EXHIBIT 10.2
NOVATION AGREEMENT FOR TRANSFER OF MEDICARE FUNCTIONS
TO AN AFFILIATED ORGANIZATION
This Novation Agreement is entered into as of May 29, 2002, by and between Blue
Cross & Blue Shield United of Wisconsin, a corporation duly organized and
existing under the laws of the State of Wisconsin, with its principal office in
the City of Milwaukee (hereinafter referred to as the "Transferor"); United
Government Services, LLC, a limited liability company duly organized and
existing under the laws of the State of Wisconsin, with its principal office in
the City of Milwaukee (hereinafter referred to as the "Transferee"); the Blue
Cross and Blue Shield Association, an association of independent Blue Cross and
Blue Shield Plans and a corporation duly organized and existing under the laws
of the State of Illinois, with its principal office in the City of Chicago,
Illinois (hereinafter referred to as the "Association"); and the Department of
Health and Human Services (hereinafter referred to as the "Government').
WITNESS THAT
1. WHEREAS, the Government has entered into a consecutive series of agreements
with the Association, as prime contractor, to engage in the administration
of the Medicare program pursuant to Title XVIII of the Social Security Act;
and,
2. WHEREAS, the Association has further entered into a consecutive series of
subcontracts, beginning July 1, 1966, in administering the Medicare
program, the last becoming effective October 1, 1998, and it continues in
force as of the date of this Novation Agreement. The term "subcontracts" as
used herein means the aforementioned subcontracts, including modifications
thereto, heretofore made between the Association and the Transferor, and
such remaining rights, duties or obligations, pursuant to the aforesaid
subcontracts. These subcontracts are herein incorporated by reference; and,
3. WHEREAS, as of January 1, 1999, the Transferor assigned, conveyed, and
transferred to the Transferee all the assets pertaining to the Medicare
Part A program of the Transferor to the Transferee; and,
4. WHEREAS, as of January 1, 1999, the Transferee, by virtue of said
assignment, conveyance, and transfer, has acquired all the assets
pertaining to the Medicare Part A program of the Transferor; and,
5. WHEREAS, by virtue of said assignment, conveyance, and transfer, the
Transferee has assumed all of the duties, obligations, and liabilities of
the Transferor under the subcontracts except as referenced in this Novation
Agreement; and,
NOVATION AGREEMENT FOR
TRANSFER OF MEDICARE FUNCTIONS
TO AN AFFILIATED ORGANIZATION
Page 1 of 6
6. WHEREAS, the Transferee is in a position fully to perform the subcontracts
and such obligations as may exist under the subcontracts; and,
7. WHEREAS, it is consistent with the Association's and the Government's
interest to recognize the Transferee as the successor party to the
subcontracts.
NOW THEREFORE, in consideration of these premises, the parties hereto agree as
follows:
1. Except for matters addressed in paragraph 2 below,
A. The Transferor hereby confirms said assignment, conveyance, and
transfer to the Transferee and does hereby release and discharge the
Association and the Government from, and does hereby waive, any and
all claims, demands, and rights against the Government which it now
has or may hereafter have in connection with the subcontracts which
arise out of occurrences on or after May 29, 2002.
B. The Transferee hereby assumes, agrees to be bound by, and agrees to
perform each and every one of the terms, covenants, and conditions
contained in the subcontracts on or after May 29, 2002. The Transferee
further assumes all obligations and liabilities on or after May 29,
2002, of all claims and demands against the Transferor under such
subcontracts on or after May 29, 2002 in all respects as if the
Transferee were the original party to the subcontracts. Further, the
Transferee hereby ratifies all previous actions of the Transferor with
respect to the subcontract as if the Transferee were the original
party.
2. With respect to any action or proceeding pertaining to matters of program
integrity and as to which claims are made or asserted for criminal
liability, civil actions for damages or application of civil monetary
penalties, the Transferor shall bear sole responsibility with respect to
occurrences prior to May 29, 2002, with the Transferee bearing sole
responsibility for occurrences on and after May 29, 2002.
3. The Association and the Government hereby recognize the Transferee as the
Transferor's successor in interest in and to the subcontracts as of May 29,
2002. The Transferee hereby becomes entitled to all rights, title, and
interest of the Transferor in and to the subcontracts in all respects as if
the Transferee were the original party to the subcontracts. As of the
effective date of this Agreement, the term "Plan" as used in the
subcontracts shall be deemed to refer to the Transferee rather than to the
Transferor.
NOVATION AGREEMENT FOR
TRANSFER OF MEDICARE FUNCTIONS
TO AN AFFILIATED ORGANIZATION
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4. The Association, the Transferor, and the Transferee hereby agree that the
Government shall not be obligated to pay or reimburse any of them for, or
otherwise give effect to, any costs, taxes, or other expenses, or any
increases therein, directly or indirectly arising out of or resulting from:
(a) said assignment, conveyance, and transfer, or (b) this Novation
Agreement, other than those the Government, in the absence of said
assignment, conveyance, and transfer, or this Novation Agreement, would
have been obligated to pay or reimburse under the terms of the
subcontracts.
