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Attachment A with proper diligence. HPHC also agrees that:
(i) A trained HPHC representative shall be available to meet with representatives

of Purchaser and its Designee to discuss the costs, health care benefits, provider network,

administration of the Plan, and future directions of the Plan.
(ii HPHC shall maintain a toll free telephone number for use by Purchaser's

Members, Purchaser and its Designee. HPHC shali have trained personnel to answer _

questions regarding claims, benefits and provider networks. .
{ili) HPHC shall work with Purchaser and its Designee to effect a smooth and

efficient initial open enrollment period, including employee/retiree health fair(s), and

subsequent open-enrollment periods and health fairs.
(iv) HPHC shall provide claim and enrollment data and reports as scheduled in
Attachment A in a format and manner satisfactory to Purchaser or its Designee, acceptance of

which shall not be unreasonably withheld.

(v) HPHC shall develop and/or maintain a network of Contracting Providers which
shall reasonably meet the needs of Purchaser's Members.
(vi) . | HPHC shall develop and/or maintain a network of participating phannadies that

shall reasonably meet the needs of Purchaser's covered Members.

Il, TERM AND TERMINATION OF AGREEMENT

2.4 Effective Date. The effective date of this Agreement shall be as first written
above, and it shall continue in effect thereafter for an initial term of 12 months, and from year
to year thereafter, subject to the termination provisions set forth below.

2.2‘ Termination on Anniversary Date, Either party may terminate this Agreement
effective on any anniversary date by written notice at least shy) (60) days prior to such

anniversary date.

2.3. Termination on Notice. Either party may terminate this Agreement upon ninety
(90) days written notice.

2.4 Termination for Cause by HPHC, HPHC shail have the option to immediately
terminate this Agreement upon the occurrence of any of the following:

(i) Purchaser shail violate any covenant of this Agreement and/or any other
agreement that is mentioned herein and shall fail to cure such violation within thirty (80) days
after written notice thereof; or

(ii) Purchaser shall make an assignment for the benefit of creditors or apply
to any tribunal for the appointment of a trustee or receiver for any subsianiial part of its assets,
or cause to be commenced any proceeding relating to it under any bankruptcy. reorganization,
arrangement, insolvency, readjustment of debt, dissolution, or liquidation laws of any
jurisdiction; or

(iii) If any such application shall be filed or any such proceedings commenced
against Purchaser by any other party or an order shalt be entered at the instance of any other
party appointing any such trustee or receiver, or adjudicating Purchaser a bankrupt or
insolvent, or approving a petition in any such proceedings, and such application, proceedings,

FORM#PSO1 08/17/2002

or order shall remain in effect for sixty (60) days; or

(iv) There exists the issuance of an attachment, garnishment or similar
process against any substantial part of the property of Purchaser and such attachment,
garnishment or other similar process shall not be dismissed within sixty (60) days unless
Purchaser shall contest the validity of such action by appropriate proceedings taken in good

faith within the sixty (60) day period; or

{v) The occurrence of any event, which with the passage of time or otherwise,
would become an event of default under any other agreement, note, lease, mortgage or
obligation to which Purchaser is a party, unless any such event of défault shall be timely cured
under any applicable cure provision, but without regard to any waiver by any other person of

any event of default; or

(vi) Purchaser shall admit in writing that it is unable to meet its current
financial obligations.

2.5 Termination for Cause by Purchaser. Purchaser shall have the option to
immediately terminate this Agreement upon the occurrence of any of the following:

(i) HPHC shall violate any covenant of this Agreement and/or any other “~
agreement that is mentioned herein and shall fail to cure such violation within thirty (80) days

after written notice thereof, or

(ii) HPHC shall make an assignment for the benefit of creditors or apply to
any tribunal for the appointment of a trustee or receiver for any substantial part of its assets, or
cause to be commenced any proceeding relating to it under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, cissonuen or liquidation laws of any

jurisdiction; or

(iii) If any such application shall be filed or any such proceedings commenced
against HPHC by any other party or an order shall be entered at the instance of any other party
appointing any such trustee or receiver, or adjudicating HPHC a bankrupt or insolvent, or
approving a petition in any such proceedings, and such application, proceedings, or order shall
remain in effect for sixty (60) days; or

(iv) There exists the issuance of an attachment, garnishment or similar
process against any substantial part of the property of HPHC and such attachment,
garnishment or other similar process shail not be dismissed within sixty (60) days unless
HPHC shail contest the validity of such action by appropriate proceedings taken in good faith

within the sixty (60) day period; or

{v) The occurrence of any event, which with the passage of time or otherwise,
would become an event of default under any other agreement, note, lease, mortgage or
obligation to which HPHC is a party, unless any such event of default shall be timely cured
under any applicable cure provision, but without regard to any waiver by any person of any

event of default; or

2.6 Termination Upon Amendment of Service Fees. HPHC may terminate this

Agreement in accordance with the provisions of section 1.5 of the Agreement.

