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. 180,
Wisconsin Statutes ("UWS"), Meridian Managed Care, Inc., a corporation organized
pursuant to Ch. 180, Wisconsin Statutes ("MMC"), and Compcare Health Services
Insurance Corporation, a stock insurance corporation organized pursuant to Ch.
611, Wisconsin Statutes ("Compcare") on behalf of its RxCel business unit
("Compcare RxCel").
RECITALS
WHEREAS, BCBSUW, UWS, MMC, and Compcare are affiliated corporations,
with MMC and Compcare being wholly owned subsidiaries of UWS;
WHEREAS, Compcare RxCel is an unincorporated business unit of
Compcare;
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, Compcare RxCel is a pharmacy operated for the benefit of
various companies in the BCBSUW/UWS Group to provide, on a third party contract
basis, pharmaceutical products to insureds/enrollees thereof;
WHEREAS, MMC provides the employees and BCBSUW and UWS collectively
provide the other business resources and services necessary for the continued
operation of Compcare RxCel'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 Compcare Rxcel 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.
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i. "Direct Employees" are those MMC employees that are assigned to
perform all of their services for Compcare RxCel. (Direct Employees may also be
referred to herein as "Employees.")
b. LEASE OF EMPLOYEES.
i. OBLIGATION TO PROVIDE EMPLOYEES. MMC shall provide to Compcare
RxCel, to the extent requested by Compcare RxCel, the entire requirement of
Direct Employees for use in Compcare RxCel's business according to such job
descriptions, qualifications, experience, education, or skills (collectively
"Employee Specifications") as may be specified by Compcare RxCel from time to
time.
ii. INDEPENDENT HIRING. Notwithstanding Section 1.b.i and Compcare
RxCel's present intent to lease Direct Employees from MMC, Compcare RxCel 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
Compcare RxCel may consider appropriate from time to time. Should Compcare
RxCel hire employees from other sources, it will not hire any individual who was
an MMC, BCBSUW or UWS Employee leased to Compcare RxCel within three (3) months
preceding such hiring, without the written consent of MMC, 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 MMC's, BCBSUW's and UWS's employee leasing obligations under this
Agreement. Employee Specifications shall be retained in the files of Human
Resources, and Compcare RxCel 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 Compcare RxCel to
perform services as an officer, Compcare RxCel will be consulted prior to all
determinations regarding the employment, or terms thereof, of such individuals;
provided, however, that Compcare RxCel'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
Compcare RxCel, for leased Direct Employees while performing services for
Compcare RxCel. Compcare RxCel shall advise Human Resources on the performance
of Direct Employees, and shall have the right to request investigation,
disciplinary action, reassignment, and removal of such employees. If at any
time Compcare RxCel becomes dissatisfied with the performance of a Direct
Employee, Compcare RxCel shall have the right to reject the continued lease of
that particular employee and request a replacement therefor. MMC, BCBSUW and
UWS shall have the exclusive right, however, to direct all MMC, BCBSUW and UWS
employees,
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respectively, as to the manner in which services are to be rendered and
performance goals are to be achieved. MMC, BCBSUW and UWS shall be, and
shall have all the privileges, rights, and responsibilities of, common law
employers of all MMC, BCBSUW and UWS employees, respectively, including, but
not limited to, establishing work and disciplinary rules, setting
compensation levels, and directing each MMC, BCBSUW or UWS Employee as to the
manner in which daily duties are completed, whether or not the employee
actually performs services for MMC, BCBSUW, UWS or another company in the
BCBSUW/UWS Group. Employees leased to Compcare RxCel pursuant to this
Agreement shall remain employees of MMC, BCBSUW or UWS, and shall in no way
be treated as or considered employees of Compcare RxCel.
e. NOTIFICATION OF PERSONNEL COST CHANGES. With respect to Direct
Employees performing services for Compcare RxCel, if MMC 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, MMC shall provide
Compcare RxCel with written notice at least 30 days before such change becomes
effective (unless such change is required by law, in which case Compcare RxCel
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 COMPCARE RXCEL
a. SERVICES AND RESOURCES PROVIDED BY BCBSUW. BCBSUW shall provide to
Compcare RxCel, to the extent requested by Compcare RxCel and subject to Section
V, the following services and resources (together "BCBSUW Services"). BCBSUW
shall supply BCBSUW Services only if Compcare RxCel has determined not to have
its own employees or third parties furnish the BCBSUW Services, subject to
Section 5.
