Document:

EX-10.47:

 

Exhibit 10.47

 

			
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WebMD, Inc.

Services Agreement

This Agreement (“Agreement”) is made and entered into by and between WebMD, Inc. (“WebMD”), a
Georgia corporation with its principal place of business at 669 River Drive, Elmwood Park, NJ 07407
and Fidelity Employer Services Company LLC (“FESCO”), a Delaware limited liability company with its
principal place of business at 82 Devonshire Street, Boston, MA 02109, (each a “Party” and
collectively referred to herein as the “Parties”) is effective this 12th day of February 2004
(“Effective Date”).

RECITALS

A. WebMD has developed or licensed certain proprietary interactive online personal health
management products (including the related databases and content) which are hosted by WebMD or its
service providers on servers and made available by means of the Internet and related services that
are more fully described in Schedule B hereto (collectively, as the same may be updated by any
Enhancements as provided herein, or augmented by any New Products, New Services or other products
and services as provided by WebMD to FESCO under this Agreement, the “Tools”).

B. FESCO specializes in human resources and benefits administration services and is in the business
of integrating human resources and benefits products and services from various vendors and offering
such to its customers (the “Integrated Product”).

C. FESCO desires to integrate the Tools into its Integrated Product for provision to FESCO
customers (“Customers”) and Customers’ End Users (as defined below), for access and use via FESCO’s
NetBenefits portal, and any successor portal used by FESCO or its Affiliates for the delivery of
its NetBenefits health and welfare product and service offering, together with any related website
controlled by FESCO and provided for dependents of End Users to access the Tools (collectively, the
“Site”). WebMD desires to provide such a right to FESCO, subject to the terms of this Agreement
described herein.

NOW, THEREFORE, in consideration of the covenants contained in this Agreement, the Parties agree as
follows:

AGREEMENT

Section 1. Definitions.

A. “Affiliate” shall mean, with respect to either Party, any entity directly or indirectly
controlling, controlled by or under common control with such Party.

B. “Aggregate Data” shall mean a set or compilation of data collected by WebMD from a group of
End Users that does not include an individual user’s personally identifiable information.

Pages where confidential treatment has been requested are stamped, “Confidential treatment has been requested. The redacted material has been separately filed with the Commission.” All redacted material has been marked by an asterisk (*).

 

 

C. “Customized Page(s)” shall mean the Internet site(s) that (i) contain and display the Tools
(ii) are customized for FESCO Customers in accordance with the terms of this Agreement, including
without limitation the Schedules hereto, (iii) incorporate FESCO’s look and feel, (iv) are
branded with WebMD Marks and FESCO Marks (as set forth on Schedule E hereto and in such locations
on the Customized Pages as FESCO may designate) and, to the extent applicable, Customer Marks, and
(v) are accessed via link(s) from the Site, as more fully described in Schedule C (“Description of
Project Scope and Services”).

D. “Data Interchange” shall mean the electronic transmission of data between WebMD and FESCO (and,
to the extent mutually agreed upon by the parties, between WebMD and designated third parties)
based upon Data Interchange specifications to be agreed upon by the parties in the Detailed Project
Plan referenced in Schedule C.

E. “End User” shall mean current or former employees of Customers (and spouses and dependents of
such employees) who are authorized and eligible to access and permitted to use the Tools via the
Site.

F. “Enhancements” shall mean an enhancement, upgrade or bug fix to a Tool, as well a changes to a
Tool to accommodate new governmental regulations or to accommodate advances in technology that are
added to the Customized Pages by WebMD during the Term as provided herein.

G. “FESCO Content” shall mean the content and promotional material FESCO provides to WebMD to use
in connection with the Customized Pages, including, but not limited to, editorial and informational
content and the content specific to the look and feel of navigational tool bars, etc. requested by
FESCO.

H. “FESCO Marks” shall mean the trademarks, service marks, trade names and logos owned by FESCO
and/or its parent company, FMR Corp., set forth on Schedule F hereto.

I. “Indexing” shall mean the service that shall be provided by WebMD if requested by FESCO, at an
additional cost, as set forth on Schedule A to index the Mayo Clinic’s proprietary content such
that such content can be accessed by End Users in accordance with the terms and conditions herein.

J. “Customer Content” shall mean the content and promotional material Customer or FESCO provides to
WebMD on behalf of a Customer to use in connection with a particular Customer’s Customized Pages,
if any, including, but not limited to, editorial and informational content and the content specific
to the look and feel of such Customer’s navigational tool bars, etc.

K. “Customer Marks” shall mean any Customer trademarks, service marks, trade names and logos
licensed to WebMD hereunder for use solely in connection with the provision of the Tools as
described herein.

 

 

			
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L. “New Product” or “New Service” shall mean a replacement, extension or other substantial
modification to a Tool that is not an Enhancement and that is added to the Customized Pages during
the Term as provided in Section 5B of the Agreement. Except as otherwise specifically agreed by
the parties, addition of New Products or New Services may require a one-time integration fee and a
revision to the annual service and maintenance fees as may be mutually agreed by the Parties, but
subject to the “most favored nations” provisions of Section 3B.

M. “Reports” shall mean compilations of End User Aggregate Data provided to FESCO by WebMD
at such times and in such format(s) as described on Schedule G (“Reports”) herein.

N. “WebMD Marks” shall mean WebMD’s trademarks, service marks, trade names and logos.

O. “WebMD Promotional Material” shall mean any promotional material that WebMD may provide to
Customer in association with this Agreement.

Section 2. Rights and Restrictions.

A. WebMD grants to FESCO a non-exclusive, nontransferable, worldwide right (but no obligation)
during the term of this Agreement:

i. to frame, link to, and provide Customer and End Users access to the Tools and Customized
Pages in connection with the operation of the Site and as part of the Integrated Product;

ii. to grant Customers and End Users the right to access, display, perform and use the Tools
and Customized Pages for personal, non-commercial purposes (with no right to sublicense);
and

iii. to incorporate, use, reproduce, copy, transmit, distribute, publicly perform and/or
display the WebMD Marks and WebMD Promotional Material in association with the Tools and
Customized Pages to perform its obligations hereunder in accordance with the terms of this
Agreement.

B. FESCO will not (and will take reasonable commercial efforts to require that Customer does not)
modify, adapt, alter or create derivative works from the Tools or any subpart thereof (including
proprietary markings), or merge the Tools or any subpart thereof (including proprietary markings)
with other services or software, except as specifically contemplated in this Agreement.

C. FESCO grants to WebMD a non-exclusive right to use, reproduce, copy, transmit, distribute,
publicly perform and/or display the FESCO Marks and, to the extent applicable, the

 

 

Customer Marks, solely in association with the Tools and Customized Pages and solely in order to
perform its obligations hereunder in accordance with the terms of
this Agreement.

D. Each Party shall use the other’s Marks in conformance with that Party’s trademark usage policies
as communicated to the other Party from time to time.

E. The Tools, WebMD Marks and WebMD Promotional Material and all intellectual property rights
therein are the exclusive property of WebMD. All rights, title and interests in and to the Tools,
WebMD Marks and WebMD Promotional Material not expressly granted to FESCO in this Agreement during
the term of this Agreement are reserved to WebMD during the term of this Agreement and thereafter.
The Site (other than the WebMD Marks), FESCO Marks, Customer Marks, and Customer Content and all
intellectual property rights therein are the exclusive property of FESCO or its Customers, as the
case may be. All rights, title and interests in and to the Site (other than the WebMD Marks),
FESCO Marks, Customer Marks, and Customer Content not expressly granted to WebMD in this Agreement
during the term of this Agreement are reserved to FESCO and/or its Customers, as the case may be,
during the term of this Agreement and thereafter. WebMD acknowledges that certain information and
content contained in the Tools or on the Customized Pages may be furnished by third party sources
other than WebMD, and that to the extent that FESCO licenses and uses such third party information
or content from such other sources for purposes unrelated to this Agreement, FESCO’s use of such
information or content shall not be subject to the terms and
conditions of this Agreement.

F. WebMD agrees to develop, operate, host and maintain the Tools described herein, during the term
hereof, in accordance with the terms and conditions contained in this Agreement including, without
limitation, the Schedules hereto.

G. WebMD shall take commercially reasonable steps, consistent with industry standards, to ensure
that no End User is permitted access to the Tools or the Customized Pages unless such End User has
agreed to the terms of use and privacy policy posted on the Customized Pages (and set forth as
Schedule D hereto). In the event that the parties agree to include in the service offerings
associated with this Agreement Tools which necessitate the interchange of personally identifiable
End User Data between WebMD and any third party, WebMD will take commercially reasonable steps,
consistent with industry standards, to ensure that no such End User Data is exchanged unless the
applicable End User has explicitly agreed to such interchange via an agreement in form and
substance acceptable to both WebMD and FESCO. Subject to applicable law and any applicable terms
and conditions of use and the privacy policy accepted by End Users as contemplated in this Section
2(G), WebMD agrees to provide FESCO, at FESCO’s request, with evidence of acceptance by an End User
or End Users of any terms and conditions agreed to by such End Users in connection with the Tools
or Customized Pages in accordance with this Section 2G.

H. WebMD agrees that it does not currently have, and shall not, at any time prior to August 31,
2009 (unless this Agreement is terminated before such date), enter into, any relationship with
Hewitt Associates LLC or its Affiliates or any successor entity thereto (collectively, “Hewitt”)
pursuant to which WebMD would provide Hewitt with any services similar or equivalent to any of
those provided by WebMD to FESCO pursuant to this Agreement that Hewitt could

 

 

offer/make available to Hewitt’s clients, provided that the foregoing shall not apply to the extent
Hewitt’s only involvement with a client is managing an RFP process. The provisions of this Section
2(H) shall not be in effect if this Agreement is extended by any renewal term effective on or after
September 1, 2009, unless otherwise agreed in writing by the Parties.

I. To the extent that content provided by WebMD within the Tools and/or the Customized Pages is
obtained by WebMD from sources other than WebMD or an affiliated entity (and excluding any FESCO
Content or Customer Content), such content is and shall be obtained from sources considered by
WebMD, exercising reasonable judgment, to be sufficiently reliable to justify inclusion of such
content. No 1) third party advertising, third-party promotional content, or links to third party
sites or 2) WebMD advertising or promotional content other than promotional content related to the
products or services described on Schedule B, will be included in the Tools or Customized Pages without the prior written approval of FESCO. As directed
by FESCO, WebMD will limit, eliminate or alter any WebMD advertising or promotional content
presented in accordance with the terms of this Section 2.I. if Customer or End User complaints are
received.

J . Except as specifically set forth in this Agreement including, without limitation, any Schedules
hereto, FESCO shall have no obligations with respect to the Tools or the content related thereto
(other than the FESCO Marks, the Customer Content, the Customer Marks and the FESCO Content),
including, without limitation, any duty to display or to review or monitor any such content, and
any review or monitoring undertaken by FESCO or any Affiliate shall not affect WebMD’s obligations
under this Agreement. Subject to applicable law, WebMD shall promptly inform FESCO of 1) any
lawsuits or other proceedings that have been filed against WebMD by any governmental agency or
third party (and which are public) and which raise material concerns about the accuracy,
functionality, quality or reliability of the Customized Pages or the Tools presented therein, and
2) any written threats or claims made by a third party or governmental agency which alleges any
liability or wrongdoing on the part of FESCO or any of its Customers.