FORM#PSO1 08/17/2002

7

27 Legal Requirements, In the event that any governmental agency determines
that HPHC is operating in Violation of any faw or regulation or otherwise requests that HPHG
cease operations for Purchaser, then this Agreement may be terminated by either partly upon

thirty (80} days written notice.

2.8 Duties on Termination, As of the effective date of termination pursuant to any
provision of this Agreement, it shall be considered of no further force or effect, and each of the
parties shail be relieved and discharged from this Agreement, and HPHC’s agency shall be
. automatically revoked, provided, however, each party shall remain liable for any obligations or
liabilities arising from activities carried on by such party or its agents, servants, or employees
during the period (including any period covered above) this Agreement shall have been in
effect. Termination shall not, at Purchaser’s option, terminate the duties and obligations of the
parties hereto for Members then being treated by Contracting Providers on an inpatient basis, .
including payment therefore, until the Member is discharged or for thirty (80) days, whichever
is sooner. HPHC shall process and pay all eligible claims incurred during the term of this
Agreement for a period up to twelve ({2) months after termination of this Agreement.

lil. MISCELLANEOUS

3.1 Amendments. Except as provided herein, this Agreement,
or any part hereof, may be amended at any time by written consent of authorized
representatives of both parties. :

3.2 Waiver. No covenant, condition, duty, obligation, or undertaking contained in or
made a part of this Agreement shall be waived except by the express written consent of the
party giving such waiver granted in accordance with the provisions hereof, and forbearance or
indulgence in any form or manner by either party in any regard whatsoever shall not constitute
a waiver of the covenant, condition, duty, obligation, or undertaking to be kept, performed, or
discharged by the party to which the same may apply.

3.3. Notice to Members. HPHC and Purchaser reserve the right to amend this
Agreement or any provision hereof, to waive any rights granted to either party hereunder by
mutual agreement, or to terminate the Agreement in any manner provided in any provision
hereof without notice to or consent of any Member.

3.4 Third Party Rights. This Agreement is entered into by and between the parties
hereto and for their benefit. Except as specifically provided herein, there is no intent by either
party to create or establish third party beneficiary status or rights in any Member,
subcontractor, or other third party to this Agreement, and no such third party shail have any
right to enforce any right or eniey any benefit created or established under this Agreement.

3.5 Assessments. Purchaser will pay HPHC within thirty (80) days after
assessment any tax or charge assessed against HPHC which is incurred by reason of a
change in, or imposition of, any charges imposed on HPHC by any public body, exclusive of
Federal or State Income Taxes, which affect this Agreement. The final billing for the
Massachusetts Uncompensated Care Pool surcharge and for charges incurred under the New
York Health Care Reform Act will occur following the end of the run out period.

FORM@PSOi 06/17/2002

3.6 Limitations. In the event the operations of HPHC’s facilities or any substantial
portion thereof are interrupted by war, fire, insurrection, labor/provider contract troubles,
millenium failures, riots, the elements, earthquakes or acts of God, the provisions of this
Agreement (or such pertions hereof as HPHC is thereby rendered incapable of performing)
shall be suspended for the duration of such interruption. In the event that this Agreement, or
any portion hereof, is suspended due to HPHC’s inability to operate due to interruptions for
reasons described above, Purchaser shall not be liable for any portion of the Service fee
specified in Attachment C for those days during which HPHC was not able to perform all

Services required under this Agreement.

In the event that Purchaser or its Designee is unable to perform its obligations and
responsibilities due to war, fire, insurrection, labor contract troubles, riots, the elements,
earthquakes or acts of God, the schedule of payments due from Purchaser and other
administrative schedule requirements shall be delayed until operations can be resumed.

3.7 Arbitration. In the event of any dispute of any kind concerning this Agreement
or the performance of obligations hereunder, said dispute shall be submitted to arbitration in
accordance with the rules of the American Arbitration Association. Fees and all related costs
of arbitration shall be borne equally by both parties. The parties agree to be bound by the
results of such arbitration. The obligations of this provision shall survive termination of this

Agreement.