i. TECHNOLOGY SUPPORT. Such technology support as shall be
necessary or appropriate for the conduct of Compcare RxCel's business.
b. SERVICES AND RESOURCES PROVIDED BY UWS. UWS shall provide to Compcare
RxCel, to the extent requested by Compcare RxCel and subject to Section 5, the
following services and resources (together "UWS Services"). UWS shall supply
UWS Services only if Compcare RxCel 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, legal and government relations, as shall be
necessary or appropriate for the conduct of Compcare RxCel's business.
ii. FINANCIAL SERVICES. Such financial services, including, but not
limited to, cash management, administration of financial systems, corporate
accounting, and strategic planning/consulting, as shall be necessary or
appropriate for the conduct of Compcare RxCel's business.
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iii. EXECUTIVE SERVICES. Such executive services as shall be
necessary or appropriate for the conduct of Compcare RxCel's business.
iv. OTHER SERVICES. Such other services, including, but not limited
to, those provided by MMC and Meridian Resource Corporation, as shall be
necessary or appropriate for the conduct of Compcare RxCel'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;
profit sharing;
benefit plans;
payroll taxes;
employee insurance.
ii. ALLOCATION OF PERSONNEL COSTS. To the extent that Direct
Employees are leased to Compcare RxCel, Total Personnel Costs associated with a
Direct Employee shall be directly charged to Compcare RxCel 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 Compcare RxCel, costs therefor shall
be allocated to Compcare RxCel as follows:
i. DIRECT CHARGES. Costs associated with those BCBSUW/UWS Services
identified on Schedule 1 shall be directly charged to Compcare RxCel 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, and various business units, 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 Compcare
RxCel to determine Compcare RxCel's allocable share of costs for Schedule 2
Services.
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Notwithstanding the preceding, (i) allocation percentages are subject
to interim Fiscal Year adjustments to allocate more accurately costs based on
actual utilization by companies/units in the BCBSUW/UWS Group, (ii) costs
associated with Schedule 2 Services performed directly for Compcare RxCel shall
be allocable to Compcare RxCel 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 Compcare RxCel for specific Schedule 2 Services shall
be subject to agreement by the parties on an annual basis.(1) Schedule 2,
attached hereto, sets forth Compcare RxCel'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 Compcare RxCel 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 Compcare RxCel cost center, if the cost is an expense
specific to a Compcare RxCel cost center. Thus, costs associated with
Chargeback Services shall be either directly charged or indirectly allocated to
Compcare RxCel on a monthly basis, depending on the nature of the cost.
c. FEES IN ADDITION TO ALLOCATED COSTS. To the extent that Compcare
RxCel leases or utilizes the services of Employees from MMC, BCBSUW and/or UWS,
and to the extent that Compcare RxCel utilizes BCBSUW/UWS Services, MMC, BCBSUW
and/or UWS may charge Compcare RxCel 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. MMC, BCBSUW, and UWS 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, MMC,
BCBSUW and/or UWS shall provide or make available to Compcare RxCel appropriate
documentation respecting the costs and expenses that are allocated, either
directly or indirectly, to Compcare RxCel for that month in sufficient detail to
permit Compcare RxCel 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, Compcare RxCel shall promptly
reimburse MMC, BCBSUW and/or UWS for all costs and expenses incurred by MMC,
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 Compcare RxCel for the preceding month.
Notwithstanding the preceding, Compcare RxCel reserves the
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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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right to offset any amounts due to MMC, BCBSUW and/or UWS under this
Agreement against other obligations of MMC, BCBSUW and/or UWS to Compcare
RxCel.
