INTERCOMPANY SERVICE AGREEMENT
This Intercompany Service Agreement ("Agreement") is entered into as
of this _____ day of _______________, 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 Proservices, Inc., a
corporation organized pursuant to Ch. 180, Wisconsin Statutes ("Proservices").
RECITALS
WHEREAS, BCBSUW, UWS and Proservices are affiliated corporations, with
Proservices 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, Proservices created and operates an electronic billing and
claims network that links health care providers and payors throughout Wisconsin
and elsewhere;
WHEREAS, BCBSUW provides the employees and BCBSUW and UWS collectively
provide the other business resources and services necessary for the continued
operation of Proservices' business; and
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 Proservices 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 Proservices.
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ii. "Dual Capacity Employees" are those BCBSUW employees assigned to
the United Government Services business unit who perform services for
Proservices. (Direct and Dual Capacity Employees may collectively be referred to
herein as "Employees.")
b. LEASE OF EMPLOYEES.
i. OBLIGATION TO PROVIDE EMPLOYEES. BCBSUW shall provide to
Proservices, to the extent requested by Proservices, the entire requirement of
Direct Employees for use in Proservices' business according to such job
descriptions, qualifications, experience, education, or skills (collectively
"Employee Specifications") as may be specified by Proservices from time to time.
BCBSUW shall also provide to Proservices, to the extent requested by
Proservices, the entire requirement of Dual Capacity Employees for use in
Proservices' business. Dual Capacity Employees shall meet Employee
Specifications that are mutually acceptable to BCBSUW and Proservices.
ii. INDEPENDENT HIRING. Notwithstanding Section 1.b.i and
Proservices' present intent to lease Direct and Dual Capacity Employees from
BCBSUW, Proservices 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 Proservices may consider appropriate from time to time.
Should Proservices hire employees from other sources, it will not hire any
individual who was a BCBSUW or UWS Employee leased to Proservices 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 Proservices 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. Changes to Employee Specifications of Dual Capacity Employees
must be mutually agreed to by BCBSUW and Proservices prior to implementation by
Human Resources.
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 Proservices to
perform services as an officer, Proservices will be consulted prior to all
determinations regarding the employment, or terms thereof, of such individuals;
provided, however, that Proservices' 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
Proservices, for leased Direct Employees and for leased Dual Capacity Employees
while performing services for
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Proservices. Proservices shall advise Human Resources on the performance of
Direct and Dual Capacity Employees, and shall have the right to request
investigation, disciplinary action, reassignment, and removal of such
employees. If at any time Proservices becomes dissatisfied with the
performance of a Direct or Dual Capacity Employee, Proservices 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 Proservices pursuant to
this Agreement shall remain employees of BCBSUW or UWS, and shall in no way
be treated as or considered employees of Proservices.
e. NOTIFICATION OF PERSONNEL COST CHANGES. With respect to Direct and
Dual Capacity Employees performing services for Proservices, 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 3.a.i) than those in existence as of the date of this Agreement,
BCBSUW shall provide Proservices with written notice at least 30 days before
such change becomes effective (unless such change is required by law, in which
case Proservices 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 PROSERVICES
a. SERVICES AND RESOURCES PROVIDED BY BCBSUW. BCBSUW shall provide to
Proservices, to the extent requested by Proservices and subject to Section 5,
the following services and resources (together "BCBSUW Services"). BCBSUW shall
supply BCBSUW Services only if Proservices 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 Proservices' 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 Proservices' 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 Proservices' 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 Proservices' business.
v. ADMINISTRATIVE SERVICES. Such administrative services,
including, but not limited to, maintenance of liability insurance, lobbyist
activities and payment of director fees, as shall be necessary or appropriate
for the conduct of Proservices' business.
vi. ACCOUNTING SERVICES. Such accounting, audit, bookkeeping and
financial statement preparation services as shall be necessary or appropriate
for the conduct of Proservices' business.
vii. EXECUTIVE SERVICES. Such executive services as shall be
necessary or appropriate for the conduct of Proservices' business.
viii. SALES AND CONFERENCE SERVICES. Such sales and conference
support as shall be necessary or appropriate for the conduct of Proservices'
business.
ix. 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 Proservices' business.
b. SERVICES AND RESOURCES PROVIDED BY UWS. UWS shall provide to
Proservices, to the extent requested by Proservices and subject to Section 5,
the following services and resources (together "UWS Services"). UWS shall
supply UWS Services only if Proservices 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 Proservices'
business.
ii. 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 Proservices'
business.
iii. 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 Proservices under
this Agreement or otherwise necessary or appropriate for the conduct of
Proservices' business.
iv. FINANCIAL SERVICES. Such financial services, including, but not
limited to, cash management, tax, treasury, administration of financial systems,
and strategic
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planning/consulting, as shall be necessary or appropriate for the conduct of
Proservices' 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 Employees are
leased to Proservices, Total Personnel Costs for such Employees shall be
directly charged to Proservices as follows:
(1) Direct Employees. The Total Personnel Costs associated
with a Direct Employee shall be directly charged to Proservices on a monthly
basis. See Schedule 1.
