INTERCOMPANY SERVICE AGREEMENT
This Intercompany Service Agreement ("Agreement") is entered into as
of this 1st day of January, 1998 ("Effective Date"), by and among Blue
Cross & Blue Shield United of Wisconsin, a service insurance corporation
organized pursuant to Ch. 000, Xxxxxxxxx Xxxxxxxx ("XXXXXX"), Xxxxxx Xxxxxxxxx
Services, Inc., an insurance holding company organized pursuant to Ch. 000,
Xxxxxxxxx Xxxxxxxx ("XXX"), and Meridian Resource Corporation, a corporation
organized pursuant to Ch. 180, Wisconsin Statutes ("Meridian Corp") on behalf of
its Audit Services business unit ("Meridian Audit").
RECITALS
WHEREAS, BCBSUW, UWS and Meridian Corp are affiliated corporations,
with Meridian Corp being a wholly owned subsidiary of UWS;
WHEREAS, Meridian Audit is an unincorporated business unit of Meridian
Corp;
WHEREAS, there is an existing service agreement between BCBSUW and UWS
that extends to subsidiaries of UWS (BCBSUW, UWS and its subsidiaries shall
hereinafter be collectively referred to as "BCBSUW/UWS Group"), and this
Agreement is intended to further specify the services, costs, and allocation
methods contemplated by that service agreement;
WHEREAS, Meridian Audit provides hospital xxxx audit services to
various companies in the BCBSUW/UWS Group on a third party contract basis, and
Meridian Audit also contracts with outside entities to provide hospital xxxx
audit and claims audit services;
WHEREAS, UWS provides the employees and BCBSUW and UWS collectively
provide the other business resources and services necessary for the continued
operation of Meridian Audit's business;
WHEREAS, by entering into this Agreement, the parties hereto wish to
establish clearly (i) an employee leasing arrangement; (ii) the services and
resources that BCBSUW and UWS will continue to provide to Meridian Audit and the
compensation and cost allocations therefor; and (iii) the respective rights and
responsibilities of the parties.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises, and of the
mutual covenants hereinafter contained, the parties hereto agree as follows:
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1. LEASE OF EMPLOYEES
a. CLASSIFICATION OF EMPLOYEES.
i. "Direct Employees" are those UWS employees that are assigned to
perform all of their services for Meridian Audit. (Direct Employees may also be
referred to herein as "Employees.")
b. LEASE OF EMPLOYEES.
i. OBLIGATION TO PROVIDE EMPLOYEES. UWS shall provide to Meridian
Audit, to the extent requested by Meridian Audit, the entire requirement of
Direct Employees for use in Meridian Audit's business according to such job
descriptions, qualifications, experience, education, or skills (collectively
"Employee Specifications") as may be specified by Meridian Audit from time to
time.
ii. INDEPENDENT HIRING. Notwithstanding Section 1.b.i and Meridian
Audit's present intent to lease Direct Employees from UWS, Meridian Audit shall
have the right, subject to Section 5, to obtain and hire directly any or all
employees from any other sources and on any terms to perform such duties as
Meridian Audit may consider appropriate from time to time. Should Meridian
Audit hire employees from other sources, it will not hire any individual who was
a BCBSUW or UWS Employee leased to Meridian Audit within three (3) months
preceding such hiring, without the written consent of BCBSUW and/or UWS.
iii. HUMAN RESOURCES DEPARTMENT. UWS's Human Resources Department
("Human Resources") shall be responsible for the implementation, management, and
operation of BCBSUW's and UWS's employee leasing obligations under this
Agreement. Employee Specifications shall be retained in the files of Human
Resources, and Meridian Audit shall notify Human Resources at any time of its
intention to change such Employee Specifications for Direct Employees, at which
time Human Resources shall promptly make the requested changes to the Employee
Specifications.
c. OFFICERS. Employment, termination, and terms of employment of all
officers shall be reserved to the full Boards of Directors of BCBSUW and UWS,
provided, however, that while any such individual is leased to Meridian Audit to
perform services as an officer, Meridian Audit will be consulted prior to all
determinations regarding the employment, or terms thereof, of such individuals;
provided, however, that Meridian Audit's input shall be of an advisory nature
and will not be binding on BCBSUW or UWS as the common law employers of such
individuals.