5. Except as expressly provided herein, nothing in this Novation Agreement
shall be construed as a waiver of any rights of the Association or the
Government against the Transferor.
6. The Transferor hereby guarantees payment of all liabilities and the
performance of all obligations prior to May 29, 2002.
7. Notwithstanding the foregoing provisions, all payments and reimbursements
heretofore made by the Association or the Government to the Transferor, and
all other actions heretofore taken by the Association or the Government
pursuant to its obligations under the subcontracts shall be deemed to have
discharged PRO TANTO the Association's and Government's obligations under
the subcontracts. All payments and reimbursements made by the Association
or the Government after the date of this Novation Agreement in the name of
or to the Transferor shall have the same force and effect as if made to
Transferee and shall constitute a complete discharge of the Association's
and the Government's obligations under the subcontracts, to the extent of
the amounts so paid or reimbursed.
8. Except as herein modified, the subcontracts shall remain in full force and
effect.
9. Nothing in this Novation Agreement shall relieve Transferor or Transferee
from compliance with any federal law.
NOVATION AGREEMENT FOR
TRANSFER OF MEDICARE FUNCTIONS
TO AN AFFILIATED ORGANIZATION
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IN WITNESS WHEREOF, each of the parties hereto has executed this Novation
Agreement as of the day and year first above written.
BLUE CROSS & BLUE SHIELD UNITED GOVERNMENT SERVICES, LLC
UNITED OF WISCONSIN (Transferee)
(Transferor)
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxx
------------------------------ -------------------------------
(Signature) (Signature)
Xxxxxx X. Xxxxx XXXXXX X. XXXXXX
------------------------------ -------------------------------
(Name) (Name)
Chairman, CEO PRESIDENT
------------------------------ -------------------------------
(Title) (Title)
6/3/02 5/30/02
------------------------------ -------------------------------
(Date) (Date)
DEPARTMENT OF HEALTH AND HUMAN BLUE CROSS AND BLUE SHIELD
SERVICES ASSOCIATION
By: /s/ X.X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------ -------------------------------
(Signature) (Signature)
X.X. XXXXXXX Xxxxxx X. Xxxxxxxx
------------------------------ -------------------------------
(Name) (Name)
Contracting Officer Medicare Contracting Officer
------------------------------ -------------------------------
(Title) (Title)
6/20/02 6/17/2002
------------------------------ -------------------------------
(Date) (Date)
NOVATION AGREEMENT FOR
TRANSFER OF MEDICARE FUNCTIONS
TO AN AFFILIATED ORGANIZATION
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NOTE: Each Corporate Signatory to this Novation Agreement should cause the
following certificate to be executed under its corporate seal if it has one,
provided that the same officers shall not execute both the Novation Agreement
and the certificate.
CERTIFICATE
I, Xxxxxxx X. Xxxxxxxx, certify that I am the Secretary of Blue Cross & Blue
Shield United of Wisconsin (Transferor); that Xxxxxx X. Xxxxx, who signed this
Novation Agreement on behalf of this corporation, was then Chairman and CEO of
this corporation; and that this Novation Agreement was duly signed for and on
behalf of this corporation by authority of its governing body and within the
scope of its corporate powers.
Witness my hand and the seal of this corporation this 3rd day of June, 2002.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
(Corporate Seal)
CERTIFICATE
I, Xxxxx Xxxxx, certify that I am the V.P and General Counsel of United
Government Services, LLC (Transferee); that XXXXXX X. XXXXXX, who signed this
Novation Agreement on behalf of this company, was then President of this
company; and that this Novation Agreement was duly signed for and on behalf of
this company by authority of its governing body and within the scope of its
corporate powers.
Witness my hand this 30th day of May, 2002.
By: /s/ Xxxxx Xxxxx
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NOVATION AGREEMENT FOR
TRANSFER OF MEDICARE FUNCTIONS
TO AN AFFILIATED ORGANIZATION
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CERTIFICATE
I, Xxxxx X. Xxxxxx, certify that I am the Secretary of the Blue Cross and Blue
Shield Association (Association); that Xxxxxx X. Xxxxxxxx, who signed this
Novation Agreement on behalf of this corporation, was then Medicare Contracting
Officer of this corporation; and that this Novation Agreement was duly signed
for and on behalf of this corporation by authority of its governing body and
within the scope of its corporate powers.
Witness my hand and the seal of this corporation this 17th day of June, 2002.
By: /s/ Xxxxx X. Xxxxxx
-------------------
(Corporate Seal)
NOVATION AGREEMENT FOR
TRANSFER OF MEDICARE FUNCTIONS
TO AN AFFILIATED ORGANIZATION
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