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
Insurance Company, a stock insurance corporation organized pursuant to Ch.
611, Wisconsin Statutes ("UWIC").
RECITALS
WHEREAS, BCBSUW, UWS and UWIC are affiliated corporations, with
UWIC being a wholly owned subsidiary of UWS;
WHEREAS, there is an existing service agreement between BCBSUW and
UWS 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, under the marketing name United Wisconsin Group ("UWG"),
UWIC performs the sales, underwriting, accounting, data processing, and other
similar functions for group disability, life, dental and vision products
written by UWIC and/or United Heartland Life Insurance Company ("UHLIC"), or
written by United Wisconsin Life Insurance Company ("UWLIC") and reinsured by
UHLIC;
WHEREAS, under the marketing name UWG, UWIC also administers agent
licensing and commission payments, and provides accounting and information
processing services for various companies in the BCBSUW/UWS Group, all on an
independent third party contract basis (all services provided by UWIC under
the UWG name hereinafter shall be collectively referred to as "UWG business");
WHEREAS, UWIC has entered into independent third party contracts
with UWLIC and UHLIC to provide various services in connection with UHLIC's
and UWLIC's business and the cost and/or profit sharing associated therewith;
WHEREAS, UWIC also underwrites "Senior Health," an individual
Medicare product, and BCBSUW provides all of the marketing and administrative
services in connection with Senior Health business;
WHEREAS, BCBSUW and UWS collectively provide other business
resources and services necessary for the continued operation of UWIC's UWG
and Senior Health business; and
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WHEREAS, by entering into this Agreement, the parties hereto wish
to establish clearly (i) an officer leasing arrangement; (ii) the services
and resources that BCBSUW and UWS will continue to provide to UWIC and the
compensation and cost allocations therefor; and (iii) the respective rights
and responsibilities of the parties.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises, and of
the mutual covenants hereinafter contained, the parties hereto agree as
follows:
I. LEASE OF OFFICERS
a. DEFINITION.
i. "Leased Officers" are those BCBSUW and/or UWS employees that
perform services as officers of UWIC or of any other company in the
BCBSUW/UWS Group for which UWIC must provide officer services pursuant to a
third party contract. (Leased Officers may also be referred to herein as
"Officers").
b. LEASE OF OFFICERS.
i. OBLIGATION TO PROVIDE OFFICERS. BCBSUW and/or UWS shall
provide to UWIC and to any other company in the BCBSUW/UWS Group, to the
extent requested by UWIC and with the consent of the respective company's
Board of Directors (the "Board"), the entire requirement of Leased Officers
as shall be necessary or appropriate for the conduct of UWIC's UWG and/or
Senior Health business and such other companies' UWG business.
ii. INDEPENDENT HIRING. Notwithstanding Section i. OBLIGATION
TO PROVIDE OFFICERS. BCBSUW and/or UWS shall provide to UWIC and to any
other company in the BCBSUW/UWS Group, to the extent requested by UWIC and
with the consent of the respective company's Board of Directors (the
"Board"), the entire requirement of Leased Officers as shall be necessary or
appropriate for the conduct of UWIC's UWG and/or Senior Health business and
such other companies' UWG business., the Boards shall have the right to
obtain and hire directly any or all Officers from any other sources and on
any terms to perform such duties, on behalf of UWIC, as the Boards may
consider appropriate from time to time. Should the Boards hire officers from
other sources, it will not hire any individual who was a BCBSUW or UWS
Employee leased under this Agreement 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 leasing obligations under this Agreement.
c. EMPLOYMENT RELATIONSHIPS. Employment, termination, and terms of
employment of all Leased Officers shall be reserved to the full Boards of
Directors of
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BCBSUW and UWS, provided, however, that while any such individual is leased
to perform services as an officer under this Agreement, UWIC will be
consulted prior to all determinations regarding the employment, or terms
thereof, of such individuals; provided, however, that UWIC'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. 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, whether or not the employee
actually performs services for BCBSUW, UWS or another company in the
BCBSUW/UWS Group. Officers leased pursuant to this Agreement shall remain
employees of BCBSUW or UWS, and shall in no way be treated as or considered
employees of UWIC or any other company in the BCBSUW/UWS Group for which UWIC
is to supply officers or employees.