K. No later than thirty (30) days from the Effective Date of this Agreement (or such other date
agreed to in writing by the Parties), WebMD shall deposit into escrow with DSI Technology Escrow
Services, Inc. (“DSI”), in accordance with the Escrow Agreement between FMR Corp. and DSI dated
March 6, 2002 (the “Escrow Agreement”), all Source Code (as defined below) for the software related
to the Tools and the Customized Pages (the “Software”). “Source Code” shall mean the version of
the Software written in a human readable programming language, such as COBOL, Java or C++, capable
of being translated into object code for operation on computer equipment through assembly or
compiling. The Source Code shall include the technical, systems, and user manuals and
documentation for the Software including, but not limited to, all job control language statements,
descriptions of data structures, and all flow charts, technical specifications, schematics,
statements or principles of operations, architecture standards and annotations describing the
operation of the Software, all in sufficient detail to enable a competent programmer to modify such
Source Code without undue effort. WebMD shall update the Source Code in escrow every quarter if
changes have been made during such quarter. Prior to the initial deposit and each subsequent
update, WebMD shall provide FESCO with the opportunity to verify or have verified the accuracy and
completeness of the Source Code deposited. The Source

 

 

Code shall be released to FESCO upon the occurrence of any of the following events (the “Release
Events”):

      1) WebMD (or any permitted successor to this Agreement) fails to continue to do business in
the ordinary course, admits a general inability to pay its debts as they become due, becomes
insolvent, makes a general assignment for the benefit of creditors, files a voluntary petition in
bankruptcy, or suffers or permits the appointment of a receiver for its business, where its assets
become subject to any proceeding under any bankruptcy or insolvency law; or

      2) WebMD (or any permitted successor to this Agreement) ceases the provision of or support for
the Tools either following WebMD’s stated intent to cease providing the Tools or as reflected by
affirmative actions taken by WebMD that result in the Tools ceasing to be available to the FESCO
Customers for a period of two weeks or more, and such action by WebMD is not otherwise permitted by
the terms of the Agreement. In addition, for purposes of this subsection, “Tools” shall be deemed
to mean i) all Tools or ii) all or substantially all of the Personal Health Manager or the Personal
Health Decisions Tool.

Notwithstanding anything to the contrary set forth in the Escrow Agreement, the Source Code shall
not be released to FESCO for any reason other than the foregoing Release Events. In addition, the
provisions of this Section 2K shall supercede Section 4.5 of the Escrow Agreement. The words
“except as otherwise provided by the terms of the Services Agreement, between WebMD, Inc. and
Fidelity Employer Services Company LLC” are added to the last sentence of the first paragraph of
the Acceptance Form to the Escrow Agreement.

Upon release of the Source Code pursuant to Section 2(K)(1) or (2) above, FESCO shall have (and
WebMD hereby grants, subject to such occurrence) a non-exclusive, non-transferable, royalty-free,
paid-up license to use, copy and modify the Source Code in any manner necessary or appropriate to
support and maintain FESCO’s, its Customers’ and their End Users’ use of and access to the Tools
and Customized Pages in the same manner in which FESCO, its Customers and End Users were being
serviced at the time of the Source Code escrow release, provided that such modifications may not:
i) introduce new functionality; ii) create additional applications or derivative works; iii) be
used beyond the scope of the license granted in Section 2 of this Agreement, or iv) be used to
service Customers who are not FESCO Customers at the time of the source code release described
herein. The license granted pursuant to this Section shall remain in effect until the earliest to
occur of the following: a) FESCO permanently stops using the affected Software, or b) twelve
months from the date of the Source Code release. Upon termination of the Source Code licenses
granted in this Section, FESCO shall return all copies of Source Code to WebMD. All modifications
made by FESCO pursuant to this Section shall be owned by WebMD.

Upon release of Source Code from escrow FESCO a) shall at all times treat the Source Code as WebMD
Confidential Information and will safeguard the Source Code in the same manner as it safeguards the
source code for its own proprietary applications and b) shall have no right to market, sell,
license or transfer the Source Code or provide access to the Source Code to third parties who are
not FESCO Developers (as defined below).

 

 

Persons permitted to access the Source Code (the “FESCO Developers”) must each (a) be FESCO
employees or contractors and (b) have previously signed nondisclosure agreements or similar
agreements with FESCO which agreements impose contractual obligations upon such persons that are
consistent with the terms and conditions of Section 9 of this Agreement. FESCO shall limit access
to and use of the Source Code to FESCO Developers who have a reasonable need for such access for
the purposes contemplated hereunder.

L. In the event of any Continuing Severity One Problem (as defined in this Section 2(L)), FESCO
shall be entitled to send such number of personnel of FESCO and its Affiliates as FESCO reasonably
determines is necessary to WebMD’s and/or any other relevant third party’s site to access WebMD’s
Source Code at such site, in the presence of WebMD personnel, to assist WebMD in resolving such
Continuing Severity One Problem, provided that 1) such personnel must be operations/technical
personnel and not sales/marketing personnel, 2) FESCO shall use commercially reasonable efforts to
limit its access only to that portion of the WebMD Source Code that is applicable to the relevant
Continuing Severity One Problem, 3) such personnel shall each have executed a confidentiality
agreement which is consistent with the provisions of Section 9 of this Agreement, 4) such
personnel shall not be permitted to copy or remove any Source Code from the site without the
permission of WebMD and 5) such access shall terminate upon resolution of the relevant Continuing
Severity One Problem. For purposes of this Section 2L, “Continuing Severity One Problem” shall mean
any of the following which is not caused by FESCO and remains unresolved for 48 hours: (i) issues
that result in the outage of the entire service provided by WebMD hereunder to the End Users, (ii)
any situation that prevents a substantial number of new End Users from accessing or using the
applicable Customized Pages or the Tools, or a substantial number of existing End Users from
receiving material End User Data, (iii) issues or software defects that result in a continuing
significant security exposure (i.e., disclosure to unauthorized third parties of personally
identifiable health information of End Users or other personally identifiable End User Data), (iv)
a continuing significant End User Data quality issue (missing, incomplete or incorrect End User
Data with significant impact on End User experience or on the integrity of End User Data), and (v)
an outage, significant slowdown, etc. (caused by failures related to the Tools or otherwise within
WebMD’s reasonable control) which materially impacts or disables major functions of the Tools from
being performed and for which no workaround is available.

M. Upon effectiveness of this Agreement and on an ongoing basis thereafter, FESCO shall provide
WebMD with a list identifying each company or employee group within a company that has outsourced
its health and welfare benefits administration to FESCO (or has signed a letter of intent to
outsource its health and welfare benefits administration to FESCO) (“FESCO Client”). This list
will be treated as FESCO Confidential Information pursuant to the terms of Section 9 of this
Agreement. WebMD agrees that following notification by FESCO to WebMD that a company or employee
group is a FESCO Client (other than FESCO Clients that are pre-existing WebMD customers), WebMD and
FESCO will engage in coordinated marketing activities as to such FESCO Client (which shall include,
for all purposes of this Agreement, WebMD providing the appropriate sales force to reasonably
support such activities and both parties meeting on a regular basis to discuss sales strategies),
describing the Site as the preferred delivery mechanism for the Tools for such FESCO Client until
the earlier to occur of 1) the end of the eighteen month period from the time of FESCO’s
notification to WebMD that such company or employee group

 

 

is a FESCO Client and such FESCO Client has not purchased the Basic Tools or 2) FESCO’s receipt of
a written notice from the FESCO Client that it does not wish to obtain access to the Tools from
FESCO via the Site, at which time WebMD may enter into a direct agreement with the FESCO Client
with respect to the Tools and such client shall not be considered a Customer under this Agreement.
In addition, once a FESCO Client has accepted the Basic Tools via the Site, WebMD shall engage only
in coordinated marketing activities with FESCO with respect to sales of Buy-up Tools to such FESCO
Client and shall not contract directly with such FESCo Client with respect to the Buy-up Tools
until such time as the FESCO Client notifies FESCO in writing that it does not wish to obtain the
Buy-up Tools from FESCO via the Site, at which time WebMD shall be free to contract directly with
the FESCO Client for the Buy-up Tools and FESCO shall, for as long as the FESCO Client receives the
Buy-up Tools or any subset thereof directly from WebMD, deduct from FESCO’s buy-up guarantees set
forth in Schedule A either 1) with respect to FESCO Clients receiving the full set of Buy-up Tools
directly from WebMD, the number of employees of such FESCO Client eligible to receive such Tools
directly from WebMD, or 2) in a case involving a subset of the Buy-up Tools, such amount as is
determined in accordance with clauses (i) and (ii) of the last sentence of Section 2N. FESCO
agrees to promptly notify WebMD of any written notification it receives from a FESCO Client stating
that such FESCO Client does not wish to obtain the Tools via the Site.

In addition, in the event that (i) a current FESCO Client has a direct agreement with WebMD as of
the date of this Agreement, or (ii) a company or employee group within a company is not a FESCO
Client at the time it initially enters into an agreement with WebMD to receive the Tools or subset
thereof, but subsequently becomes a FESCO Client, and such FESCO Client indicates a preference to
receive the Tools or subset thereof from FESCO via the Site, then:

     1) FESCO will be free to offer the Tools to such FESCO Client via the Site during the term of
the FESCO Client’s direct contract with WebMD, provided that, except with respect to integration
fees owed by FESCO to WebMD with respect to a FESCO Client that has accepted receiving the Basic
Tools via the Site, such FESCO Client shall not be considered a Customer under this Agreement.

     2) within a reasonable time prior to expiration or potential renewal of the FESCO Client’s
direct contract with WebMD, or otherwise at the time of termination of the FESCO Client’s direct
contract with WebMD, WebMD will inform the FESCO Client that FESCO is the preferred provider of the
Tools via the Site, and the parties shall jointly pursue transitioning the FESCO Client to a direct
contractual relationship with FESCO pursuant to which FESCO would provide the Tools to such FESCO
Client in accordance with the terms of this Agreement. In connection with any and all discussions
with such FESCO Client, if WebMD is offering pricing or other financial terms directly to such
FESCO Client which are more favorable than the pricing or other financial terms offered to FESCO
under this Agreement, then FESCO shall be entitled to (i) offer the more favorable terms to the
FESCO Client, and (ii) pay WebMD, with respect to such FESCO Client, in accordance with the more
favorable terms. If, despite the parties efforts to transition the FESCO Client to a direct
contractual relationship with FESCO, the FESCO Client states a preference for renewing or extending
its direct contractual relationship with WebMD, WebMD shall be entitled to enter into such a
renewal or extension, provided that if such FESCO Client has accepted receiving the Basic Tools via
the Site, then FESCO shall

 

 

receive credit against its Basic guarantee for the number of employees of such FESCO Client
who are eligible to receive the Basic Tools via the Site and if such FESCO Client has entered into
a direct contract with WebMD to receive the Buy-up Tools or any subset thereof then FESCO shall
receive credit against its Buy-up guarantees set forth in Schedule A either a) with respect to a
FESCO Client receiving the full set of Buy-up Tools, for the number of employees of such FESCO
Client eligible to receive such Tools, or b) in a case involving a subset of the Buy-up Tools, for
such amount as is determined in accordance with clauses (i) and (ii) of the last sentence of
Section 2N.

If a FESCO Client that has a direct agreement with WebMD enters into a renewal or extension of such
agreement with WebMD, but is not receiving the Basic Tools from FESCO via the Site

either at the time of or subsequent to such renewal or extension, then such FESCO Client shall not
be considered a Customer for purposes of this Agreement and FESCO shall not receive credit against
its guarantees for the number of employees of such FESCO Client who are eligible to receive the
Basic or Buy-up Tools from WebMD.

N. During the Term of this Agreement, FESCO will first offer to FESCO Clients and prospective
clients the Tools in connection with its marketing of interactive online personal health management
products and services via the Site, and shall not market third party products or services
substantially equivalent to the Tools to FESCO Clients or prospective clients, provided that if a
Customer requests that FESCO implement alternative interactive online personal health management
products or services via the Site, then, FESCO may provide such alternative products or services to
such Customer.

In addition, (1) FESCO shall not offer a subset of the Tools to any FESCO Client or prospective
client, (2) WebMD shall not offer a subset of the Tools to (a) a FESCO Client or (b) a prospective
client to whom WebMD and FESCO are each marketing the Tools, and (3) WebMD shall not enter into any
agreement, subsequent to the date hereof, which permits a provider of human resources benefits
administration outsourcing services with the right to offer a subset of the Tools, provided that
if a FESCO Client or prospective client requests such a subset from FESCO, WebMD shall permit FESCO
to provide such subset to such FESCO Client or prospective client via the Site if such FESCO Client
or prospective client is considering a bona fide offer from another provider of human resources
benefits administration outsourcing services for such subset pursuant to an agreement between such
other provider of human resources benefits administration outsourcing services and WebMD which
predates this Agreement (in which case the most favored nations provisions of Section 3B would
apply). FESCO shall not otherwise provide such subset to such FESCO Client or prospective client
without WebMD’s approval and if a FESCO Client or prospective client requests such a subset from
FESCO and WebMD refuses to allow FESCO to offer such subset to such FESCO Client or prospective
client, WebMD shall not subsequently provide such subset to such FESCO Client or prospective client
(either directly or through another provider of human resources benefits administration outsourcing
services) for a period of twenty-four (24) months from the date of such refusal by WebMD. If WebMD
offers a subset of the Tools generally to its direct clients for use by their employees or to
another provider of human resources benefits administration outsourcing services, if requested by
FESCO, WebMD shall discuss with FESCO whether to permit FESCO

 

 

to provide such subset to such FESCO Client or prospective client via the Site. In the event that
FESCO sells a subset of the Tools in accordance with any of the preceding three sentences, FESCO
shall be entitled to credit against its guarantees either (i) an amount equal to the number of
employees of such Customer receiving the subset of Tools multiplied by the ratio of the subset
price to the price for the full set of Tools, or (ii) such amount as may otherwise be agreed by the
parties.

