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 Consulting Services business unit ("Meridian Consulting").
RECITALS
WHEREAS, BCBSUW, UWS and Meridian Corp are affiliated corporations,
with Meridian Corp being a wholly owned subsidiary of UWS;
WHEREAS, Meridian Consulting 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 Consulting (i) provides consulting services,
including, but not limited to, the Meridian Profiling System, the Standard
Hospital Cost Index, and external accreditation services, to various companies
in the BCBSUW/UWS Group and to outside entities, all on a third party contract
basis, and (ii) through the Medicaid Evaluation and Decision Support Project
("MEDS"), provides the Wisconsin Bureau of Health Care Financing with various
services to support the daily management of the Wisconsin Medicaid program;
WHEREAS, UWS provides the employees and BCBSUW and UWS collectively
provide the other business resources and services necessary for the continued
operation of Meridian Consulting'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 Consulting
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 Consulting. (Direct Employees may
also be referred to herein as "Employees.")
b. LEASE OF EMPLOYEES.
i. OBLIGATION TO PROVIDE EMPLOYEES. UWS shall provide to Meridian
Consulting, to the extent requested by Meridian Consulting, the entire
requirement of Direct Employees for use in Meridian Consulting's business
according to such job descriptions, qualifications, experience, education, or
skills (collectively "Employee Specifications") as may be specified by Meridian
Consulting from time to time.
ii. INDEPENDENT HIRING. Notwithstanding Section 1.b.i and Meridian
Consulting's present intent to lease Direct Employees from UWS, Meridian
Consulting 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 Consulting may consider appropriate from time to time.
Should Meridian Consulting hire employees from other sources, it will not hire
any individual who was a BCBSUW or UWS Employee leased to Meridian Consulting
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 Consulting 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
Consulting to perform services as an officer, Meridian Consulting will be
consulted prior to all determinations regarding the employment, or terms
thereof, of such individuals; provided, however, that Meridian Consulting'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 Consulting, for leased Direct Employees while performing services for
Meridian Consulting. Meridian Consulting shall advise Human Resources on the
performance of Direct Employees, and shall have the right to request
investigation, disciplinary action, reassignment, and removal
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of such employees. If at any time Meridian Consulting becomes dissatisfied
with the performance of a Direct Employee, Meridian Consulting 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 Consulting
pursuant to this Agreement shall remain employees of BCBSUW or UWS, and shall
in no way be treated as or considered employees of Meridian Consulting.
e. NOTIFICATION OF PERSONNEL COST CHANGES. With respect to Direct
Employees performing services for Meridian Consulting, 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 Consulting with written notice at least 30 days before
such change becomes effective (unless such change is required by law, in which
case Meridian Consulting 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 CONSULTING
a. SERVICES AND RESOURCES PROVIDED BY BCBSUW. BCBSUW shall provide to
Meridian Consulting, to the extent requested by Meridian Consulting and subject
to Section 5, the following services and resources (together "BCBSUW Services").
BCBSUW shall supply BCBSUW Services only if Meridian Consulting 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 Consulting'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 Consulting'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 Consulting'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 Consulting'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 Consulting'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 Consulting's business.
b. SERVICES AND RESOURCES PROVIDED BY UWS. UWS shall provide to
Meridian Consulting, to the extent requested by Meridian Consulting and
subject to Section 5, the following services and resources (together "UWS
Services"). UWS shall supply UWS Services only if Meridian Consulting 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
Consulting's business.
ii. EXECUTIVE SERVICES. Such executive services as shall be
necessary or appropriate for the conduct of Meridian Consulting'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
Consulting'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
Consulting under this Agreement or otherwise necessary or appropriate for the
conduct of Meridian Consulting'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 Consulting'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 Consulting'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 Consulting'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 Consulting, Total Personnel Costs associated
with a Direct Employee shall be directly charged to Meridian Consulting 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 Consulting, costs therefor
shall be allocated to Meridian Consulting as follows:
i. DIRECT CHARGES. Costs associated with those BCBSUW/UWS Services
identified on Schedule 1 shall be directly charged to Meridian Consulting 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
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with Schedule 2 Services performed directly for Meridian Corp shall be
allocable to Meridian 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
Consulting, each month based on the ratio of the unit's directly charged
expenses to the total Meridian Corp directly charged expenses. 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 Consulting 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 Consulting cost center, if the cost is an expense
specific to a Meridian Consulting cost center. Thus, costs associated with
Chargeback Services shall be either directly charged or indirectly allocated to
Meridian Consulting on a monthly basis, depending on the nature of the cost.
c. FEES IN ADDITION TO ALLOCATED COSTS. To the extent that Meridian
Consulting leases or utilizes the services of Employees from BCBSUW and/or UWS,
and to the extent that Meridian Consulting utilizes BCBSUW/UWS Services, BCBSUW
and/or UWS may charge Meridian Consulting 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 Consulting'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 Consulting
appropriate documentation respecting the costs and expenses that are allocated,
either directly or indirectly, to Meridian Consulting for that month in
sufficient detail to permit Meridian Consulting 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 Consulting 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
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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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Consulting for the preceding month. Notwithstanding the preceding, Meridian
Consulting 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 Consulting.
5. MODIFICATIONS TO LEASED EMPLOYEES AND BCBSUW/UWS SERVICES
a. MID-CONTRACT YEAR MODIFICATIONS. Each Contract Year, Meridian
Consulting shall be required to utilize Employees and BCBSUW/UWS Services
budgeted to Meridian Consulting 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 Consulting
requires employees, services or other resources in addition to those budgeted to
Meridian Consulting by BCBSUW and UWS, Meridian Consulting may obtain such
employees, services or resources from a source outside of the BCBSUW/UWS Group
only if Meridian Consulting's additional needs cannot be accommodated by BCBSUW
or UWS.
b. CONTRACT YEAR RENEWAL MODIFICATIONS. Meridian Consulting 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 Consulting either
directly or indirectly, through any company in the BCBSUW/UWS Group. BCBSUW and
UWS may provide employees, services and other resources to Meridian Consulting
indirectly through purchase from or contract with a source outside the
BCBSUW/UWS Group ("Outside Services") only with Meridian Consulting'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
Consulting 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 Consulting, 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.
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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 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 Consulting 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 Consulting 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 Consulting in any
market in which Meridian Consulting 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.
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8. 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 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 CONSULTING.
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 Consulting, 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 Consulting for
any action or inaction taken or omitted to be taken by such Indemnitee;
PROVIDED, HOWEVER, that such Indemnitee acted (or
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failed to act) in good faith and such action or inaction does not constitute
actual fraud, gross negligence or willful or wanton misconduct.
ii. Meridian Consulting 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 Consulting 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
Consulting under this Agreement.
b. INDEMNIFICATION BY BCBSUW AND UWS. BCBSUW and UWS, jointly and
severally, hereby agree to indemnify and hold harmless Meridian Consulting, 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
Consulting 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.
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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 conduct of Meridian Consulting'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 Consulting (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
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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.
(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
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P.O. Box 2025
Milwaukee, Wisconsin 53201-2025
Facsimile Telephone Number: (000) 000-0000
3. If to Meridian Consulting:
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 Consulting on an independent contractor
basis. Nothing in this Agreement shall be construed to create an
employer-employee relationship between Meridian Consulting 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.
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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:
---------------------------------
ON BEHALF OF MERIDIAN CONSULTING, MERIDIAN RESOURCE CORPORATION
By:
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Title:
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