "Release 1.1" of the Licensed Software that is
          installed at Empire

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            pursuant to the Systems Integration Effort, or such other release as
            agreed to by Empire; (ii) configuration of HICL rules; (iii)
            configuration of benefits plans; and (iv) generic configuration of
            the Licensed Software.

3.10  Financial Commitment to Complete the Licensed Software.

      In addition, IBM agrees to spend (itself or with deNovis) an amount equal
      to all of the Maintenance Fees paid by Empire solely on the development /
      maintenance of the Licensed Software and the Systems Integration Effort
      under this Agreement until the Systems Integration Effort is fully
      completed for the roll-out of the Licensed Software into Empire's
      business.

3.11  Users Group.

      (a)   When there are sufficient users to support a users group, IBM will
            use Commercially Reasonable Efforts to establish or assist the
            commercial user community Licensed Software users to establish a
            users group (the "Users Group"). IBM will use Commercially
            Reasonable Efforts to support such Users Group.

      (b)   If IBM or deNovis enters into a transaction with a single major
            government or commercial user for the Licensed Software, IBM and
            deNovis each warrant and shall ensure that the priorities with
            respect to Updates and Upgrades for the Licensed Software arising
            out of the IBM or deNovis relationship with such user will not take
            priority over the Users Group's priorities for Updates and Upgrades
            to the Licensed Software.

3.12  Subcontracting.

      (a)   IBM will not delegate or subcontract, without Empire's prior written
            approval: (i) any of its material obligations, (ii) obligations that
            are material to any particular function constituting a part of IBM's
            obligations under this Agreement, or (iii) a material function or
            portion of the maintenance and support services. In seeking Empire's
            approval, IBM will specify in writing to Empire: (A) the specific
            components of IBM's obligations that IBM proposes to subcontract,
            (B) the scope of the proposed subcontract, and (C) the identity and
            qualifications of the proposed subcontractor. Empire shall have the
            right to approve or disapprove of proposed subcontractors in its
            sole discretion. Empire agrees and hereby approves deNovis as a
            subcontractor to IBM. In addition, Empire agrees that a reasonable
            number routine individual programmers who are independent
            contractors or are provided as individual programmers or analysts
            from a third party entity providing such services to IBM or deNovis
            will be deemed to be approved subcontractors as of the Effective
            Date.

      (b)   Empire shall have the right to revoke its prior approval of a
            subcontractor, or for those instances where no prior approval was
            given, to request that an IBM subcontractor be removed, and in
            either case IBM shall remove such IBM subcontractor from the Empire
            account if: (i) the subcontractor's performance is materially
            deficient; (ii) the subcontractor is bought by a competitor of
            Empire, which competitors are listed in Attachment N as such
            Attachment N may be reasonably updated by Empire from time to time,
            or enters the health insurance business; or (iii) otherwise, or
            there have been material misrepresentations by or concerning the
            subcontractor. Notwithstanding the foregoing, Section 3.12(b)(i) and
            (iii) shall not apply to deNovis, and Empire shall have no right to
            revoke its acceptance of deNovis as a subcontractor hereunder.

      (c)   IBM shall remain responsible for obligations, services and functions
            performed by subcontractors to the same extent as if such
            obligations, services and functions were performed by IBM employees
            and for purposes of this Agreement such work shall be

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            deemed work performed by IBM. Any delegation or subcontracting by
            IBM in violation of this Section 3.12 shall be null and void. IBM
            shall be Empire's sole point of contact with respect to this
            Agreement, including with respect to payment. IBM shall not disclose
            Confidential Information of Empire to a subcontractor unless and
            until such subcontractor has agreed in writing to protect the
            confidentiality of such Confidential Information in a manner
            substantially equivalent to that required of IBM under this
            Agreement.

      (d)   To the extent subcontractors, agents, representatives and other
            entities perform, or otherwise provide support to IBM related to
            IBM's obligations hereunder, IBM shall cause such entities to comply
            with the applicable obligations and restrictions under this
            Agreement.

3.13  IBM Contract Executive.

      IBM shall designate an individual to serve as "IBM Contract Executive."
      The IBM Contract Executive shall (i) serve as the single point of
      accountability for IBM with respect to this Agreement; and (ii) have
      day-to-day authority for undertaking to ensure customer satisfaction.

4.    LICENSES AND RESTRICTIONS

4.1   License Grant.

      Subject to the terms and conditions of this Agreement, IBM hereby grants
      to Empire and its Affiliates a worldwide, royalty-free (subject to the
      payment of the Development and License Fee hereunder), perpetual,
      irrevocable, non-exclusive, non-transferable (except in connection with a
      permitted assignment hereunder) license (the "License"):

      (a)   to use, load, execute, display, perform, configure and operate the
            Licensed Software in Object Code Form for purposes of testing
            pursuant to the Testing Procedures and for continued testing through
            the Acceptance Date;

      (b)   to use, load, execute, display, perform, configure, operate and
            support the Licensed Software in Object Code Form for and on behalf
            of Empire solely for Empire's Processing after the Acceptance Date;

      (c)   to reproduce and make copies of the Licensed Software and
            Documentation solely as permitted by Section 4.2 below;

      (d)   to use the Documentation solely for purposes of supporting the
            permitted uses of the Licensed Software described herein; and

      In addition, IBM agrees that Empire shall have the right to create
      adapters for and interfaces to the Licensed Software (and the Licensed
      Software will include connection points, as described in the applicable
      requirements and Software Specifications, for such adapters and
      interfaces); provided that such right does not include the right to create
      derivative works (as defined by the Copyright Act, 18 U.S.C. ss. 101, as
      amended) of the Licensed Software.

4.2   Copies.

      Empire may make a reasonable number of copies of the Licensed Software in
      Object Code Form and the Documentation for use including for backup and
      archive purposes in accordance with the licenses granted herein. Such
      copies shall be deemed to constitute Confidential Information

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      hereunder. Upon IBM's reasonable request, Empire shall notify IBM in
      writing of each copy made of the Licensed Software, and the facility where
      such copy will be stored and/or operated.

4.3   Sublicenses.

      Solely to support Empire's Processing, Empire may permit use of the
      Licensed Works under this Agreement by Empire or its Affiliates and
      Empire's (and its Affiliates) consultants, outsourcers and other
      contractors (including IBM and deNovis, if applicable) who are, in each
      case, bound by commercially-reasonable, legally-enforceable obligations
      (whether through their employment relationship or by written contract)
      that are sufficient to maintain the confidentiality of the Confidential
      Information in a manner that is consistent with restrictions on Empire.
      Without limiting Empire's Processing rights hereunder, Empire shall not
      allow use of the Licensed Works by all other persons. Empire shall be
      responsible for all use and misuse of the Licensed Works made by or
      authorized by Empire.

4.4   Usage Parameters.

      Empire acknowledges that the Licensed Software has specific usage
      parameters such as applicable load limitations, sizing parameters,
      hardware configurations, and other technical parameters set forth in the
      Software Specifications (the "Usage Parameters"). IBM shall have no
      responsibility for errors or performance defaults to the extent caused by
      Empire's use of the Licensed Software outside of these parameters.
      Notwithstanding the foregoing, the Usage Parameters for the Licensed
      Software will meet or exceed the requirements specified in Attachment A
      and the Software Specifications (including that the Licensed Software will
      meet or exceed Empire's scalability requirements in a mainframe
      environment and that, at a minimum, the Licensed Software will be able
      support seven million five hundred thousand (7,500,000) Lives within a
      single logical database).

4.5   Certain Restrictions.

      Except as expressly permitted hereby or by another agreement between the
      Parties, Empire shall not (a) copy or reproduce the Licensed Works in
      whole or in part; (b) modify, translate or create derivative works of the
      Licensed Works; (c) reverse engineer, decompile, disassemble or otherwise
      reduce the Licensed Software to Source Code Form; (d) distribute,
      sublicense, assign, share, timeshare, sell, rent, lease, grant a security
      interest in, use for service bureau purposes or otherwise transfer the
      Licensed Works; (e) export, re-export or transship the Licensed Works from
      any country in violation of applicable export or import laws; or (f)
      remove or modify any copyright, trademark or other proprietary notice of
      IBM or its suppliers affixed to the media containing the Licensed Works or
      contained within the Licensed Works. ALL RIGHTS NOT EXPRESSLY GRANTED
      HEREUNDER ARE RESERVED.

4.6   Access to Systems.

      As reasonably determined by Empire, Empire will allow IBM (and, if
      applicable, IBM's subcontractors hereunder), at no charge, to access and
      use any computer system and software of Empire or any of their respective
      Affiliates solely as necessary to perform IBM's obligations hereunder
      (including the support and maintenance obligations set forth in Attachment
      B). IBM agrees to comply with any applicable third party license
      agreements pertaining to such use and access to the extent that such
      agreements are provided to IBM.

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4.7   Patent Rights.

      IBM and deNovis each agree not to assert against Empire any claim of
      infringement of any IBM or deNovis patents embodied in or related to the
      Licensed Works that are or may be infringed by the use of such Licensed
      Works by Empire to the extent authorized in this Agreement.

5.    OWNERSHIP; INTELLECTUAL PROPERTY RIGHTS

5.1   Ownership of Intellectual Property.

      (a)   Empire acknowledges and agrees that this Agreement grants only those
            license rights specified herein, and does not convey any title or
            ownership of the Licensed Works to Empire.

      (b)   IBM acknowledges that it shall obtain no proprietary interest in or
            to any or all information, data and/or content entered, processed,
            stored or transmitted by the Licensed Software, in the course of
            Empire's exercise of the License hereunder, excluding information,
            data and/or content first provided by IBM to Empire as part of the
            Licensed Works ("Empire Data").

5.2   Third Party Products.

      All Third Party Products are included as part of the Development and
      License Fee hereunder. Without limiting IBM's responsibilities with
      respect to the Licensed Works hereunder, IBM makes no specific
      representations or warranties with respect to such Third Party Products.
      For the avoidance of doubt, notwithstanding the failure of any Third Party
      Products, IBM is responsible (and IBM is not relieved of its obligations):
      (a) to provide the Licensed Works to Empire in accordance with this
      Agreement; (b) to provide maintenance and support services in accordance
      with this Agreement and (c) to comply with IBM's obligations under this
      Agreement, as if such Third Party Products were not incorporated into or
      being used by the Licensed Software. Empire will comply with any
      additional terms or conditions with respect to the use of such Third Party
      Products that are contained on Attachment E, as amended from time to time
      by mutual agreement of the Parties.

5.3   Reporting.

      Empire shall promptly report to IBM upon becoming aware of any actual
      violation of Sections 4 or 5 hereof of which it has actual knowledge and
      shall take such further steps as may reasonably be requested by IBM to
      stop an ongoing violation and to prevent the re-occurrence of such
      violation.

5.4   Residual Knowledge.

      Either Party shall be free to use Residuals for any purpose, including use
      in the development, manufacturing, marketing and maintenance of its
      products and services, provided that such use does not infringe any valid
      patents or published or unpublished patent applications (including
      provisional applications), registered designs or copyrights of the other
      Party or third parties who have licensed or provided materials to the
      other Party. Notwithstanding the foregoing, this paragraph does not give a
      Party the right to use or disclose any Confidential Information consisting
      of:

      (a)   financial, statistical or personnel data of the other Party;

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      (b)   the business plans of the other Party including, in the case of
            Empire, healthcare insurance products, services and ancillary
            services;

      (c)   Empire customer information;

      (d)   proprietary information of third parties made available to IBM;

      (e)   information that could reasonably be deemed to be uniquely developed
            for Empire that yields competitive advantage in the healthcare
            industry, except where such information is required to develop,
            implement or operate those elements of the Payor Services Offering
            (as defined in the Licensing and Joint Development Agreement) for
            which Revenue Sharing (as defined in the Licensing and Joint
            Development Agreement) is applicable;

      (f)   healthcare provider information;

      (g)   Protected Health Information; or

      (h)   in the case where such Party is IBM, any J2EE compliant e-business
            architecture substantially similar to the J2EE compliant e-business
            architecture developed by Empire (or by a third party for Empire).
            For the purposes of clarification, an e-business architecture that
            is substantially similar to the e-business architecture developed by
            Empire shall mean an architecture that includes substantially
            similar methods, functions or design approaches to those
            incorporated into Empire's architecture, including Empire's software
            infrastructure topology, the application framework models, Empire's
            internal framework software implementation, real-time experience
            (web perspective) while batch mode processing, Empire's system and
            methodologies for achieving real-time claims processing, Empire's
            systems and methods of augmenting legacy data with XML, and all
            software development models as defined by the UML guidelines of
            software engineering. This Section 5.4 does not apply to non-unique
            implementations of the J2EE specification.

      Except for the license rights contained in this Agreement, neither this
      Agreement nor any disclosure made hereunder grants any license to either
      Party under any intellectual property rights of the other Party. The
      preceding sentence is not intended to diminish any rights available under
      this Section 5.4. This Section 5.4 shall survive termination/expiration of
      this Agreement.

6.    SUPPORT AND MAINTENANCE

      Attachment B sets forth the obligations of IBM in connection with the
maintenance, support and updating of the Licensed Software which shall commence
effective as of the Acceptance Date (but Maintenance Fees shall not be charged
to Empire until the expiration of the Warranty Period). Such obligations shall
terminate upon any release of the escrowed Source Code Form of the Licensed
Software (and Empire's obligation to pay Maintenance Fees shall also terminate).

7.    FEES; PAYMENT; AND TAXES

7.1   Fees.

      Empire shall pay the fees set forth on Attachment C for the development,
      testing, modification, customization, warranty, training and use of the
      Licensed Works (the "Development and License Fee") and for the support and
      maintenance of the Licensed Works (the "Maintenance Fees").

