EXHIBIT 10.11.7
ADDENDUM TO BLUE SHIELD CONTROLLED AFFILIATE LICENSE AGREEMENT
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This Blue Shield Controlled Affiliate License Agreement is made by and
among Blue Cross and Blue Shield Association ("BCBSA") and RightCHOICE Managed
Care, Inc. (the "Controlled Affiliate"), a Controlled Affiliate of the Blue
Shield Plan(s) known as Blue Cross and Blue Shield of Missouri (the "Plan"),
which is also a Party signatory hereto.
Preamble
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WHEREAS, BCBSA is the owner of the BLUE SHIELD and the BLUE SHIELD
Design service marks (collectively the "Licensed Marks");
WHEREAS the Controlled Affiliate was given the right to use the
Licensed Marks as service marks for health care plans in its service area and
the right to use BLUE SHIELD in its trade name (the "Licensed Name");
WHEREAS, BCBSA has informed the Controlled Affiliate that the
Controlled Affiliate's Blue Shield Controlled Affiliate License Agreement
automatically terminated pursuant to paragraph 7.B. of that Controlled Affiliate
License Agreement, as a result of an order entered by the Circuit Court of Xxxx,
County, Missouri dated October 29, 1998 (the "Missouri Order") in certain
litigation pending among and between the Plan, the Missouri Department of
Insurance, and the Attorney General of the State of Missouri (the "Litigation");
WHEREAS, the Controlled Affiliate has informed BCBSA that: (i) the
Controlled Affiliate believes that because the Missouri Order was void and was
vacated as void ab initio six days after it was entered, it was not effective
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and did not result in the automatic termination of the Controlled Affiliate's
Blue Shield Controlled Affiliate License Agreement; (ii) the Controlled
Affiliate contends that its Blue Shield Controlled Affiliate License Agreement
remains in effect; and (iii) to avoid the expense and delay of litigation and to
clarify its right to continue to use the Licensed Marks and Licensed Name, the
Controlled Affiliate is willing to accept benefits and rights under this
Addendum to Blue Shield Controlled Affiliate License Agreement;
WHEREAS, BCBSA has determined that it is in the best interest of the
Licensed Marks, BCBSA, and its member Plans to grant the Controlled Affiliate a
Blue Shield Controlled Affiliate license pursuant to the terms of the Blue
Shield Controlled Affiliate License Agreement as amended by this Addendum to
Blue Shield Controlled Affiliate License Agreement;
NOW THEREFORE, in consideration of the foregoing and the mutual
agreements hereinafter set forth and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
Addendum
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1. BCBSA hereby grants the Controlled Affiliate, upon the terms,
covenants, and conditions of the Blue Shield Controlled Affiliate License
Agreement attached hereto (the "Full Affiliate License") as amended by this
Addendum to Blue Shield Controlled Affiliate License Agreement ("Addendum"), the
right to use the Licensed Name in its trade name and the right to use the
Licensed Marks in the sale, marketing, and administration of health care plans
and related services in its licensed service area. Notwithstanding any provision
to the contrary in the Full Affiliate License, paragraphs 1 through 8 of this
Addendum shall control to the extent they conflict with any terms, conditions,
or covenants of the Full Affiliate License. The term "Agreement" as used in the
Full Affiliate License shall be construed to include this Addendum.
2. The Controlled Affiliate releases any and all claims, causes of
action, actions, suits, or any demands whatsoever against BCBSA or any of its
Member Plans, whether at law or equity, whether in judicial, arbitral, or
alternative fora, and whether known or unknown, that the Controlled Affiliate
now has or may have had on behalf of itself or any other person or entity at any
time prior to and including the date hereof, or hereafter can, shall, or may
have or claim to have, arising out of or in any way related to the
aforementioned alleged automatic termination.