d. EMPLOYMENT RELATIONSHIPS. Human Resources shall establish performance
criteria or standards, which reflect the Employee Specifications supplied by
Meridian Audit, for leased Direct Employees while performing services for
Meridian Audit. Meridian Audit shall advise Human Resources on the performance
of Direct Employees, and shall have the right to request investigation,
disciplinary action, reassignment, and removal of such employees. If at any
time Meridian Audit becomes dissatisfied with the performance of a
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Direct Employee, Meridian Audit shall have the right to reject the continued
lease of that particular employee and request a replacement therefor. BCBSUW
and UWS shall have the exclusive right, however, to direct all BCBSUW and UWS
employees, respectively, as to the manner in which services are to be
rendered and performance goals are to be achieved. BCBSUW and UWS shall be,
and shall have all the privileges, rights, and responsibilities of, common
law employers of all BCBSUW and UWS employees, respectively, including, but
not limited to, establishing work and disciplinary rules, setting
compensation levels, and directing each BCBSUW or UWS Employee as to the
manner in which daily duties are completed, whether or not the employee
actually performs services for BCBSUW, UWS or another company in the
BCBSUW/UWS Group. Employees leased to Meridian Audit pursuant to this
Agreement shall remain employees of BCBSUW or UWS, and shall in no way be
treated as or considered employees of Meridian Audit.
e. NOTIFICATION OF PERSONNEL COST CHANGES. With respect to Direct
Employees performing services for Meridian Audit, if UWS adopts or implements
any change in compensation, employee benefit plans, or any other fringe benefit
that results in higher Total Personnel Costs (as defined at Section 3.a.i)
than those in existence as of the date of this Agreement, UWS shall provide
Meridian Audit with written notice at least 30 days before such change becomes
effective (unless such change is required by law, in which case Meridian Audit
will be notified as soon as possible), describing such new benefit and the
projected increase in the Total Personnel Costs.
2. SERVICES AND OTHER RESOURCES PROVIDED TO MERIDIAN AUDIT
a. SERVICES AND RESOURCES PROVIDED BY BCBSUW. BCBSUW shall provide to
Meridian Audit, to the extent requested by Meridian Audit and subject to
Section 5, the following services and resources (together "BCBSUW Services").
BCBSUW shall supply BCBSUW Services only if Meridian Audit has determined
not to have its own employees or third parties furnish the BCBSUW Services,
subject to Section 5.
i. OFFICE SPACE AND FACILITIES. Office space and facilities,
including, but not limited to, furniture and equipment, as shall be necessary or
appropriate for the conduct of Meridian Audit's operations.
ii. BUILDING SERVICES. Building services, including, but not limited
to, repair and maintenance of any property and facilities made available
hereunder as shall be necessary to maintain such property and facilities in good
working order, and such other building services as may be necessary or
appropriate for the conduct of Meridian Audit's business.
iii. OFFICE SERVICES. Such office services, including, but not
limited to, warehousing, transportation, stockroom, graphics, printing,
duplicating and forms management, as shall be necessary or appropriate for the
conduct of Meridian Audit's business.
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iv. CENTRAL SYSTEMS. Such central systems, including, but not
limited to, management information systems, telecommunications, centralized
mailing, technology support and central data base maintenance, as shall be
necessary or appropriate for the conduct of Meridian Audit's business.
v. ADMINISTRATIVE SERVICES. Such administrative services,
including, but not limited to, lobbyist activities, documentation and training,
as shall be necessary or appropriate for the conduct of Meridian Audit's
business.
vi. COMPANY CAR AND TRAVEL. Availability and maintenance of vehicles
for company related travel and such other travel related services as shall be
necessary or appropriate for the conduct of Meridian Audit's business.
b. SERVICES AND RESOURCES PROVIDED BY UWS. UWS shall provide to Meridian
Audit, to the extent requested by Meridian Audit and subject to Section 5, the
following services and resources (together "UWS Services"). UWS shall supply
UWS Services only if Meridian Audit has determined not to have its own employees
or third parties furnish the UWS Services, subject to Section 5.
i. CORPORATE SUPPORT SERVICES. Such corporate support services,
including, but not limited to, corporate compliance, legal, and government
relations, as shall be necessary or appropriate for the conduct of Meridian
Audit's business.
