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 Managed Care, Inc., a corporation
organized pursuant to Ch. 180, Wisconsin Statutes ("MMC").
RECITALS
WHEREAS, BCBSUW, UWS and MMC are affiliated corporations, with MMC
being a wholly owned subsidiary of UWS;
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, MMC provides care services management and medical director
services to various companies in the BCBSUW/UWS Group, and MMC also contracts
with outside entities to provide care services management;
WHEREAS, BCBSUW provides certain employees and BCBSUW and UWS
collectively provide the other business resources and services necessary for the
continued operation of MMC'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 MMC and that MMC will
continue to provide to various companies in the BCBSUW/UWS Group, 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:
1. LEASE OF EMPLOYEES
a. CLASSIFICATION OF EMPLOYEES.
i. "Direct Employees" are those BCBSUW employees that are assigned
to perform all of their services for MMC with respect only to the information
support
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services provided by MMC to other companies in the BCBSUW/UWS Group. (Direct
Employees may also be referred to herein as "Employees.")
b. LEASE OF EMPLOYEES.
i. OBLIGATION TO PROVIDE EMPLOYEES. BCBSUW shall provide to MMC, to
the extent requested by MMC, the entire requirement of Direct Employees for use
in MMC's business according to such job descriptions, qualifications,
experience, education, or skills (collectively "Employee Specifications") as may
be specified by MMC from time to time.
ii. INDEPENDENT HIRING. Notwithstanding Section 1.b.i. and MMC's
present intent to lease Direct Employees from BCBSUW, MMC shall have the
right, subject to Section 6, to obtain and hire directly any or all employees
from any other sources and on any terms to perform such duties as MMC may
consider appropriate from time to time. Should MMC hire employees from other
sources, it will not hire any individual who was a BCBSUW or UWS Employee
leased to MMC 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 MMC 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 MMC to perform
services as an officer, MMC will be consulted prior to all determinations
regarding the employment, or terms thereof, of such individuals; provided,
however, that MMC'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 MMC, for leased Direct Employees while performing services for
MMC. MMC 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 MMC
becomes dissatisfied with the performance of a Direct Employee, MMC 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
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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 MMC pursuant to this
Agreement shall remain employees of BCBSUW or UWS, and shall in no way be
treated as or considered employees of MMC.
e. NOTIFICATION OF PERSONNEL COST CHANGES. With respect to
Direct Employees performing services for MMC, if BCBSUW 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 4.a.i) than those in existence as of the date of this Agreement,
BCBSUW shall provide MMC with written notice at least 30 days before such
change becomes effective (unless such change is required by law, in which
case MMC 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 MMC
a. SERVICES AND RESOURCES PROVIDED BY BCBSUW. BCBSUW shall
provide to MMC, to the extent requested by MMC and subject to Section 6, the
following services and resources (together "BCBSUW Services"). BCBSUW shall
supply BCBSUW Services only if MMC has determined not to have its own
employees or third parties furnish the BCBSUW Services, subject to Section 6.
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 MMC'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 MMC'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 MMC's business.
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 MMC's business.
v. ADMINISTRATIVE SERVICES. Such administrative services,
including, but not limited to, lobbyist activities, as shall be necessary or
appropriate for the conduct of MMC's business.
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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 MMC's business.
b. SERVICES AND RESOURCES PROVIDED BY UWS. UWS shall provide to MMC,
to the extent requested by MMC and subject to Section 6, the following
services and resources (together "UWS Services"). UWS shall supply UWS
Services only if MMC has determined not to have its own employees or third
parties furnish the UWS Services, subject to Section 6.
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 MMC's
business.
ii. EXECUTIVE SERVICES. Such executive services as shall be
necessary or appropriate for the conduct of MMC'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 MMC'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 MMC under this
Agreement or otherwise necessary or appropriate for the conduct of MMC's
business.
v. ACCOUNTING SERVICES. Such accounting, audit, bookkeeping and
financial statement preparation services as shall be necessary or appropriate
for the conduct of MMC's business.
vi. FINANCIAL SERVICES. Such financial services, including, but not
limited to, tax, treasury, administration of financial systems, corporate
accounting, and strategic planning/consulting, as shall be necessary or
appropriate for the conduct of MMC's business.
vii. ACTUARIAL SERVICES. Such actuarial services as shall be
necessary or appropriate for the conduct of MMC's business.
viii. OTHER SERVICES. Such other services, including, but not
limited to, those provided by Compcare or Meridian Resource Corporation, as
shall be necessary or appropriate for the conduct of MMC'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. SERVICES PROVIDED BY MMC TO THE BCBSUW/UWS GROUP
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a. SERVICES PROVIDED BY MMC. To the extent that MMC does not have
independent third party pricing contracts with companies in the BCBSUW/UWS
Group, MMC shall provide the following services (together "MMC Services") to
companies in the BCBSUW/UWS Group, to the extent requested by any such
individual company:
i. CARE SERVICES MANAGEMENT. Such care services management,
including, but not limited to, disease and outcomes management, health policy,
data management and reporting, and information support services, as shall be
necessary or appropriate for any company in the BCBSUW/UWS Group.
ii. MEDICAL DIRECTOR. Such medical director services as shall be
necessary or appropriate for any company in the BCBSUW/UWS Group.
