1988-040-RES WHEREAS, the City Council of the City of Paris, is desirous of continuing to provide health coverage for

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B. Blue Cross and Blue Shield of Texas, Inc. will furnish the Employer a Health Contract report within ninety (90) days after the end of each Accounting Period, detailing Specific Health Stop Loss Benefits, if any. Health Contract Underwritten Premium, Incurred Health Benefits, Specific Health Contract Stop Loss Premium and Heal th Contract Administration Charge for such Accounting Period and all other data required for settlement, as provided herein. If the report reflects that the Health Contract Underwritten Premium exceeds the sum of: (1) Incurred Health Benefits plus (2) Health Contract Administration Charge, plus (3) Specific Health Contract Stop Loss Premium (if any), such excess shall be termed herein as the Health Contract Accounting Period Surplus; if the results thus obtained is a negative figure, such amount shall be termed herein as the Health Contract Accounting Period Deficit. Based on the report, the following applies: 1. If the report reflects a Health Contract Accounting Period Deficit, such deficit shall be combined with any deficits carried forward from previous Accounting Periods and the total of such deficits shall, for the accounting required for the next succeeding Accounting Period, be termed the Health Contract Standing Deficit. 2. If the report reflects a Health Contract Accounting Period Surplus, any such surplus shall be first applied against the Health Contract Standing Deficit, if any, such excess shall be reduced to zero. C. If Item IV (a) of IV (b) of the Exhibit is indicated "Applied For" and the report provided for in Section B above reflects Specific Health Stop Loss Benef its for the Accounting Period involved, Blue Cross and Blue Shield of Texas, Inc. will settle with the employer within 30 days of such report for any Specific Health Stop Loss Benefits. D. On termination of the Health Contract or the 30th day following the notice provided for in Paragraph C of Article IV of this Agreement, the time intervening between the end of the last previous Accounting Period and the termination date or the 30th day following such notice shall, regardless of the number of months involved, be considered an Accounting Period and shall be termed herein as the Final Accounting Period. Except as otherwise provided below, reports and settlements for the Final Accounting Period shall be effected in accordance with the provisions of the foregoing Sections of this Article III, and Specific Health Stop Loss Benefits will not extend beyond the end of the Final Accounting Period. Within ten (10) days after the end of the Final Accounting Period, all the Remaining Health Contract Administration Charges as specified in Item VI of the Exhibit are to be paid to Blue Cross and Blue Shield of Texas, Inc. within fifteen (15) days of the end of the Final Accounting Period, the Remaining Heal th Contract Underwritten Premium shall be transferred to the Employer's Account by the Employer and the Flex Pay Banking arrangements provided for in Article II hereof shall continue for twenty-four (24) months following the end of the Final Accounting Period. After transfer of Remaining Health Contract Underwritten Premium, Draft Authority is the Remaining Health Contract Underwritten Premium and no further drafts will be made on the Employer's Bank. In the event that the Remaining Health Contract Underwritten Premium is insufficient to pay for the remaining claims liability, Blue Cross and Blue Shield of Texas, Inc. will bill the Employer for such remaining claim liability up to the amount of any Health Contract Accounting Period Surplus developed by the accounting for the Final +v