3.8 Performance by HPHC. HPHC shail perform its obligations under this
Agreement through, at its discretion, employees or arrangements or contracts with agents or

independent contractors.

8.9 Successors and Assigns. The provisions of this Agreement and obligations
arising hereunder shall extend to, be binding upon, and inure to the benefit of the executors,

administrators, successors, and assigns of the parties hereto.

3.10 Assignment. Purchaser shall not assign its rights and obligations under this
Agreement without the prior written consent of HPHC. HPHC may assign its respective rights
and responsibilities under this Agreement to any entity which owns or controls HPHC, to any
entity which is owned or controlled by HPHC, or to any entity which is under common
ownership or control with HPHC and HPHC shall provide written notice to Purchaser within

thirty (30) days of such assignment.

3.11 Headings. The headings of the various sections of the Agreement are inserted
merely for the purpose of convenience and do not, expressly or by implication, limit, define or
extend the specific terms of the section so designated.

3.12 Notice. Any notice required to be given pursuant to the terms and provisions of
this Agreement shall be in writing and may either be personally delivered or sent by registered
or certified mail by United States Postal Service, return receipt requested, postage prepaid,
addressed to each party at the addresses which follow:

i} Purchaser:

Company Name:

FORM#PS01 05/17/2002

“Care of: ouck rwncl Do] k
Street: aad arn} S

City/State/Zip: . Wt 030 66

iiJHPHG:
The Office of General Counsel
Harvard Pilgrim Heaith Care, Inc.
93 Worcester Street
Wellesiey, MA 02481

3.13 Entire Agreement. This Agreement (together with all attachments) contains the
" entire agreement between the parties relating to the rights granted and the obligations

assumed by this Agreement. Any prior agreements, promises, negotiations, or representations
relating to the subject matter of this Agreement not expressly set forth in this Agreement are of

no force or effect.

. 8.14 Apolicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts..

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their duly authorized officers, this Yday of aa 2008,

HARVARD PILGRIM HEALTH CARE, INC.

By:

CITY OF NASHUA

By:

FORMA#PSO1 05/17/2002

10

ATTACHMENT B
CONTRACTING PROVIDER COMPENSATION PROVISIONS

For Covered Services provided by Contracting Providers in accordance with the
terms and conditions of the Plan and the provisions of agreements through which HPHC
has arranged for the provision of Covered Services to Members, Purchaser shall provide
compensation in the amounts charged at the rate to which each Contracting Provider, or
an entity acting on the Contracting Provider's behalf, has agreed with HPHC or HPHC’s
designee. Purchaser understands that HPHC has a variety of agreements with
Contracting Providers relating to compensation arrangements for self-insured plans
administered by HPHC. These arrangements include, but are not limited to, withholds,
risk-sharing, vendor rebates/refunds, capitation, per diem paymenis, fee schedules and
DRGs. These arrangements are for the sole benefit of HPHC and Purchaser shall have
no interest in or claim on any of these arrangements, except to the extent that HPHC
has determined, in accordance with its reimbursement practices and procedures relating
to self-insured plans, to make such arrangements partiaily available to self-insured
plans. Purchaser acknowledges and agrees that HPHC has not represented or
guaranteed that Purchaser will receive the same reimbursements arrangement that
would apply to HPHC's insured business. Claims paid under the Plan shall be
determined and calculated on the basis of the foregoing rates of payment, for purposes
of Attachment D. Ail payments to providers shall be subject to the applicable
copayments and deductibles under the Plan.

Primary Care Providers, as defined in Attachment E, may be paid a monthly
management Fee for each member enrolled in his or her practice in addition to
compensation for Covered Services rendered. HPHC may amend the Managerient Fee
by thirty-days advance written notice to Purchaser.

Contracting Providers shall accept the above compensation as payment in full for .
Covered Services, except for applicable copayments and coinsurance.

FORM# PS_B01 i 05/17/2002

ATTACHMENT C
HPHC COMPENSATION PROVISIONS

Purchaser shall pay HPHC on the first day of each month a Service Fee
described below. In return for this monthly Service Fee from Purchaser during the term
of the Purchaser Service Agreement and for one (1) year thereafter, HPHC shall process
and pay all eligible claims incurred during the term of the Agreement for a period up to
twelve (12) months after termination of the Agreement. There will be periodic retroactive
and prospective adjustments to such payments to reflect the actual number of covered
contracts and prorated portions thereof. HPHC shall provide the Purchaser or its
Designee with a monthly bill for administrative services. All HPHC administrative
services are included in this Service Fee except as specifically excluded in paragraph 10
of Attachment A or as specifically provided in the Purchaser Service Agreement.