(2) Dual Capacity Employees. The Total Personnel Costs
associated with a Dual Capacity Employee shall, on a monthly basis, be directly
charged to Proservices based on hours worked for Proservices. See Schedule 2.
b. BCBSUW AND UWS SERVICES. To the extent that BCBSUW/UWS Services are
rendered on behalf of or for the benefit of Proservices, costs therefor shall be
allocated to Proservices as follows:
i. DIRECT ALLOCATIONS. Costs associated with those BCBSUW/UWS
Services identified on Schedule 1 shall be directly charged to Proservices on a
monthly basis. Costs associated with those BCBSUW/UWS Services identified on
Schedule 2 shall, on a monthly basis, be directly charged to Proservices based
on Proservices' actual use.
ii. INDIRECT ALLOCATIONS. Cost allocations for those BCBSUW/UWS
Services 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
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Allocation Methods, as described in Schedule 4 attached hereto, utilization
of Schedule 3 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 3 Services shall be multiplied by the allocation
percentage of Proservices to determine Proservices' allocable share of costs
for Schedule 3 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 3 Services performed
directly for Proservices shall be allocable to Proservices 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 for specific
Schedule 3 Services shall be subject to agreement by the parties on an annual
basis.(1) Schedule 3, attached hereto, sets forth Proservices' annual
allocation percentage for costs and expenses associated with Schedule 3
Services. Schedule 3 shall be amended annually.
iii. CHARGEBACKS. Costs associated with those BCBSUW/UWS Services
identified on Schedule 5 ("Chargeback Services") either shall be (i) indirectly
allocated to Proservices 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 Proservices' cost center, if the cost is an expense specific
to Proservices' cost center. Thus, costs associated with Chargeback Services
shall be either directly charged or indirectly allocated to Proservices on a
monthly basis, depending on the nature of the cost.
c. FEES IN ADDITION TO ALLOCATED COSTS. To the extent that Proservices
leases or utilizes the services of Employees from BCBSUW and/or UWS, and to the
extent that Proservices utilizes BCBSUW/UWS Services, BCBSUW and/or UWS may
charge Proservices a reasonable negotiated fee therefor, as set forth in
Schedule 6.
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 Proservices' 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 Proservices appropriate
documentation respecting the costs and expenses that are allocated, either
directly or indirectly, to Proservices for that month in sufficient detail to
permit Proservices 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, Proservices shall promptly
reimburse BCBSUW for all costs and expenses incurred by BCBSUW in furnishing or
obtaining the Employees and
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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 provided for under Sections I and II, which amount shall be based on
the total of direct charges and indirect allocations to Proservices from
BCBSUW for the preceding month. At the end of each Fiscal Year quarter, not
later than the 30th day after the end of each quarter, Proservices shall
promptly reimburse UWS for all costs and expenses incurred by UWS in
furnishing or obtaining the Employees and Services provided for under Section
1 and 2, which amount shall be based on the total of direct charges and
indirect allocations to Proservices from UWS for the preceding Fiscal Year
quarter. Notwithstanding the preceding, Proservices 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 Proservices.
5. MODIFICATIONS TO LEASED EMPLOYEES AND SERVICES
a. MID-CONTRACT YEAR MODIFICATIONS. Each Contract Year, Proservices
shall be required to utilize Employees and BCBSUW/UWS Services budgeted to
Proservices 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, Proservices requires employees, services or other
resources in addition to those budgeted to Proservices by BCBSUW and UWS,
Proservices may obtain such employees, services or resources from a source
outside of the BCBSUW/UWS Group only if Proservices' additional needs cannot be
accommodated by BCBSUW or UWS.
b. CONTRACT YEAR RENEWAL MODIFICATIONS. Proservices 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 Proservices either
directly or indirectly, through any company in the BCBSUW/UWS Group. BCBSUW and
UWS may provide employees, services and other resources to Proservices
indirectly through purchase from or contract with a source outside the
BCBSUW/UWS Group ("Outside Services") only with Proservices' 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 Proservices
may, for the sole purpose of
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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;
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
Proservices, for inspection, examination and copying, all of its books and
records pertaining to the Employees and BCBSUW/UWS Services provided to
Proservices 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;
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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 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 Proservices as the case
may be.
c. COVENANT NOT TO COMPETE. BCBSUW and UWS agree that no company in the
BCBSUW/UWS Group (excluding Proservices) will directly compete with the products
or markets of Proservices 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
Proservices) will directly compete with Proservices in any market in which
Proservices 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,
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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 in any way Proservices' ability to contract with any other person
or entity to provide services similar to or the same as those which are the
subject of this Agreement.