5. MODIFICATIONS TO LEASED EMPLOYEES AND BCBSUW/UWS SERVICES
a. MID-CONTRACT YEAR MODIFICATIONS. Each Contract Year, Compcare RxCel
shall be required to utilize Employees and BCBSUW/UWS Services budgeted to
Compcare RxCel 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, Compcare RxCel requires employees, services or
other resources in addition to those budgeted to Compcare RxCel by MMC, BCBSUW
and UWS, Compcare RxCel may obtain such employees, services or resources from a
source outside of the BCBSUW/UWS Group only if Compcare RxCel's additional needs
cannot be accommodated by MMC, BCBSUW or UWS.
b. CONTRACT YEAR RENEWAL MODIFICATIONS. Compcare RxCel shall provide
MMC, 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 MMC, 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. MMC, BCBSUW and UWS have
the right to provide Employees and BCBSUW/UWS Services to Compcare RxCel either
directly or indirectly, through any company in the BCBSUW/UWS Group. MMC,
BCBSUW and UWS may provide employees, services and other resources to Compcare
RxCel indirectly through purchase from or contract with a source outside the
BCBSUW/UWS Group ("Outside Services") only with Compcare RxCel'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, MMC or Compcare
RxCel may, for the sole purpose of documenting in more detail the terms and
respective rights and obligations of the parties with respect to Employees and
Services provided hereunder, request that any of the following types of
ancillary agreements be executed by any parties hereto and effected thereby:
i. Employee Lease Agreement;
ii. Office and Equipment Lease;
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iii. Management Information Systems Agreement;
iv. Service Agreement(s); or
v. Any other Agreement deemed necessary or expedient by the parties
(together "Ancillary Agreements").
The terms of any executed Ancillary Agreement shall (i) be subject to
negotiation of the respective parties, and (ii) control in case of any conflict
with Sections 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
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. MMC, BCBSUW, and UWS shall make available to
each other, 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
MMC, 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.
b. CONFIDENTIALITY.
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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 MMC, BCBSUW, UWS or Compcare RxCel as
the case may be.
c. COVENANT NOT TO COMPETE. MMC, BCBSUW and UWS agree that no company in
the BCBSUW/UWS Group (excluding Compcare) will directly compete with the
products or markets of Compcare RxCel during the term of this Agreement. MMC,
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 Compcare) will directly compete with Compcare RxCel in any market in
which Compcare RxCel 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.
8. TERM AND TERMINATION
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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 COMPCARE RXCEL.
i. Notwithstanding anything to the contrary in this Agreement,
neither MMC, BCBSUW, UWS, nor any other company in the BCBSUW/UWS Group (other
than Compcare), nor any person who is or was, at the time of any action or
inaction affecting Compcare RxCel, a director, officer, employee or agent of
MMC, BCBSUW, UWS or any other company in the BCBSUW/UWS Group (other than
Compcare) (collectively "Indemnitees") shall be liable to Compcare RxCel 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.
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ii. Compcare RxCel 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
Compcare RxCel 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 Compcare
RxCel under this Agreement.
b. INDEMNIFICATION BY MMC, BCBSUW AND UWS. MMC, BCBSUW and UWS, jointly
and severally, hereby agree to indemnify and hold harmless Compcare RxCel, 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 Compcare
RxCel by reason of, arising out of or resulting from any breach or
misrepresentation by MMC, 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 X.D of this Agreement.
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
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and utilization of Employees necessary for the conduct of Compcare RxCel's
business, shall be submitted to a coordinating committee for resolution. The
coordinating committee shall consist of four (4) 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 four (4) 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, MMC, BCBSUW, UWS or Compcare RxCel (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 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.
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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 MMC:
Xx. Xxxxx Xxxxxxx
Meridian Managed Care, Inc.
000 Xxxx Xxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Facsimile Telephone Number: (000) 000-0000
4. If to Compcare RxCel:
5.
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Xx. Xxxx Xxxxxxx
Compcare Health Services Insurance 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 Compcare RxCel on an independent contractor
basis. Nothing in this Agreement shall be construed to create an
employer-employee relationship between Compcare RxCel 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.
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
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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.
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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:
---------------------------------
UNITED WISCONSIN SERVICES, INC.
By:
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Title:
---------------------------------
MERIDIAN MANAGED CARE, INC.
By:
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Title:
---------------------------------
ON BEHALF OF COMPCARE RXCEL, COMPCARE HEALTH SERVICES INSURANCE CORPORATION
By:
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Title:
---------------------------------
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