Section 3. Fees, Charges, Payment Terms and Reporting.

A. Subject to the terms of this Agreement, FESCO agrees to pay WebMD in accordance with the fees
and the payment terms set forth in Schedule A (“Fees,
Term of Agreement and Payment Terms”). The
payment terms set forth in Schedule A are exclusive of any applicable taxes. FESCO shall be solely
responsible for any applicable sales, use or other like taxes based upon WebMD’s fees for providing
its services hereunder, excluding however taxes based upon WebMD’s net income.

B. During the term of this Agreement, if, with respect to a package of Tools or subset thereof
(including any Enhancements, New Products, New Services and other products and services offered to
FESCO by WebMD under this Agreement) which is the same or substantially similar to the Tools or any
subset thereof, WebMD offers to a provider of human resources benefits administration outsourcing
services pricing or other financial terms for the same or substantially similar volume levels
(either actual or committed) which are more favorable than those described in this Agreement, then
WebMD shall promptly notify FESCO of such fact, and the more favorable terms shall be made
available immediately to FESCO at FESCO’s option during the period that such more favorable pricing
is in effect. WebMD warrants that as of the date of this Agreement, it is not a party to any
agreements with other providers of human resources benefits administration outsourcing services
which would trigger the protections outlined in the immediately preceding sentence. In addition,
if WebMD and FESCO are each marketing the Tools to the same client or prospective client at the
same time (including through cooperative marketing efforts in accordance with Section 2M), and the
pricing or other financial terms WebMD is offering such client for the Tools or any subset thereof
is more favorable than the pricing or other financial terms described in this Agreement, then WebMD
shall promptly notify FESCO of such fact, and FESCO shall be entitled to offer the Tools or the
subset thereof being offered by WebMD to such client at the more favorable terms and pay WebMD,
with respect to such client, in accordance with the more favorable terms. For avoidance of doubt,
the foregoing sentence shall not apply in situations in which WebMD is marketing to a client whose
business is not being solicited by FESCO.

C. FESCO will keep accurate records, which are sufficient to calculate all payments due to WebMD
and, during the term of this Agreement FESCO will provide an accounting of all such payments (an
“Accounting”) to WebMD on a monthly basis. FESCO shall make available to WebMD all supporting
documentation sufficient to calculate such payments (“Supporting Documentation”) within thirty (30)
business day after receiving written request by WebMD, provided that such request is received by
FESCO within ninety (90) days of WebMD receiving the Accounting for such month. If required by
WebMD after reviewing any Supporting Documentation provided pursuant to the forgoing sentence,
WebMD shall have the right to audit (during normal business hours), with at least

 

 

fifteen (15) days’ prior written notice to FESCO, and at WebMD’s expense) the books and records of
FESCO in order to verify that it has performed its obligations in accordance with this provision
and made all payments required to be made under this Agreement, provided that WebMD requests such
an audit within thirty (30) days of receiving such Supporting Documentation. In addition, FESCO
shall have the right to audit (during normal business hours, with at least fifteen (15) days’ prior
written notice to WebMD) and at FESCOs’s expense, the relevant books, records or other applicable
documentation necessary to verify WebMD’s compliance with the terms of this Agreement. The
foregoing Section is not intended in any way to diminish or alter WebMD’s or FESCO’s termination
rights described elsewhere in this Agreement or WebMD’s or FESCO’s right to assert a breach of
contract in accordance with the terms of this Agreement, including, without limitation, the terms
of Schedule A.

D. Annual Maintenance Fees. Annual maintenance services will be provided in the amounts and
for the fees set forth in Schedule A (subject to Section 4(A)).

E. Integration Fees. WebMD will develop Customized Pages for FESCO. FESCO will receive the
specific integration services set forth in Schedule C and in the Statement of Work referenced
therein at the cost set forth in Schedule A (subject to Section 4(A)).

Section 4. Term; Renewal; Termination.

A. The initial term of this Agreement will commence on the Effective Date and continue through
August 31, 2007 unless sooner terminated by the parties in accordance with this Section 4 of this
Agreement. If, as of August 31, 2007 and as of the last day of each of the first three (3)
subsequent one-year renewal terms thereafter (if applicable), this Agreement has not already
terminated, FESCO may renew this Agreement for a successive one-year term (not to exceed four
successive one-year renewal terms, in the aggregate) by providing written notice of such election
to WebMD within thirty (30) days of the expiration of the current term and subject to the following
additional conditions:

	 	1)	 	all applicable fees for each renewal term will be determined by mutual
agreement of the Parties at the time of renewal, subject to the “most favored nations”
provisions of Section 3B
	 
	 	2)	 	throughout a renewal term of 9/1/07-8/31/08, FESCO shall guarantee a cumulative
total of * employees for the Buy-up Tools
	 
	 	3)	 	throughout a renewal term of 9/1/08-8/31/09 FESCO shall guarantee a
cumulative total of * employees for the Buy-up Tools
	 
	 	4)	 	throughout a renewal term of 9/1/09-8/31/10 FESCO shall guarantee a cumulative
total of * employees for the Buy-up Tools
	 
	 	5)	 	throughout a renewal term of 9/1/10-8/31/11 FESCO shall guarantee a cumulative
total of * employees for the Buy-up Tools
	 
	 	6)	 	Each FESCO right of renewal for each additional one-year renewal term shall be
contingent upon FESCO providing the buy-up products and services to at least the number
of employees specified in the buy-up guarantee for the then current term on the last
day of the then current term, and if FESCO has not achieved the applicable guarantee as
of such date, then such renewal shall not

	 	*	 	Confidential treatment has been requested. The redacted
material has been separately filed with the Commission.

 

 

	 	 	 	occur (e.g., if FESCO is not providing the Buy-Up Tools to at least *
employees by August 31, 2007, the renewal term beginning 9/1/07 shall not occur).
If the conditions for a renewal term are not met, there will be no further
renewal terms. .

Upon any such renewal, unless otherwise provided herein, all of the terms provided in this
Agreement, including, without limitation, the terms set forth in Schedule A, shall remain in full
force and effect for such successive term.

B. In the event of a final determination by a State or Federal governmental authority that WebMD
has engaged in a wrongful act (which wrongful act has a material adverse effect on the business and
brand of WebMD) (a “Wrongful Act”), and directly as a result of such Wrongful Act, (i) Customer
acceptance or usage of the Tools and (ii) FESCO’s ability to market the Tools as contemplated by
the Agreement, have been materially and adversely affected for a period of at least ninety (90)
days, FESCO shall notify WebMD and the parties will immediately meet to discuss the impact of the
Wrongful Act. If, after such meeting (or if the meeting does not occur within ten (10) days after
the request by FESCO, after such ten (10) day period), FESCO determines, in its reasonable
discretion, that the Wrongful Act has the material adverse effect as described in the preceding
clauses (i) and (ii) of this Section 4B, FESCO shall have the right to terminate this Agreement
upon thirty (30) days notice to WebMD.

C. FESCO may terminate the provision of the Tools or Customized Pages to specific FESCO Customer(s)
at any time, upon written notice to WebMD.

D. In the event either party materially breaches this Agreement and fails to cure such breach
within 30 days following receipt of written notice concerning the breach, the other party may
terminate this Agreement upon written notice to the other party.

E. In addition, WebMD will provide FESCO with at least ninety (90) days’ prior written notice of
any proposed material changes to the Tools and at least thirty (30) days prior written notice of
any proposed material changes to the terms of use or security measures employed by WebMD. If, in
its reasonable discretion, FESCO determines that any such changes (other than changes that are
mandated by applicable governmental regulations or requirements) may have a significant adverse
effect on FESCO, FESCO will so notify WebMD within fifteen (15) days after receipt of notice of
such proposed change from WebMD. If WebMD thereafter elects to implement the changes despite
receiving such notification from FESCO, FESCO may immediately, upon providing written notice to
WebMD, terminate this Agreement.

F. Upon termination of this Agreement for any reason, at FESCO’s election, for those Customers
receiving the Tools hereunder as of the effective date of termination as to which FESCO has
continuing contractual obligations to deliver the Tools, WebMD shall continue to provide the Tools
in accordance with this Agreement for a period of up to three (3) years from the effective date of
termination (the “Transition Period”) in order to facilitate an orderly transition to another
provider. During such Transition Period, FESCO shall continue to pay

 

			
	*	 	Confidential treatment has been requested. The redacted material has been separately filed with the Commission.

 

 

WebMD for all Customers that continue to use the Tools during the Transition Period at the
applicable prices for the Tools at the time of termination. All other terms of this Agreement,
with the exception of Sections 2H, 2M, 2N and 5B (except for those provisions with respect to
Enhancements) hereof and the guarantees set forth in Schedule A or Section 4A hereof, as the case
may be, shall remain in full force and effect during such Transition Period.

G. To the extent such notification is required by applicable law or regulations, FESCO and WebMD
will agree on a mutually acceptable method of contacting End Users to notify them of the
termination or expiration of this Agreement and advise them of their options regarding transfer or
disposition of their personally identifiable health information in accordance with applicable law.
WebMD agrees to reasonably assist FESCO with such notification to the extent such notification is
delivered by FESCO. WebMD agrees to provide FESCO and, if applicable, its Customers with
reasonable assistance in transferring or disposing of End Users’ personally identifiable health
information in WebMD’s possession upon expiration or termination of this Agreement.

H. Upon expiration or termination of this Agreement for any reason, each party shall cease any and
all use of the other Party’s intellectual property rights, including, without limitation,
trademarks and copyrights.

I. Upon expiration or termination of this Agreement for any reason, all fees and charges set forth
in Section 3 then owing by FESCO will be immediately due and payable, and FESCO shall promptly
discontinue all further use of WebMD Marks and all further use of the Tools. Notwithstanding
anything to the contrary set forth herein, FESCO shall be responsible for any amounts due under the
terms of this Agreement through the expiration or termination of this Agreement.

Section 5. WebMD Responsibilities.

A. Services. WebMD shall perform the services described in Schedule C, which shall include,
without limitation, if requested by FESCO, Indexing, during the term of this Agreement. WebMD
shall provide all Tools in accordance with the provisions of Schedule H (“Service Level
Agreement”).

B. Error Correction; Enhancements; New Products and New Services.

In the event that FESCO, Customer(s) or End Users advise WebMD that the Tools contain material
defects or material errors, or WebMD otherwise becomes aware that the Tools contain such defects or
errors, WebMD shall promptly, and in accordance with Schedule H hereto correct such errors. At
least ninety (90) days prior to each planned introduction of New Products and New Services, but in
any event no less than two (2) times per year, a WebMD senior executive will meet with FESCO to
discuss New Products or New Services that WebMD plans to provide to its customers. FESCO, at its
option, shall be entitled to add any such New Products and New Services to those products and
services included on Schedule B hereto, at a price to be determined by the Parties, subject to the
“most favored nations” provisions of Section 3B hereto. In addition, at least ninety (90) days
prior to implementation of any Enhancements by WebMD, WebMD will provide a high level description
of the Enhancements to FESCO. At least thirty (30) days prior to implementation of any
Enhancements, or the introduction of any New Products

 

 

or New Services, by WebMD, WebMD shall provide FESCO with (i) a detailed description of and
specifications for such Enhancements or New Products or New Services, and (ii) in-person, or via
webcast, FESCO-only training sessions at which the changes associated with the Enhancements, or the
New Products or New Services, will be introduced and explained in detail to FESCO associates. In
addition, WebMD shall have the right to automatically implement Enhancements, so long as such
implementation is in accordance with the provisions described in Schedule H hereto.