ii. EXECUTIVE SERVICES. Such executive services as shall be
necessary or appropriate for the conduct of Meridian Audit's business.
iii. MARKETING AND COMMUNICATIONS. Such marketing and communications
services, including, but not limited to, public relations and employee community
events, as shall be necessary or appropriate for the conduct of Meridian Audit's
business.
iv. HUMAN RESOURCES. Such human resource services, including, but
not limited to, staffing, labor and employment relations, training and
development, and administration of payroll and employee benefits, as shall be
necessary or appropriate with respect to Employees utilized by Meridian Audit
under this Agreement or otherwise necessary or appropriate for the conduct of
Meridian Audit's business.
v. ACCOUNTING SERVICES. Such accounting, audit, bookkeeping and
financial statement preparation services as shall be necessary or appropriate
for the conduct of Meridian Audit's business.
vi. FINANCIAL SERVICES. Such financial services, including, but not
limited to, cash management, tax, treasury, administration of financial systems,
corporate accounting, and strategic planning/consulting, as shall be necessary
or appropriate for the conduct of Meridian Audit's business.
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vii. OTHER SERVICES. Such other services, including, but not limited
to, those provided by Compcare, Dentacare or Meridian Managed Care, as shall be
necessary or appropriate for the conduct of Meridian Audit's business.
c. STAFFING. BCBSUW and UWS shall both maintain an adequate source of
qualified employees to ensure the acceptable performance of BCBSUW and UWS
Services.
3. COST ALLOCATION METHODS
a. LEASED EMPLOYEES.
i. TOTAL PERSONNEL COSTS. The term "Total Personnel Costs" shall
include all costs or expenses of whatever nature and from whatever origin
arising out of or related to the maintenance of an Employee. Such term shall
include, but shall not be limited to, the following costs, expenses, and
obligations:
a. salaries, wages, and bonuses;
b. profit sharing;
c. benefit plans;
d. payroll taxes;
e. employee insurance.
ii. ALLOCATION OF PERSONNEL COSTS. To the extent that Direct
Employees are leased to Meridian Audit, Total Personnel Costs associated with a
Direct Employee shall be directly charged to Meridian Audit on a monthly basis.
See Schedule 1.
b. BCBSUW AND UWS SERVICES. To the extent that BCBSUW/UWS Services are
rendered on behalf of or for the benefit of Meridian Audit, costs therefor shall
be allocated to Meridian Audit as follows:
i. DIRECT CHARGES. Costs associated with those BCBSUW/UWS Services
identified on Schedule 1 shall be directly charged to Meridian Audit on a
monthly basis.
ii. INDIRECT ALLOCATIONS. Cost allocations for those BCBSUW/UWS
Services identified on Schedule 2 ("Schedule 2 Services") shall be determined
annually for the next succeeding Fiscal Year ("Fiscal Year" shall mean January 1
through December 31) on the basis of utilization and cost studies performed by
UWS. Through the use of Indirect Allocation Methods, as described in Schedule 3
attached hereto, utilization of Schedule 2 Services shall be reduced to an
allocation percentage for each company in the BCBSUW/UWS Group. Each month all
costs associated with the utilization of Schedule 2 Services shall be multiplied
by the allocation percentage of Meridian Corp to determine Meridian Corp's
allocable share of costs for Schedule 2 Services. Notwithstanding the
preceding, (i) allocation percentages are subject to interim Fiscal Year
adjustments to allocate more accurately costs based on actual utilization by
each company in the BCBSUW/UWS Group, (ii) costs associated with Schedule 2
Services performed directly for Meridian Corp shall be allocable to Meridian
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Corp only, and (iii) subject to approval by the Vice President of Finance for
the BCBSUW/UWS Group, the Indirect Allocation Method used to allocate costs
to Meridian Corp for specific Schedule 2 Services shall be subject to
agreement by the parties on an annual basis.(1) Subsequently, indirect cost
allocations to Meridian Corp shall be allocated to each individual business
unit within Meridian Corp, including Meridian Audit, each month based on the
ratio of the unit's directly charged expenses to the total Meridian Corp
directly charged expenses. Notwithstanding the preceding sentence, costs
associated with those Schedule 2 Services not actually utilized by Meridian
Audit, such as cost center 104 for the Meridian Madison office, shall not be
allocated to Meridian Audit. Schedule 2, attached hereto, sets forth Meridian
Corp's annual allocation percentage for costs and expenses associated with
Schedule 2 Services. Schedule 2 shall be amended annually.