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7.2   Organic Growth; Growth by Merger.

      (a)   The Development and License Fee hereunder anticipates that the
            number of Lives covered by Empire's (and Empire's Affiliates')
            processing using the Licensed Software will grow as Empire's
            business grows ("Organic Growth").

      (b)   Organic Growth, however, excludes growth in the number of Lives
            covered by the Licensed Software which results from Empire's merger
            with or acquisition of another health plan ("Merger Growth").

      (c)   If the number of Lives covered by Empire's processing using the
            Licensed Software is greater than five million (5,000,000) Lives
            covered and subsequently increases as a result of Merger Growth (but
            excluding any Organic Growth in the covered Lives), then Maintenance
            Fees hereunder will be increased by $1.20 per Life per year for
            Lives acquired as a result of such Merger Growth for the remainder
            for the Term (beginning in the month following the effective date of
            such Merger Growth).

      (d)   If the number of Lives covered by Empire's processing using the
            Licensed Software has increased above the amount specified in
            Section 7.2(c) and subsequently decreases as a result of a
            divestiture of a line of business (but not losses in the number of
            covered Lives in the ordinary course of business), then Maintenance
            Fees hereunder will be reduced at a rate $1.20 per Life decreased
            (to a minimum of the Maintenance Fees set forth in under this
            Agreement as of the Effective Date) effective as of the date such
            line of business is no longer processed using the Licensed Software
            under this Agreement (beginning in the month following such date).
            If the number of Lives covered by Empire's processing using the
            Licensed Software decreases below five million (5,000,000) Lives
            covered as a result of the reduction in covered Lives in the
            ordinary course of business, the then-current Maintenance Fees shall
            be reduced to the Maintenance Fees set forth in under this Agreement
            as of the Effective Date (beginning in the month following such date
            such reduction occurs).

7.3   Future Discussion of Maintenance Fees.

      Commencing ten (10) years after the Acceptance Date, the Parties agree to
      discuss in good faith appropriate adjustments to the Maintenance Fee.

7.4   Invoices.

      (a)   General. All Fees are payable in U.S. Dollars. Attachment C
            describes the Development and License Fee and Maintenance Fees
            hereunder. The Development and License Fees shall be invoiced as
            specified in Attachment C. The Maintenance Fees shall be invoiced
            monthly as specified in Attachment C. Each invoice shall separately
            state the amounts of any taxes IBM is collecting from Empire, if
            any, and IBM shall remit such taxes to the appropriate authorities.

      (b)   Form of Invoice. IBM shall render a single consolidated invoice for
            the Development and License Fees and each month's Maintenance Fees.
            The form of invoice shall be as approved by Empire.

7.5   Payment Due.

      (a)   Subject to the other provisions of this Section 7, invoices provided
            for under Section 7.4(a) and properly submitted to Empire pursuant
            to this Agreement shall be due and payable by Empire within thirty
            (30) days after receipt of such invoice by Empire.

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      (b)   In the event that any payment, excluding any payment withheld or
            paid into escrow pursuant to Section 7.7, is not received by IBM
            within five (5) days after Empire's receipt of written notice from
            IBM indicating that such payment is due and owing and unpaid, then
            Empire will pay interest on such due and unpaid amount commencing at
            the end of such five (5) day period and ending on the date that
            payment is made, at an interest rate equal to the lesser of (i)
            twelve percent (12%) per year; or (ii) the maximum amount
            permissible by law.

7.6   Set Off.

      At its option and in good faith, Empire may set off, as a credit against
      the Fees payable to IBM under this Agreement, any amounts to be paid,
      reimbursed, or otherwise owed or owing to Empire by IBM under this
      Agreement, the Staten Island Data Center Sublease, the Master Services
      Agreement, the Licensing and Joint Development Agreement, and such other
      agreements as the Parties may mutually agree, provided that with respect
      to fees or services already paid by Empire that Empire later disputes,
      Empire must set off such amounts within ninety (90) days after payment of
      such disputed fees or services. Notwithstanding the ninety (90) day
      limitation above, Empire may set off (pursuant to this Section 7.6) any
      amounts owing to Empire, as identified in audits performed pursuant to
      this Agreement.

7.7   Disputed Charges.

      (a)   Subject to Section 7.6, Empire shall pay charges when such payments
            are due under this Section 7. Notwithstanding the previous sentence,
            Empire may withhold payment of particular charges that Empire
            disputes in good faith, subject to Section 7.7(b). In the event that
            charges cover both disputed and undisputed items, Empire shall pay
            all undisputed items in accordance with this Section 7 and
            Attachment C.

      (b)   With respect to particular charges that Empire disputes in good
            faith, the provisions of this Section 7.7(b) shall apply. Subject to
            the remainder of this Section 7.7(b), (i) if Empire has already paid
            any disputed charge, Empire may set-off the disputed charge against
            other charges owed by Empire hereunder, subject to Section 7.6; and
            (ii) if Empire has not paid any disputed charge, Empire may withhold
            payment of such charge. Empire shall notify IBM in writing on or
            before the date that any amount is so withheld (whether in respect
            of dispute on a current invoice or as a set off) and describe, in
            reasonable detail, the reason for such withholding. Empire and IBM
            shall diligently pursue an expedited resolution of such dispute. If
            the aggregate amount of all charges then under dispute pursuant to
            this Section 7.7 exceeds one month of monthly charges under this
            Agreement (the "Escrow Threshold"), then for any amounts in dispute
            in excess of the Escrow Threshold, Empire shall deposit such amount
            into an escrow account. Empire shall promptly furnish evidence of
            any escrow deposit to IBM. The Parties agree that such escrow
            account shall be mutually established by the Parties at the Bank of
            New York, or its successor, or such other bank as may be mutually
            agreed by the Parties, and the costs of such escrow shall be borne
            by the Party which is not ultimately entitled to receive over fifty
            percent (50%) of the escrowed funds (with the Parties splitting the
            costs of escrow evenly, should they both be entitled to fifty
            percent (50%) of the escrowed funds). The escrow account will be
            mutually established pursuant to an escrow agreement that provides
            that the funds therein, including accrued interest, will be
            disbursed to IBM or Empire or both, as applicable, in accordance
            with the result of the dispute resolution process referred to in
            Section 15 or by mutual agreement of the Parties. For as long as
            Empire makes such escrow deposits in accordance with this Section
            7.7 during the pendency of the dispute and pays undisputed amounts,
            IBM shall continue to

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            provide the services to Empire; provided however that if the
            aggregate amount of charges then under dispute pursuant to this
            Section 7.7 and paid into escrow exceeds six (6) months of
            additional monthly charges under this Agreement (i.e., five (5)
            months of charges in addition to the one (1) month of charges below
            the Escrow Threshold) (the "Escrow Cap"), then for any amounts in
            dispute in excess of the Escrow Cap, Empire shall pay such
            additional disputed charges to IBM under protest, without prejudice,
            and without waiving its rights under this Agreement.

7.8   Taxes.

      The Parties' respective responsibilities for taxes arising under or in
      connection with this Agreement shall be as follows:

      (a)   Each Party shall be responsible for any personal property taxes on
            property it owns or leases, for franchise and privilege taxes on its
            business, and for taxes based on its net income or gross receipts.

      (b)   IBM shall be responsible for any sales, use, excise, value-added,
            services, consumption, transfer and other taxes and duties payable
            by IBM on the goods or services used or consumed by IBM in
            performing its obligations under this Agreement or the provision of
            the License hereunder where the tax is imposed on IBM's acquisition
            or use of such goods or services and the amount of tax is measured
            by IBM's costs in acquiring such goods or services.

      (c)   IBM shall be responsible for any sales, use, excise, value-added,
            services, consumption, transfer or other tax existing as of the
            Effective Date that is assessed on the performance of IBM's
            obligations under this Agreement (including maintenance and support
            services) or the provision of the License hereunder as a whole, or
            on any particular portion thereof. The Parties shall share equally
            the responsibility for any sales, use, excise, value-added,
            services, consumption, transfer or other tax becoming applicable
            during the Term (or that is increased during the Term) that is
            assessed on the provision of the License hereunder or the
            maintenance and support services as a whole, or on any particular
            portion thereof provided by IBM, or on IBM's charges for some or all
            of same; provided that "becoming applicable" shall not mean any tax
            existing as of the Effective Date that becomes applicable due to
            Empire's conversion from a tax-exempt entity to a taxable entity
            (i.e. Such taxes will be IBM's responsibility).

      (d)   In the event that a sales, use, excise, value added, services,
            consumption, transfer or other tax is assessed on the performance of
            IBM's obligations under this Agreement or the provision of the
            License hereunder, the Parties shall work together to segregate the
            payments under this Agreement into three (3) payment streams:

            (i)   those for taxable services and the software;

            (ii)  those for which IBM functions merely as a payment agent for
                  Empire in receiving goods, supplies, or services and software
                  (including leasing and licensing arrangements); and

            (iii) those for other nontaxable services and software.

      (e)   The Parties agree to cooperate with each other to enable each to
            more accurately determine its own tax liability and to minimize such
            liability to the extent legally permissible. The Parties acknowledge
            that, and Empire represents that as of the Effective Date, Empire is
            tax-exempt within the State of New York. Empire will provide, on the
            Effective Date and (thereafter upon IBM's request so long as Empire
            continues to be tax-

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            exempt in the State of New York), appropriate tax-exempt
            certificates to support the foregoing representation, upon ay such
            request by IBM. IBM shall cooperate with Empire to leverage such
            tax-exempt status, in order to allow Empire to minimize potential
            tax liability (e.g., through the procurement of Equipment and
            Software). IBM's invoices shall separately state the amounts of any
            taxes IBM is collecting from Empire, and IBM shall remit any such
            taxes to the appropriate authorities, if any. Each Party shall
            provide and make available to the other any resale certificates,
            information regarding out-of-state or out-of-country sales or use of
            equipment, materials or services, and other exemption certificates
            or information reasonably requested by the other Party.

      (f)   IBM shall promptly notify Empire of any claim for taxes assessed by
            applicable taxing authorities for which Empire is responsible
            hereunder.

            (i)   If IBM decides not to challenge the assessment, Empire may
                  itself pursue such challenge.

            (ii)  If such challenge may not be brought by Empire directly under
                  applicable law, Empire may request that IBM itself challenge
                  the assessment, and IBM shall do so in a timely manner. IBM
                  will cooperate and coordinate on the tax strategy and
                  consequences with the tax advisors of Empire's choosing in
                  such challenge. Empire shall be responsible for paying its tax
                  advisors, and Empire shall reimburse IBM for the reasonable
                  legal fees and Out-of-Pocket Expenses paid to third parties by
                  IBM and incurred in connection with such challenge. If such
                  challenge is rejected by applicable taxing authorities Empire
                  agrees to pay applicable assessed taxes.

            (iii) Empire shall be entitled to any tax refunds or rebates granted
                  to the extent such refunds or rebates are of taxes that were
                  paid by Empire, provided that IBM shall be entitled to any tax
                  refunds or rebates granted to the extent such refunds or
                  rebates are of taxes that were paid by IBM.

      (g)   In connection with any administrative or judicial proceedings
            relating to taxes assessed or to be assessed on either Party
            relating to this Agreement, each of the Parties shall make available
            to each other, as reasonably requested and available, personnel
            (including officers, directors, employees and agents of the Parties
            or their respective Affiliates) responsible for preparing,
            maintaining and interpreting information and documents relevant to
            such taxes, and personnel reasonably required as witnesses or for
            purposes of providing information or documents in connection with
            such proceedings. Any such information or documents provided under
            this Section 7.8(g) shall be kept confidential by the Party
            receiving the information or documents in accordance with Section
            13, provided that disclosure in connection with the filing of tax
            returns or with any such administrative or judicial proceeding shall
            not be deemed to be a violation of this Agreement.

7.9   Audit of Empire.

      (a)   Records. Empire shall maintain complete and accurate records, audit
            trail and supporting documentation, in accordance with generally
            accepted accounting principles applied on an consistent basis,
            relating to Empire's Lives processed using the Licensed Software, as
            such numbers increase (through Organic Growth and Merger Growth) and
            decrease (through ordinary course and through divestitures).

      (b)   IBM shall have the following audit rights:

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            (i)   If IBM has a reasonable basis to doubt Empire's compliance
                  with the License, Empire will allow IBM to access for the
                  purpose of auditing the Empire and Affiliate records and
                  facilities applicable to the use of the Licensed Works in
                  order to verify Empire's compliance with the License;

            (ii)  If IBM has a reasonable basis to doubt Empire's compliance
                  with Section 7.2, Empire will allow IBM to access for the
                  purpose of auditing the Empire and Affiliate records and
                  facilities applicable to the number Lives covered by Empire's
                  use of the Licensed Works in order to verify Empire's
                  compliance with Section 7.2; or

            (iii) If IBM has a reasonable basis to doubt Empire's compliance
                  with Section 13, Empire will allow IBM to access for the
                  purpose of auditing the Empire and Affiliate records and
                  facilities applicable Empire's compliance with Section 13.

            Any such audit may be conducted by IBM or its independent
            accountants or consultants who Empire, in its reasonable discretion,
            deems not to be competitors of Empire or that are pre-approved by
            Empire in its sole discretion. Such audits shall be conducted in
            person during regular business hours at IBM or Empire facilities,
            with one (1) month's written notice. In all cases, IBM or its
            consultants shall commit to maintain the confidentiality of Empire
            information obtained from such audit, except as necessary to enforce
            IBM's rights under this Agreement. IBM will pay for any such audit,
            unless, with respect to an audit under Section 7.9(b)(ii), the
            amount that should have been paid to IBM is greater than five
            percent (5%) (but at least $75,000) of the amount reported by IBM.
            In these cases, Empire shall reimburse IBM for actual and reasonable
            audit costs in addition to the underpaid amounts and applicable late
            fees in accordance with Section 7.5(b) hereof.