Without limiting FESCO’s rights under the first sentence of Section 2N, in the event that FESCO
desires to obtain from an outside vendor a new product, service or feature which is related to the
Tools, but is not already being provided by WebMD, FESCO will first offer WebMD the opportunity to
provide FESCO with a proposal for provision of such product, service or feature. In the event
that, within sixty (60) days of FESCO’s submission of a request for a proposal from WebMD, the
parties have not reached agreement with respect to pricing, delivery time frames, or any other
material terms and conditions related to the new product, service or feature, FESCO shall be free
to obtain such product, service or feature from a third party vendor whose proposed terms and
conditions for such product, service or feature are more favorable than those proposed by WebMD’s,
as determined in FESCO’s sole discretion.

C. Staffing. Technical support services, including levels of support and applicable response
times, shall be provided as set forth in Schedule H. Each party will designate a technical contact
as the primary individual responsible for technical and content matters relating to the Tools and
the Customized Pages.

D. Security. WebMD shall at all times during the term of this Agreement abide by the
security provisions and procedures described on Schedule I (“Security Schedule”) hereto.

E. Compliance with Laws. WebMD will at all times provide tools and related services in a
professional manner, consistent with industry standards, and will at all times comply with all laws
and regulations applicable to the performance of its services.

Section 6. FESCO Responsibilities.

A. Technical Requirements. The Parties acknowledge that successful implementation and use of the
Tools depends upon FESCO’s and its Customers’ provision of appropriate hardware and software.
WebMD will provide specifications for equipment and systems necessary to support the Tools. Unless
otherwise provided for in the schedules hereto, WebMD will not provide FESCO, Customer or End User
with any hardware, software, or telecommunications consulting services. Without limiting any of
the provisions of the Schedules to this Agreement, WebMD may, from time to time, recommend
reasonable changes or additions to the hardware and software. FESCO shall be responsible for
notifying Customer and End Users of such recommendations. Customer and End User shall have the
responsibility for securing and maintaining equipment and software necessary to support access to
the Tools.

B. Placement. FESCO will collaborate with WebMD to implement placement of the Tools as detailed in
Schedule C.

 

 

C. Compliance with Laws. FESCO will act in a professional manner, consistent with industry
standards, and will at all times comply with all applicable laws and regulations.

D. End User Activities. FESCO will use commercially reasonable efforts to not permit any person or
entity, other than Customer and End Users, to use or gain access to the Tools and shall provide
reasonable security devices to protect against unauthorized usage of or access to the Tools.

E. Provision of Plan Data. FESCO shall provide plan data information relevant to FESCO Customers’
health plans and updates thereto (“Plan Data”) as often as is deemed reasonably necessary by FESCO
to keep the Plan Data current and accurate, consistent with the provisions of Schedule C. WebMD
agrees to implement changes to such Plan Data as promptly as practicable, but in no event longer
than thirty (30) days following submission of such updated Plan Data by FESCO. WebMD acknowledges
that Plan Data provided by FESCO hereunder has been furnished to FESCO by the relevant health plans
and/or FESCO Customers. FESCO accepts no responsibility for the accuracy and completeness of Plan
Data, provided that FESCO will promptly correct any inaccuracy, incompleteness or other defect in
such Plan Data of which FESCO becomes aware. WebMD shall not be responsible for the accuracy of
any Plan Data furnished to WebMD, provided that WebMD shall 1) present such Plan Data in connection
with the Tools and Customized Pages as accurately as such Plan Data is furnished to WebMD by FESCO
and 2) WebMD shall promptly correct any errors in such Plan Data reported to WebMD by FESCO.

Section 7. Representations and Warranties.

A. Each Party hereby represents and warrants that it is duly organized and validly existing and in
good standing under the laws of the state of its organization and has full power and authority to
enter into this Agreement.

B. WebMD’s Representations; Limited Warranty; Disclaimer of Additional Warranties.

i. WebMD represents and warrants to FESCO that the Tools will substantially conform in all
material respects to the current documentation provided by WebMD in connection with the
Tools when used in accordance with the technical requirements specified by WebMD. In the
event that the Tools fail to perform in accordance with this warranty, FESCO shall promptly
inform WebMD of such fact, and WebMD shall either (a) repair or replace the Tools to correct
any defects in performance in accordance with Schedule H without any additional charge to
FESCO, or (b) in the event that such repair or replacement cannot be done within a
reasonable time and at a reasonable cost, provide FESCO with a pro rata refund of the
unused, prepaid fees paid to WebMD hereunder. In the event WebMD is unable to provide on an
ongoing basis 1) all or substantially all of the Personal Health Manager or 2) the Personal
Health Decisions Tool, WebMD will notify FESCO of same, and FESCO will have the option to
either (i) terminate this Agreement immediately, upon written notice, and receive a pro rata
refund of any unused, prepaid fees paid to WebMD hereunder or (ii) accept a substitution by
WebMD of content with similar functionality and quality, all such content to be acceptable
to FESCO in its reasonable discretion. The foregoing sentence is not intended in any way to
diminish or alter FESCO’s termination rights described elsewhere in this Agreement or

 

 

FESCO’s right to assert a breach of contract in accordance with the terms of this Agreement,
including, without limitation, the terms of Schedule H.

ii. Subject to the provisions of Section 7(B)(iii), WebMD represents and warrants that the
information, content, and data that appear in the Tools and on the Customized Pages during
the term of this Agreement, specifically excluding FESCO Marks, FESCO Content, Customer
Content and Customer Marks, are, to WebMD’s knowledge, accurate in all material respects.
WebMD makes no representations or warranties with respect to the FESCO Marks, FESCO Content,
Customer Content and Customer Marks. WebMD currently has, and during the term of this
Agreement will maintain all the rights, titles, licenses, permissions, approvals and
authority required for WebMD to provide the Customized Pages and the Tools (excluding FESCO
Marks, FESCO Content, Customer Content and Customer Marks), to FESCO, its Customers and
their End Users as required by the terms of the Agreement, except that WebMD makes no
representation or warranty as to any right, title, license, permission, approval or
authority required from or required to be obtained by FESCO or its Customers (in their
capacity as users of the Customized Pages and Tools), with respect to provision of the
Customized Pages and Tools, and WebMD has no responsibility for any right, title,
permission, approval and authority necessary on the part of any End User except to the
extent of its obligations in Section 2G.

iii. FESCO EXPRESSLY ACKNOWLEDGES AND AGREES THAT WEBMD IS NOT RESPONSIBLE FOR THE
RESULTS OF A CUSTOMER’S OR END USER’S DECISION RESULTING FROM THE USE OF THE TOOLS OR
CUSTOMIZED PAGES, INCLUDING BUT NOT LIMITED TO, A CUSTOMER OR END USER CHOOSING TO SEEK OR
NOT TO SEEK PROFESSIONAL MEDICAL CARE, OR A CUSTOMER OR END USER CHOOSING OR NOT CHOOSING
SPECIFIC TREATMENT BASED ON THE INFORMATION OBTAINED FROM THE TOOLS OR CUSTOMIZED PAGES,
EXCEPT TO THE EXTENT OF WEBMD’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

iv. EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN THE SCHEDULES HERETO, WEBMD DOES NOT MAKE ANY
WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO ANY
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT,
AND SUCH WARRANTIES ARE HEREBY DISCLAIMED. FESCO ACKNOWLEDGES THAT IT HAS RELIED ON NO
WARRANTIES OTHER THAN THE EXPRESS WARRANTIES IN THIS AGREEMENT AND THAT NO WARRANTIES ARE
MADE TO FESCO BY ANY OF WEBMD’S SUPPLIERS OR AGENTS.

C. FESCO’s Representations and Warranties.

i. FESCO represents and warrants that, should it upload, record or otherwise transmit any
FESCO Content, that it has all of the rights, title, licenses, permissions, approvals and
authority required to do so.

 

 

ii. FESCO acknowledges that the Tools are (a) based on current medical information prepared
by health and medical professionals and organizations independent of WebMD and (b) are not
intended to replace professional medical advice and are not a tool for diagnosing the
existence of a specific disease in any given individual. FESCO further acknowledges that,
other than as specifically set forth herein or in the Schedules hereto, WebMD does not
guarantee the accuracy, timeliness or completeness of the information obtained from the
Tools, or warrant any results from using the Tools.

Section 8. Limitation of Liability.

A. NEITHER PARTY SHALL HAVE LIABILITY TO THE OTHER WITH RESPECT TO ITS OBLIGATIONS UNDER THIS
AGREEMENT FOR CONSEQUENTIAL, EXEMPLARY, SPECIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES, OR ANY
LOSS OF PROFIT, REVENUE, DATA OR GOODWILL, WHETHER INCURRED OR SUFFERED AS A RESULT OF
UNAVAILABILITY OF THE SERVICE OR OTHERWISE, EVEN IF IT HAS BEEN ADVISED OF THE POSSIBLITY OF SUCH
DAMAGES.

B. IN NO EVENT SHALL EITHER PARTY’S AGGREGATE LIABILITY HEREUNDER FOR ANY CAUSE ARISING OUT OF OR
RELATED TO ITS PERFORMANCE OR NON-PERFORMANCE UNDER THIS AGREEMENT OR OTHERWISE EXCEED THE AMOUNT
OF THE FEES PAID HEREUNDER TO WEBMD. THIS LIMITATION APPLIES TO ALL CAUSES OF ACTION OR CLAIMS IN
THE AGGREGATE INCLUDING WITHOUT LIMITATION BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE,
STRICT LIABILITY, MISREPRESENTATION AND OTHER TORTS.

C. THE LIMITATIONS ON LIABILITY IN THE FOREGOING PARAGRAPHS A AND B SHALL NOT APPLY TO ANY
LIABILITIES RELATING TO (i) INDEMNIFICATION AS SET FORTH IN SECTION 11, (ii) TRADEMARK, COPYRIGHT,
PATENT OR TRADE SECRET INFRINGEMENT, (iii) BREACHES OF CONFIDENTIALITY OR PRIVACY OBLIGATIONS IN
SECTION 9 OR 10, AND (iv) BODILY DAMAGE, PERSONAL INJURY OR DAMAGE TO TANGIBLE PROPERTY.

Section 9. Confidentiality and Nondisclosure

A. Both parties shall maintain as confidential and shall not disclose (except for those employees,
attorneys, accountants and other advisors of the recipient and its Affiliates who need to know such
information in connection with the recipient’s performance of its obligations under this Agreement,
and have in turn been advised of the confidentiality obligation hereunder), copy, or use for
purposes other than the performance of this Agreement, any information which relates to the other
party’s, its Affiliates’ or their respective customers’ personal information and affairs, business
information and affairs, trade secrets, technology, research and development, or the terms of this
Agreement (“Confidential Information”) and each party agrees to protect that Confidential
Information with the same degree of care a prudent person would exercise to protect its own
confidential information (but in no event less than a reasonable degree of care) and to prevent the
unauthorized, negligent, or inadvertent use, disclosure, or publication thereof. Breach of
confidentiality and unauthorized disclosure may cause irreparable damage and therefore, in addition
to all other remedies available at law or in equity, the injured party shall

 

 

have the right to seek equitable and injunctive relief, and to recover the amount of damages
(including reasonable attorneys’ fees and expenses) incurred in connection with such unauthorized
use or disclosure. The recipient shall be liable under this Agreement to the disclosing party for
any use or disclosure in violation of this Section by it or its Affiliates’ employees, attorneys,
accountants or other advisors.

B. Subject to applicable consumer privacy laws and regulations, the parties shall have no
obligation under this agreement with respect to any information that is: (a) already known by the
receiving party at the time of the disclosure; (b) publicly known at the time of the disclosure or
becomes publicly known through no wrongful act of the receiving party; (c) subsequently disclosed
on a non-confidential basis by a third party not having a confidential relationship with the
disclosing party and which third party rightfully acquired such information; (d) independently
developed by the receiving party; (e) communicated to a third party with the express written
consent of the disclosing party; or (f) required to be disclosed to any governmental agency or is
required by any subpoena, summons, order or other judicial process, provided however that the
receiving party shall give at least fourteen days written notice to the other party prior to
disclosing such information.