4. 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:
salaries, wages, and bonuses;
profit sharing;
benefit plans;
payroll taxes;
employee insurance.
ii. ALLOCATION OF PERSONNEL COSTS. To the extent that Direct
Employees are leased to MMC, Total Personnel Costs associated with a Direct
Employee shall be directly charged to MMC 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 MMC, costs therefor shall be
allocated to MMC as follows:
i. DIRECT CHARGES. Costs associated with those BCBSUW/UWS Services
identified on Schedule 1 shall be directly charged to MMC 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
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multiplied by the allocation percentage of MMC to determine MMC'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 MMC shall be allocable to MMC 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 MMC for specific
Schedule 2 Services shall be subject to agreement by the parties on an annual
basis.(1) Schedule 2, attached hereto, sets forth MMC'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 MMC as discussed in Section 4.b.ii, if the cost is a
general expense for providing the Chargeback Service to all users; or (ii)
directly charged to an MMC cost center, if the cost is an expense specific to an
MMC cost center. Thus, costs associated with Chargeback Services shall be
either directly charged or indirectly allocated to MMC on a monthly basis,
depending on the nature of the cost.
C. MMC SERVICES. To the extent that MMC Services are rendered on behalf
of or for the benefit of a company in the BCBSUW/UWS Group (excluding those
companies that separately enter into third party pricing contracts with MMC for
the provision of such services) costs therefor shall be allocated to the
respective company as follows:
i. INDIRECT ALLOCATIONS. Costs allocations for MMC Services shall
be determined annually for the next succeeding Fiscal Year on the basis of cost
center surveys completed by those companies in the BCBSUW/UWS Group that utilize
MMC Services ("Internal Users"). Based on the survey results, Internal Users
shall be assigned a fixed percentage. Each month all costs associated with the
utilization of MMC Services by Internal Users shall be multiplied by the fixed
allocation percentage of each Internal User to determine the Internal User's
respective allocable share of costs for MMC 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, and (ii) subject to approval by the Vice
President of Finance for the BCBSUW/UWS Group, the Indirect Allocation Method
used to allocate costs for MMC Services shall be subject to agreement by the
parties on an annual basis.
d. FEES IN ADDITION TO ALLOCATED COSTS. To the extent that MMC
leases or utilizes the services of Employees from BCBSUW and/or UWS, and to
the extent that MMC utilizes BCBSUW/UWS Services, BCBSUW and/or UWS may
charge MMC a reasonable negotiated fee therefor, as set forth in Schedule 5.
To the extent that MMC provides MMC
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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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Services to any company in the BCBSUW/UWS Group pursuant to this Agreement,
MMC may charge a reasonable negotiated fee therefor, as set forth in Schedule 6.
5. 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, UWS and MMC shall
maintain reasonable and appropriate operating procedures to allocate costs
and expenses so as to enable each party's independent certified public
accounting firm to audit such costs and the allocation thereof. At the end
of each month, (i) BCBSUW and/or UWS shall provide or make available to MMC
appropriate documentation respecting the costs and expenses that are
allocated, either directly or indirectly, to MMC for that month in sufficient
detail to permit MMC to identify the sources of such charges, and (ii) MMC
shall provide or make available to the BCBSUW/UWS Group appropriate
documentation respecting the costs and expenses that are allocated to
individual companies in the BCBSUW/UWS Group for that month for MMC Services
in sufficient detail to permit the identification of 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, (i) MMC 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 MMC for the preceding month, and (ii) any company in the
BCBSUW/UWS Group on whose behalf MMC Services have been rendered in the
preceding month shall promptly reimburse MMC for all costs and expenses incurred
by MMC in furnishing MMC Services thereto. Notwithstanding the preceding, the
parties reserve the right to offset amounts due to each other under this
Agreement.