      (c)   Records Retention. Until the later of (a) six (6) years after
            expiration or termination of this Agreement; (b) all pending matters
            relating to this Agreement (e.g., disputes) are closed; or (c) the
            information is no longer required to meet IBM's records retention
            policy as disclosed by IBM to Empire and as such policy may be
            adjusted from time to time as disclosed by IBM to Empire, Empire
            shall maintain and provide access upon request to the records,
            documents and other information required to meet IBM's audit rights
            under this Agreement. Upon reasonable notice from IBM, Empire will
            recover such information and deliver it to IBM within a reasonable
            period of time, with IBM paying Empire's reasonable expenses.

7.10  Audit of IBM (and deNovis).

      (a)   Audit. Empire and its auditors (including internal audit staff and
            external auditors), inspectors, regulators and other representatives
            as Empire may from time to time designate in writing (collectively
            "Empire Auditors") shall have the right to perform periodic on-site
            audits of IBM (annually, or more often if required by law), for the
            purposes set forth below. Empire shall also have the right to
            perform periodic on-site audits of deNovis (annually, or more often
            if required by law), for the specific purposes set forth below where
            deNovis is identified; (provided, however that notwithstanding that
            an audit right is identified as "IBM only", such designation does
            not relieve IBM of the obligation to pass-through such audit
            requirements to deNovis). The applicable entity subject to audit
            hereunder (IBM or deNovis) is referred to as the "Applicable
            Auditee"). The Applicable Auditee shall provide to Empire and Empire
            Auditors, access at all reasonable times and after reasonable
            notice, unless circumstances reasonably preclude such notice (and in
            the case of regulators at any time required by such regulators) (i)
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            any facility or part of a facility at which the Applicable Auditee
            is performing the development effort or maintenance and support
            services pursuant to this Agreement'; (ii) to the Applicable
            Auditee's personnel; (iii) and to data and records relating to same
            and to data and records relating to product and services (including
            contracts between IBM and IBM's Subsidiaries, Resellers or
            Customers, and contracts between IBM's Subsidiaries and Resellers or
            Customers (and related thereto records, provided that access to
            Reseller and Customer contracts shall only be provided to
            third-party Empire Auditors)) which generates Gross Revenue, for the
            purpose of performing audits and inspections of the Applicable
            Auditee or any of its Subsidiaries, during the Term and for the
            period the Applicable Auditee is required to maintain records
            hereunder as follows.

            With respect to IBM only:

            (i)   To verify compliance with Section 13; and

            (ii)  To examine IBM's performance of its obligations under this
                  Agreement with respect to development of the Licensed Works,
                  including performing audits: (A) of practices and procedures;
                  (B) of general controls and security practices and procedures;
                  and (C) as necessary to enable Empire to meet, or to confirm
                  that IBM is meeting, applicable regulatory and other legal
                  requirements.

            With respect to both IBM and deNovis:

            (iii) To verify the performance of the development effort for the
                  Licensed Works;

            (iv)  To verify the amount of Gross Revenues Earned by the
                  Applicable Auditee and its Subsidiaries; and

            (v)   To verify supporting information and calculations by the
                  Applicable Auditee regarding the Gross Revenue and Revenue
                  Sharing.

      (b)   Assistance by the Applicable Auditee. The Applicable Auditee shall
            provide to such Empire Auditors such assistance as they require. The
            Applicable Auditee shall cooperate fully with Empire Auditors in
            connection with audit functions and with regard to examinations by
            regulatory authorities. In all cases, Empire Auditors shall commit
            to maintain the confidentiality of the Applicable Auditee's
            information obtained from such audit, except as necessary to enforce
            Empire's rights under this Agreement. Empire Auditors (i) shall
            comply with the Applicable Auditee's reasonable security
            requirements; and (ii) if Empire external auditors, shall not, in
            IBM's reasonable judgment, be a competitor of IBM (as reasonably
            determined by IBM). The Parties agree that (i) KPMG; (ii) Ernst and
            Young; and (iii) any auditor engaged by regulatory agencies to
            perform an audit hereunder shall not be deemed to be competitors of
            IBM for purposes of this Section 7.10(b).

      (c)   Cost of Audit. Audits under this Section 7.10 shall be at Empire's
            cost and expense, unless the audit reveals, with respect to Gross
            Revenues and Revenue Sharing, that the Applicable Auditee underpaid
            the amount of Revenue Sharing actually owing by five percent (5%) or
            more (but at least $75,000), in which case the Applicable Auditee
            shall pay the costs and expenses of such Audit. If Empire elects to
            conduct a follow-up audit to assure that deficiencies revealed by
            the audit have been remedied, the Applicable Auditee shall pay for
            the costs of such subsequent audit related to the components the
            prior audit revealed to be not in compliance, but not more than
            twenty-five thousand dollars ($25,000) for each such subsequent
            audit.

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      (d)   Audit Follow-up. If (i) an audit and/or (ii) the Applicable
            Auditee's review of the records provided by the Applicable Auditee
            pursuant to Section 16.11(g), reveal that the Applicable Auditee
            underpaid the amount of Revenue Sharing actually owing, the
            Applicable Auditee shall pay Empire such underpaid Revenue Sharing
            within five (5) business days plus interest at the rate described in
            Section 16.11(e).

            (i)   Following an audit or examination, Empire shall conduct, or
                  request Empire Auditors to conduct, an exit conference with
                  the Applicable Auditee to obtain factual concurrence with
                  issues identified in the review. The Applicable Auditee shall
                  promptly brief Empire on the results of any review or audit
                  conducted by the Applicable Auditee or its Affiliates
                  (including by internal audit staff or external auditors), or
                  by inspectors, regulators or other representatives (including
                  internal and external auditors), relating to the Applicable
                  Auditee's operating practices and procedures to the extent
                  relevant to the Applicable Auditee's obligations pursuant to
                  this Agreement.

            (ii)  The Applicable Auditee and Empire shall meet to review each
                  audit report promptly after the issuance thereof and to
                  mutually agree upon the appropriate manner, if any, in which
                  to respond to the changes suggested by the audit report.
                  Empire and the Applicable Auditee agree to meet and to develop
                  action plans to address (A) the audit; and (B) regulatory
                  findings and reports related to the Applicable Auditee's
                  operating practices and procedures related to the performance
                  of the Applicable Auditee's obligations hereunder.

      (e)   Records Retention. Until the later of (a) seven (7) years after
            expiration or termination of this Agreement; (b) all pending matters
            relating to this Agreement (e.g., disputes) are closed; or (c) the
            information is no longer required to meet Empire's records retention
            policy as disclosed by Empire to the Applicable Auditee and as such
            policy may be adjusted from time to time by Empire to the Applicable
            Auditee, the Applicable Auditee shall maintain and provide access
            upon request to the records, documents and other information
            required to meet Empire's audit rights under this Agreement. Upon
            reasonable notice from Empire, IBM will recover such information and
            deliver it to Empire within a reasonable period of time, with Empire
            paying IBM's reasonable expenses.

8.    NO OTHER SERVICES

      Except as specifically set forth in this Agreement or the Master Services
Agreement, IBM shall have no obligation to provide configuration, installation,
implementation, training and other services relating to the Licensed Software.
To the extent that a Modification to the Licensed Software is made for Empire by
IBM and Empire does not receive a copy of the source code for such Modification,
such Modification will be deemed to be part of the Licensed Software and be
covered by the maintenance and support services hereunder at no additional
charge, unless otherwise agreed by the Parties.

9.    ESCROW OF SOURCE CODE

      IBM, Empire and deNovis shall execute concurrently with this Agreement a
"preferred beneficiary" source code escrow agreement with DSI Technology Escrow
Services (the "Escrow Agent"), and such escrow agreement is attached hereto as
Attachment D (the "Escrow Agreement"), for the deposit of the Source Code Form
of the Licensed Software (excluding the Third Party Products) into escrow on or
before the Acceptance Date. The Parties shall promptly confirm Escrow Agent's
acceptance of such Escrow Agreement (and make any mutually agreed and reasonable
changes proposed by the Escrow Agent) and such Escrow Agreement shall be
submitted to the Escrow Agent for execution by the

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Escrow Agent at least thirty (30) days prior to the scheduled Acceptance Date
(as set forth in the Overall Project Plan). Upon the Acceptance Date IBM shall
be deemed to have granted to Empire a worldwide, perpetual, royalty-free,
paid-up right and license, to (a) use, execute, load, copy, modify, prepare
derivative works, display and perform all or a portion of the Source Code Form
of the Licensed Software solely to support, correct and enhance the Licensed
Software for Empire's Processing; and (b) compile such Source Code Form
(including modifications thereto and derivative works thereof) into Object Code
Form. As specified in the Escrow Agreement, only upon the occurrence of one or
more events triggering release of the Source Code Form of the Licensed Software
shall Empire be entitled to access the Source Code Form of the Licensed
Software.

10.   LIMITED WARRANTIES AND DISCLAIMERS

10.1  IBM represents and warrants to Empire that:

      (a)   IBM has all right and authority necessary to grant Empire the
            licenses and rights granted herein (including the rights granted in
            and to the Licensed Software with respect to the Third Party
            Products), and that such licenses and rights (taken as a whole) are
            not within the public domain or subject to any encumbrances or
            restrictions including but not limited to the assertion of moral
            rights and IBM has disclosed to Empire (in Attachment E hereto) all
            Third Party Products embedded in or included with the Licensed
            Works.

      (b)   The Licensed Works provided by IBM hereunder are not subject to any
            liens or encumbrances which would impair Empire's use of the
            Licensed Works in accordance with the terms hereof.

      (c)   IBM has all requisite power and authority to execute and deliver
            this Agreement (including all Attachments) and to perform its
            obligations under the Agreement.

      (d)   The Licensed Works (excluding the Third Party Products) as delivered
            to Empire do not infringe and that IBM shall perform its
            responsibilities under this Agreement in a manner that does not
            infringe any patent, copyright, trademark or other intellectual
            property right of any third party, nor constitute a misappropriation
            of any trade secret; and no claim has been brought against IBM or
            its suppliers alleging any of the foregoing.

      (e)   IBM will use Commercially Reasonable Efforts so that the Licensed
            Software, including any additional elements delivered to Empire
            during the Term (and any Modifications thereto) as delivered to
            Empire does not contain any Harmful Code.

      (f)   During the Warranty Period (defined below), the Licensed Works
            (including any Modifications thereto) will conform with Attachment A
            and the Software Specifications (including Empire's scalability
            requirements as described in Attachment A). IBM shall correct any
            deviations of the Licensed Works from Attachment A or the Software
            Specifications ("Errors") arising during such Warranty Period in
            accordance with Sections 2 and 3 of Attachment B; provided that
            during the first year after the Acceptance Date of the Licensed
            Works (the "Warranty Period"), if IBM is unable to correct such
            Errors after a reasonable number of repeated attempts, Empire's sole
            remedy under this Agreement (in addition to Empire's termination
            rights hereunder; Empire's rights to receive service level credits
            under the Master Services Agreement; and Empire's right to obtain
            the release of the Source Code Form of the Licensed Software, if
            applicable) will be for Empire (at Empire's option): (i) to receive
            a equitable adjustment in the Development and License Fee for the
            Licensed Works (up to the total amount of such Development and
            License Fees under this Agreement) to reflect any reduction in the
            value of the Licensed Works as a result of the uncorrected Error; or
            (ii) to return the Licensed Software to IBM and receive a refund of
            all Fees paid by Empire under this

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            Agreement in which case any and all rights and the License under
            this Agreement, the Source Code Escrow Agreement and IBM's
            obligation to perform the Systems Integration Effort related to the
            Licensed Software under the Master Services Agreement shall
            terminate.

      (g)   IBM will perform all obligations under this Agreement with
            promptness, efficiency and diligence and IBM's obligations shall be
            executed in a workmanlike, professional and cost-effective manner,
            in accordance with the practices and high professional standards
            used in well-managed operations performing services similar to the
            services provided hereunder. IBM represents and warrants that it
            shall use adequate numbers of qualified individuals with suitable
            training, education, experience and skill to perform the maintenance
            and support services hereunder.

      (h)   IBM will not insert (or permit deNovis to insert) into the Licensed
            Software provided to Empire hereunder any Disabling Code without the
            prior written consent of Empire.

10.2  DISCLAIMER OF WARRANTIES.

      (a)   EXCEPT AS STATED IN THIS AGREEMENT, EACH PARTY DISCLAIMS ALL
            WARRANTIES, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE LICENSED
            WORKS, INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY,
            NONINFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE, OR ARISING
            FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICE.

      (b)   SUBJECT TO ITS OBLIGATIONS CONTAINED IN THIS AGREEMENT, IBM DOES NOT
            WARRANT THE ACCURACY OF ANY REPORT, DATA OR OTHER MATERIAL DELIVERED
            TO EMPIRE, AND IBM SHALL NOT BE LIABLE FOR ANY INACCURACY THEREOF,
            ALL TO THE EXTENT THAT THE INACCURACY RESULTS FROM INACCURATE DATA
            SUPPLIED BY EMPIRE.

      (c)   IBM SPECIFICALLY DISCLAIMS ANY WARRANTY THAT THE OPERATION OF THE
            LICENSED SOFTWARE WILL BE UNINTERRUPTED OR ERROR FREE OR THAT IBM
            WILL FIND OR CORRECT ALL DEFECTS.

11.   LIABILITY

11.1  General Intent.

      Subject to the specific provisions of this Section 11 and Section 3.8(c),
      it is the intent of the Parties that each Party shall be liable to the
      other Party for any actual damages incurred by the non-breaching Party as
      a result of the breaching Party's failure to perform its obligations in
      the manner required by this Agreement.