C. WebMD acknowledges that as a financial institution, FESCO may be subject to certain laws and
regulations regarding the privacy and protection of consumer information, and that any receipt or
use of personal information by WebMD may also be subject to compliance with such laws and
regulations. WebMD agrees that any personally identifiable information or data concerning or
relating to FESCO’s customers or prospective customers, or any information or data that WebMD
collects or derives from interactions with FESCO, Customers or End Users, including without
limitation data collected or received by WebMD as an End User views and interacts with the Tools
(“Personal Information”), shall be treated as FESCO Confidential Information hereunder and shall be
used solely for the purpose of carrying out the services described under this Agreement. WebMD
also agrees to treat such Personal Information in accordance with FESCO’s current published privacy
policy (a copy of which is attached hereto as Schedule J), except (without limiting the provisions
of the following two paragraphs) to the extent aspects of FESCO’s policy are inconsistent with
WebMD’s obligations under this Agreement, or the terms of use or privacy policy accepted by End
Users.

In no event shall any such Personal Information be used by WebMD for any purpose other than that
contemplated in this Agreement (including, without limitation, the marketing of WebMD’s other
products or services), and WebMD is expressly prohibited from using Personal Information to contact
or market to FESCO customers or prospects through any means for any other purpose. WebMD agrees
that such Personal Information shall not be given, bartered, sold, traded, transferred or exchanged
in any way to other companies or entities for any uses without the express written consent of FESCO
and the applicable End User(s) and, if this were to occur, it would cause irreparable harm to
FESCO.

Should WebMD wish to share any such Personal Information with an Affiliate or a third party for the
purpose of carrying out the services described under this Agreement, WebMD shall (a) obtain the
advance written approval of FESCO, and (b) obtain the agreement of any such affiliate or third
party not to redisclose the Personal Information or to use the Personal Information other

 

 

than as set forth above in this Section. FESCO acknowledges that WebMD may share Personal
Information with its wholly owned subsidiary, Wellmed, Inc., solely for the purpose of assisting
WebMD in the performance of WebMD’s obligations under this Agreement.

Section 10. Protection of End User Data.

A. WebMD shall use data provided to WebMD by End Users (“End User Data”) solely to fulfill all
obligations set forth herein. In no event shall WebMD provide such End User Data to FESCO or to
third parties in a manner that identifies an End User without that End User’s prior consent,
provided that WebMD may use Aggregate Data (provided that such Aggregate Data is not identifiable,
directly or indirectly, with any individual Customer) for the purpose of reporting metrics about
its sites on an aggregate basis, such as total number of page views, aggregate number of users,
etc. All End User Data shall be protected in accordance with the security provisions described in
Schedule I hereto. WebMD agree that End Users shall retain rights of privacy in any and all
information provided by such End Users to WebMD in connection with use of the Tools and/or the
Customized Pages. Without limiting the obligations described in Section 9, such information shall
be treated at all times in accordance with WebMD’s then-current privacy policy.

B. WebMD
will provide FESCO with electronic Reports as further described on Schedule G hereto in such format as the parties may mutually agree upon. All such reports shall
be comprised of Aggregate Data that can be accessed online via FESCO’s confidential password on
such terms as agreed to by parties, unless otherwise provided for herein.

C. WebMD will not provide FESCO or Customer with any personally identifiable health
information (“PIHI”) unless it has received FESCO, Customer and End User authorization to do so.
Each party agrees to treat any and all PIHI in accordance with all applicable laws and regulations
(“Laws”).

D. In the event that FESCO has access to non-personally identifiable information about End Users
from a source or sources other than WebMD, FESCO specifically agrees not to attempt to identify
otherwise unidentifiable individual End Users through the use of such information.

E. Each Party agrees to promptly notify the other if it becomes aware of the inadvertent disclosure
of any personally identifiable information transmitted in violation of this Agreement.

F. In the event of any security breach or incident that affects the security, confidentiality or
integrity of End User Data, WebMD shall comply with the security provisions set forth in Schedule I
hereto and, upon receiving notification of such breach from WebMD, FESCO, at its option, will
either notify, or direct WebMD to notify, End Users of such security breach or incident if required
by applicable law or as otherwise mutually agreed to by the parties. In the event FESCO elects to
provide the notification, WebMD will reasonably assist FESCO with such notification. In no such
event shall WebMD directly notify Customers or End Users of a security breach or incident without
FESCO’s prior written approval of such notification, unless

 

 

notification is required by law and FESCO has failed to provide such approval within time frames
specified by the applicable law.

Section 11. Indemnification.

A. WebMD Indemnity. WebMD will indemnify, defend and hold harmless, at its own expense, FESCO and
its Affiliates and its and their respective officers, directors, employees, agents, successors and
assigns with respect to any third party claims, suits, losses, damages, liabilities, demands,
costs, expenses and actions (“Liabilities”) against FESCO to the extent that such Liabilities are
based upon:

i. a breach of any of WebMD’s representations, warranties, obligations, covenants or
agreements hereunder;

ii. any bodily damage, personal injury or damage to property caused by the negligence or
misconduct of WebMD (except to the extent such Liabilities relate to the information,
content, or data, supplied by WebMD in the Tools or the Customized Pages, unless such
Liabilities are due to the gross negligence or willful misconduct of WebMD);

iii. a claim that the Tools, when used in accordance with this Agreement, infringe any
proprietary right of any third party; provided, however, that WebMD shall have no obligation
pursuant to this clause iii to the extent that any claim is based on (a) any use of the
Tools in violation of this Agreement, or (b) any FESCO or Customer Content. If FESCO’s use
of any Tools is enjoined by reason of an infringement claim, WebMD shall either (1) procure
the right for FESCO to continue using the Tools, (2) replace or modify the components of the
Tools subject to the infringement claim with non-infringing components of substantially
equivalent functionality, or (3) if neither of the above are available, refund to FESCO a
pro-rata portion, if any, of the unused fees prepaid for access to the affected Tools and,
if the affected Tools constitute all or substantially all of the Personal Health Manager or
the Personal Health Decisions Tool, permit FESCO to terminate this Agreement immediately;

iv. the gross negligence or willful misconduct of WebMD;

provided that, in any such case under (i) through (iv) above, WebMD shall not be responsible for
Liabilities based on the results of End Users’ decisions made in connection with use of the Tools
or the Customized Pages, unless such Liabilities are due to the gross negligence or willful
misconduct of WebMD.

WebMD will pay those costs and damages awarded against FESCO (including attorneys’ fees) that are
specifically attributable to a claim covered under this paragraph A or those costs and damages
agreed to in a monetary settlement of such claim, and all such costs and damages shall be
considered Liabilities hereunder.

B. FESCO Indemnity. FESCO will indemnify, defend and hold harmless WebMD and its affiliates and
its and their respective officers, directors, employees, agents, successors and assigns with
respect to any Liabilities to the extent that such Liabilities are based upon:

 

 

i. a breach of any of FESCO’s representations, warranties, obligations, covenants or
agreements hereunder;

ii. any bodily damage, personal injury or damage to property caused by the negligence or
misconduct of FESCO; or

iii. the gross negligence or willful misconduct of FESCO.

FESCO will pay those costs and damages awarded against WebMD (including attorneys’ fees) that are
specifically attributable to a claim covered under this paragraph B or those costs and damages
agreed to in a monetary settlement of such claim, and all such costs and damages shall be
considered Liabilities hereunder.

C. Indemnification Procedures. A party seeking indemnification hereunder shall give the party from
whom indemnification is sought reasonably prompt notice of the relevant claim; provided, however,
that failure to provide such notice shall not relieve the indemnifying party from its liability or
obligation hereunder except to the extent of any material prejudice directly resulting from such
failure. The indemnifying party shall control the defense of any third party claim giving rise to
the indemnification obligations herein; the indemnified party shall have the right to participate
in the proceeding at its own expense; provided that the indemnified party’s participation shall be
at the indemnifying party’s expense if either the indemnifying party fails to defend the claim or
the indemnifying party agrees to pay such expenses in writing. In addition, the indemnified party
shall reasonably cooperate with the indemnifying party in the defense of any such claim.

Section 12. Press Releases; Advertising and Promotion. The parties shall agree upon the language
for a press release regarding the services contemplated in this Agreement at a time to be mutually
agreed between the parties (such press release may be a joint release by both parties or an
individual release by one or both parties, as mutually agreed to by the parties). In addition,
each party shall have the right to review and approve in its absolute discretion, prior to posting,
publication, or other method of delivery, any additional press releases or any advertising,
marketing or promotional messages (regardless of the medium of transmission) and materials which
refer to or mention that party, that party’s products or services, or that party’s trademarks,
service marks or trade names.

Section 13. Insurance. WebMD, at its own expense, shall procure and maintain during the term of
this Agreement, policies of insurance to include the following coverage: (a) Workers’ Compensation
Insurance for its own employees that meets the statutory limits of the states in which WebMD
operates and all federal statutes and regulations, (b) Employers Liability Insurance with not less
than statutory limits (except in states where there are no statutory limits for such insurance then
with limits of not less than $1,000,000 each accident, $1,000,000 disease per each employee and
$1,000,000 disease policy limit), (c) Comprehensive General Liability of not less than $1,000,000
per occurrence and $2,000,000 in aggregate including personal injury, (d) Comprehensive Automobile
Liability (including Automobile Non-Ownership Liability) with a combined single limit of not less
than $1,000,000 per occurrence and $1,000,000 in aggregate, and (e) Umbrella or excess Liability
Insurance providing coverage in excess of the coverage

 

 

listed in (c) and (d) above in an amount not less than $5,000,000 per occurrence and $5,000,000 in
aggregate. FMR Corp. and all subsidiary and affiliated companies are to be named as an additional
insured as their interests may appear under the aforementioned policies. WebMD shall furnish FESCO
with a Certificate of Insurance evidencing such coverage and such Certificate is to provide 30 days
written notice to FMR Corp. prior to the effective date of any termination of coverage. WebMD will
provide FESCO with at least thirty (30) days written notice of any material reduction in coverage.
Nothing in this Section shall be deemed to limit any WebMD liability to the amounts stated above or
to limit any coverage of WebMD’s insurance policies.

Insurance certificates and notices of modification or termination shall clearly state WebMD’s name
and shall be sent to:

FMR Corp

82 Devonshire Street, V11D

Boston, MA 02109

     Attn: Insurance & Risk Management

Section 14. Detailed Project Plan; Change Management Procedures. Set forth as Schedule C hereto
is a Description of Project Scope and Services providing a blueprint for the services to be
provided pursuant to this Agreement. By no later than March 15, 2004, the parties shall agree upon
(i) a detailed Statement of Work including, without limitation, a project plan, integration
specifications and detailed acceptance criteria, for Phase I and (ii) a timetable for completion by
the parties of a detailed Statement of Work, including, without limitation, a project plan and
acceptance criteria, for Phases II and III. Except as otherwise specifically set forth in Section
5B hereto, if, after the Effective Date of this Agreement, either party wishes to recommend an
addition, modification or change to Schedule C hereto, or if, after acceptance by the parties of a
Statement of Work, either party wishes to recommend an addition, modification or change to any such
Statement of Work, the party requesting a change shall submit a written document to the other party
describing in reasonable detail such change, the reason for the change and the effect the change
may have on the services contemplated in this Agreement. Promptly following receipt of such
document, the parties will seek in good faith for a reasonable period of time (not to exceed 14
days) to reach agreement on the requested change. If such agreement is reached, the agreed upon
changes will be incorporated herein, either as an amendment to existing Schedules hereto or
Statements of Work related hereto or as a new Schedule or Statement of Work to be incorporated
herein.

The parties acknowledge that Enhancements made to the Tools and the Customized Pages in accordance
with the terms of this Agreement will not be treated as change requests as described in this
Section 14.

Section 15. Relationship of the Parties.

Neither the making of this Agreement nor the performance of its provisions shall be construed to
constitute either party an agent, employee or legal representative of the other party for any
purpose whatsoever. Nor shall this Agreement be deemed to establish a joint venture or
partnership. Each party to this Agreement is an independent contractor engaged in its own and

 

 

entirely separate business. Neither party shall have any right or authority to create any
obligation, warranty, representation or responsibility, whether express or implied, on behalf of
the other party in any manner whatsoever, provided that the foregoing shall not be deemed to limit
in any way FESCO’s right to obligate WebMD to provide the Tools to FESCO’s Customers subject to the
terms of this Agreement.

