Exhibit 10.11
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"), xxx Xxxxxx Xxxxxxxxx Insurance Company, a stock insurance corporation
organized pursuant to Ch. 611, Wisconsin Statutes ("UWIC").
RECITALS
WHEREAS, BCBSUW, UWS and UWIC are affiliated corporations, with UWIC
being a wholly owned subsidiary of UWS;
WHEREAS, there is an existing service agreement between BCBSUW and UWS,
and this Agreement is intended to further specify the services, costs, and
allocation methods contemplated by that service agreement;
WHEREAS, BCBSUW and UWS provide to each other business resources and
services that are necessary for the continued operation of BCBSUW's and UWS's
business, and UWIC provides both BCBSUW and UWS with officer services;
WHEREAS, by entering into this Agreement, the parties hereto wish to
establish clearly (i) an officer leasing arrangement; (ii) the services and
resources that BCBSUW and UWS will continue to provide to each other 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:
I. LEASE OF OFFICERS
A. DEFINITION.
1. "Leased Officers" are those UWS employees that perform
services as officers of BCBSUW, those BCBSUW employees that perform services
as officers of UWS, and those UWIC employees that perform services as officers
of BCBSUW and/or UWS. (Leased Officers may also be referred to herein as
"Officers").
B. LEASE OF OFFICERS.
1. OBLIGATION TO PROVIDE OFFICERS. BCBSUW and UWS shall
provide to each other, and UWIC shall provide to BCBSUW and/or UWS, to the
extent requested by BCBSUW and/or UWS and with the consent of the respective
company's Board of Directors (the "Board"), the entire requirement of Leased
Officers as shall be necessary or appropriate for the conduct of BCBSUW's and
UWS's business.
2. INDEPENDENT HIRING. Notwithstanding Section I.B.1, the
Boards shall have the right to obtain and hire directly any or all Officers from
any other sources and on any terms to perform such duties, on behalf of BCBSUW
or UWS, as the case may be, as the Boards may consider appropriate from time to
time. Should the Boards hire officers from other sources, it will not hire any
individual who was a BCBSUW, UWS, or UWIC employee leased under this Agreement
within three (3) months preceding such hiring, without the written consent of
the other party(ies) to this Agreement.
3. HUMAN RESOURCES DEPARTMENT. UWS's Human Resources
Department ("Human Resources") shall be responsible for the implementation,
management, and operation of BCBSUW's, UWS's, and UWIC's leasing obligations
under this Agreement.
C. EMPLOYMENT RELATIONSHIPS. BCBSUW, UWS, and UWIC shall be, and
shall have all the privileges, rights, and responsibilities of, common law
employers of all BCBSUW, UWS, and UWIC employees, respectively, whether or not
the employee actually performs services for BCBSUW or UWS. Employment,
termination, and terms of employment of all Leased Officers shall be reserved to
the full Boards of Directors of the Leased Officer's common law employer
(BCBSUW, UWS or UWIC, as the case may be), provided, however, that while any
such individual is leased to perform services as an officer under this
Agreement, BCBSUW, UWS or UWIC, as the case may be, will be consulted prior to
all determinations regarding the employment, or terms thereof, of such
individuals; provided, however, that such input shall be of an advisory nature
and will not be binding on the common law employer of such individuals. Officers
leased to UWS shall remain employees of BCBSUW and UWIC, respectively, and
Officers leased to BCBSUW shall remain employees of UWS and UWIC, respectively,
and shall in no way be treated as or considered employees of the company to
which such Officer is leased.
II. SERVICES AND OTHER RESOURCES
A. SERVICES AND RESOURCES PROVIDED BY BCBSUW TO UWS. BCBSUW shall
provide to UWS, to the extent requested by UWS and subject to Section V, the
following services and resources (together "BCBSUW Services"). BCBSUW shall
supply BCBSUW Services only if UWS has determined not to have its own employees
or third parties furnish the BCBSUW Services, subject to Section V.
1. 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 UWS's operations.
2. 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 UWS's business.
3. OFFICE SERVICES. Such office services as shall be necessary
or appropriate for the conduct of UWS's business.
4. CENTRAL SYSTEMS. Such central systems, including, but not
limited to, telecommunications, centralized mailing, technology support and
central data base maintenance, as shall be necessary or appropriate for the
conduct of UWS's business.