iii. CHARGEBACKS. Costs associated with those BCBSUW/UWS Services
identified on Schedule 4 ("Chargeback Services") either shall be (i) indirectly
allocated to Meridian Audit as discussed in Section 3.b.ii, if the cost is a
general expense for providing the Chargeback Service to all users; or (ii)
directly charged to a Meridian Audit cost center, if the cost is an expense
specific to a Meridian Audit cost center. Thus, costs associated with
Chargeback Services shall be either directly charged or indirectly allocated to
Meridian Audit on a monthly basis, depending on the nature of the cost.
c. FEES IN ADDITION TO ALLOCATED COSTS. To the extent that Meridian
Audit leases or utilizes the services of Employees from BCBSUW and/or UWS, and
to the extent that Meridian Audit utilizes BCBSUW/UWS Services, BCBSUW and/or
UWS may charge Meridian Audit a reasonable negotiated fee therefor, as set forth
in Schedule 5.
4. SUBSTANTIATION OF AND REIMBURSEMENT FOR ALLOCATED COSTS
a. SUBSTANTIATION OF ALLOCATED COSTS. All costs and expenses shall be
allocated in a fair and reasonable manner. BCBSUW and UWS shall maintain
reasonable and appropriate operating procedures to allocate costs and expenses
so as to enable Meridian Audit's independent certified public accounting firm to
audit such costs and the allocation thereof. At the end of each month, BCBSUW
and/or UWS shall provide or make available to Meridian Audit appropriate
documentation respecting the costs and expenses that are allocated, either
directly or indirectly, to Meridian Audit for that month in sufficient detail to
permit Meridian Audit to identify the sources of such charges.
b. REIMBURSEMENT FOR ALLOCATED COSTS. At the end of each month, not
later than the 30th day of the following month, Meridian Audit shall promptly
reimburse BCBSUW and/or UWS for all costs and expenses incurred by BCBSUW and/or
UWS in furnishing or obtaining the Employees and Services provided for under
Sections I and II, which amount shall be based on the total of direct charges
and indirect allocations to Meridian Audit for the
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(1) Before granting approval of any negotiated change to the method of
allocating costs for a particular service, the following factors should be
considered: (i) compliance with FAS rules; (ii) other federal government
contracting implications; and (iii) feasibility.
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preceding month. Notwithstanding the preceding, Meridian Audit reserves the
right to offset any amounts due to BCBSUW and/or UWS under this Agreement
against other obligations of BCBSUW and/or UWS to Meridian Audit.
5. MODIFICATIONS TO LEASED EMPLOYEES AND BCBSUW/UWS SERVICES
a. MID-CONTRACT YEAR MODIFICATIONS. Each Contract Year, Meridian Audit
shall be required to utilize Employees and BCBSUW/UWS Services budgeted to
Meridian Audit for that Contract Year, unless otherwise negotiated by the
parties. ("Contract Year" shall mean January 1 through December 31.) If, at any
time during the Contract Year, Meridian Audit requires employees, services or
other resources in addition to those budgeted to Meridian Audit by BCBSUW and
UWS, Meridian Audit may obtain such employees, services or resources from a
source outside of the BCBSUW/UWS Group only if Meridian Audit's additional needs
cannot be accommodated by BCBSUW or UWS.
b. CONTRACT YEAR RENEWAL MODIFICATIONS. Meridian Audit shall provide
BCBSUW and/or UWS with at least three (3) months' written notice prior to the
next Contract Year (unless the parties mutually agree upon a shorter period) of
its intent to do any of the following:
i. Increase or decrease the number or utilization of Employees or
BCBSUW/UWS Services with respect to the next Contract Year;
ii. Obtain employees, services or other resources, which are
available either from BCBSUW or UWS, from a party outside the BCBSUW/UWS Group
with respect to the next Contract Year.
c. PROVISION OF SERVICES BY BCBSUW/UWS GROUP. BCBSUW and UWS have the
right to provide Employees and BCBSUW/UWS Services to Meridian Audit either
directly or indirectly, through any company in the BCBSUW/UWS Group. BCBSUW and
UWS may provide employees, services and other resources to Meridian Audit
indirectly through purchase from or contract with a source outside the
BCBSUW/UWS Group ("Outside Services") only with Meridian Audit's consent.