Section 16. Notices.

All notices, requests, demands, payments and other communications which are required or may be
given under this Agreement shall be in writing and shall be deemed to have been duly given if
delivered personally, telecopied or sent by nationally recognized overnight carrier, or mailed by
certified mail, postage prepaid, return receipt requested, as follows:

	 	 	 
	          If to WebMD:

	 	WebMD, Inc.
	 

	 	Attention: General Manager
	 

	 	520 NW Davis, Suite 300
	 

	 	Portland, OR 97209
	 

	 	Tel: (503) 279-9010
	 

	 	Fax: (503) 279-1632
	 
	 	 
	 

	 	With a copy to:
	 

	 	WebMD, Inc.
	 

	 	669 River Drive
	 

	 	Elmwood Park, NJ 07407
	 

	 	Attn.: General Counsel
	 

	 	Tel.: (201) 703-3475
	 

	 	Fax.: (201) 703-3443
	 
	 	 
	 

	 	If to FESCO:
	 

	 	Glenn Dill
	 

	 	One Spartan Way
	 

	 	Merrimack NH 03054
	 

	 	Tel: (603 ) 791-8651
	 

	 	Fax: (603) 889-4166
	 
	 	 
	 

	 	With a copy to:
	 

	 	FMR Corp.
	 

	 	82 Devonshire Street, MZ F5E
	 

	 	Boston, MA 02109
	 

	 	Attn.: Deputy General Counsel
	 

	 	Fax.: (617)692-4560

Section 17. Amendment.

This Agreement may not be amended, modified, or otherwise altered, nor may any provision hereof be
waived, except pursuant to a written agreement signed by the Parties hereto.

 

 

Section 18. Effect of Agreement.

This Agreement and the schedules hereto constitute the entire agreement of the Parties hereto with
respect to the matters set forth herein and supersede and cancel all previous written or oral
agreements and understandings of the Parties with respect to such matters.

Section 19. Waiver.

All waivers of and consents to any terms and conditions of this Agreement (or any rights, powers,
or remedies under it) by either party must be in writing in order to be effective. No waiver or
consent granted with respect to one matter or incident shall be construed to operate as a waiver or
consent with respect to any different or subsequent matter or incident.

Section 20. Assignment.

Neither party is entitled to assign this Agreement (including, without limitation an assignment by
operation of law) without the other party’s prior written consent, except that consent
shall not be required if FESCO seeks to assign this Agreement to one of its Affiliates responsible
for the provision of health and welfare products or services that succeeds to FESCO’s business.

Section 21. Severability and Effect of Laws.

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 court with jurisdiction over the
Parties to this Agreement (i) such provision will be deemed to be restated to reflect as nearly as
possible the original intentions of the Parties in accordance with applicable law, and (ii) the
remaining terms, provisions, covenants and restrictions of this Agreement will remain in full force
and effect provided the resulting agreement is not fundamentally different that the original
Agreement.

Section 22. Force Majeure.

Neither party shall be liable for any loss or damage sustained by the other party because of any
delay in performance or noncompliance with any provision of this Agreement that results from an
act, event, omission, or cause beyond its reasonable control and without its fault or negligence,
including, but not limited to, failure of suppliers, shortage of raw materials, or other industrial
disturbances, civil commotion, riots, wars, fires, explosions, floods, earthquakes, volcanic
eruptions, embargoes, disruptions in telecommunications or acts of civil or military authority.

Section 23. Survival.

The provisions of Sections 1, 2E, 2G, 4F, 4G, 4H, 4I, 8, 9, 10 (excluding 10B), 11, 15, 16, 18,
21, 23, 24, 25, 26 and 27 shall survive the termination or expiration of this Agreement. In
addition, any payment obligations accrued prior to termination or expiration will survive the
completion, expiration, termination or cancellation of this Agreement.

Section 24. Agreement Counterparts.

This Agreement may be executed on two counterparts, each of which shall be deemed to be an
original, but both of which shall constitute only one agreement.

 

 

Section 25. Integration.

EACH PARTY ACKNOWLEDGES THAT IT HAS READ THIS AGREEMENT (INCLUDING THE SCHEDULES HERETO),
UNDERSTANDS EACH AND EVERY TERM AND CONDITION IN IT, AND AGREES TO BE BOUND BY ITS TERMS AND
CONDITIONS. EACH PARTY ALSO AGREES THAT THIS AGREEMENT (INCLUDING THE SCHEDULES HERETO) IS A
COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN WEBMD AND FESCO AND THAT THIS AGREEMENT
SUPERSEDES ALL PRIOR AND CONTEMPORANEOUS AGREEMENTS, PROPOSALS, NEGOTIATIONS, OR DISCUSSIONS, ORAL
OR WRITTEN, RELATING TO THE SUBJECT MATTER HEREIN. NO COURSE OF DEALING OR USAGE OF TRADE OR
COURSE OF PERFORMANCE SHALL BE RELEVANT TO EXPLAIN OR SUPPLEMENT ANY TERMS EXPRESSED HEREIN. EACH
PARTY FURTHER AGREES THAT NO REPRESENTATIONS OR STATEMENTS OF ANY KIND, INCLUDING BUT NOT LIMITED
TO DEALER ADVERTISING OR PRESENTATIONS, ORAL OR WRITTEN, MADE BY ANY AGENT OR REPRESENTATIVE OF THE
OTHER PARTY, WHICH IS NOT STATED HEREIN, SHALL BE BINDING ON FESCO OR WEBMD.

Section 26. No Third Party Beneficiary.

No person not a party to this Agreement shall have a right to enforce any term of this
Agreement.

Section 27. Governing Law; Jurisdiction. This Agreement shall be governed by and construed under
the laws of the Commonwealth of Massachusetts without giving regard to any conflicts of law
principles. THE PARTIES AGREE THAT ANY SUIT RELATING TO THIS AGREEMENT MAY BE BROUGHT IN
THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENT TO
THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS AND SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE
UPON THE PARTIES BY MAIL AT THE ADDRESS SET FORTH HEREIN. EACH PARTY HEREBY WAIVES ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT
IS BROUGHT IN AN INCONVENIENT FORUM.

 

 

IN WITNESS WHEREOF, the parties hereto do hereby execute this Agreement as of the day and year
first written above.

	 	 	 
	WebMD, Inc.

	 	Fidelity Employer Services Company LLC
	 
	 	 
	/s/ Douglas Wamsley

 

	 	/s/ Surinder Singh

 

	Name: Douglas Wamsley

	 	Name: Surinder Singh
	Title: Executive Vice President

	 	Title: Executive Vice President

 

 

Schedule A

Fees, Term of Agreement and Payment Terms

*

 

 

 

 

 

			
	 	 	*Confidential treatment has been requested.
The redacted material has been separately filed with the Commission.

 

 

*

 

 

 

 

 

			
	 	 	*Confidential treatment has been requested.
The redacted material has been separately filed with the Commission.

 

 

*

 

 

 

 

 

			
	 	 	*Confidential treatment has been requested.
The redacted material has been separately filed with the Commission.

 

 

V. Term of the Agreement

The term of the Agreement shall be as provided in Section 4A of the Agreement.

VI. Payment Terms

The One-Time Fees for Integration Services related to the Basic option of $195,000 set forth in
this Schedule A are payable as follows: One-third upon acceptance of the design and specification
by FESCO of the Customized Pages and Tools, one-third upon delivery of code and availability of
testing by FESCO of the Customized Pages and Tools and one-third upon final acceptance by FESCO of
the Customized Pages and Tools following the end of the testing period as defined in the Project
Plan. Notification regarding acceptance will be given by FESCO within 10 business days following
the end of the acceptance testing period and no response within that time frame will be deemed as
acceptance.

Additional one-time customization and integration fees related to the Buy Up option will be
outlined in a detailed Project Plan for each Customer and payable by FESCO as follows: One-third
upon acceptance of the design and specification by FESCO of the Customized Pages and Tools with
respect to the applicable Customer, one-third upon delivery of code and availability of testing by
FESCO of the Customized Pages and Tools with respect to such Customer and one-third upon final
acceptance by FESCO of the Customized Pages and Tools with respect to such Customer following the
end of the testing period as defined in the Project Plan. Notification regarding acceptance of
the Customized Pages and Tools with respect to such Customer will be given by FESCO within 10
business days following the end of the applicable acceptance testing period and no response within
that time frame will be deemed as acceptance.

For purposes of determining the aggregate ongoing license fees per employee per month (such fees
are referred to for all purposes in this Agreement as “pepm”) for the Basic Option and Buy-up
Option payable by FESCO for each month, the aggregate ongoing license fee for each such month shall
be equal to the applicable pepm (ie, the rate in Section III opposite the minimum number of
employees for such month based on Section IV above unless the actual number of employees eligible
to use the Tools for such month exceeds the minimum number for such month in Section IV in which
case the actual number of employees eligible to use the Tools for such month shall be the basis for
the applicable pepm rate in Section III), multiplied by the actual number of employees eligible to
use the Tools at the end of each such month, except that the minimum number of such employees at
the end of each such month shall be equal to the minimum applicable to each such month as set forth
in Section IV (for example, the minimum number of employees for the Basic Option for purposes of
calculating the aggregate ongoing license fees for the period from September 1, 2004 through
December 31, 2004 shall be 850,000; 1,500,000 for the period from January 1, 2005 through August
31, 2005; 1,800,000 for the period from September 1, 2005 through August 31, 2006; 2,400,000 for
any time from September 1, 2006 through August 31, 2007; and zero prior to September 1, 2004); and
provided further that if the actual number of employees eligible to use the Tools for any month
following the Effective Date exceeds the minimum number of employees for such month, the aggregate
ongoing license fees for such month shall be based on the actual number of employees eligible to
use the Tools for such month multiplied by the applicable pepm for such number of employees.

For the ongoing license (pepm) and maintenance fees for the Basic Option for the period 9/1/04 to
12/31/04, WebMD will invoice FESCO on 1/1/05 with payment due and payable within thirty (30) days
after receipt of invoice. For all other ongoing license (pepm) and maintenance fees (including
fees for the Buy Up option for the period 7/1/04 to 12/31/04), WebMD will invoice FESCO on the
1st of the month for the previous month’s End Users and payment will be due and payable
within thirty (30) days after receipt of invoice.

 

 

Any custom work beyond the products and services contemplated by Schedule A, Schedule B, Schedule C
and the associated project plan, will be detailed in writing in a work order by WebMD and will be
sent to FESCO for approval as provided by the terms of the Agreement. 100% of the agreed cost of
the custom work will be due and payable within thirty (30) days after receipt of invoice following
acceptance by FESCO.

 

 

*

 

 

 

 

 

			
	 	 	*Confidential treatment has been requested.
The redacted material has been separately filed with the Commission.

 

 

Fidelity Employer Services Company (FESCo)

Schedule B

Catalog of Products for the WebMD Health Hub TM 

[This schedule has been intentionally omitted. The Registrant will supplementally furnish this
omitted schedule to the Commission upon request.]

 

 

Fidelity Employer Services Company (FESCo)

Schedule C

Description of Project Scope and Services

[This schedule has been intentionally omitted. The Registrant will supplementally furnish this
omitted schedule to the Commission upon request.]<PAGE>
                                                                    Exhibit 10.3

                        INTEREST AND LIABILITIES CONTRACT
                   (hereinafter referred to as the "Contract")

                                       to

                 WORKERS' COMPENSATION AND EMPLOYER'S LIABILITY
                       PROPORTIONAL REINSURANCE AGREEMENT
                                    NYM-01/03
                  (hereinafter referred to as the "Agreement")

                                     between

                   NEW YORK MARINE & GENERAL INSURANCE COMPANY
                   (hereinafter referred to as the "Company")

                                      and

                           TWIN BRIDGES (BERMUDA) LTD
                               (Hamilton, Bermuda)
            (hereinafter referred to as the "Subscribing Reinsurer")

It is hereby mutually agreed that the Subscribing Reinsurer shall have a one
hundred per cent. (100%) participation in the Interests and Liabilities of the
Reinsurers as set forth in the Agreement attached hereto.