11.2  Liability Restrictions.

      (a)   SUBJECT TO SECTION 11.2(c), IN NO EVENT, WHETHER IN CONTRACT OR IN
            TORT (INCLUDING BREACH OF WARRANTY, NEGLIGENCE AND STRICT LIABILITY
            IN TORT), SHALL A PARTY BE LIABLE FOR INDIRECT OR CONSEQUENTIAL,
            EXEMPLARY, PUNITIVE OR SPECIAL DAMAGES EVEN IF SUCH PARTY HAS BEEN
            ADVISED OF THE POSSIBILITY OF SUCH DAMAGES IN ADVANCE.

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      (b)   Subject to Section 11.2(d), each Party's total and aggregate
            liability to the other under this Agreement, whether in contract or
            in tort (including breach of warranty, negligence and strict
            liability in tort) shall be limited as follows:

            (i)   Prior to the Acceptance Date, Section 3.8(c) states the
                  complete liability of the Parties under this Agreement. For
                  the avoidance of doubt, prior to the Acceptance Date, except
                  as provided in Section 3.8(c), neither Party shall have any
                  liability to the other Party;

            (ii)  After the Acceptance Date through the expiration of the
                  Warranty Period, each Party's liability shall be limited to
                  the total Development and License Fees paid or payable by
                  Empire to IBM under this Agreement; and

            (iii) After the expiration of the Warranty Period, each Party's
                  liability will be limited to an amount equal to the
                  Maintenance Fees paid or payable to IBM by Empire pursuant to
                  this Agreement for the twelve (12) months prior to the month
                  in which the first event giving rise to the liability
                  occurred; provided that if the first event giving rise to
                  liability occurs during the first twelve (12) months after the
                  expiration of the Warranty Period, liability shall be limited
                  to an amount equal to the total charges that would be payable
                  to IBM pursuant to this Agreement for proper performance of
                  the maintenance and support services during such twelve (12)
                  month period.

            Notwithstanding the foregoing, the applicable amount set forth above
            shall be increased to two times (2x) the applicable amount, if and
            to the extent that either Party suffers damages occasioned by the
            tortious willful misconduct or tortious gross negligence of the
            other Party.

      (c)   The limitations set forth in Section 11.2(a) shall not apply to
            damages occasioned by

            (i)   a Party's breach of its obligations with respect to
                  Confidential Information;

            (ii)  any and all Losses to be paid pursuant to Section 12.5;

            (iii) fines, penalties, interest and similar financial obligations
                  levied as a result of a Party's breach of Section 16.7 of this
                  Agreement; or

            (iv)  either party's obligation to pay amounts due and payable or
                  IBM's obligation to pay or provide credits (as applicable)
                  Revenue Sharing to Empire under this Agreement.

      (d)   The limitations set forth in Sections 11.2(b) shall not apply with
            respect to:

            (i)   any and all Losses to be paid pursuant to Section 12.5;

            (ii)  damages occasioned by a Party's breach of its obligations with
                  respect to Confidential Information;

            (iii) fines, penalties, interest and similar financial obligations
                  levied as a result of a Party's breach of Section 16.7 of this
                  Agreement; and

            (iv)  either party's obligation to pay amounts due and payable or
                  IBM's obligation to pay or provide credits (as applicable)
                  Revenue Sharing to Empire under this Agreement.

      (e)   Each Party shall have a duty to mitigate damages for which the other
            Party is responsible.

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12.   INDEMNIFICATION

12.1  Intellectual Property Indemnification.

      (a)   IBM shall defend at its expense, Empire and its respective
            Affiliates and their respective officers, directors, employees,
            agents, successors and assigns, against any and all non-Affiliated
            third party claims' arising from a claim that the Licensed Works,
            including Empire's use of the Licensed Works as authorized under
            this Agreement, infringes, misappropriates or violates any patent,
            copyright, trademark, trade secret or other proprietary right of any
            third party.

      (b)   IBM shall have no obligation to defend Empire pursuant to Section
            12.1(a) if and only to the extent that a Loss arises out of:

            (i)   Empire's or Empire's agents modification of the Licensed Works
                  or use by Empire of the Licensed Work other than their
                  specified operating environment, unless such modification or
                  use was at the direction, request or recommendation of, or in
                  accordance with the specifications provided by, IBM (or its
                  suppliers);

            (ii)  Empire's or Empire's agents combination of the Licensed Works
                  with products, data, or apparatus not provided by IBM unless
                  such combination was at the direction, request or
                  recommendation of, or in accordance with the specifications
                  provided by, IBM (or its suppliers); and

            (iii) any portion of such Licensed Works that are designed in
                  accordance with written, detailed Software Specifications
                  provided by Empire, to the extent that infringement
                  necessarily arises from such Software Specifications.

12.2  Subcontractor Indemnity.

      IBM shall defend, at its expense, Empire and its respective Affiliates and
      their respective officers, directors, employees, agents, successors and
      assigns, against any and all non-Affiliated third party claims arising
      from any claim or action by IBM's subcontractors arising out of IBM's
      breach or violation of IBM's subcontracting arrangements.

12.3  Additional Indemnities.

      IBM and Empire each agree to defend, at the indemnitor's expense, the
      other, and its Affiliates, officers, directors, employees, agents,
      successors and assigns, against any and all non-Affiliated third party
      claims set forth below: (a) the death or bodily injury of any agent,
      employee (other than an employee of the indemnitor), customer, business
      invitee, or business visitor or other person caused by the tortious
      conduct of the indemnitor; (b) the damage, loss or destruction of any real
      or tangible personal property caused by the tortious conduct of the
      indemnitor; and (c) any claim, demand, charge, action, cause of action, or
      other proceeding asserted against the indemnitee but resulting from an act
      or omission of the indemnitor in its capacity as an employer of a person.

12.4  Infringement: Injunctive Relief.

      In the event that an injunctive restraint is threatened or obtained
      against Empire's, its Affiliates or its permitted users' (or others
      authorized to access the Licensed Works) (the "Permitted Users") use of
      any of the Licensed Works by reason of infringement or violation of any
      patent, copyright, trademark or trade secret, or if in IBM's opinion any
      of the Licensed Works is likely to become the subject of such an
      injunction, IBM shall, in addition to indemnifying Empire and Empire's

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      other rights under this Agreement, promptly take the following actions, at
      no additional charge to Empire in the listed order of priority: (a) at
      IBM's expense promptly procure for Empire or such Permitted Users the
      right to continue to use the Licensed Works as provided in this Agreement,
      or (b) if such procurement cannot be accomplished with Commercially
      Reasonable Efforts, promptly modify at IBM's expense the Licensed Software
      so that it becomes non-infringing (so long as the functionality, features
      and performance of the Licensed Software are not impaired in all but
      insubstantial respects), or (c) if neither of the preceding clauses (a)
      and (b) can be accomplished by IBM with Commercially Reasonable Efforts,
      and only in such event, then remove the infringing item from the Licensed
      Software, in which case IBM's Fees hereunder shall be equitably adjusted
      to reflect the diminished value to Empire of such removal, or if in
      Empire's reasonable opinion such removal is material to all or any portion
      of the Licensed Works, the maintenance and support services hereunder or
      the entire Agreement, as the case may be, then Empire may terminate this
      Agreement in whole or in part, as the case may be and/or the license with
      respect to such infringing Licensed Software and IBM shall promptly refund
      to Empire the Fees paid (pursuant to Section 7 hereof) to IBM by Empire in
      respect of such Licensed Software, less an adjustment for depreciation
      (unless such infringement by IBM (or deNovis) was intentional or willful)
      on a straight-line basis over eight (8) years, starting on the Acceptance
      Date.

12.5  Procedures With Respect to Indemnities.

      If IBM or Empire is obligated to provide the defense, as provided in
      Section 12.1, 12.2 or 12.3, then subject to the procedures provided in
      Section 12.6, such Party shall pay to the other Party all Losses (a)
      finally awarded to a third party, or (b) paid via settlement to a third
      party. The Parties acknowledge that such Losses shall not be limited by
      Section 11.2(a).

12.6  Indemnification Procedures.

      With respect to third party claims the following procedures shall apply:

      (a)   Notice. Promptly after receipt by any entity entitled to
            indemnification under Sections 12.1 through 12.3 of notice of the
            assertion or the commencement of any action, proceeding or other
            claim by a third party in respect of which the indemnitee will seek
            indemnification pursuant to any such Section, the indemnitee shall
            promptly notify the indemnitor of such claim in writing. No failure
            to so notify an indemnitor shall relieve it of its obligations under
            this Agreement except to the extent that it can demonstrate damages
            attributable to such failure. Within fifteen (15) days following
            receipt of written notice from the indemnitee relating to any claim,
            but no later than ten (10) days before the date on which any
            response to a complaint or summons is due, the indemnitor shall
            notify the indemnitee in writing if the indemnitor acknowledges its
            indemnification obligation and elects to assume control of the
            defense and settlement of that claim (a "Notice of Election").

      (b)   Procedure Following Notice of Election. If the indemnitor delivers a
            Notice of Election relating to any claim within the required notice
            period, the indemnitor shall be entitled to have sole control over
            the defense and settlement of such claim; provided that (i) the
            indemnitor shall obtain the prior written approval of the indemnitee
            before entering into any non-monetary settlement of such claim or
            ceasing to defend against such claim and (ii) the indemnitee shall
            be entitled to participate in the defense of such claim and to
            employ counsel at its own expense to assist in the handling of such
            claim After the indemnitor has delivered a Notice of Election
            relating to any claim in accordance with Section 12.6(a), the
            indemnitor shall not be liable to the indemnitee for any legal

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            expenses incurred by the indemnitee in connection with the defense
            of that claim, except for legal expenses incurred by the indemnitee
            in providing assistance requested by the indemnitor. In addition,
            the indemnitor shall not be required to indemnify the indemnitee for
            any amount paid or required to be paid by the indemnitee in the
            settlement of any claim for which the indemnitor has delivered a
            timely Notice of Election if such amount was agreed to without the
            written consent of the indemnitor. The indemnitee shall provide such
            reasonable assistance in connection with the defense and settlement
            of the claim as may be requested by the indemnitor, at the expense
            of the indemnitor; or

      (c)   Procedure Where No Notice of Election Is Delivered. If the
            indemnitor does not deliver a Notice of Election relating to a
            claim, or otherwise fails to acknowledge its indemnification
            obligation or to assume the defense of a claim, within the required
            notice period, or fails to reasonably diligently defend the claim,
            the indemnitee shall have the right to defend the claim in such
            manner as it may deem appropriate, at the cost, expense, and risk of
            the indemnitor, including payment of any judgment or award and the
            costs of settlement or compromise of the claim. The indemnitor shall
            promptly reimburse the indemnitee for all such costs and expenses,
            including payment of any judgment or award and the costs of
            settlement or compromise of the claim. If it is determined that the
            indemnitor failed to defend a claim for which it was liable, the
            indemnitor shall not be entitled to challenge the amount of any
            settlement or compromise paid by the indemnitee.

12.7  Subrogation.

      In the event that an indemnitor shall be obligated to indemnify an
      indemnitee pursuant to this Section 12, the indemnitor shall, upon
      fulfillment of its obligations with respect to indemnification, including
      payment in full of all amounts due pursuant to its indemnification
      obligations, be subrogated to the rights of the indemnitee with respect to
      the claims to which such indemnification relates.

13.   SAFEGUARDING OF DATA; CONFIDENTIALITY

      The Parties agree that for purposes of this Section 13, references to
      "IBM" shall also be deemed to include deNovis and references to the
      "Parties" shall also be deemed to include deNovis.

13.1  Empire Information.

      (a)   Empire Information shall be and remain, as between the Parties, the
            property of Empire. IBM shall not possess or assert any lien or
            other right against or to Empire Information. No Empire Information,
            or any part thereof, shall be sold, assigned, leased or otherwise
            disposed of to third parties by IBM or commercially exploited by or
            on behalf of IBM.

      (b)   Upon Empire's request, the termination or expiration of this
            Agreement for any reason (including termination for cause) or, with
            respect to any particular Empire Information, on such earlier date
            that the same shall be no longer required by IBM in order to render
            perform its obligations hereunder, Empire Information (including
            copies thereof) (i) shall be promptly returned to Empire by IBM in a
            form reasonably requested by Empire, provided that Empire has given
            prior approval to any reasonable costs associated with the
            conversion of Empire Information from the form maintained by IBM, or
            (ii) if Empire so elects, shall be destroyed by IBM.

      (c)   Subject to Section 5.4, Empire Information shall not be utilized by
            IBM for any purpose other than that of performing its obligations
            under this Agreement, the Master Services Agreement, or the
            Licensing and Joint Development Agreement.

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13.2  Safeguarding Empire Data.

      (a)   IBM shall establish and maintain safeguards against the destruction,
            loss or alteration of Empire Data in the possession or control of
            IBM which are no less rigorous than those maintained by Empire as of
            the Effective Date, as specified to the IBM Contract Executive, and
            are no less rigorous than those maintained by IBM for its own
            information of a similar nature, but in no event shall IBM use less
            than Commercially Reasonable Efforts to safeguard such Empire Data.
            Empire shall have the right to establish backup security for Empire
            Data and to keep backup Empire Data and Empire Data files in its
            possession if it chooses.

      (b)   Without limiting the generality of Section 13.2(a):

            (i)   IBM Personnel shall not attempt to access, or allow access to,
                  any Empire Data which they are not permitted to access under
                  this Agreement. If such access is attained (or is reasonably
                  suspected), IBM shall immediately report such incident to
                  Empire, describe in detail the accessed Empire Data, and if
                  applicable return to Empire any copied or removed Empire Data.