Costs for Outside Services shall be subject to a cost structure negotiated by
the parties hereto.
6. EXECUTION OF ANCILLARY AGREEMENTS
a. RIGHT TO REQUEST EXECUTION OF ANCILLARY AGREEMENTS. In the event of
the Change of Control (as hereinafter defined in this Section) of any party
hereto and while this Agreement remains in effect, BCBSUW, UWS or Meridian Audit
may, for the sole purpose of documenting in more detail the terms and respective
rights and obligations of the parties with respect to Employees and Services
provided hereunder, request that any of the following types of ancillary
agreements be executed by any parties hereto and effected thereby:
1. Employee Lease Agreement;
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2. Office and Equipment Lease;
3. Management Information Systems Agreement;
4. Service Agreement(s); or
5. Any other Agreement deemed necessary or expedient by the parties
(together "Ancillary Agreements").
The terms of any executed Ancillary Agreement shall (i) be subject to
negotiation of the respective parties, and (ii) control in case of any conflict
with Sections 1 through 5 of this Agreement. Executed Ancillary Agreements
shall be attached to this Agreement as amendments hereto. "Change of Control"
for purposes of this section shall mean an event whereby a person, group, or
entity that is not affiliated with the BCBSUW/UWS Group purchases all or
substantially all of the assets or acquires the ownership of 50% or more of the
voting stock of a party hereto.
b. EFFECT OF A REQUEST TO EXECUTE. If any party hereto requests the
execution of an Ancillary Agreement ("Requesting Party"), the parties shall have
sixty 60 days (unless the parties hereto mutually agree to a different period)
to negotiate and execute the Ancillary Agreement, during which time the parties
hereto shall remain obligated to perform in accordance with the terms of this
Agreement. If after 60 days (unless a different period is mutually agreed upon
by the parties hereto) the requested Ancillary Agreement has not been executed,
the Requesting Party may terminate this Agreement in accordance with Section
8.b.ii. The parties hereby agree that any negotiations subject to this
Section 6.b shall be performed in good faith and every reasonable effort shall
be made to effect the execution of a requested Ancillary Agreement.
7. ADDITIONAL COVENANTS
a. AVAILABILITY OF RECORDS. BCBSUW and UWS shall make available to
Meridian Audit, for inspection, examination and copying, all of its books and
records pertaining to the Employees and BCBSUW/UWS Services provided under this
Agreement each Contract Year:
i. At all reasonable times at the principal places of business of
BCBSUW and UWS, or at such other place as the parties hereto may otherwise agree
to and designate;
ii. In a form maintained in accordance with generally accepted
accounting principles and with any other general standards or laws applicable to
such book or record;
iii. For a term of at least five (5) years, from the end of each
Contract Year, irrespective of the termination of this Agreement.
b. CONFIDENTIALITY.
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i. The parties acknowledge and agree that they may deliver to each
other information about themselves and their business which is nonpublic,
confidential or proprietary in nature. All such information, regardless of the
manner in which it is delivered, is referred to as "Proprietary Information."
However, Proprietary Information does not include information which 1. is or
becomes generally available to the public other than as a result of a disclosure
by the other party, 2. was available to the other party on a nonconfidential
basis prior to its disclosure by the disclosing party, or 3. becomes available
to the other party on a nonconfidential basis from a person other than by the
disclosing party. Unless otherwise agreed to in writing by the disclosing
party, the other party shall a. except as required by law, keep all Proprietary
Information confidential and not disclose or reveal any Proprietary Information
to any person other than those employed by the other party, or who is actively
and directly participating in the performance under this Agreement on behalf of
the other party ("Involved Persons"); b. cause each Involved Person to keep all
Proprietary Information confidential and not disclose or reveal any Proprietary
Information to any person other than another Involved Person; and c. not use the
Proprietary Information, and ensure that each Involved Person does not use the
Proprietary Information, for any purpose other than in connection with the
performance under this Agreement.
