EXHIBIT 10.3
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT (this "AGREEMENT")
effective as of the 1st day of October, 2002 (the "Effective Date"), is entered
into by and between Cobalt Corporation, a Wisconsin business corporation
("Cobalt"), and Blue Cross & Blue Shield United of Wisconsin, a Wisconsin stock
insurance corporation ("BCBSUW").
RECITALS
WHEREAS, Cobalt owns all of the issued and outstanding shares of
capital stock of Compcare Health Services Insurance Corporation, a Wisconsin
health maintenance organization ("Compcare"), which consists solely of two
million (2,000,000) shares of common stock (collectively, the "Shares"); and
WHEREAS, Cobalt has outstanding debt obligations to BCBSUW
pursuant to the terms of a Promissory Note, dated February 15, 2002, in the
principal amount of Seventy Million Dollars ($70,000,000) ("Note"), and the Note
matures and becomes due and payable on January 2, 2003; and
WHEREAS, the Cobalt and BCBSUW ("Parties") desire to consummate a
transfer of the Shares from Cobalt to BCBSUW in order to satisfy Cobalt's debt
obligations under the Note, upon the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained hereinafter, the Parties agree as follows:
AGREEMENT
1. ASSIGNMENT AND ASSUMPTION.
Cobalt hereby assigns, transfers, and conveys to BCBSUW, all of
its rights, title and interest in and to the Shares, and BCBSUW hereby accepts
and assumes all such rights, title and interest in and to the Shares in
satisfaction of Cobalt's debt obligations under the Note (collectively, the
"Assignment and Assumption"). The Assignment and Assumption shall be effective
as of October 1, 2002; provided, however, the full force and effect of the
Assignment and Assumption shall be subject to the condition that Compcare first
completes its dividend of all of the issued and outstanding capital stock of
United Heartland Life Insurance Company to Cobalt. The Parties each agree to
execute and deliver all necessary written instruments and to take such other
actions as may be necessary and proper to give full force and effect to the
Assignment and Assumption.
2. OTHER TERMS.
Cobalt makes the following representations and warranties to
Buyer, each of which is true and correct at and as of the Effective Date.
a. CAPITALIZATION. The authorized capital stock of Compcare
consists solely of two million (2,000,000) shares of common stock, par
value $1.00 per share, of which two million (2,000,000) shares are
issued and outstanding and owned beneficially and of record by Cobalt.
No other class of capital stock or equity interest of Compcare is
authorized or outstanding. There are no outstanding options,
contracts, calls, commitments or demands of any character with respect
to the capital stock of Compcare, whether by option, warrant, right of
subscription, right of conversion, call, reorganization or otherwise.
No Shares are subject to any voting trust agreement or any other
agreement relating to the voting of shares or restricting in any
manner the sale or transfer of the Shares. There is no liability for
dividends declared or accumulated but unpaid with respect to any of
Compcare's capital stock. There are no shares of capital stock held in
the treasury of Compcare. No agreement exists providing for the
amendment of the Articles of Incorporation of Compcare so as to
increase the amount of its authorized capital stock.
b. TITLE. Except for any liens, claims and encumbrances arising
from the Loan Agreement between Cobalt and M&I Xxxxxxxx & Xxxxxx
Bank, dated August 7, 2002, Cobalt has, and upon giving effect to the
Assignment and Assumption, BCBSUW will receive, good and marketable
title to the Shares, free and clear of all liens, claims, and
encumbrances of any kind.
3. GENERAL PROVISIONS.
a. COUNTERPARTS. This Assignment may be executed simultaneously
in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
b. HEADINGS. The headings in the paragraphs of this Assignment
are inserted for convenience only and shall not constitute a part
hereof.
c. PARTIES IN INTEREST. This Agreement shall be binding upon
and inure to the benefit of the Parties hereto and their respective
successors and assigns.
d. CHOICE OF LAW. This Assignment and any amendments thereto
shall be subject to and governed by the laws of the State of
Wisconsin.
e. AMENDMENT AND MODIFICATION. This Agreement may only be
amended by a written agreement signed by both Parties.
f. SEVERABILITY. In the event any provision of this Assignment
shall be held invalid or unenforceable for any reason, such invalidity
or unenforceability shall not effect the remaining parts of this
Assignment.
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IN WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be executed as of the date and year first set forth above.
COBALT CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
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Title: President and COO
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BLUE CROSS & BLUE SHIELD
UNITED OF WISCONSIN
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
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Title: Sr. VP and Treasurer
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