            (ii)  IBM shall utilize Commercially Reasonable Efforts, including
                  through systems security measures, to guard against the
                  unauthorized access, alteration or destruction of Empire Data.

      (c)   Upon Empire's request, the termination or expiration of this
            Agreement for any reason (including termination for cause) or, with
            respect to any particular Empire Data, on such earlier date that the
            same shall be no longer required by IBM in order to perform its
            obligations hereunder, Empire Data (including copies thereof) (i)
            shall be promptly returned to Empire by IBM in a form usable by
            Empire, as reasonably requested by Empire, provided that Empire has
            given prior approval to any reasonable costs associated with the
            conversion of Empire Information from the form maintained by IBM, or
            (ii) if Empire so elects, shall be destroyed by IBM.

13.3  Confidentiality.

      (a)   Confidential Information. IBM and Empire each acknowledge that they
            may be furnished with, receive or otherwise have access to
            information of or concerning the other Party (or its subcontractors)
            which such Party considers to be confidential, a trade secret or
            otherwise restricted. As used in this Agreement, "Confidential
            Information" means all information, in any form, furnished or made
            available directly or indirectly by one Party, or to which either
            Party gains access in the course of or incidental to the performance
            of this Agreement, and that should reasonably have been understood
            by the recipient (because of legends or other markings, the
            circumstances of disclosure, or the nature of the information
            itself) to be proprietary and confidential to the disclosing Party,
            an Affiliate of the disclosing Party, or a third party. The terms
            and conditions of this Agreement shall be deemed Confidential
            Information. In the case of Empire, Confidential Information also
            shall include, whether or not designated "Confidential Information,"
            (i) Empire Data; (ii) the specifications, designs, documents,
            correspondence, software, documentation, data and other materials
            and work products provided by Empire to IBM hereunder; and (iii) all
            information concerning the operations, affairs and businesses of
            Empire, the financial affairs of Empire, and the relations of Empire
            with its customers, employees, providers, subscribers, business
            partners, vendors, consultants, brokers and service providers
            (including customer lists, customer information, account information
            and consumer markets); (collectively, the "Empire Confidential
            Information"). In the case of IBM, Confidential Information

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            also shall include, whether or not designated "Confidential
            Information," the Licensed Works, including notes, analyses,
            compilations, studies, interpretations, memoranda or other documents
            provided by IBM (or its subcontractors) to Empire which contain,
            reflect or are based upon, in whole or in part, the Licensed Works.

      (b)   Obligations. Subject to Section 13.4:

            (i)   Empire and IBM shall each use at least the same degree of care
                  as it employs to avoid unauthorized disclosure of its own
                  information, but in any event no less than Commercially
                  Reasonable Efforts, to prevent disclosing to unauthorized
                  parties the Confidential Information of the other Party,
                  provided that IBM may disclose such information (except for
                  the terms and conditions of this Agreement) to properly
                  authorized subcontractors as and to the extent necessary for
                  performance of its obligations hereunder, and Empire may
                  disclose such information (except for the terms and conditions
                  of this Agreement) to third parties as and to the extent
                  necessary for the conduct of its business, where in each such
                  case, the receiving entity first agrees in writing to the
                  obligations described in this Section 13.3. Any disclosure to
                  such entities shall be under terms and conditions contained in
                  a written agreement containing substantially the same terms
                  and conditions as those provided herein.

            (ii)  As requested by Empire during the Term, upon expiration or any
                  termination of this Agreement, or completion of IBM's
                  obligations under this Agreement, IBM shall return or destroy,
                  as Empire may direct, all material in any medium that
                  contains, refers to, relates to, or is derived from Empire
                  Confidential Information, and retain no copies (except for an
                  archival copy retained for purposes of interpreting and
                  enforcing its rights under this Agreement).

            (iii) Each Party shall use Commercially Reasonable Efforts so that
                  its Personnel comply with these confidentiality provisions,
                  and each Party shall cause each of its Personnel to annually
                  certify that he/she is complying with terms and conditions
                  substantially the same as those provided herein.

            (iv)  In the event of any actual or suspected misuse, disclosure or
                  loss of, or inability to account for, any Confidential
                  Information of the furnishing Party, the receiving Party
                  promptly shall (A) notify the furnishing Party upon becoming
                  aware thereof; (B) promptly furnish to the other Party full
                  details of the unauthorized possession, use, or knowledge, or
                  attempt thereof, and use reasonable efforts to assist the
                  other Party in investigating or preventing the reoccurrence of
                  any unauthorized possession, use, or knowledge, or attempt
                  thereof, of Confidential Information; (C) take such actions as
                  may be necessary or reasonably requested by the furnishing
                  Party to minimize the violation; and (D) cooperate in all
                  reasonable respects with the furnishing Party to minimize the
                  violation and any damage resulting therefrom.

            (v)   The Parties' obligations respecting Confidential Information
                  shall survive expiration or termination of this Agreement for
                  a period of six (6) years, except: (A) for medical, provider,
                  subscriber and customer information, which shall survive
                  indefinitely, (B) as otherwise provided by law; and (C) with
                  respect to the Source Code Form of the Licensed Software.

      (c)   Exclusions. Section 13.3(b) shall not apply to any particular
            information which IBM or Empire can demonstrate: (i) was, at the
            time of disclosure to it, in the public domain; (ii) after
            disclosure to it, is published or otherwise becomes part of the
            public domain through

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            no fault of the receiving Party; (iii) was in the possession of the
            receiving Party at the time of disclosure to it without obligation
            of confidentiality; (iv) was received after disclosure to it from a
            third party who had a lawful right to disclose such information to
            it without any obligation to restrict its further use or disclosure;
            or (v) was independently developed by the receiving Party without
            reference to Confidential Information (including unaided mental
            impressions) of the furnishing Party. In addition, a Party shall not
            be considered to have breached its obligations by disclosing
            Confidential Information of the other Party (i) as required by law,
            except with respect to those laws and regulations described in item
            (ii), to satisfy any legal requirement of a competent government
            body provided that, immediately upon receiving any such request and
            to the extent that it may legally do so, such Party advises the
            other Party of the request prior to making such disclosure in order
            that the other Party may interpose an objection to such disclosure,
            take action to assure confidential handling of the Confidential
            Information, or take such other action as it deems appropriate to
            protect the Confidential Information; or (ii) as required pursuant
            to any listing agreement with or rules of any national securities
            exchange or interdealer quotation system or federal or state
            securities laws or insurance or health regulatory regulations;
            provided that the Parties shall cooperate to minimize disclosure
            (e.g., redaction) consistent with such agreements, rules, laws, and
            regulations, including that the disclosing Party shall notify the
            other Party before such disclosure. Further, a Party shall not be
            considered to have breached its obligations under this Section 13.3
            for disclosing Confidential Information to its attorneys, auditors
            and other professional advisors in connection with services rendered
            by such advisors, provided that such Party has confidentiality
            agreements with such professional advisors and/or such advisors owe
            professional confidentiality obligations to such Party.

      (d)   No Implied Rights. Each Party's Confidential Information shall
            remain the property of that Party. Nothing contained in this Section
            13.3 shall be construed as obligating a Party to disclose its
            Confidential Information to the other Party, or as granting to or
            conferring on a Party, expressly or impliedly, any rights or license
            to the Confidential Information of the other Party, and any such
            obligation or grant shall only be as provided by other provisions of
            this Agreement.

13.4  HIPAA Privacy and Security Requirements.

      (a)   Definitions.

            (i)   The "Privacy Rule" shall mean the HIPAA regulations governing
                  individually identifiable health information codified at 45
                  C.F.R. Parts 160 and 164.

            (ii)  "Protected Health Information" or "PHI" shall have the meaning
                  given to such term under the Privacy Rule, including 45 C.F.R.
                  (S) 160.103, created or received by IBM under the terms of
                  this Agreement.

            (iii) "Covered Entity" shall have the meaning given to such term
                  under the Privacy Rule, including 45 C.F.R. (S) 160.103.

            (iv)  "Business Associate" shall have the meaning given to such term
                  under the Privacy Rule, including 45 C.F.R. (S) 160.103.

      (b)   Obligations of IBM under the Privacy Rule. To receive the
            maintenance and support services under this Agreement, Empire may be
            required to disclose certain PHI to IBM, and IBM may receive such
            PHI or create PHI on Empire's behalf in connection with its
            obligations under this Agreement. Empire and IBM shall protect the
            privacy and provide for the security of PHI disclosed to IBM
            pursuant to this Agreement in compliance with

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            the Privacy Rule. IBM may use and disclose PHI created or received
            pursuant to this Agreement only as follows:

            (i)   To Carry Out the Purposes of this Agreement. IBM may use and
                  disclose PHI received from Empire or created on behalf of
                  Empire to perform its obligations under this Agreement solely
                  in accordance with the specifications set forth in this
                  Agreement or as required by law.

            (ii)  Nondisclosure. IBM shall not use or further disclose the PHI
                  received from or created on behalf of Empire in a manner that
                  would violate the requirements of the Privacy Rule (including
                  the minimum necessary requirements), if done by Empire or any
                  covered entity that Empire serves in the capacity of a
                  business associate.

            (iii) Safeguards. IBM shall use appropriate safeguards to prevent
                  use or disclosure of the PHI as provided for under this
                  Agreement, including adopting policies and procedures
                  regarding the safeguarding of PHI; providing training to
                  relevant employees, independent contractors and subcontractors
                  on such policies and procedures to prevent the improper use or
                  disclosure of PHI; and implementing appropriate technical
                  safeguards to protect PHI.

            (iv)  Reporting Improper Disclosures. IBM shall report in writing to
                  Empire any use or disclosure of the PHI not provided for under
                  this Agreement, of which IBM becomes aware promptly but in no
                  event later than five (5) Business Days of first learning of
                  any such use or disclosure.

            (v)   Use of Agents and Subcontractors. IBM shall ensure that any
                  approved subcontractors or agents to whom IBM provides PHI
                  created or received pursuant to this Agreement agree to the
                  same restrictions and conditions, as set forth in this Section
                  13.4, that apply to IBM with respect to such PHI.

            (vi)  Availability of Information to Empire. Within ten (10)
                  Business Days of receipt of a request from Empire, IBM shall,
                  in accordance with such Empire request, make PHI available to
                  Empire, provide Empire access to PHI, and/or make a copy of
                  PHI available to Empire, all in accordance with the Privacy
                  Rule, including 45 C.F.R. (S) 164.524. If the individual
                  requests PHI directly from IBM, IBM shall not give the
                  individual access to the PHI unless access is approved by
                  Empire. Empire shall have full discretion to determine whether
                  the individual shall be given access. If and to the extent
                  that the IBM project office supporting the Empire environment
                  or any IBM personnel providing services to Empire receives,
                  directly or indirectly, a request from an individual
                  requesting PHI, IBM shall use Commercially Reasonable Efforts
                  to notify Empire in writing promptly after and of such
                  individual's request for PHI, as set forth in the previous two
                  sentences, but in no event not later than ten (10) Business
                  Days of receiving such request.

            (vii) Amendment of PHI. Within ten (10) Business Days of a request
                  from Empire, IBM shall make Empire's PHI available to Empire
                  as it may request to fulfill its obligations to amend such PHI
                  pursuant to the Privacy Rule, including but not limited to, 45
                  C.F.R. (S) 164.526. IBM shall incorporate any amendments to
                  Empire's PHI into any and all PHI IBM maintains. If the
                  individual requests an amendment to PHI directly from IBM, IBM
                  shall not amend the PHI unless directed by Empire. Empire
                  shall have full discretion to determine whether the amendment
                  shall occur. If and to the extent that the IBM project office

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                    supporting the Empire environment or any IBM personnel
                    providing services to Empire receives, directly or
                    indirectly, a request from an individual requesting
                    modification of PHI, IBM shall use Commercially Reasonable
                    Efforts to notify Empire in writing promptly after and of
                    such individual's request for an amendment to PHI, as set
                    forth in the previous two sentences, but in no event not
                    later than ten (10) Business Days of receiving such request.

            (viii)  Accounting of PHI. Within ten (10) Business Days of notice
                    by Empire of a request for an accounting of disclosures of
                    PHI by IBM or its subcontractors, IBM shall make available
                    the account of such disclosures to Empire as requested for
                    Empire to fulfill its obligations to provide an accounting
                    pursuant to the Privacy Rule, including 45 C.F.R. (S)
                    164.528. IBM shall implement a process that allows for such
                    an accounting. If the individual requests an accounting of
                    disclosures of PHI directly from IBM, IBM shall not provided
                    the individual the account of such disclosures unless
                    directed by Empire. Empire shall have full discretion to
                    determine whether the individual shall be given such
                    accounting. If and to the extent that the IBM project office
                    supporting the Empire environment or any IBM personnel
                    providing services to Empire receives, directly or
                    indirectly, a request from an individual requesting an
                    accounting of disclosures of PHI, IBM shall use Commercially
                    Reasonable Efforts to notify Empire in writing promptly
                    after and of such individual's request for an accounting of
                    disclosures of PHI, as set forth in the previous two
                    sentences, but in no event not later than ten (10) Business
                    Days of receiving such request.

            (ix)    Availability of Books and Records. As required by the
                    Privacy Rule, IBM shall make its internal practices, books,
                    and records relating to the use and disclosure of PHI
                    received or created pursuant to this Agreement available to
                    the Secretary of Health and Human Services for purposes of
                    determining Empire's (or any covered entities that Empire
                    services) compliance with the Privacy Rule.

            (x)     Record Retention. IBM shall retain all PHI received from
                    Empire, or created or received in the course of performing
                    its obligations under this Agreement, for the duration of
                    the Term of this Agreement unless otherwise directed by
                    Empire.