ii. Upon termination of this Agreement for any reason whatsoever,
each party shall promptly surrender and deliver to each other party all records,
materials, documents, data and any other Proprietary Information of the other
parties and shall not retain any description containing or pertaining to any
Proprietary Information of the other parties, unless otherwise consented to in
writing by a duly authorized officer of BCBSUW, UWS or Meridian Audit as the
case may be.
c. COVENANT NOT TO COMPETE. BCBSUW and UWS agree that no company in the
BCBSUW/UWS Group (excluding Meridian Corp) will directly compete with the
products or markets of Meridian Audit during the term of this Agreement. BCBSUW
and UWS further agree that for a period of two (2) years following the
termination of this Agreement for any reason, no company in the BCBSUW/UWS Group
(excluding Meridian Corp) will directly compete with Meridian Audit in any
market in which Meridian Audit operates or does business at the termination of
this Agreement.
d. COOPERATION. The parties hereto will fully cooperate with each other
and their respective counsel, if any, agents and accountants in connection with
any action to be taken in the performance of their obligations under this
Agreement. In the conduct of their affairs and the performance of this
Agreement the parties hereto shall, unless otherwise agreed, maintain the
working relationships of the parties on substantially the same terms as before
the execution of this Agreement. Notwithstanding the preceding, the parties do
not intend, nor should this Agreement be construed, to restrict any party's
ability to contract with any other person or entity to provide services similar
to or the same as those which are the subject of this Agreement.
8. TERM AND TERMINATION
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a. TERM. This Agreement shall commence on the Effective Date and shall
automatically renew annually therefrom until such time as otherwise terminated
pursuant to Section 8.b.
b. TERMINATION.
i. This Agreement may be terminated by any party at any time by
giving one (1) years advance written notice to the nonterminating parties of its
intention to terminate.
ii. This Agreement may be terminated pursuant to Section 6.b by the
Requesting Party giving three (3) months advance written notice to the
nonterminating parties of its intention to terminate.
iii. This Agreement shall terminate immediately at the election of and
upon written notice from the non-defaulting party in the event of any of the
following:
(1) A party hereto becomes incapable of fully performing
its duties and obligations according to the terms of this
Agreement for the following reason(s): insolvency, bankruptcy,
or substantial cessation or interruption of its business
operations for any reason whatsoever;
(2) A party hereto commits fraud or gross negligence in
performing its obligations under this Agreement;
HOWEVER, if the defaulting party provides the non-defaulting parties with prompt
notice of the event of default, the defaulting party shall have 30 days to cure
the defect, during which time the non-defaulting parties may not exercise the
termination right under this Section 8.b.iii.
iv. Liabilities After Termination. The termination of this Agreement
shall not limit the obligation or liabilities of any party hereto incurred but
not discharged prior to termination.
9. INDEMNIFICATION
a. INDEMNIFICATION BY MERIDIAN AUDIT.
i. Notwithstanding anything to the contrary in this Agreement,
neither BCBSUW, UWS, nor any other company in the BCBSUW/UWS Group (other than
Meridian Corp), nor any person who is or was, at the time of any action or
inaction affecting Meridian Audit, a director, officer, employee or agent of
BCBSUW, UWS or any other company in the BCBSUW/UWS Group (other than Meridian
Corp) (collectively "Indemnitees") shall be liable to Meridian Audit for any
action or inaction taken or omitted to be taken by such Indemnitee; PROVIDED,
HOWEVER, that such Indemnitee acted (or failed to act) in good faith and such
action or inaction does not constitute actual fraud, gross negligence or willful
or wanton misconduct.
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ii. Meridian Audit shall, to the fullest extent not prohibited by
law, indemnify and hold harmless each Indemnitee against any liability, damage,
cost, expense, loss, claim or judgment (including, without limitation,
reasonable attorneys' fees and expenses) resulting to, imposed upon or incurred
by such Indemnitee a. in connection with any action, suit, arbitration or
proceeding to which such Indemnitee was or is a party or is threatened to be
made a party by reason of the Employees and BCBSUW/UWS Services provided to
Meridian Audit hereunder; PROVIDED, HOWEVER, that such Indemnitee acted (or
failed to act) in good faith and such action or inaction does not constitute
actual fraud, gross negligence or willful or wanton misconduct, or b. by reason
of, arising out of or resulting from any breach or misrepresentation by Meridian
Audit under this Agreement.
b. INDEMNIFICATION BY BCBSUW AND UWS. BCBSUW and UWS, jointly and
severally, hereby agree to indemnify and hold harmless Meridian Audit, and its
successors and assigns, from and against any liability, damage, cost, expense,
loss, claim or judgment (including, without limitation, reasonable attorneys'
fees and expenses) resulting to, imposed upon or incurred by Meridian Audit by
reason of, arising out of or resulting from any breach or misrepresentation by
BCBSUW or UWS under this Agreement.