3. BCBSA releases any and all claims, causes of action, actions,
suits, or any demands whatsoever against the Controlled Affiliate, whether at
law or equity, whether in judicial, arbitral, or alternative fora, and whether
known or unknown, that BCBSA now has or may have had on behalf of itself or any
other person or entity at any time prior to and including the date hereof, or
hereafter can, shall, or may have or claim to have, arising out of or in any way
related to the aforementioned alleged automatic termination.
4. The Controlled Affiliate warrants that, apart from the
Litigation, it is in compliance with all, and has no plans to engage in conduct
that would violate any, BCBSA rules and regulations, including all provisions of
this Addendum. The Controlled Affiliate warrants that there is no imminent risk
of dissolution of the Controlled Affiliate or of the appointment of a trustee,
interim trustee, receiver, or other custodian for any of the Controlled
Affiliate's business or property. The Controlled Affiliate shall immediately
provide BCBSA's General Counsel with copies of all pleadings and orders in the
Litigation upon receipt and shall regularly update BCBSA's General Counsel on
the Litigation. If at any time after the effective date of this Addendum the
Controlled Affiliate becomes aware of any event that indicates that the
Controlled Affiliate is in imminent danger of dissolution, the Controlled
Affiliate shall immediately notify BCBSA's General Counsel in writing.
5. All disputes related to the termination of the Controlled
Affiliate's licenses shall be adjudicated exclusively in a United States
District Court, or if that Court does not have subject matter jurisdiction, in a
Court with competent jurisdiction in Illinois. The Controlled Affiliate shall
not claim that a Court in Illinois lacks personal
jurisdiction over the Controlled Affiliate concerning any such dispute, nor that
a Court in Illinois is an improper or inconvenient venue for any such dispute.
6. The provisions of paragraphs 7.G. and 7.H.(1) of the Full
Affiliate License related to notice to customers, and the provisions of
paragraph 7.H.(3) of the Full Affiliate License related to the reestablishment
fee, shall not apply to the alleged automatic termination triggered by the
Missouri Order. The BCBSA Board of Directors' March 12, 1998 resolution relating
to the Controlled Affiliate's licenses is superseded by the terms of the Full
Affiliate License as amended by this Addendum, provided, however, that paragraph
7.E.(3)(vii) of the Full Affiliate License shall not apply with respect to the
Litigation and is superseded by paragraph 8 of this Addendum.
7. The Full Affiliate License as amended by this Addendum shall
automatically terminate upon any judicial act which: (i) provides that, or
approves a transaction pursuant to which, a person, entity or group other than
licensees of BCBSA, acquires the ability to select the majority of the members
of the Board of Directors of the Controlled Affiliate or otherwise gains control
of the Controlled Affiliate; or (ii) changes the composition, or the voting
rights of the members, of the Board of Directors of the Controlled Affiliate.
This paragraph shall not apply to a settlement or resolution of the Litigation
that complies with all BCBSA rules, regulations, and standards and is approved
by or conditioned on the approval of BCBSA.
8. The Full Affiliate License as amended by this Addendum shall
automatically terminate on March 10, 2000, unless the BCBSA Board of Directors
takes affirmative action to extend the license on or before the scheduled Board
meeting on March 10, 2000.
9. The Full Affiliate License as amended by this Addendum shall be
deemed effective as of October 29, 1998.
IN WITNESS HEREOF, the parties have caused the Full Affiliate License as amended
by this Addendum to Blue Shield Controlled Affiliate License Agreement to be
executed, effective October 29, 1998:
BLUE CROSS AND BLUE SHIELD ASSOCIATION:
By: ____/s/ Xxxxx X. Seroto________________________
Title: ____EVP-COO____________________________________
Date: ____11-23-99___________________________________
RIGHTCHOICE MANAGED CARE, INC.
By: ___/s/ Xxxx O'Rourke___________________________
Title: ___President___________________________________
Date: ___November 23, 1999___________________________
BLUE CROSS AND BLUE SHIELD OF MISSOURI
By: ____/s/ Xxxx O'Rourke__________________________
Title: ____President__________________________________
Date: ____November 23, 1999__________________________