2. SERVICES AND OTHER RESOURCES PROVIDED TO UWIC
a. SERVICES AND RESOURCES PROVIDED BY BCBSUW. BCBSUW shall provide to
UWIC, to the extent requested by UWIC and subject to Section 5. MODIFICATIONS
TO BCBSUW/UWS SERVICES, the following services and resources (together
"BCBSUW Services"). BCBSUW shall supply BCBSUW Services only if UWIC has
determined not to have its own employees or third parties furnish the BCBSUW
Services, subject to Section 5. MODIFICATIONS TO BCBSUW/UWS SERVICES.
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 UWIC's UWG and/or Senior Health business.
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 UWIC's UWG and/or Senior Health
business.
iii. OFFICE SERVICES. Such office services, including, but not
limited to, forms management, transportation, graphics, printing, and
duplicating, as shall be necessary or appropriate for the conduct of UWIC's
UWG and/or Senior Health business.
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 UWIC's UWG and/or Senior Health
business.
v. ADMINISTRATIVE SERVICES. Such administrative services,
including, but not limited to, administrative reporting, customer service and
relations, electronic enrollment, claims processing, and lobbyist activities,
as shall be necessary or appropriate for the conduct of UWIC's UWG and/or
Senior Health business.
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vi. MARKETING, SALES AND CONFERENCE SERVICES. Such marketing,
sales, advertising, and conference support as shall be necessary or
appropriate for the conduct of UWIC's UWG and/or Senior Health business.
vii. 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 UWIC's UWG and/or Senior
Health business.
b. SERVICES AND RESOURCES PROVIDED BY UWS. UWS shall provide to
UWIC, to the extent requested by UWIC and subject to Section 5. MODIFICATIONS
TO BCBSUW/UWS SERVICES, the following services and resources (together "UWS
Services"). UWS shall supply UWS Services only if UWIC has determined not to
have its own employees or third parties furnish the UWS Services, subject to
Section 5. MODIFICATIONS TO BCBSUW/UWS SERVICES.
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 UWIC's UWG
and/or Senior Health business.
ii. EXECUTIVE SERVICES. Such executive services as shall be
necessary or appropriate for the conduct of UWIC's UWG and/or Senior Health
business.
iii. CORPORATE MARKETING AND COMMUNICATIONS. Such corporate
marketing and communications services, including, but not limited to, public
relations and employee community events, as shall be necessary or appropriate
for the conduct of UWIC's UWG and/or Senior Health 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 for the conduct of UWIC's UWG and/or Senior Health
business.
v. FINANCIAL SERVICES. Such financial services, including, but
not limited to, cash management, tax, treasury, corporate accounting, and
strategic planning/consulting, as shall be necessary or appropriate for the
conduct of UWIC's UWG and/or Senior Health business.
vi. ACTUARIAL AND UNDERWRITING. Such actuarial and underwriting
services as shall be necessary or appropriate for the conduct of UWIC's UWG
and/or Senior Health business.
vii. OTHER SERVICES. Such other services as shall be necessary or
appropriate for the conduct of UWIC's UWG and/or Senior Health 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.
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3. COST ALLOCATION METHODS
a. LEASED OFFICERS.
i. ALLOCATION OF OFFICER COSTS. To the extent that Officers are
leased to UWIC or any other company in the BCBSUW/UWS Group for which UWIC
must provide officer services, costs associated with the lease of such
Officers shall be indirectly charged to UWIC as provided in Section 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.
For any specific Schedule 2 Service, UWIC's total allocation percentage
shall be determined by adding the applicable allocation percentage from each
of the service agreements included in Schedule 2. Each month all costs
associated with the utilization of Schedule 2 Services shall be multiplied by
UWIC's total allocation percentage to determine UWIC'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 with Schedule 2 Services performed
directly for UWIC shall be allocable to UWIC 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 2
Services shall be subject to agreement by the parties on an annual basis.
Schedule 2, attached hereto, sets forth UWIC's annual allocation percentage
for costs and expenses associated with Schedule 2 Services rendered on behalf
of or for the benefit of UWIC's UWG and Senior Health business. Schedule 2
shall be amended annually.