B. SERVICES AND RESOURCES PROVIDED BY UWS TO BCBSUW. UWS shall
provide to BCBSUW, to the extent requested by BCBSUW and subject to Section V,
the following services and resources (together "UWS Services"). UWS shall supply
UWS Services only if BCBSUS has determined not to have its own employees or
third parties furnish the UWS Services, subject to Section V.
1. 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
BCBSUW's business.
2. EXECUTIVE SERVICES. Such executive services as shall be
necessary or appropriate for the conduct of BCBSUW's business.
3. MARKETING AND COMMUNICATIONS. Such corporate 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 BCBSUW's business.
4. 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 for the conduct of BCBSUW's business.
5. FINANCIAL SERVICES. Such financial services, including, but
not limited to, tax, treasury, cash management, administration of financial
systems, corporate accounting, and strategic planning/consulting, as shall be
necessary or appropriate for the conduct of BCBSUW's business.
6. ACTUARIAL AND UNDERWRITING SERVICES. Such actuarial and
underwriting services as shall be necessary or appropriate for the conduct of
BCBSUW'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.
III. COST ALLOCATION METHODS
A. LEASED OFFICERS.
1. ALLOCATION OF OFFICER COSTS. To the extent that Officers
are leased to BCBSUW or UWS, costs associated with the lease of such Officers
shall be indirectly charged to BCBSUW or UWS, as the case may be, as provided in
Section III.B.2.
B. BCBSUW AND UWS SERVICES. To the extent that BCBSUW Services
are rendered on behalf of or for the benefit of UWS, and to the extent that UWS
Services are rendered on behalf of or for the benefit of BCBSUW, costs therefor
shall be allocated to UWS and BCBSUW, respectively, as follows:
1. DIRECT CHARGES. Costs associated with those BCBSUW and UWS
Services identified on Schedule 1 shall be directly charged to UWS and BCBSUW,
respectively, on a monthly basis.
2. INDIRECT ALLOCATIONS. Cost allocations for (i) those BCBSUW
Services provided to UWS, as identified on Schedule 2 ("Schedule 2 Services"),
and (ii) those UWS Services provided to BCBSUW, as identified on Schedule 3
("Schedule 3 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 4 attached hereto,
utilization of the services identified on Schedules 2 and 3 shall be reduced to
an allocation percentage for each company in the BCBSUW/UWS Group
("BCBSUW/UWS Group" includes BCBSUW, UWS and UWS subsidiaries). Each month (i)
all costs associated with the utilization of Schedule 2 Services shall be
multiplied by UWS's total allocation percentage to determine UWS's allocable
share of costs for Schedule 2 Services, and (ii) all costs associated with the
utilization of Schedule 3 Services shall be multiplied by BCBSUW's total
allocation percentage to determine BCBSUW's allocable share of costs for
Schedule 3 Services. For any specific Schedule 3 Service, BCBSUW's total
allocation percentage shall be determined by adding the applicable allocation
percentage from each of the service agreements included in Schedule 3.
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 UWS shall be allocable to UWS only
and costs associated with Schedule 3 Services performed directly for BCBSUW
shall be allocable to BCBSUW 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 UWS for specific Schedule 2 Services and to BCBSUW for
specific Schedule 3 Services shall be subject to agreement by the parties on an
annual basis.(1) Schedule 2, attached hereto, sets forth UWS's annual allocation
percentages for costs and expenses associated with Schedule 2 Services. Schedule
3, attached hereto, sets forth BCBSUW's annual allocation percentages for costs
and expenses associated with Schedule 3 Services. Schedule 2 and Schedule 3
shall be amended annually.
3. CHARGEBACKS. Costs associated with those BCBSUW and UWS
Services identified on Schedule 5 ("Chargeback Services") either shall be (i)
indirectly allocated to UWS or BCBSUW, as the case may be, as discussed in
Section III.B.2, if the cost is a general expense for providing the Chargeback
Service to all users; or (ii) directly charged to a UWS or BCBSUW cost center,
as the case may be, if the cost is an expense specific to a UWS or BCBSUW cost
center. Thus, costs associated with Chargeback Services shall be either directly
charged or indirectly allocated to UWS and BCBSUW on a monthly basis, depending
on the nature of the cost.