6. MODIFICATIONS TO LEASED EMPLOYEES AND BCBSUW/UWS SERVICES
a. MID-CONTRACT YEAR MODIFICATIONS. Each Contract Year, MMC shall be
required to utilize Direct Employees and BCBSUW/UWS Services budgeted to MMC 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, MMC requires services or other non-human resources in addition to those
budgeted to MMC by BCBSUW and UWS, MMC may obtain such services or resources
from a source outside of the BCBSUW/UWS Group only if MMC's additional needs
cannot be accommodated by BCBSUW or UWS.
b. CONTRACT YEAR RENEWAL MODIFICATIONS. MMC 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;
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ii. Obtain services or other non-human 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 MMC either directly or
indirectly, through any company in the BCBSUW/UWS Group. BCBSUW and UWS may
provide employees, services and other resources to MMC indirectly through
purchase from or contract with a source outside the BCBSUW/UWS Group ("Outside
Services") only with MMC's consent. Costs for Outside Services shall be
subject to a cost structure negotiated by the parties hereto.
7. 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 MMC 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:
i. Employee Lease Agreement;
ii. Office and Equipment Lease;
iii. Management Information Systems Agreement;
iv. Service Agreement(s); or
v. 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 6 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.
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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 9.b.ii. The parties hereby agree that any
negotiations subject to this Section 7.b shall be performed in good faith
and every reasonable effort shall be made to effect the execution of a
requested Ancillary Agreement.
8. ADDITIONAL COVENANTS
a. AVAILABILITY OF RECORDS. BCBSUW, UWS and MMC shall make available to
each other, for inspection, examination and copying, all of its books and
records pertaining to the Employees, BCBSUW/UWS Services, and MMC Services
provided under this Agreement each Contract Year:
i. At all reasonable times at the principal places of business of
BCBSUW, UWS, and MMC, 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.
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
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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 MMC as the case may be.
c. COVENANT NOT TO COMPETE. BCBSUW and UWS agree that no company in the
BCBSUW/UWS Group (excluding MMC and CNR Health, Inc.) will directly compete with
the products or markets of MMC 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
MMC and CNR Health, Inc.) will directly compete with MMC in any market in which
MMC 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.
9. TERM AND TERMINATION
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 9.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 7.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:
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(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 tdays to cure the defect, during which time the non-defaulting
parties may not exercise the termination right under this section 9.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.
10. INDEMNIFICATION
a. INDEMNIFICATION BY MMC.
i. Notwithstanding anything to the contrary in this Agreement,
neither BCBSUW, UWS, nor any other company in the BCBSUW/UWS Group (other than
MMC), nor any person who is or was, at the time of any action or inaction
affecting MMC, a director, officer, employee or agent of BCBSUW, UWS or any
other company in the BCBSUW/UWS Group (other than MMC) (collectively
"Indemnitees") shall be liable to MMC 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.
ii. MMC 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 MMC 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 MMC under this Agreement.
b. INDEMNIFICATION BY BCBSUW AND UWS.
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i. Notwithstanding anything to the contrary in this Agreement,
neither MMC, nor any person who is or was, at the time of any action or inaction
affecting the BCBSUW/UWS Group (other than MMC), a director, officer, employee
or agent of MMC (collectively "Indemnitees") shall be liable to any company in
the BCBSUW/UWS Group 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.
ii. BCBSUW and UWS, jointly and severally, hereby agree to indemnify
and hold harmless, to the fullest extent not prohibited by law, 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 MMC Services provided
to the BCBSUW/UWS Group 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 BCBSUW
or UWS under this Agreement.
11. 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 11.d of this Agreement.
d. RESOLUTION OF DISPUTES.
i. INFORMAL RESOLUTION.
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(1) Coordinating Committee: Any conflicts or disputes
regarding 1. occupancy, utilization or delivery of BCBSUW/UWS
Services, or scheduling, performance and utilization of
Employees necessary for the conduct of MMC's business, or 2.
utilization or delivery of MMC Services, 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 11.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 11.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 11.d.i(1) or an
audit committee pursuant to Section 11.d.i(2) shall be settled
by arbitration. In order to initiate an arbitration, BCBSUW,
UWS or MMC (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.
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Judgment upon the award rendered may be entered in any court
having jurisdiction thereof.
(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:
i. 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
ii. If to UWS:
Mr. C. Xxxxxx Xxxxx
United Wisconsin Services, Inc.
000 Xxxx Xxxxxxxx Xxxxxx
P.O. Box 2025
Milwaukee, Wisconsin 53201-2025
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Facsimile Telephone Number: (000) 000-0000
iii. If to MMC:
Xx. Xxxxx Xxxxxxx
Meridian Managed Care, Inc.
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
11.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 MMC on an independent contractor basis. Nothing
in this Agreement shall be construed to create an employer-employee relationship
between MMC 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.
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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.
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:
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Title:
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By:
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Title:
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UNITED WISCONSIN SERVICES, INC.
By:
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Title:
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MERIDIAN MANAGED CARE, INC.
By:
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Title:
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