b. BCBSUW AND UWS SERVICES. To the extent that BCBSUW/UWS Services
are rendered on behalf of or for the benefit of UWIC's UWG and/or Senior
Health business, costs therefor shall be allocated to UWIC as follows:
i. DIRECT ALLOCATIONS. Costs associated with those BCBSUW/UWS
Services identified on Schedule 1 shall be directly charged to UWIC 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. For any specific Schedule 2 Service, UWIC's total
allocation percentage shall be determined by adding the applicable allocation
percentage from each of the service agreements included in Schedule 2. Each
month all costs associated with the utilization of Schedule 2 Services shall
be multiplied by UWIC's total allocation percentage to determine UWIC's
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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 with Schedule 2
Services performed directly for UWIC shall be allocable to UWIC 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 2 Services shall be subject to agreement by the parties on an annual
basis.(1) Schedule 2, attached hereto, sets forth UWIC's annual allocation
percentage for costs and expenses associated with Schedule 2 Services
rendered on behalf of or for the benefit of UWIC's UWG and Senior Health
business. 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 UWIC as discussed in Section 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. For any specific
Schedule 2 Service, UWIC's total allocation percentage shall be determined by
adding the applicable allocation percentage from each of the service
agreements included in Schedule 2. Each month all costs associated with the
utilization of Schedule 2 Services shall be multiplied by UWIC's total
allocation percentage to determine UWIC'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 with Schedule 2 Services performed
directly for UWIC shall be allocable to UWIC 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 2
Services shall be subject to agreement by the parties on an annual basis.
Schedule 2, attached hereto, sets forth UWIC's annual allocation percentage
for costs and expenses associated with Schedule 2 Services rendered on behalf
of or for the benefit of UWIC's UWG and Senior Health business. Schedule 2
shall be amended annually., if the cost is a general expense for providing
the Chargeback Service to all users; or (ii) directly charged to a UWIC cost
center, if the cost is an expense specific to a UWIC cost center. Thus,
costs associated with Chargeback Services shall be either directly charged or
indirectly allocated to UWIC on a monthly basis, depending on the nature of
the cost.
c. FEES IN ADDITION TO ALLOCATED COSTS. To the extent that UWIC
leases or utilizes the services of Officers from BCBSUW and/or UWS, and to
the extent that UWIC
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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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utilizes BCBSUW/UWS Services, BCBSUW and/or UWS may charge UWIC 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 UWIC'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 UWIC appropriate
documentation respecting the costs and expenses that are allocated, either
directly or indirectly, to UWIC for that month in sufficient detail to permit
UWIC 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, UWIC shall promptly reimburse
BCBSUW and/or UWS for all costs and expenses incurred by BCBSUW and/or UWS in
furnishing or obtaining the Officers and Services provided for under Sections
I and II, which amount shall be based on the total of direct charges and
indirect allocations to UWIC for the preceding month. Notwithstanding the
preceding, UWIC 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
UWIC.
5. MODIFICATIONS TO BCBSUW/UWS SERVICES
a. MID-CONTRACT YEAR MODIFICATIONS. Each Contract Year, UWIC shall be
required to utilize BCBSUW/UWS Services budgeted to UWIC 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,
UWIC requires services or other resources in addition to those budgeted to
UWIC by BCBSUW and UWS, UWIC may obtain such services or resources from a
source outside of the BCBSUW/UWS Group only if UWIC's additional needs cannot
be accommodated by BCBSUW or UWS, or if otherwise agreed to by the parties.
b. CONTRACT YEAR RENEWAL MODIFICATIONS. UWIC 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 Officers or
BCBSUW/UWS Services with respect to the next Contract Year;
ii. Obtain officers, 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.
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c. PROVISION OF SERVICES BY BCBSUW/UWS GROUP. BCBSUW and UWS have the
right to provide BCBSUW/UWS Services to UWIC either directly or indirectly,
through any company in the BCBSUW/UWS Group. BCBSUW and UWS may provide
services and other resources to UWIC indirectly through purchase from or
contract with a source outside the BCBSUW/UWS Group ("Outside Services") only
with UWIC'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
UWIC may, for the sole purpose of documenting in more detail the terms and
respective rights and obligations of the parties with respect to Officers and
Services provided hereunder, request that any of the following types of
ancillary agreements be executed by any parties hereto and effected thereby:
i. Officer Lease Agreement;
ii. Office and Equipment Lease;
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 ii.
This Agreement may be terminated pursuant to Section VI.B by the
Requesting Party giving three (3) months advance written notice to the
nonterminating parties of its intention to terminate. The parties hereby
agree that any negotiations subject to this Section ERROR! NOT A VALID
BOOKMARK SELF-REFERENCE. shall be performed in good faith and
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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
UWIC, for inspection, examination and copying, all of its books and records
pertaining to the Officers and BCBSUW/UWS Services provided to UWIC 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.
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 UWIC as the case may be.
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c. 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 in any way UWIC'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
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 b. TERMINATION..