      (c)   Audits and Inspection. Notwithstanding any provision set forth in
            Article 7.10 to the contrary, if Empire, in good faith, believes
            that IBM has breached any provision of this Section 13.4 then upon
            providing five (5) business days' written notice, Empire may inspect
            IBM's facilities, systems, books, records, agreements, policies and
            procedures relating to the use or disclosure of PHI pursuant to the
            Agreement, for the purpose of determining whether IBM has complied
            with this Agreement.

      (d)   Termination by Empire for Material Violation.

            (i)     Subject to Section 13.4(d)(ii), Empire may terminate this
                    Agreement, in accordance with Section 14.2, if IBM has
                    violated a material term of this Section 13.4. Upon
                    termination of this Agreement for any reason, IBM shall
                    return and/or destroy all PHI received or created pursuant
                    to this Agreement that IBM maintains in any form, and shall
                    retain no copies of such PHI; or, if return or destruction
                    is not feasible, IBM shall continue to extend protections of
                    this Agreement to such information, and limit further use or
                    disclosure of such PHI to those purposes that make the
                    return or destruction infeasible, for so long as IBM
                    maintains such PHI.

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            (ii)  Cure. With respect to any IBM violation of a material term of
                  Section 13.4(d)(ii), IBM shall have the opportunity to cure
                  such violation, as set forth in Section 14.2(a)(i). If such
                  violation is not cured within the time period set forth in
                  Section 14.2(a)(i), Empire may declare a material breach of
                  the Agreement in accordance with Section 14.2(a)(i) or, if not
                  feasible, report the problem to the Secretary of U.S. Health
                  and Human Services, as set forth in 45 C.F.R. (S)
                  164.504(e)(1)(ii)(B).

      (e)   Modifications to Privacy Rule. If the Privacy Rule is modified in
            any way impacting this Agreement, the Parties shall, at least sixty
            (60) days prior to the compliance date for such modifications, amend
            this Agreement to ensure compliance with such modifications.

      (f)   Interpretation of this Agreement. Any ambiguity in the terms set
            forth in this Section 13.4 shall be construed to permit Empire's
            full compliance with the Privacy Rule.

13.5  HIPAA Transactions Rule.

      At least sixty (60) days prior to the compliance date for the HIPAA
      Standards for Electronic Transactions ("Transactions Rule") (codified at
      45 C.F.R. Parts 160 and 162), the Parties shall review this Agreement,
      and, as necessary, modify this Agreement to incorporate any relevant
      provisions, including provisions governing trading partner agreements.

13.6  HIPAA Security Rule.

      At least sixty (60) days prior to the compliance date for the HIPAA
      Security and Electronic Signature Standards ("Security Rule") (63 Fed.
      Reg. 43,242 (August 12, 1998)), the Parties shall review this Agreement,
      and, as necessary, modify this Agreement to incorporate any relevant
      provisions, including, provisions governing chain of trust partner
      agreements.

13.7  Other HIPAA Administrative Simplification Regulations.

      At least sixty (60) days prior to the compliance date for any other HIPAA
      Administrative Simplification regulations, the Parties shall review this
      Agreement, and, as necessary, modify this Agreement to incorporate any
      relevant provisions.

14.   TERM AND TERMINATION

14.1  Term.

      This Agreement shall commence on the Effective Date and continue in effect
      until terminated as provided below (the "Term"). For the avoidance of
      doubt, unless this Agreement is terminated pursuant Section 14.4 or Empire
      terminates the License pursuant to Section 14.2, the License granted to
      Empire hereunder is irrevocable and will survive any termination of this
      Agreement.

14.2  Termination For Cause by Empire.

      (a)   In the event:

            (i)   IBM commits a material breach of this Agreement which breach
                  is not cured within ten (10) days after notice of such breach
                  is received by IBM from Empire;

            (ii)  IBM commits numerous breaches over a period of one (1) year,
                  of its duties or obligations which breaches do not arise out
                  of a single event or series of closely

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                  related events, and such breaches collectively constitute a
                  material breach of this Agreement; or

            (iii) Empire terminates the Master Services Agreement for cause,

            then Empire may terminate this Agreement and/or the License, for
            cause and at no-cost, subject to Sections 14.11 and 14.12, upon
            written notice of such termination.

      (b)   Savings Clause. Subject to Section 14.4, due to the impact any
            termination of this Agreement would have on Empire's business,
            Empire's failure to perform its responsibilities set forth in this
            Agreement shall not be deemed to be grounds for termination by IBM.
            IBM acknowledges that Empire would not be willing to enter into this
            Agreement without assurance that it may not be terminated by IBM and
            that IBM may not suspend performance except, and only to the extent
            IBM suspends performance pursuant to Section 16.5. IBM's
            nonperformance of its obligations under this Agreement shall be
            excused if and to the extent (a) such IBM nonperformance results
            from Empire's failure to perform its responsibilities; and (b) IBM
            provides Empire with reasonable notice of such nonperformance and
            (if requested by Empire) uses Commercially Reasonable Efforts to
            perform notwithstanding Empire's failure to perform.

14.3  Additional Termination Rights.

      Empire may terminate this Agreement and/or the License, for no-cost, by
      giving written notice to IBM within six (6) months after Empire receives
      notice of the any of the following events:

      (a)   IBM enters the health insurance business (provided that IBM's self
            insurance of its own employees, or those of its Affiliates, shall
            not be deemed entering into the health insurance business); or

      (b)   IBM, directly or indirectly, in a single transaction or series of
            related transactions, acquires either (i) Control of, or (ii) all or
            substantially all of the assets of another entity which is in the
            health insurance business and continues to be in the health
            insurance business subsequent to such transaction(s); or

      (c)   another entity which is in the health insurance business acquires,
            directly or indirectly, in a single transaction or series of related
            transactions, either (i) Control of, or (ii) all or substantially
            all of the assets of IBM.

14.4  Termination Prior To The Acceptance Date.

      Subject to Section 3.8(c), IBM may terminate this License Agreement for
      convenience at any time prior to the Acceptance Date, upon thirty (30)
      days prior written notice.

14.5  Termination of Maintenance and Support Services by Empire.

      Empire may terminate the maintenance and support services provided by IBM
      hereunder for convenience at any time, upon thirty (30) days prior written
      notice.

14.6  Termination Upon Change of Control.

      (a)   In the event (i) that (A) another entity, directly or indirectly, in
            a single transaction or series of related transactions, acquires
            either Control of IBM or all or substantially all of the assets of
            IBM, or (B) IBM is merged with or into another entity, and (ii)
            Empire has a

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            reasonable concern with such other entity, including such instances
            in which: (A) the entity is a competitor of Empire, which
            competitors are listed in Attachment N as such Attachment N may be
            reasonably updated by Empire from time to time, (B) the entity has a
            poor relationship with Empire, or (C) Empire has a significant
            concern as to such entity's ability to perform, then, at any time
            within six (6) months after Empire receives notice of the last to
            occur of such events, Empire may terminate this Agreement and/or the
            License for no-cost by giving IBM at least ninety (90) days' prior
            written notice and designating a date upon which such termination
            shall be effective.

      (b)   In the event that (i) another entity, directly or indirectly, in a
            single transaction or series of related transactions, acquires
            either Control of Empire or all or substantially all of the assets
            of Empire, or (ii) Empire is merged with or into another entity,
            then, at any time within twelve (12) months after Empire receives
            notice of the last to occur of such events, Empire may terminate
            this Agreement and/or the License by giving IBM at least ninety (90)
            days' prior written notice and designating a date upon which such
            termination shall be effective, and (B) paying to IBM on the
            effective date of termination. For purposes of this Section 14.6(b),
            an initial public offering shall not be deemed to be a change of
            Control of Empire.

14.7  Due To IBM's Financial Inability To Perform.

      If: (a) IBM files any petition in bankruptcy, (b) IBM has an involuntary
      petition in bankruptcy filed against it which is not challenged in twenty
      (20) days and dismissed within sixty (60) days, (c) IBM becomes insolvent,
      (d) IBM makes a general assignment for the benefit of creditors, (e) IBM
      admits in writing its inability to pay its debts as they mature, (f) IBM
      has a receiver appointed for its assets, or (g) IBM has any significant
      portion of its assets attached, then Empire shall have the right to
      terminate this Agreement and/or the License and at no cost.

14.8  Termination by Empire Due To Force Majeure Event.

      Empire may terminate this Agreement and/or the License upon thirty (30)
      days' prior written notice, in the event that a force majeure event set
      forth in Section 16.10 prevents a IBM from properly performing its
      obligations hereunder in excess of thirty (30) days and prior to the
      Acceptance Days, in excess of sixty (60) days.

14.9  Termination by Empire for Convenience.

      If deNovis is bought by a competitor of Empire, which competitors are
      listed in Attachment N as such Attachment N may be reasonably updated by
      Empire from time to time, or enters into the health insurance business as
      described in Section 3.12(b), Empire may terminate this Agreement for
      convenience at any time and at no cost to either Party, upon thirty (30)
      days prior written notice.

14.10 Termination related to Staten Island Sublease.

      In the event that the Parties fail to execute the Staten Island Data
      Center Sublease (as defined in the Master Services Agreement) within
      thirty (30) days of the Effective Date of the Master Services Agreement
      and the Master Services Agreement is terminated pursuant to Section 8.2
      thereof, then upon written notice from Empire to IBM, this Agreement shall
      be terminated, at no cost to Empire, and the Parties shall take such
      actions as are necessary to return both Parties to equivalent positions as
      such Parties were immediately prior to the Effective Date.

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14.11 Effect of Termination.

      (a)   If this Agreement is terminated prior to the Acceptance Date, Empire
            shall promptly return or destroy all copies of the Licensed Works
            (except for an archival copy retained for purposes of interpreting
            and enforcing its rights under this Agreement).

      (b)   If, following the Acceptance Date, Empire terminates this Agreement,
            then, subject to Section 7.6, Empire's obligation to pay the
            Development and License Fee hereunder shall not terminate, except in
            the event Empire exercises its rights under Section 10.1(f)(ii).

      (c)   If this Agreement is terminated for any reason, each Party shall
            promptly return to the other Party the Confidential Information of
            such other Party (except for an archival copy retained for purposes
            of interpreting and enforcing such Party's rights under this
            Agreement).

14.12 Survival.

      The Parties' rights and obligations under Sections 2, 3.8(c), 3.12(c), 5,
      7.9, 7.10, 11, 12, 13, 14.11, 14.12, 15 and 16, the License granted to
      Empire hereunder (except as such License may be expressly terminated by
      Empire pursuant to this Section 14) as well as, subject to Section
      14.11(b), any obligations to make payments of the Development and License
      Fees and other amounts accrued prior to termination, shall survive any
      termination of this Agreement.

15.   DISPUTE RESOLUTION

      Any dispute between the Parties arising out of or relating to this
      Agreement, including with respect to the interpretation of any provision
      of this Agreement and with respect to the performance by IBM or Empire,
      shall be resolved as provided in this Article 15.

15.1  Informal Dispute Resolution.

      (a)   Subject to Section 15.1(b), the Parties initially shall attempt to
            resolve the dispute informally, in accordance with the following:

            (i)   Upon the written notice by a Party to the other Party of a
                  dispute ("Dispute Date"), each Party shall appoint a
                  designated representative who does not devote substantially
                  all of his or her time to performance under this Agreement,
                  whose task it will be to meet for the purpose of endeavoring
                  to resolve such dispute.

            (ii)  The designated representatives shall meet as often as the
                  Parties reasonably deem necessary in order to gather and
                  furnish to the other all information with respect to the
                  dispute which the Parties believe to be appropriate and
                  germane in connection with its resolution. The representatives
                  shall discuss the problem and attempt to resolve the dispute
                  without the necessity of any formal proceeding.

            (iii) During the course of discussion, all reasonable requests made
                  by a Party to the other for non-privileged information,
                  reasonably related to the dispute, shall be honored in order
                  that a Party may be fully advised of the other's position.

            (iv)  The specific format for the discussions shall be left to the
                  discretion of the designated representatives.

      (b)   Litigation of a dispute may only be commenced by either Party upon
            the earlier to occur of any of the following:

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            (i)   the designated representatives conclude in good faith that
                  amicable resolution through continued negotiation of the
                  matter does not appear likely;

            (ii)  thirty (30) days have elapsed from the Dispute Date (this
                  period shall be deemed to run notwithstanding any claim that
                  the process described in this Section 15.1 was not followed or
                  completed); or

            (iii) commencement of litigation is reasonably deemed appropriate by
                  a Party to avoid the expiration of an applicable limitations
                  period or to preserve a superior position with respect to
                  other creditors, or a Party makes a good faith determination
                  that a temporary restraining order or other injunctive relief
                  is necessary with respect to this Agreement.

15.2  Litigation.

      For all litigation that may arise with respect this Agreement, the Parties
      irrevocably and unconditionally submit (i) to the exclusive jurisdiction
      and venue (and waive any claim of forum non conveniens) of the United
      States District Court for the Southern District of New York or (ii) if
      such court does not have jurisdiction, to the Supreme Court of the State
      of New York, New York County. The Parties further consent to the
      jurisdiction of any state court located within a district which
      encompasses assets of a Party against which a judgment has been rendered
      for the enforcement of such judgment or award against the assets of such
      Party.

15.3  Continued Performance.

      Except as provided in Section 16.5, each Party agrees to continue
      performing its obligations under this Agreement while a dispute is being
      resolved except to the extent the issue in dispute precludes performance
      (dispute over payment shall not be deemed to preclude performance) and
      without limiting Empire's right to terminate this Agreement as provided in
      Section 14.