Administrative Fee Schedule

Product Name Individual - Dual Family
Contract Contract Contract
EPO $27.50 $55.00 $74.25

FORM# PS_CO1 05/17/2002

ATTACHMENT D
FUNDING OF COVERED SERVICES

OVERVIEW: HPHC shali from time to time, generally at weekly intervals, issue
payment to Contracting Providers for Covered Services. HPHC makes such
payments from a master claims paying account. This Attachment describes the
manner in which the Purchaser provides sufficient funds to HPHC to cover such
payments. Purchaser understands that failure to make sufficient funds available
in accordance with this Attachment shall cause HPHC to suspend further claims.

payments.

WEEKLY TRANSFER WITH PURCHASER AS ORIGINATOR: Purchaser has
agreed to reimbursement through weekly wire transfer with Purchaser as the
originator, HPHC will invoice Purchaser each week by Friday. Unless otherwise
agreed, the invoice will be in the form of a fax. Each invoice will include all claims
that were paid on Tuesday of that week from the HPHC master claims paying
account. Purchaser shall wire the amount due to HPHC by the third business day
following notification. This form of reimbursement requires that Purchaser make
an initial working deposit equal to one half of a month’s anticipated claims
expense as calculated by HPHC. The working deposit shall be kept in a
segregated sub-account specific to Purchaser maintained by HPHC at Citizens
Bank. HPHC acts as the custodian of the sub-account. A “W-9 Form” must be
filled out by Purchaser to establish the sub-account. Interest earned at the
current bank interest rate will be added to the working deposit. Each plan year,
HPHC will recalculate the working deposit required based on current utilization

and membership.

MONTHLY STATEMENT: Each month, HPHC shail provide a statement to the
Purchaser, which will include all claims paid and all payments received within the
month. This report will include detailed reports that support the claims charges on

the monthly billing statement.

DUTIES ON TERMINATION: Pursuant to section 3.8 of the Agreement, HPHC
shall process and pay all eligible claims incurred during the term of this
Agreement for a period up to twelve (12) months after termination of the
Agreement, and Purchaser shall continue to provide funding for such claims
payments in accordance with this Attachment.

Form# PS_4D01 05/17/2002

ATTACHMENT LIST

Attachment A Administrative Services

Attachment B Contracting Provider Compensation
Provisions

Attachment C HPHC Compensation Provisions

Attachment D Funding of Covered Services

Attachment E Purchaser's Plan

FORM#PS01 . 05/17/2002
1

ATTACHMENT A
ADMINISTRATIVE SERVICES

HPHC shail perform the following administrative services for Purchaser with
. respect to the Plan.

- 4. Financial Systems and Services. HPHC shall establish, administer and
maintain accounting procedures and systems for the preparation of appropriate financial
reports for the efficient management and planning for the Plan. The foregoing shall

include, but not be limited to:

(a) Not later than ninety (90) days prior to the beginning of each annual
contract period, HPHC shail prepare and provide the Purchaser with
an annual operating budget setting forth an estimate of the Plan’s
operating expenses for the contractual year which shall be in
reasonable detail and shall contain an explanation of anticipated
changes, if any, in utilization, claims paid, and other factors which
may significantly affect the operating budget.

(b) HPHC shall assist Purchaser on Purchaser's request in preparing
and filing all financial reports required of Purchaser regarding the
Plan by any federal, state or other agency or authority.

(c) HPHC will provide the Purchaser monthiy accounting statement,
standard support reports, working fund billing services, and up to ten
(10) hours per year of personnel support for audits. Comprehensive
audits of claims data covering a multiple year period require a 45
day notice. HPHC will accommodate non standard report requests
subject to available staffing capacity and will reserve the right to
charge one hundred dollars ($100) per hour for labor costs, and a
set up fee of one hundred dollars ($100.00) per hour for
programming costs and seventy-five dollars ($75.00) per hour for
installation costs associated with each request. Audit support in
excess of ten (10) hours per year will be charged at one hundred
dollars ($100) per hour for each request.

2. Claims Processing and Administration. Subject to the restrictions in
Section 2(c) below, HPHC shall design, implement and maintain such systems and
procedures as may be necessary for the appropriate adjudication and timely payment of
all claims for payment submitted to Purchaser (including Member and provider claims)
and to assure the availability of appropriate and accurate information for the
administration of the Plan's programs. HPHC's services shall include, but not be limited

to the following:

FORM# PS_AO1 05/17/2002