10. MISCELLANEOUS
a. ASSIGNMENT. Neither this Agreement nor any rights or obligations
hereunder may be assigned or transferred by any of the parties hereto without
the prior written consent of the other parties. A Change of Control shall be
deemed an assignment requiring the consent of the other parties hereto.
b. AMENDMENT. The parties recognize that it may be desirable to alter
the terms of this Agreement in the future to take into account such events or
conditions as may from time to time occur. Any amendments to this Agreement
shall be in writing and shall be executed by all parties; however, Ancillary
Agreements need only be executed by the parties affected thereby.
c. WAIVER; REMEDIES. No failure or delay of a party in exercising any
power or right hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. In
addition to any rights granted herein, the parties hereto shall have and may
exercise any and all rights and remedies now or hereafter provided by law except
as may be limited by Section 10.d of this Agreement.
d. RESOLUTION OF DISPUTES.
i. INFORMAL RESOLUTION.
(1) Coordinating Committee: Any conflicts or disputes
regarding occupancy, utilization or delivery of BCBSUW/UWS
Services, or scheduling, performance and utilization of
Employees necessary for the
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conduct of Meridian Audit's business shall be submitted to a
coordinating committee for resolution. The coordinating
committee shall consist of three (3) persons, each of whom
shall 1. represent the respective interest of a party hereto,
and 2. be mutually agreed upon by the parties hereto. If the
coordinating committee is unable to unanimously resolve the
dispute, then the parties hereto may resort to the dispute
resolution process provided for in Section 10.d.ii.
(2) Audit Committee: Any conflicts or disputes
regarding allocation methods, allocated costs, offsets, fees
or any matter related thereto shall be submitted to an audit
committee for resolution. The audit committee shall consist
of three (3) persons, each of whom shall 1. represent the
respective interest of a party hereto, and 2. be mutually
agreed upon by the parties hereto. If the audit committee is
unable to unanimously resolve the dispute, then the parties
hereto may resort to the dispute resolution process provided
for in Section 10.d.ii.
ii. FORMAL RESOLUTION.
(1) Any dispute, controversy or claim between or among
the parties hereto that arises out of or relates to this
Agreement or any Ancillary Agreement entered into pursuant
hereto, and which otherwise has been unresolved by a
coordinating committee pursuant to Section 10.d.i(1) or an
audit committee pursuant to Section 10.d.i(2) shall be settled
by arbitration. In order to initiate an arbitration, BCBSUW,
UWS or Meridian Audit (as the case may be) shall deliver a
written notice of demand for arbitration to the other affected
party(ies). Within thirty (30) days of the giving of such
written notice, each party involved shall appoint an
individual as arbitrator (the "Party Arbitrators"). Within
thirty (30) days of their appointment, the Party Arbitrators
shall collectively select one (or two if necessary to
constitute an odd total number of arbitrators) additional
arbitrator (together the "Panel Arbitrators") and shall give
the parties involved notice of such choice.
(2) The arbitration hearings shall be held in Milwaukee,
Wisconsin. Each party shall submit its case to the Panel
Arbitrators within sixty (60) days of the selection of the
Panel Arbitrators or within such longer period as may be
agreed by the Panel Arbitrators. The decision rendered by a
majority of the Panel Arbitrators shall be final and binding
on the parties involved. Such decision shall be a condition
precedent to any right of legal action arising out of the
arbitrated dispute. Judgment upon the award rendered may be
entered in any court having jurisdiction thereof.
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(3) Each involved party shall a. pay the fees and
expenses of its own Party Arbitrator, and pay its own legal,
accounting, and other professional fees and expenses, b.
jointly share in the payment of the fees and expenses of the
other one (or two) arbitrator(s) selected by the Party
Arbitrators, and c. jointly share in the payment of the other
expenses jointly incurred by the involved parties directly
related to the arbitration proceeding.