4. CHARGES AND ALLOCATIONS TO BCBSUW REGIONS. Direct charges
and indirect allocations to BCBSUW subsequently shall be charged/re-allocated to
the regional operations of BCBSUW ("Regions") as follows:
(a) Direct charges to BCBSUW, which are attributable
to a specific regional operation(s) of BCBSUW, shall be charged to the
Region(s).
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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.
(b) Indirect cost allocations to BCBSUW for Schedule 3
Services shall be re-allocated to the Regions as follows:
(i) Regional Expenses: Regional expense allocations
shall be determined using only the BCBSUW (Total Less All Other LOB's) and the
FEP services agreements included in Schedule 3 (the "BCBSUW/FEP Service
Agreements"). Schedule 6, attached hereto, identifies certain cost centers from
the BCBSUW/FEP Service Agreements that shall be allocated to the Regions in the
manner specified in Schedule 6. The remainder of the BCBSUW indirect allocations
from the BCBSUW/FEP Service Agreements shall be re-allocated to the Regions pro
rata based on earned fees.
(ii) Unique Lines of Business ("LOB") Expenses: All
service agreements included in Schedule 3, other than the BCBSUW/FEP Service
Agreements, shall be referred to herein as "Unique LOB Service Agreements." The
BCBSUW indirect allocations from certain Unique LOB Service Agreements shall be
allocated to the Regions as provided in Schedule 7, attached hereto.
Notwithstanding Section III.B.4(b), the methodology used to allocate BCBSUW
indirect cost allocations to the Regions shall be subject to negotiation, on an
annual basis, by the Finance Manager of BCBSUW and the directors of the BCBSUW
Regions. Accordingly, Schedule 6 and 7 shall be amended, if necessary, on an
annual basis.
C. FEES IN ADDITION TO ALLOCATED COSTS. To the extent that UWS
leases or utilizes the services of Officers from BCBSUW and/or UWIC, and to the
extent that UWS utilizes BCBSUW Services, BCBSUW and/or UWIC may charge UWS a
reasonable negotiated fee therefor, as set forth in Schedule 8. To the extent
that BCBSUW leases or utilizes the services of Officers from UWS and/or UWIC,
and to the extent that BCBSUW utilizes UWS Services, UWS and/or UWIC may charge
BCBSUW a reasonable negotiated fee therefor, as set forth in Schedule 9.
IV. 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 UWIC 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,
BCBSUW, UWS, and UWIC shall provide or make available to each other appropriate
documentation respecting the costs and expenses that are allocated,
either directly or indirectly, to each other for that month in sufficient detail
to permit the other party 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, (i) UWS shall promptly
reimburse BCBSUW and UWIC for all costs and expenses incurred by BCBSUW and UWIC
in furnishing or obtaining the Officers and BCBSUW Services provided for under
Sections I and II, which amount shall be based on the total of direct charges
and indirect allocations to UWS for the preceding month, and (ii) BCBSUW shall
promptly reimburse UWS and UWIC for all costs and expenses incurred by UWS and
UWIC in furnishing or obtaining the Officers and UWS Services provided for under
Sections I and II, which amount shall be based on the total of direct charges
and indirect allocations to BCBSUW for the preceding month. Notwithstanding the
preceding, the parties reserve the right to offset amounts due to each other
under this Agreement.
V. MODIFICATIONS TO LEASED EMPLOYEES AND BCBSUW/UWS SERVICES
A. MID-CONTRACT YEAR MODIFICATIONS. Each Contract Year, BCBSUW
and UWS shall be required to utilize BCBSUW and UWS Services budgeted to each
other 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, BCBSUW and/or UWS require services or other resources
in addition to those budgeted to each other, BCBSUW and/or UWS, as the case may
be, may obtain such services or resources from a source outside of the
BCBSUW/UWS Group only if such company's additional needs cannot be accommodated
by each other.
B. CONTRACT YEAR RENEWAL MODIFICATIONS. BCBSUW shall provide
UWS and/or UWIC and UWS shall provide BCBSUW and/or UWIC 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:
1. Increase or decrease the number or utilization of Officers
or BCBSUW or UWS Services, as the case may be, with respect to the next Contract
Year;
2. Obtain services or other resources, which are available
from each other, 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 BCBSUW and UWS Services to each other either directly or
indirectly, through any company in the BCBSUW/UWS Group.