8. TERM AND TERMINATION
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 PROSERVICES.
i. Notwithstanding anything to the contrary in this Agreement,
neither BCBSUW, UWS, nor any other company in the BCBSUW/UWS Group (other than
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Proservices), nor any person who is or was, at the time of any action or
inaction affecting Proservices, a director, officer, employee or agent of
BCBSUW, UWS or any other company in the BCBSUW/UWS Group (other than
Proservices) (collectively "Indemnitees") shall be liable to Proservices 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. Proservices 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 Proservices
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 Proservices under this
Agreement.
b. INDEMNIFICATION BY BCBSUW AND UWS. BCBSUW and UWS, jointly and
severally, hereby agree to indemnify and hold harmless Proservices, 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 Proservices 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 Proservices' 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(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 Proservices
(as the case may be) shall deliver a written notice of demand for arbitration
to the other affected party(ies). Within thirty (30) days of the giving of
such written notice, each party involved shall appoint an individual as
arbitrator (the "Party Arbitrators"). Within thirty (30) days of their
appointment, the Party Arbitrators shall collectively select one (or two if
necessary to constitute an odd total number of arbitrators) additional
arbitrator (together the "Panel Arbitrators") and shall give the parties
involved notice of such choice.
(2) The arbitration hearings shall be held in Milwaukee,
Wisconsin. Each party shall submit its case to the Panel Arbitrators within
sixty (60) days of the selection of the Panel Arbitrators or within such
longer period as may be agreed by the Panel Arbitrators. The decision
rendered by a majority of the Panel Arbitrators shall be final and binding on
the parties involved. Such decision shall be a condition precedent to any
right of legal action arising out of the arbitrated dispute. Judgment upon
the award rendered may be entered in any court having jurisdiction thereof.
(3) Each involved party shall a. pay the fees and expense 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)
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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:
Xx. Xxxxx Xxxxxxxxx
United Wisconsin Services, Inc.
000 Xxxx Xxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Facsimile Telephone Number: (000) 000-0000
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3. If to Proservices:
Mr. C. Xxxxxx Xxxxx
United Wisconsin Proservices, 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 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 Proservices on an independent contractor basis.
Nothing in this Agreement shall be construed to create an employer-employee
relationship between Proservices and Employees or any of the parties hereto.
g. ENTIRE AGREEMENT. This Agreement, including the schedules and
exhibits referred to herein constitute the entire understanding and agreement of
the parties hereto and supersede all prior agreements and understandings,
written or oral, between the parties with respect to the transactions
contemplated herein. Provided, however, the foregoing shall not operate or be
construed to prohibit proof of prior understandings and agreements between or
among the parties to the extent necessary to properly construe or interpret this
Agreement. Notwithstanding the preceding, the parties acknowledge that there
are, and/or may be in the future, any number of independent third party
contracts between various companies in the BCBSUW/UWS Group for various services
and/or business arrangements, and any such contracts, whether written or oral,
shall survive the execution of this Agreement and any renewal hereof.
h. HEADINGS. The headings used in this Agreement have been inserted for
convenience and do not constitute matter to be construed or interpreted in
connection with this Agreement.
i. NO THIRD PARTY BENEFICIARIES. This Agreement is only for the benefit
of the parties hereto and does not confer any right, benefit, or privilege upon
any person or entity not a party to this Agreement.
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j. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Wisconsin (without giving effect to
principles of conflicts of laws) as to all matters, including, without
limitation, matters of validity, construction, effect, performance and remedies.
k. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under any present or future law, and if the
rights or obligations of any party under this Agreement will not be materially
and adversely affected thereby, 1. such provision will be fully severable, 2.
this Agreement will be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part hereof, 3. the remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid, or unenforceable provision or by its
severance herefrom, and 4. in lieu of such illegal, invalid, or unenforceable
provision, there will be added automatically as part of this Agreement, a legal,
valid, and enforceable provision as similar terms to such illegal, invalid, or
unenforceable provision as may be possible.
l. COUNTERPARTS. This Agreement may be executed simultaneously in any
number of counterparts, each of which will be deemed an original, but all of
which will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives as of the Effective Date.
BLUE CROSS BLUE SHIELD UNITED OF WISCONSIN
By:
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Title:
---------------------------------
By:
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Title:
---------------------------------
UNITED WISCONSIN SERVICES, INC.
By:
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Title:
---------------------------------
UNITED WISCONSIN PROSERVICES, INC.
By:
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Title:
---------------------------------
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