15.4  Waiver of Right to Jury Trial.

      The Parties hereby unconditionally waive their respective rights to a jury
      trial of any claim or cause of action arising directly or indirectly out
      of, related to, or in any way connected with the performance or breach of
      this Agreement, and/or the relationship that is being established among
      them.

16.   GENERAL PROVISIONS

16.1  Governing Law; Jurisdiction.

      This Agreement and performance under it shall be governed by, and
      construed in accordance with, the laws of the State of New York without
      regard to any portion of its choice of law principles which might provide
      for application of a different jurisdiction's law. The Parties expressly
      intend to avail themselves of the benefits of Section 5-1401 of the New
      York General Obligations Law.

16.2  Assignment.

      (a)   This Agreement shall be binding on the Parties hereto and their
            respective successors and assigns. Neither Party may, or shall have
            the power to, assign this Agreement without the prior written
            consent of the other, except that Empire may assign its rights and
            obligations under this Agreement without the approval of IBM (i) to
            an entity which

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            acquires all or substantially all of the assets of Empire or (ii) to
            any subsidiary or Affiliate or successor in a merger, acquisition,
            restructuring or reorganization of Empire; provided that in no event
            shall such assignment relieve Empire of its obligations under this
            Agreement.

      (b)   IBM further acknowledges that Empire is contemplating as of the
            Effective Date a corporate reorganization and that in connection
            with such reorganization, Empire may assign its rights and
            obligations as contemplated in Section 16.2(a)(i) and (ii) above to
            an Affiliate, without IBM's prior written consent, and the proviso
            in the preceding paragraph shall be inapplicable to such assignment;
            provided that such Affiliate owns, directly or indirectly, the
            successor or equivalent organization to Empire, its securities are
            publicly traded, and it meets the minimum market capitalization
            requirements for listing on the New York Stock Exchange. Without
            limiting the generality of the foregoing, Empire may, without the
            approval of IBM, undertake any transactions necessary with respect
            to an initial public offering of Empire.

      (c)   Subject to the foregoing, any assignment by operation of law, order
            of any court, or pursuant to any plan of merger, consolidation or
            liquidation, shall be deemed an assignment for which prior consent
            is required. Any assignment made without Empire's consent as
            required above shall be null and void and of no effect as between
            the Parties.

16.3  Amendments; Waivers.

      (a)   No change, waiver, or discharge hereof shall be valid unless in
            writing and signed by an authorized representative of the Party
            against which such change, waiver or discharge is sought to be
            enforced.

      (b)   A delay or omission by either Party to exercise any right or power
            under this Agreement shall not be construed to be a waiver thereof.
            A waiver by either of the Parties of any of the covenants to be
            performed by the other or any breach thereof shall not be construed
            to be a waiver of any succeeding breach thereof or of any other
            covenant herein contained.

      (c)   Except as otherwise expressly provided herein, all remedies provided
            for in this Agreement shall be cumulative and in addition to and not
            in lieu of any other remedies available to either Party at law or in
            equity.

16.4  Complete Agreement.

      This Agreement, including any Attachment referred to herein and attached
      hereto, each of which is incorporated herein for all purposes, constitutes
      the entire agreement between the Parties with respect to the subject
      matter contained in this Agreement and supersedes all prior agreements,
      whether written or oral, with respect to such subject matter.

16.5  Suspension of Performance.

      If, at any time, Empire has not paid all amounts due hereunder in an
      amount equal to at least $100,000, other than amounts disputed by Empire
      in good faith pursuant to Section 7.7, then IBM shall have the right, in
      addition to all other remedies hereunder and at law and equity, to suspend
      its performance of maintenance and support services hereunder, within
      fifteen (15) days of Empire's receipt of written notice from IBM of such
      failure; provided that IBM shall provide an additional four (4) days'
      written notice (sent by certified mail to the Empire Contract Executive),
      subsequent to the initial fifteen (15) days' notice period, prior to any
      actual suspension of performance, until such time as payment is made.

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16.6   Notices.

       All notices, requests, demands and determinations under this Agreement
       (other than routine operational communications), shall be in writing and
       shall be deemed duly given (i) when delivered by hand, (ii) on the
       designated day of delivery after being timely given to an express
       overnight courier with a reliable system for tracking delivery, or (iii)
       six (6) days after the day of mailing, when mailed by United States mail,
       registered or certified mail, return receipt requested and postage
       prepaid, and addressed as follows:

<TABLE>
<CAPTION>
       ------------------------------------------------------------------------------------------------
       In the case of Empire:                                 with a copy of legal notices to:
       ------------------------------------------------------------------------------------------------
       <S>                                                    <C>
       Empire Blue Cross Blue Shield                          Empire Blue Cross Blue Shield
       11 W. 42/nd/ Street                                    11 W. 42/nd/ Street
       New York, New York 10036                               New York, New York 10036
       Attention: Kenneth Klepper                             Attention: General Counsel
                                                               And
                                                              Shaw Pittman
                                                              2300 N Street, NW
                                                              Washington, DC  20037
                                                              Attention: Joseph E. Kendall, Esq.
       ------------------------------------------------------------------------------------------------
       In the case of IBM:                                    With a copy of legal notices to:
       ------------------------------------------------------------------------------------------------
       IBM Contract Executive                                 IBM Global Services
       c/o Empire Blue Cross Blue Shield                      Route 100
       11 W. 42/nd/ Street                                    Somers, New York 10589
       New York, New York 10036                               Attention: General Counsel
       ------------------------------------------------------------------------------------------------
       In the case of deNovis:                                With a copy of legal notices to:
       ------------------------------------------------------------------------------------------------
       deNovis, Incorporated                                  deNovis, Incorporated
       One Cranberry Hill                                     One Cranberry Hill
       Lexington, Massachusetts 02421                         Lexington, Massachusetts 02421
       Attention: President                                   Attention: General Counsel
                                                               And
                                                              Hale and Dorr LLP
                                                              60 State Street
                                                              Boston, MA 02109
                                                              Attention: Jorge L. Contreras, Esq.
       ------------------------------------------------------------------------------------------------
</TABLE>

       A Party may from time to time change its address or designee for
       notification purposes by giving the other prior written notice of the new
       address or designee and the date upon which it will become effective. In
       addition to the foregoing, notices for breach, suspension by IBM pursuant
       to Section 16.5 and termination by IBM for convenience shall be sent by
       certified mail.

16.7   Compliance with Laws.

       (a)    Compliance with Laws and Regulations Generally. The Licensed Works
              shall comply with and each Party shall perform its obligations in
              a manner that complies with the applicable federal, state and
              local laws, regulations, ordinances and codes (including

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              identifying and procuring required permits, certificates,
              approvals and inspections). If a charge occurs of non-compliance
              of a Party with any such laws, regulations, ordinances or codes,
              the Party so charged shall promptly notify the other Party of such
              charges in writing.

       (b)    Export Laws. Each Party shall comply with all applicable United
              States laws and regulations which may govern the use of software
              by entities or persons located abroad, including without
              limitation the Export Administration Act of 1979, as amended (the
              "Export Act"), any successor legislation and the Export
              Administration Regulations issued by the Department of Commerce
              under the Export Act

       (c)    HIPAA, Gramm-Leach-Bliley Act and Similar Laws. The Licensed Works
              and IBM shall comply with all applicable federal, state or local
              laws, and rules and regulations of regulatory agencies, protecting
              the confidential material and privacy rights of Empire, its
              Affiliates, and/or their customers and consumers, including the
              federal Health Insurance Portability and Accountability Act of
              1996 (HIPAA), Title V of the Gramm-Leach-Bliley Act (15 U.S.C. (S)
              6801 et. seq.) and the Economic Espionage Act (18 U.S.C. (S) 1831
              et. seq.).

16.8   No Third Party Beneficiaries.

       There are no intended third party beneficiaries to this Agreement.
       Without limiting the generality of the foregoing, it is expressly agreed
       and intended that any Affiliate of Empire or IBM shall not be a third
       party beneficiary of this Agreement.

16.9   Counterpart and Facsimile Signatures.

       This Agreement may be executed in two or more counterparts, each of which
       shall be deemed to be an original, and each of which together shall
       constitute a single instrument.

16.10  Force Majeure.

       (a)    Neither Party will be liable for any failure or delay in its
              performance of its obligations under this Agreement (i) if and to
              the extent such default or delay is caused, directly or
              indirectly, by acts of terrorism, fire, flood, earthquake,
              elements of nature or acts of God, riots, civil disorders, or any
              other such similar cause beyond the reasonable control of such
              Party; (ii) provided the non-performing Party is without fault in
              causing such failure or delay, and such failure or delay could not
              have been prevented by reasonable precautions and could not
              reasonably be circumvented by the non-performing Party through the
              use of alternate sources, workaround plans or other means
              (including with respect to IBM by IBM meeting its obligations for
              performing disaster recovery services as described in this
              Agreement).

       (b)    In such event the non-performing Party shall be excused from
              further performance or observance of the obligations so affected
              for as long as such circumstances prevail and such Party continues
              to use Commercially Reasonable Efforts to recommence performance
              or observance without delay. Any Party so delayed in its
              performance shall immediately notify the Party to whom performance
              is due by telephone (to be confirmed in writing within twenty-four
              (24) hours of the inception of such delay) and describe at a
              reasonable level of detail the circumstances causing such delay.

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16.11  Revenue Sharing for Sales of the Licensed Software.

       The terms "IBM Subsidiaries", "Resellers" and "Customers" shall have the
       meanings for such terms set forth in the Licensing and Joint Development
       Agreement.

       (a)    Scope of Revenue Sharing. With respect to the Licensed Software
              and during the Revenue Sharing Period, IBM shall pay to Empire two
              percent (2%) of Gross Revenue (the "Revenue Sharing"). "Revenue
              Sharing Period" means the period beginning on the Effective Date
              and ending on the effective date of the termination or expiration
              of the Master Services Agreement as such Master Services Agreement
              may be extended, amended or replaced (with IBM).

       (b)    Definition of Gross Revenue. "Gross Revenue" means the U.S. Dollar
              value of all revenue Earned (or other consideration Earned in lieu
              of revenue) by IBM or IBM Subsidiaries, derived in any way from
              the Licensed Software (including any modifications, extensions,
              combinations and derivative works of and to the Licensed
              Software). "Gross Revenue" includes fees (or other consideration
              in lieu of fees) Earned by IBM or by IBM Subsidiaries, from
              licensing (or providing on an application services provider basis,
              subject to the following sentence) of the Licensed Software and
              providing related customization, maintenance, integration,
              implementation services and other professional services related to
              such licensing (or providing on an application services provider
              basis, subject to the following sentence) of the Licensed
              Software, but specifically excludes feasibility study and product
              evaluation services related to the Licensed Software. "Gross
              Revenue" also includes an equitable portion of application service
              provider fees (to determine that portion of such application
              service provider fees related to the Licensed Software versus
              related infrastructure charges) if the Licensed Software is
              provided on an application service provider basis. "Gross Revenue"
              does not include any sums paid by Empire to IBM derived from the
              Licensed Software.

       (c)    Bundling.

              (i)    In the course of marketing the Licensed Software, the
                     Parties acknowledge that IBM may offer products or services
                     for which Revenue Sharing must be paid under this Section
                     16.11 together in a single offering with and other products
                     and services that are not subject to Revenue Sharing under
                     this Section 16.11. IBM agrees that it shall, unless and
                     only to the extent required for a specific opportunity,
                     refrain from significantly discounting or offering for free
                     those products and services that are subject to Revenue
                     Sharing under this Section 16.11 as compared to other
                     products and services that are not subject to Revenue
                     Sharing under this Section 16.11.

              (ii)   If and to the extent that IBM is required (for a specific
                     opportunity) to significantly discount (or offer for free)
                     the products or services that are subject to Revenue
                     Sharing under this Section 16.11, the amount of Gross
                     Revenues Earned shall be equitably adjusted with respect to
                     such opportunity to increase the amount of Revenue Sharing
                     payable to Empire to account for the disproportionate
                     discount on that portion of the products or services that
                     are subject to Revenue Sharing under this Section 16.11.
                     Such equitable adjustment shall include (as baseline data
                     for comparison) prior sales of products or services for
                     which Revenue Sharing must be paid under this Section 16.11
                     on a stand-alone (unbundled) basis.

       (d)    Payment Terms.

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              (i)    Revenue Sharing Payments. Revenue Sharing on Gross Revenues
                     shall be due and payable by IBM to Empire on a monthly
                     basis within thirty (30) days after the end of each
                     calendar month in which such Gross Revenues are Earned
                     (defined below). Notwithstanding the foregoing and so long
                     as the Master Services Agreement has not been terminated or
                     has expired, Revenue Sharing on Gross Revenues under this
                     Section 16.11 shall be included in the calculation of
                     Revenue Sharing Credits (as defined in the Licensing and
                     Joint Development Agreement) provided by IBM to Empire
                     under Section 4.3(b) of the Licensing and Joint Development
                     Agreement for the first ten million U.S. dollars
                     ($10,000,000) per year of Revenue Sharing. Such section
                     4.3(b) of the Licensing and Joint Development Agreement
                     shall survive (for purposes of this Section 16.11(d)(i))
                     any termination of the Licensing and Joint Development
                     Agreement.

              (ii)   DeNovis Revenue Sharing Credits. IBM acknowledges that
                     Empire and deNovis may enter into a transaction relating to
                     revenue sharing based on deNovis' sales of the Licensed
                     Software. If and to the extent that deNovis provides to IBM
                     credits on Empire's behalf for maintenance and support
                     services hereunder (the "deNovis Revenue Sharing Credits"),
                     IBM shall apply such deNovis Revenue Sharing Credits as
                     same are provided to IBM to the next monthly Maintenance
                     Fees hereunder and any remaining deNovis Revenue Sharing
                     Credits will be carried forward to future months'
                     Maintenance Fees hereunder.