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 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 ii. This Agreement may be terminated pursuant to Section VI.B
by the Requesting Party giving three (3) months advance written notice to the
nonterminating parties of its intention to terminate.. The parties hereby
agree that any negotiations subject to this Section ERROR! NOT A VALID
BOOKMARK SELF-REFERENCE. shall be performed in good faith and every
reasonable effort shall be made to effect the execution of a requested
Ancillary Agreement. 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;
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(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 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:.
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 UWIC.
i. Notwithstanding anything to the contrary in this Agreement,
neither BCBSUW, UWS, nor any other company in the BCBSUW/UWS Group (other than
UWIC), nor any person who is or was, at the time of any action or inaction
affecting UWIC, a director, officer, employee or agent of BCBSUW, UWS or any
other company in the BCBSUW/UWS Group (other than UWIC) (collectively
"Indemnitees") shall be liable to UWIC 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. UWIC shall, to the fullest extent not prohibited by law,
indemnify and hold harmless each Indemnitee against any liability, damage, cost,
expense, loss, claim or judgment (including, without limitation, reasonable
attorneys' fees and expenses) resulting to, imposed upon or incurred by such
Indemnitee a. in connection with any action, suit, arbitration or proceeding to
which such Indemnitee was or is a party or is threatened to be made a party by
reason of the Officers and BCBSUW/UWS Services provided to UWIC 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 UWIC under this Agreement.
b. INDEMNIFICATION BY BCBSUW AND UWS. BCBSUW and UWS, jointly and
severally, hereby agree to indemnify and hold harmless UWIC, 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 UWIC by reason of, arising
out of or resulting from any breach or misrepresentation by BCBSUW or UWS under
this Agreement.
10. MISCELLANEOUS
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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 d. RESOLUTION OF DISPUTES. 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 and utilization of Officers necessary for the conduct of UWIC's UWG
and/or Senior Health 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 II. FORMAL RESOLUTION..
(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 ii. FORMAL RESOLUTION..
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 (1) Coordinating Committee:
Any conflicts or disputes
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regarding occupancy, utilization or delivery of BCBSUW/UWS Services, or
scheduling, performance and utilization of Officers necessary for the conduct
of UWIC's UWG and/or Senior Health 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 ii. FORMAL RESOLUTION.. or an audit committee
pursuant to Section (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 ii. FORMAL RESOLUTION..
shall be settled by arbitration. In order to initiate an arbitration, BCBSUW,
UWS or UWIC (as the case may be) shall deliver a written notice of demand for
arbitration to the other affected party(ies). Within thirty (30) days of the
giving of such written notice, each party involved shall appoint an
individual as arbitrator (the "Party Arbitrators"). Within thirty (30) days
of their appointment, the Party Arbitrators shall collectively select one (or
two if necessary to constitute an odd total number of arbitrators) additional
arbitrator (together the "Panel Arbitrators") and shall give the parties
involved notice of such choice.
(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.
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:
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Xx. Xxxxx Xxxxxxxx
Blue Cross & Blue Shield United of Wisconsin
0000 Xxxxx XxxxxXxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Facsimile Telephone Number: (000) 000-0000
With copies to:
Xx. Xxxxx Xxxxxxx
Blue Cross & Blue Shield United of Wisconsin
X00X00000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxx 00000
Facsimile Telephone Number: (000) 000-0000
2. If to UWS:
Mr. C. Xxxxxx Xxxxx
United Wisconsin Services, Inc.
000 Xxxx Xxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Facsimile Telephone Number: (000) 000-0000
3. If to UWIC:
Xx. Xxxx Xxxxxxx
United Wisconsin Insurance Company
000 Xxxx Xxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Facsimile Telephone Number: (000) 000-0000
Any notice or other communication given as provided in this Section 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:, 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-
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mail return receipt). Any party from time to time may change its address for
purpose of notices to that party by giving a similar notice specifying a new
address.
f. RELATIONSHIP OF THE PARTIES. Negotiations relating to this
Agreement have occurred and shall continue to be carried out on an arm's
length basis. Further, the officers, services and other resources
contemplated by this Agreement shall be provided to UWIC on an independent
contractor basis, and nothing in this Agreement shall be construed to create
an employer-employee relationship between UWIC and Officers 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 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.
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l. COUNTERPARTS. This Agreement may be executed simultaneously in any
number of counterparts, each of which will be deemed an original, but all of
which will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized representatives as of the Effective
Date.
BLUE CROSS BLUE SHIELD UNITED OF WISCONSIN
By:
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Title:
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By:
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Title:
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UNITED WISCONSIN SERVICES, INC.
By:
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Title:
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UNITED WISCONSIN INSURANCE COMPANY
By:
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Title:
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