Such participation shall be several and not joint with the participation of any
other Subscribing Reinsurers, and the Subscribing Reinsurer shall under no
circumstances participate in the Interests and Liabilities of the other
Reinsurers in this Contract.

The Contract shall become effective 12:01 a.m., Eastern Daylight Time, December
1, 2003 and is subject to the provisions contained in the attached Agreement.

The Agreement to which this Contract is attached, and therefore the interests
and liabilities of the Subscribing Reinsurer therein, may be changed, altered,
or amended as the parties may agree; provided that such change, alteration, or
amendment is evidenced by endorsement to this Contract executed by the Company
and the Subscribing Reinsurer.

IN WITNESS WHEREOF, the parties hereto have caused this Contract to be signed in
duplicate by their duly authorized representatives.
<PAGE>
Signed in New York, NY
This 24th day of December, 2003

ATTEST:

                                        NEW YORK MARINE & GENERAL INSURANCE
                                        COMPANY

                                        By: /s/ MARK BLACKMAN
                                            ------------------------------------
                                        Title: CHIEF UNDERWRITING OFFICER
                                        Reference: TGH 01

And signed in Hamilton, Bermuda
This 24th day of December, 2003

ATTEST: Garth A. Fleming

                                        TWIN BRIDGES (BERMUDA) LTD

                                        By: /s/ Nick Frost
                                            ------------------------------------
                                        Title: Director
                                        Reference:
                                                   -----------------------------

<PAGE>
                 WORKERS' COMPENSATION AND EMPLOYER'S LIABILITY
                       PROPORTIONAL REINSURANCE AGREEMENT
                                    NYM-01/03

                         (HEREINAFTER, THE "AGREEMENT")

                                     BETWEEN

                  NEW YORK MARINE AND GENERAL INSURANCE COMPANY
                                 (NEW YORK, NY)

                          (HEREINAFTER, THE "COMPANY")

                                       AND

                         TWIN BRIDGES (BERMUDA) LIMITED
                               (HAMILTON, BERMUDA)

                         (HEREINAFTER, THE "REINSURER")

ARTICLE I - RECITALS AND BUSINESS COVERED

A.   WHEREAS the Company has agreed to underwrite certain specific and aggregate
     excess workers' compensation and employers' liability Policies for group
     self-insurance Trusts managed by Compensation Risk Managers LLC
     (Poughkeepsie, New York) ("CRM"); and

B.   WHEREAS certain managers, owners, and/or principals of CRM have formed the
     Reinsurer in order to reinsure the Company's Policies underwritten pursuant
     to Article I(A); and

C.   WHEREAS each Trust and CRM have entered into a management agreement,
     pursuant to which CRM provides each Trust with marketing, underwriting,
     loss control, claims, and accounting services, including without limitation
     authority to place excess workers' compensation and employers' liability
     coverage; and

D.   WHEREAS CRM accepts members only in accordance with each Trust's
     Underwriting Guidelines; and

E.   WHEREAS CRM has effected or will effect Statutory Specific Excess Coverage
     for the Trusts for Loss and Loss Adjustment Expense in excess of one
     million dollars ($1,000,000) per Occurrence; and

F.   NOW, therefore, in consideration of the payment of the premium displayed in
     Article X, the Company agrees to cede and the Reinsurer agrees to assume
     liability as displayed in Article VI during the Term as displayed in
     Article III and in the Territory displayed in Article IV, subject to the
     conditions and exclusions contained herein.

ARTICLE II - DEFINITONS

A.   "Agreement Year" means the twelve (12) month period from the inception or
     anniversary of this Agreement.
<PAGE>
B.   "Gross Ceded Premium" means the Reinsurer's proportionate share - before
     allowances for ceding commission or stop loss premiums - of the Company's
     Gross Net Written Premium.

C.   "Gross Net Unearned Premium" means that portion of Gross Net Written
     Premium accounted by the Company in its statutory filings as unearned.

D.   "Gross Net Written Premium" means the direct written premium accounted by
     the Company under its Policies, plus or minus audit adjustments, minus
     return premiums arising from cancellations.

E.   "Loss," "Loss Adjustment Expense," "Occurrence," and "Ultimate Net Loss"
     have the same meanings in this Agreement as they are defined in the
     Company's Policies.

F.   "Net Ceded Premium" means Gross Ceded Premium minus the ceding commission
     displayed in Article X (B), the premium for stop loss protection displayed
     in Article X (D), and the allowance for Federal Excise Tax displayed in
     Article XVII.

G.   "Notice Period" means the period between the effective date of cancellation
     of this Agreement and the date upon which either or both parties gave
     notice of cancellation.

H.   The term "Policies" means each excess workers' compensation and employers'
     liability coverage agreement issued by the Company to a group
     self-insurance trust managed by CRM.

ARTICLE III - EFFECTIVE DATE AND CANCELLATION

A.   This Agreement shall become effective at 12:01 a.m. Eastern Standard Time
     December 1, 2003, shall cover new and renewal Policies that become
     effective thereafter, and shall remain in force until cancelled.

B.   Except as provided in Article III (C), either party may cancel this
     Agreement upon one hundred twenty (120) days prior written notice to be
     effective on any anniversary date. The Company shall continue to cede new
     and renewal Policies that become effective during the Notice Period for
     cancellations pursuant to Article III (B).

C.   Either party may cancel this Agreement upon five (5) days prior written
     notice if the other party (1) becomes the subject of regulatory or
     supervisory action or (2) suffers a reduction of net worth greater than
     fifty percent (50%) since the date of its last audited financial
     statements. The Company shall not cede new and renewal Policies that become
     effective during the Notice Period for cancellations pursuant to Article
     III (C).

D.   Except as provided in Article III (E), termination of this Agreement will
     be on a run-off basis, and the Reinsurer will remain responsible for Losses
     subsequent to termination but only through the common expiration date of
     each Trust's Excess Coverage Term. The Company's original Policies will be
     issued for a term of one year but may be extended, with written notice to
     the Reinsurer, in order to conform the excess coverage term to the Trusts'
     Membership Renewal Period as defined in the Company's Policies.

E.   The Company may terminate this Agreement on a cut-off basis if it effected
     cancellation pursuant to Article III (C), in which case the Reinsurer will
     refund its portion of Gross Unearned Premiums, and the Company will credit
     the Reinsurer proportionately with the unearned Ceding Commission and
     unearned stop loss premiums.

F.   If any law, regulation, or ruling of the Federal government of the United
     States or any State, Territory, or Local government, or the rulings of any
     official having jurisdiction or supervision over insurance companies,
     should render the enforcement of this Agreement, in whole or in part,
     illegal within a given jurisdiction, the Company may, upon written notice
     to the Reinsurer, suspend, abrogate, or amend this Agreement insofar as it
     relates to such jurisdiction, to the extent necessary to comply with such
     law,
<PAGE>
     regulation, or ruling. Such suspension, abrogation, or amendment of this
     Agreement shall in no way affect any other portion thereof.

ARTICLE IV - TERRITORY

A.   This Agreement applies wherever coverage under the Company's Policies
     applies.

ARTICLE V - EXCLUSIONS

A.   This Agreement does not apply and specifically excludes liability arising
     from any source other than excess workers' compensation and employers'
     liability Policies issued by the Company to group self-insurance trusts
     managed by CRM.

B.   This Agreement includes and incorporates all exclusions contained in the
     Company's original Policies.

ARTICLE VI - RETENTION AND CESSION

A.   The Company's original Policy limits shall not exceed (1) five hundred
     thousand dollars ($500,000) per occurrence or accident, as defined in its
     Policies, in respect of specific claims or (2) two million dollars
     ($2,000,000) in respect of aggregate claims.

B.   The Company shall retain (1) fifty percent (50%) of the liability arising
     from its original Policies plus (2) one hundred per cent (100%) of the
     liability exceeding the Reinsurer's maximum liability displayed in Article
     VI (D).

C.   Subject to the limitation contained in Article VI (D), the Company shall
     cede and the Reinsurer shall assume fifty per cent (50%) of the liability
     arising from the Company's original Policies.

D.   Article VI (C) notwithstanding, the Reinsurer's maximum liability under
     this Agreement shall not exceed one hundred eighty-one and sixteen
     one-hundredths percent (181.16%) of Net Ceded Premium.

ARTICLE VII - ORIGINAL CONDITIONS

A.   The liability of the Reinsurer shall commence obligatorily and
     simultaneously with that of the Company, subject to the terms, conditions,
     and limitations set forth in this Agreement.

B.   Business ceded hereunder shall include every original Policy, rewrite,
     renewal, or extension (whether before or after the termination of this
     Agreement) required by applicable statute or by rule or regulation.

C.   The liability of the Reinsurer shall commence obligatorily and
     simultaneously with that of the Company as soon as the Company becomes
     liable, and the premium on account of such liability shall be credited to
     the Reinsurer from the original date of the Company's liability.

D.   All reinsurance for which the Reinsurer shall be liable, by virtue of this
     Agreement, shall be subject, in all respects, to the same rates, terms,
     conditions, interpretations, waivers, the exact proportion of premiums paid
     to the Company without any deduction for brokerage, and to the same
     modifications, alterations and cancellations, as the respective insurance
     of the Company to which such reinsurance relates, the true intent of this
     Agreement being that the Reinsurer shall, in every case to which this
     Agreement applies and in the proportion specified herein, follow the
     fortunes of the Company.
<PAGE>
E.   Nothing herein shall in any manner create any obligations, establish any
     rights, or create any direct right of action against the Reinsurer in favor
     of any third party, or other person not party to this Agreement; or create
     any privity of contract between the Trusts, their members, and the
     Reinsurer.

ARTICLE VIII - RESERVES

A.   The Reinsurer shall fund its share of the Company's ceded unearned premium
     and outstanding loss and loss adjustment expense reserves including
     incurred but not reported loss reserves by:

     1.   Clean, unconditional, and irrevocable Letter of Credit ("LOC") issued
          by any bank acceptable to the Company, and/or

     2.   A reinsurance trust fund ("Trust") for the benefit of the Company,
          provided that such trust fund complies with Regulation 114 of the
          Insurance Department of the State of New York; and/or

     3.   Funds withheld by the Company or cash advances by the Reinsurer
          ("cash").

     if, without such funding, a penalty would accrue to the Company on the
     financial statements it is required to file with any insurance regulatory
     authority. The Reinsurer may elect any combination of funding vehicles.

B.   With regard to funding in whole or in part by LOC, it is agreed that each
     such LOC will be issued for a term of not less than one year and will
     include a so-called "evergreen" clause which automatically extends the term
     for at least one additional year at each expiration date unless thirty (30)
     days prior to any expiration date, the issuing bank notifies the Company by
     certified mail it elects not to consider the Letter of Credit renewed or
     extended for any additional period.

     1.   The Company and the Reinsurer further agree, notwithstanding anything
          to the contrary in this Agreement, that said LOC may be drawn upon by
          the Company or its successors in interest at any time, without
          diminution because of the insolvency of the Company or the Reinsurer,
          but only for one or more of the following purposes:

          a)   To reimburse itself for the Reinsurer's share of the unearned
               premium paid under this Agreement, and/or

          b)   To reimburse itself for the Reinsurer's share of the unearned
               premium returned or returnable to insureds upon cancellation of
               insurance contracts covered under this Agreement, and/or

          c)   To pay the Reinsurer's share or to reimburse the Company for the
               Reinsurer's share of any liability for loss reinsured by this
               Agreement, which is due to the Company and has not been otherwise
               paid by the Reinsurer, and/or

          d)   To make refund to the Reinsurer of any sum which exceeds the
               actual amounts required to pay the Reinsurer's obligations under
               1, 2, and 3, above.

     2.   The bank issuing the LOC shall have no responsibility whatsoever in
          connection with the propriety of withdrawals made by the Company or
          the disposition of funds withdrawn, except to see that withdrawals are
          made only upon the order of properly authorized representatives of the
          Company.
<PAGE>
C.   With regard to funding in whole or in part by a Trust, the Company and the
     Reinsurer will appoint a Trustee and use their best efforts to conclude a
     Trust Agreement.

D.   With regard to funding in whole or in part by cash, the Company will credit
     the Reinsurer with interest income monthly in arrears by applying the
     two-year Treasury Constant Maturity Rate (as published monthly by the
     Federal Reserve Bank of Saint Louis at
     http://research.stlouisfed.org/fred2/series/GS2/22) to the average daily
     balance retained for Reinsurer's account by the Company.