              (iii)  Definition of Earned. "Earned" shall mean that IBM (or the
                     applicable IBM Subsidiary) has the right under the contract
                     with the applicable IBM Subsidiary, Reseller or Customer,
                     to either receive payment or other consideration (including
                     termination for convenience fees or other liquidated
                     damages) from, or invoice the applicable IBM Subsidiary,
                     Reseller or Customer, for amounts which would constitute
                     Gross Revenue. For clarity, Empire, IBM intends that
                     Revenue Sharing shall be due and payable with respect to
                     sums or other consideration that constitute Gross Revenue
                     even if IBM (or the applicable IBM Subsidiary) has not yet
                     collected such sums or other consideration from the
                     applicable IBM Subsidiary, Reseller or Customer so long as
                     such sums are Earned. For clarity, IBM shall bear the risk
                     that the IBM Subsidiary, Reseller or Customer fails to pay
                     sums Earned.

              (iv)   Counting of Earned Amounts as Gross Revenues. If an IBM
                     Subsidiary Earned an amount from a Customer which would be
                     considered Gross Revenues, only the original amount first
                     Earned from the Customer will be included for purposes of
                     calculating Gross Revenues, and amounts paid thereon to IBM
                     by such IBM Subsidiary shall not be included for purposes
                     of calculating Gross Revenues. If an IBM Subsidiary Earned
                     an amount from a Reseller which would be considered Gross
                     Revenues, only the original amount first Earned from the
                     Reseller will be included for purposes of calculating Gross
                     Revenues, and amounts paid thereon to IBM by such IBM
                     Subsidiary shall not be included for purposes of
                     calculating Gross Revenues.

              (v)    Returns. If IBM (or their respective Subsidiaries or
                     Resellers) is required to return to a Customer a sum or
                     other consideration on which IBM has paid Revenue Sharing
                     to Empire (for instance, IBM must return a sum for failing
                     to meet a contractually required implementation date), but
                     excluding returns caused by software defects, IBM shall
                     give notice to Empire of such event and the Parties shall
                     make such equitable adjustments as are necessary to reflect
                     that Revenue Sharing should not be paid on such amount
                     returned to the Customer.

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       (e)    Late Payment Interest. In the event that any undisputed Revenue
              Sharing payments (including Revenue Sharing Credits) are not
              received by Empire within five (5) days after IBM's receipt of
              written notice from Empire indicating that such payment is due and
              owing and unpaid, then IBM will pay interest on such due and
              unpaid amount commencing at the end of such five (5) day period
              and ending on the date that payment is made, at an interest rate
              equal to the lesser of (i) twelve percent (12%) per year; or (ii)
              the maximum amount permissible by law.

       (f)    Disputed Payments.

              (i)    Payment of Undisputed Revenue Sharing; Good Faith Revenue
                     Sharing Disputes. IBM shall pay undisputed Revenue Sharing
                     when such Revenue Sharing are due under this Section 16.11.
                     IBM may withhold payment of particular Revenue Sharing that
                     IBM disputes in good faith, subject to Section
                     16.11(f)(ii).

              (ii)   Disputed Revenue Sharing. With respect to particular
                     amounts that IBM does not believe in good faith are
                     included within Gross Revenues, are Earned or are subject
                     to Revenue Sharing or are otherwise in dispute under this
                     Agreement, the provisions of this Section 16.11(f)(ii)
                     shall apply. Subject to the remainder of this Section
                     16.11(f)(ii), IBM may withhold payment of disputed Revenue
                     Sharing. IBM shall notify Empire in writing on or before
                     the date that any amount is so withheld and describe, in
                     reasonable detail, the reason for such withholding and
                     provide Empire with all documentation supporting its
                     position. Empire and IBM shall diligently pursue an
                     expedited resolution of such dispute. If the aggregate
                     amount of all Revenue Sharing then under dispute pursuant
                     to this Section 16.11(f) exceeds the greater of (i) one
                     hundred thousand dollars ($100,000) of Revenue Sharing or
                     (2) one-twelfth (1/12th) of the prior year's Revenue
                     Sharing (the "Revenue Sharing Escrow Threshold"), then for
                     any amounts in dispute in excess of the Revenue Sharing
                     Escrow Threshold, IBM shall deposit such amount into an
                     escrow account. IBM shall promptly furnish evidence of any
                     escrow deposit to Empire. The Parties agree that such
                     escrow account shall be mutually established by the Parties
                     at a federally chartered bank and the costs of such escrow
                     shall be borne by the Party which is not entitled to
                     receive over fifty percent (50%) of the escrowed funds
                     (with the Parties splitting the costs of escrow evenly,
                     should they both be entitled to fifty percent (50%) of the
                     escrowed funds). The escrow account will be mutually
                     established pursuant to an escrow agreement that provides
                     that the funds therein, including accrued interest, will be
                     disbursed to IBM or Empire or both, as applicable, in
                     accordance with the result of the dispute resolution
                     process referred to in Section 15 or by mutual agreement of
                     the Parties.

       (g)    Reports and Payments; Records.

              (i)    Reports and Payments. While Revenue Sharing is in effect
                     hereunder, within fifteen (15) days after the end of each
                     calendar month, IBM shall submit a report listing (A) any
                     contract entered into during such calendar month by IBM for
                     the distribution of the Licensed Software to an IBM
                     Subsidiary or a Reseller; (B) any contract entered into
                     during such calendar month by IBM or an IBM Subsidiary for
                     any distribution of the Licensed Software to a Customer by
                     IBM, an IBM Subsidiary or a Reseller; (C) any contract
                     entered into during such calendar month by IBM or an IBM
                     Subsidiary for any services which will generate Gross
                     Revenue; (D) the amount of Gross Revenue Earned by IBM or
                     IBM Subsidiaries during such calendar month, and the
                     Reseller or Customer which is obligated to

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EMPIRE/IBM CONFIDENTIAL                                         FINAL Version 13

                     pay such Gross Revenue; (E) any credits against Revenue
                     Sharing pursuant to Section 16.11(d)(v) that have accrued
                     during such calendar month; and (F) any other details
                     requested by Empire. Empire understands and agrees that
                     IBM's contracts with its Resellers and Customers are
                     confidential and will treat any information received or
                     reviewed as IBM Confidential Information. Empire
                     understands and agrees that in order to protect IBM's
                     confidentiality obligations, IBM shall prepare such reports
                     hereunder by providing only that information required for
                     Empire to exercise its rights under this Agreement.

              (ii)   Records. IBM shall maintain, subject to Section 7.10(e),
                     complete and accurate records, audit trail and supporting
                     documentation, in accordance with generally accepted
                     accounting principles applied on an consistent basis,
                     relating to (A) the amount of Gross Revenue Earned by IBM
                     and IBM Subsidiaries; (B) IBM's distribution and licensing
                     of Licensed Software to IBM Subsidiaries, Resellers and
                     Customers (and IBM will impose the same requirement on IBM
                     Subsidiaries); and (C) other information related to IBM's
                     obligations under this Agreement.

16.12  Most Favored Customer.

       If IBM provides to another (non-U.S. government agency) customer a
       license to the Licensed Software and/or maintenance and support services
       that are similar to the license and/or maintenance and support services
       under this Agreement, and the prices charged to such customer are lower
       than the prices charged to Empire under this Agreement, the prices
       charged to Empire shall be equitably adjusted to provide to Empire the
       benefit of such lower prices. IBM shall, in good faith, compare charges
       for such new customer's license to the charges under this Agreement
       normalized on a "per member, per month" basis. Such adjustment shall be
       retroactive to the first date on which the lower charges to such other
       customer became effective. Within thirty (30) days after each anniversary
       of the Effective Date during the Term thereafter, IBM's Contract
       Executive shall certify in writing to Empire that IBM is in compliance
       with this Section 16.12, and shall provide the information reasonably
       requested by Empire to verify such compliance.

16.13  Public Disclosures.

       All media releases, public announcements and public disclosures by either
       Party relating to this Agreement or the subject matter of this Agreement,
       including promotional or marketing material, but not including
       announcements intended solely for internal distribution or disclosures to
       the extent required to meet legal or regulatory requirements beyond the
       reasonable control of the disclosing Party, shall be coordinated with and
       approved by the other Party prior to release. Notwithstanding the
       foregoing, IBM may (and IBM may permit deNovis to) list Empire as a
       customer and describe in general terms the services provided by IBM under
       this Agreement in proposals and other marketing materials.

16.14  Service Marks.

       Neither Party shall not, without the other Party's prior written consent,
       use the name, service marks or trademarks of the other Party or, with
       respect to IBM, the Blue Cross and Blue Shield Association, an
       association of independent Blue Cross and Blue Shield Plans.

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EMPIRE/IBM CONFIDENTIAL                                         FINAL Version 13

16.15  Nonsolicitation of Employees.

       During the Term of the Master Services Agreement: (a) Empire shall
       neither solicit, directly or indirectly, nor hire IBM's employees engaged
       in the performance of IBM's obligations under this Agreement, during the
       period they are so engaged and for nine (9) months thereafter, without
       the prior written consent of IBM, and (b) IBM shall neither solicit,
       directly or indirectly, nor hire Empire's employees and consultants,
       during the period they are so engaged and for nine (9) months thereafter,
       without the prior written consent of Empire. The Parties acknowledge that
       the restrictions provided in Sections 16.15(a)-(b) shall not apply with
       respect to solicitation by IBM employees and Empire employees and
       consultants that are not directly or indirectly involved in the
       day-to-day operations of the Empire environment.

16.16  Covenant of Good Faith.

       Each Party, in its respective dealings with the other Party under or in
       connection with this Agreement, shall act in good faith.

16.17  Consents and Approval.

       Except where expressly provided as being in the discretion of a Party,
       where approval, acceptance, consent or similar action by either Party is
       required under this Agreement, such action shall not be unreasonably
       delayed or withheld. An approval or consent given by a Party under this
       Agreement shall not relieve the other Party from responsibility for
       complying with the requirements of this Agreement, nor shall it be
       construed as a waiver of any rights under this Agreement, except as and
       to the extent otherwise expressly provided in such approval or consent.
       Empire's representatives may not be fully familiar with, or necessarily
       insist at all times on the full and complete performance with, the terms
       of the Agreement. Empire's failure to insist in any one or more instances
       upon strict performance of any provision of the Agreement, or failure or
       delay to take advantage of any of its rights or remedies hereunder, or
       failure to notify IBM of any breach, violation, or default, shall not be
       construed as a waiver or construction by Empire of any such performance,
       provision, rights, breach, violation, or default either then or in the
       future or the relinquishment of any of its rights and remedies. Each
       Party shall, at the request of the other Party, perform those actions,
       including executing additional documents and instruments, reasonably
       necessary to give full effect to the terms of this Agreement.

16.18  Severability.

       In the event that any provision of this Agreement conflicts with the law
       under which this Agreement is to be construed or if any such provision is
       held invalid by a competent authority, such provision shall be deemed to
       be restated to reflect as nearly as possible the original intentions of
       the Parties in accordance with applicable law. The remainder of this
       Agreement shall remain in full force and effect.

16.19  Relationship of the Parties.

       IBM, in performing its obligations under this Agreement and furnishing
       the maintenance and support services, is acting as an independent
       contractor, and, as between the Parties, IBM has the sole right and
       obligation to supervise, manage, contract, direct, procure, perform or
       cause to be performed, all work to be performed by IBM under this
       Agreement. No contract of agency and no joint venture is intended to be
       created hereby. IBM is not an agent of Empire and has no authority to
       represent Empire as to any matters, except as expressly authorized in
       this Agreement.

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EMPIRE/IBM CONFIDENTIAL                                         FINAL Version 13

       None of IBM's employees shall be deemed employees of Empire, and, as
       between the Parties, IBM shall be responsible for reporting and payment
       of all wages, unemployment, social security and other payroll taxes,
       including contributions from them when required by law. Empire does not
       and shall not have actual, potential or any other control over IBM or its
       employees.

16.20  Mutually Negotiated.

       The Parties agree that the terms and conditions of this Agreement
       (including any perceived ambiguity herein) shall not be construed in
       favor of or against any Party by reason of the extent to which any Party
       or its professional advisors participated in the preparation of the
       original or any further drafts of this Agreement, as each Party has been
       represented by counsel in its negotiation of this agreement and it
       represents their mutual efforts.

16.21  Effect of Headings.

       The article and section headings and the table of contents used in this
       Agreement are for reference and convenience only and shall not enter into
       the interpretation of this Agreement.

               [Remainder of This Page Intentionally Left Blank.]

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EMPIRE/IBM CONFIDENTIAL                                         FINAL Version 13

      IN WITNESS WHEREOF, Empire and IBM have caused this Software License
         and Support Agreement to be executed by their duly authorized
                   representatives as of the Effective Date.

Empire HealthChoice, Inc.            International Business Machines Corporation

By: /s/ Michael A. Stocker            By: /s/ Thomas J. Burlin
   ------------------------------         ------------------------------------
         (Sign)                             (Sign)

Name:     Michael A. Stocker         Name:  Thomas J. Burlin
     ----------------------------         ------------------------------------
         (Print)                            (Print)

Title: Chief Executive Officer       Title: Vice President IBM Global Services
      ---------------------------          -----------------------------------

Executed solely to acknowledge its
agreement with respect to with
respect to Sections 3.2(e), 3.11(b),
4.7, 7.10, 13, 16.6 and Attachments
L and M: deNovis, Incorporated

By: /s/ Michael A. Carusi
   ------------------------------
         (Sign)

Name: Michael A. Carusi
     ----------------------------
         (Print)

Title: Acting Chief Executive Officer
      -------------------------------
                                      -48-

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