(4) Except as provided above, the arbitration shall be
conducted in accordance with the Commercial Arbitration Rules
of the American Arbitration Association.
e. NOTICES. All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally, or if mailed (by registered or certified mail, postage
prepaid, return receipt requested), or if transmitted by facsimile or e-mail, as
follows:
1. If to BCBSUW:
Xx. Xxxxx Xxxxxxxx
Blue Cross & Blue Shield United of Wisconsin
0000 Xxxxx XxxxxXxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Facsimile Telephone Number: (000) 000-0000
With copies to:
Xx. Xxxxx Xxxxxxx
Blue Cross & Blue Shield United of Wisconsin
X00X00000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxx 00000
Facsimile Telephone Number: (000) 000-0000
2. If to UWS:
Mr. C. Xxxxxx Xxxxx
United Wisconsin Services, Inc.
000 Xxxx Xxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Facsimile Telephone Number: (000) 000-0000
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3. If to Meridian Audit:
Xx. Xxxxx Xxxxxxxxx
Meridian Resource Corporation
000 Xxxx Xxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Facsimile Telephone Number: (000) 000-0000
Any notice or other communication given as provided in this Section 10.e, shall
be deemed given upon the first business day after actual delivery to the party
to whom such notice or other communication is sent (as evidenced by the return
receipt or shipping invoice signed by a representative of such party or by the
facsimile confirmation or e-mail return receipt). Any party from time to time
may change its address for purpose of notices to that party by giving a similar
notice specifying a new address.
f. RELATIONSHIP OF THE PARTIES. Negotiations relating to this Agreement
have occurred and shall continue to be carried out on an arm's length basis.
Further, the employees, services and other resources contemplated by this
Agreement shall be provided to Meridian Audit on an independent contractor
basis. Nothing in this Agreement shall be construed to create an
employer-employee relationship between Meridian Audit and Employees or any of
the parties hereto.
g. ENTIRE AGREEMENT. This Agreement, including the schedules and
exhibits referred to herein constitute the entire understanding and agreement of
the parties hereto and supersede all prior agreements and understandings,
written or oral, between the parties with respect to the transactions
contemplated herein. Provided, however, the foregoing shall not operate or be
construed to prohibit proof of prior understandings and agreements between or
among the parties to the extent necessary to properly construe or interpret this
Agreement. Notwithstanding the preceding, the parties acknowledge that there
are, and/or may be in the future, any number of independent third party
contracts between various companies in the BCBSUW/UWS Group for various services
and/or business arrangements, and any such contracts, whether written or oral,
shall survive the execution of this Agreement and any renewal hereof.
h. HEADINGS. The headings used in this Agreement have been inserted for
convenience and do not constitute matter to be construed or interpreted in
connection with this Agreement.
i. NO THIRD PARTY BENEFICIARIES. This Agreement is only for the benefit
of the parties hereto and does not confer any right, benefit, or privilege upon
any person or entity not a party to this Agreement.
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j. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Wisconsin (without giving effect to
principles of conflicts of laws) as to all matters, including, without
limitation, matters of validity, construction, effect, performance and remedies.
k. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under any present or future law, and if the
rights or obligations of any party under this Agreement will not be materially
and adversely affected thereby, 1. such provision will be fully severable, 2.
this Agreement will be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part hereof, 3. the remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid, or unenforceable provision or by its
severance herefrom, and 4. in lieu of such illegal, invalid, or unenforceable
provision, there will be added automatically as part of this Agreement, a legal,
valid, and enforceable provision as similar terms to such illegal, invalid, or
unenforceable provision as may be possible.
l. COUNTERPARTS. This Agreement may be executed simultaneously in any
number of counterparts, each of which will be deemed an original, but all of
which will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives as of the Effective Date.
BLUE CROSS BLUE SHIELD UNITED OF WISCONSIN
By:
------------------------------------
Title:
---------------------------------
By:
------------------------------------
Title:
---------------------------------
UNITED WISCONSIN SERVICES, INC.
By:
------------------------------------
Title:
---------------------------------
ON BEHALF OF MERIDIAN AUDIT, MERIDIAN RESOURCE CORPORATION
By:
------------------------------------
Title:
---------------------------------
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