BCBSUW and UWS may provide services and other resources to each other indirectly
through purchase from or contract with a source outside the BCBSUW/UWS Group
("Outside Services") only with the other party's consent. Costs for Outside
Services shall be subject to a cost structure negotiated by the parties hereto.
VI. 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 UWIC
may, for the sole purpose of documenting in more detail the terms and respective
rights and obligations of the parties with respect to Officers and Services
provided hereunder, request that any of the following types of ancillary
agreements be executed by any parties hereto and effected thereby:
1. Officer Lease Agreement;
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 I through V 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 VIII.B.2. The parties hereby agree that any negotiations subject to this
Section
VI.B shall be performed in good faith and every reasonable effort shall be made
to effect the execution of a requested Ancillary Agreement.
VII. ADDITIONAL COVENANTS
A. AVAILABILITY OF RECORDS. BCBSUW, UWS, and UWIC shall make
available to each other, for inspection, examination and copying, all of its
books and records pertaining to the Officers and BCBSUW/UWS Services provided
under this Agreement each Contract Year:
1. At all reasonable times at the principal places of business
of BCBSUW, UWS, and UWIC, or at such other place as the parties hereto may
otherwise agree to and designate;
2. 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;
3. 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.
1. 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.
2. 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 UWIC, as the case
may be.
C. COVENANT NOT TO COMPETE. BCBSUW and UWS agree not to directly
compete with the products or markets of each other 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, the parties will not
directly compete with each other in any market in which the other 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.
VIII. 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 VIII.A.
B. TERMINATION.
1. 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.
2. This Agreement may be terminated pursuant to Section VI.B
by the Requesting Party giving three (3) months advance written notice to the
nonterminating parties of its intention to terminate.
3. 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:
(a) 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;
(b) 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 party may not exercise the
termination right under this section VIII.B.3.
4. 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.
IX. INDEMNIFICATION
A. INDEMNIFICATION BY BCBSUW.
1. Notwithstanding anything to the contrary in this Agreement,
neither UWIC, UWS, nor any UWS subsidiaries, nor any person who is or was, at
the time of any action or inaction affecting BCBSUW, a director, officer,
employee or agent of UWIC, UWS or any UWS subsidiary (collectively
"Indemnitees") shall be liable to BCBSUW 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.
2. BCBSUW 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 Officers and/or UWS Services provided to BCBSUW 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 under this Agreement.
B. INDEMNIFICATION BY UWS.
1. Notwithstanding anything to the contrary in this Agreement,
neither UWIC, BCBSUW, nor any person who is or was, at the time of any action or
inaction affecting UWS, a director, officer, employee or agent of UWIC or BCBSUW
(collectively "Indemnitees") shall be liable to UWS or any UWS subsidiary 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.
2. UWS 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 Officers and/or BCBSUW Services provided to UWS 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 UWS under this Agreement.
C. INDEMNIFICATION BY UWIC. UWIC hereby agrees to indemnify and
hold harmless BCBSUW and UWS, and their 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 BCBSUW and/or UWS by reason of, arising out of, or
resulting from any breach or misrepresentation by UWIC under this Agreement.
X. 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 X.D of this Agreement.
D. RESOLUTION OF DISPUTES.
1. INFORMAL RESOLUTION.
(a) Coordinating Committee: Any conflicts or disputes
regarding occupancy, utilization or delivery of BCBSUW or UWS Services, or
scheduling, performance and utilization of Officers necessary for the conduct of
BCBSUW's or UWS'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 X.D.2.
(b) 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 X.D.2.
2. FORMAL RESOLUTION.
(a) 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 X.D.1(a) or an audit
committee pursuant to Section X.D.1(b) shall be settled by arbitration. In order
to initiate an arbitration, BCBSUW, UWS, or UWIC (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.
(b) 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.
(c) 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.
(d) 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
3. If to UWIC:
Xx. Xxxx Xxxxxxx
United Wisconsin Insurance Company
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 X.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 officers, services and other resources contemplated by this
Agreement shall be provided to BCBSUW and UWS on an independent contractor
basis. Nothing in this Agreement shall be construed to create an
employer-employee relationship between (i) Officers leased by BCBSUW hereunder
and UWS and/or UWIC, or (ii) Officers leased by UWS hereunder and BCBSUW and/or
UWIC.
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.
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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UNITED WISCONSIN INSURANCE COMPANY
By:
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Title:
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