E.   At annual intervals -- or more frequently as determined by the Company, but
     never more frequently than quarterly -- the Company shall prepare a
     specific statement, for the sole purpose of amending the LOC, and/or Trust,
     and/or cash, of the Reinsurer's share of any obligations.

1.   If the statement shows that the Reinsurer's share of obligations exceeds
     the balance of funding as of the statement date, the Reinsurer shall,
     within thirty (30) days after receipt of notice of such excess, secure
     delivery to the Company of an amendment of the LOC increasing the amount of
     credit by the amount of such difference and/or increase the balances of the
     Trust and/or make additional cash advances to eliminate the difference.

2.   If, however, the statement shows that the Reinsurer's share of obligations
     is less than the balance of funding as of the statement date, the Company
     shall, within thirty (30) days after receipt of written request from the
     Reinsurer, release such excess funding by agreeing to secure an amendment
     to LOC reducing the amount of credit available, and/or releasing excess
     amounts from the Trust, and/or refunding cash.

F.   The rights and obligations of the Company and the Reinsurer, as set forth
     in this Article, shall not be diminished in any manner whatsoever by the
     insolvency of any party hereto.

ARTICLE IX - GAP FUNDING

A.   In addition to Reserve funding described in Article VIII, the Reinsurer
     shall also fund, in the same manner provided for in Article VIII (A), the
     difference between (1) the maximum sum recoverable by the Company - that
     is, one hundred eighty-one and sixteen one hundredths per cent (181.16%) of
     Net Ceded Premium - and (2) the Reserve funding discussed in Article VIII.
     The difference between (1) and (2) equals the "Gap."

     1.   Within thirty (30) days of the inception of this Agreement, the
          Reinsurer will establish provisional Gap funding of one million five
          hundred thousand dollars ($1,500,000).

     2.   During the first Agreement Year, the Reinsurer will increase
          provisional Gap funding at a rate of 1.37x net premium ceded by the
          Company until Reserve funding and Gap funding equal one hundred eighty
          one point one six percent (181.16%) of Net Ceded premium.

B.   The stipulations for funding by an LOC, a Trust, or cash described in
     Article VIII shall also apply to Gap funding.

C.   Thirty-six (36) months from the inception of an Agreement Year, the
     Reinsurer may substitute an Indemnification Agreement for Gap funding,
     provided that the Indemnification Agreement contain such covenants as the
     Company may reasonably require concerning (a) the distribution of retained
     earnings and/or surplus capital by the Reinsurer or (b) the use of any such
     distributions by the Reinsurer's shareholders.
<PAGE>
ARTICLE X - PREMIUM AND COMMISSION

A.   The Company shall pay the Reinsurer fifty per cent (50%) of Gross Net
     Written Premium for subject Policies.

B.   The Reinsurer shall allow the Company to deduct a ceding commission of
     twenty-eight per cent (28%) of Gross Ceded Premium.

C.   In addition to the ceding commission described in Article X (B), the
     Reinsurer will reimburse the Company for its proportionate share of any
     profit commission or Policy taxes payable by the Company under its
     Policies.

D.   In consideration of limitation displayed in Article VI (C), the Reinsurer
     shall pay the Company a stop loss premium of two percent (2%) of its Gross
     Ceded Premium.

ARTICLE XI - REPORTS AND REMITTANCES

A.   Quarterly within thirty (30) days of the end of each calendar quarter, the
     Company shall submit a Policy bordereau displaying the Company's Policy
     number, the identity of the Group Self-Insurance Trust, specific and
     aggregate Policy retentions and limits, annual minimum and deposit premium,
     and Policy adjustment rate.

B.   Quarterly within thirty (30) days of the end of each calendar quarter, the
     Company shall submit a premium account listing by Policy details of all
     cash premium transactions during the quarter.

C.   Quarterly within thirty (30) days of the end of each calendar quarter, the
     Company shall submit a copy of the specific and aggregate claims bordereaux
     it receives from CRM for each Trust as well as any independent evaluation
     of claims it has undertaken.

D.   Quarterly within thirty (30) days of the end of each calendar quarter, the
     Company shall submit a loss account listing by claim details of all cash
     claims transactions during the quarter.

E.   Subject to the Reinsurer's simultaneous performance of its obligation
     pursuant to Article IX, the Company will remit net balances due to the
     Reinsurer with its account. The Reinsurer will remit net balances due to
     the Company within thirty (30) days of its receipt of the Company's
     account.

F.   Annually within ninety (90 days, the Company and the Reinsurer will
     exchange audited financial statements.

ARTICLE XII - CASH CALL

A.   Article XI notwithstanding, in the event of a settlement of an individual
     specific or aggregate claim, including commutation of a Policy, exceeding
     two hundred thousand dollars ($200,000) for the Reinsurer's share thereof,
     the Company may submit a demand for immediate funding by the Reinsurer.

B.   The Reinsurer shall remit payment of demands for cash funding within five
     (5) days of its receipt of the Company's demand.

ARTICLE XIII - OFFSET

A.   The Company and the Reinsurer shall have the right to offset any balance or
     amounts due from one party to the other under the terms of this Agreement.
<PAGE>
B.   The party asserting the right of offset may exercise such right any time
     whether the balances due are on account of premiums, commissions, losses or
     otherwise.

ARTICLE XIV - ACCESS TO RECORDS

The Reinsurer or its designated representatives shall have free access to the
books and records of the Company on matters relating to this Agreement at all
reasonable times for the purpose of obtaining information concerning this
Agreement or the subject matter hereof.

ARTICLE XV - ERRORS OR OMISSIONS

Errors and omissions on the part of the Company shall not invalidate the
coverage under this Agreement, provided such errors or omissions are corrected
promptly after discovery.

ARTICLE XVI - ARBITRATION

A.   Any dispute or other matter in question between the Company and the
     Reinsurer arising out of or relating to the formation, interpretation,
     performance, or breach of this Agreement, whether such dispute arises
     before or after termination of this Agreement, shall be settled by
     arbitration.

B.   The Company and the Reinsurer agree that upon the delivery of an
     arbitration notice, either party to the arbitration may seek the aid of the
     courts, in accordance with the provisions of Article XVIII, to obtain a
     temporary restraining order, preliminary injunction, or other appropriate
     relief to maintain the status quo ante or prevent the mooting of matters
     that are the subject of the arbitration while the arbitration process is
     pending. For purposes of this Article XVI (B), a wrongful termination of
     this Agreement or a breach of the Agreement that substantially impairs the
     continued operation of the Company shall be deemed to constitute
     irreparable harm for the purposes of establishing the elements for the
     entry of a temporary restraining order or preliminary injunction.

C.   Arbitration shall be initiated by the delivery by registered mail of a
     written notice of demand for arbitration by one party to the other within a
     reasonable time after the dispute has arisen. The demand for arbitration
     will contain details of the dispute and the identity of the arbitrator
     appointed by the initiating party.

D.   The party receiving notice shall appoint and identify its arbitrator to the
     initiating party within sixty (60) days of its receipt of the demand for
     arbitration. If the receiving party refuses or neglects to appoint an
     arbitrator within sixty (60) days, the initiating party shall appoint the
     second arbitrator within thirty (30) days thereafter.

E.   The two party arbitrators shall appoint a third arbitrator as an umpire
     (collectively, the "Arbitrators") within thirty (30) days of appointment of
     the second arbitrator. If the two party arbitrators do not agree on an
     umpire within thirty (30) days after the appointment of the second
     arbitrator, the parties shall allow the American Arbitration Association to
     select the umpire.

F.   The Arbitrators shall be individuals who may be active or retired officers
     of an insurance or reinsurance company, or professionals with at least ten
     years' experience in insurance or reinsurance matters, other than current
     or former officers, directors, or employees of any party or an affiliate of
     any party.

G.   Each party shall submit its case brief in writing to the arbitrators within
     thirty (30) days of the selection of the umpire or within such longer
     period as may be agreed by the arbitrators. The arbitrators may agree by
     majority vote to permit written rebuttals from the parties and/or to hear
     live testimony.
<PAGE>
H.   The arbitration hearings shall be held in New York, New York within thirty
     (30) days of exchange of case briefs and rebuttals, if any.

I.   The arbitrators shall not be obliged to follow judicial formalities or the
     rules of evidence except to the extent required by the laws of the State of
     New York. They shall make their decisions according to the practice of the
     reinsurance business.

J.   The written decision rendered by a majority of the arbitrators shall be
     final and binding on both parties. Judgment upon the award rendered may be
     entered in any court having jurisdiction thereof.

K.   Each party shall pay the fee and expenses of its own arbitrator and
     one-half of the fee and expenses of the umpire. All other expenses of the
     arbitration shall be equally divided between the parties.

L.   Except as provided above, arbitration shall be based upon the procedures of
     the American Arbitration Association.

ARTICLE XVII - TAXES

A.   The Reinsurer agrees to allow the Company to deduct one per cent (1%) of
     Gross Ceded Premium for the purpose of paying Federal Excise Tax (FET) to
     the extent such premium is subject to FET.

B.   In the event of any return of premium becoming due hereunder, the Reinsurer
     will deduct the FET allowance from the return premium payable to the
     Company.

C.   The Reinsurer shall reimburse the Company for its proportionate share of
     specific Policy taxes, if any, which the Company becomes liable to pay.

ARTICLE XVIII - GOVERNING LAW

A.   This Agreement will be subject to the laws of the State of New York.

B.   The Company and the Reinsurer agree to the jurisdiction of New York State
     Court sitting in New York County.

ARTICLE XIX - INSOLVENCY

A.   In the event of the insolvency of the Company, payments by the Reinsurer
     under this Agreement shall be payable on demand, with reasonable provision
     for verification, on the basis of claims allowed against the insolvent
     Company by any court of competent jurisdiction or by any liquidator,
     receiver, or statutory successor of the insolvent Company that has
     authority to allow such claims, without diminution because of such
     insolvency or because such liquidator, receiver, or statutory successor has
     failed to pay all or a portion of any claims.

B.   Such payments by the Reinsurer shall be made directly to the Company or its
     liquidator, receiver or statutory successor, except as provided by Section
     4118 (a) of the New York Insurance Law or except (a) where the Agreement
     specifically provides another payee of such payments in the event of the
     insolvency of the Company, or where (b) the Reinsurer with the consent of
     the direct insured or insureds has assumed such Policy obligations of the
     Company as direct obligations of the Reinsurer to the payees under such
     Policies and
<PAGE>
     in substitution for the obligations of the Company to such payees.

C.   It is agreed, however, that the liquidator, receiver, or statutory
     successor of the insolvent Company shall give written notice to the
     Reinsurer of the pendency of a claim against the insolvent Company on the
     Policy or Policies within a reasonable time after such claim is filed in
     the insolvency proceeding and that during the pendency of such claim the
     Reinsurer may investigate such claim and interpose, at its own expense, in
     the proceeding where such claim is to be adjudicated, any defense or
     defenses which it may deem available to the Company or its liquidator,
     receiver, or statutory successor. The expense thus incurred by the
     Reinsurer shall be chargeable, subject to court approval, against the
     insolvent Company as part of the expense of liquidation to the extent of a
     proportionate share of the benefit that may accrue to the Company solely as
     a result of the defense undertaken by the Reinsurer.

ARTICLE XX - CURRENCY

A.   Whenever the word "Dollars" or the "$" sign appears in this Agreement, they
     shall be construed to mean United States Dollars.

B.   All payments made by either party shall be made in United States Dollars.

ARTICLE XXI - INTERMEDIARY

TGH ADVISORS, INC., 420 Lexington Avenue, Suite 300, New York, NY 10170, is
hereby recognized as the Broker of Record for all business hereunder. All
communications (including but not limited to notices, statements, premiums,
return premiums, commissions, taxes, losses, loss adjustment expense, salvages,
and loss settlements) relating thereto shall be transmitted to the Company or
the Reinsurer through TGH ADVISORS, INC. Payments by the Company to the Broker
of Record shall be deemed to constitute payment to the Reinsurer. Payments by
the Reinsurer to the Broker of Record shall be deemed to constitute payment to
the Company only to the extent that such payments are actually received by the
Company.

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