Document:

ex10_1.htm

  
Exhibit 10.1

 

BRANCH PURCHASE AND ASSUMPTION AGREEMENT

AND

AGREEMENT FOR PURCHASE

 

This Agreement, dated as of December 30, 2010 is made by and among Amboy Bank, Old Bridge, New Jersey, a New Jersey state chartered commercial bank, (“Seller”) and 1st Constitution Bank, Cranbury, New Jersey, a New Jersey state chartered commercial bank (“Buyer”).

 

I.              DEFINITIONS

 

1.1    Certain Defined Terms.

 

Some of the capitalized terms appearing in this Agreement are defined below. The definition of a term expressed in the singular also applies to that term as used in the plural and vice versa.

 

“Actual Knowledge of Buyer (or Buyer’s Actual Knowledge)”.  The knowledge of any Responsible Individual of Buyer, after reasonable inquiry.

 

“Actual Knowledge of Seller (or Seller’s Actual Knowledge)”.  The knowledge of any Responsible Individual of Seller, after reasonable inquiry.

 

“Additional Rents”.  All amounts, other than Fixed Rents, due from any Tenant under any Lease, including without limitation percentage rents, escalation charges for real estate taxes, parking charges, marketing fund charges, reimbursement of operating expenses or common area expenses, maintenance escalation rents or charges, cost-of-living increases or other charges of a similar nature, if any, and any additional charges and expenses payable under any Lease.

 

“Affiliate” means a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, a specified Person, except in those cases where the controlling Person exercises control solely in a fiduciary capacity.

 

“Amount of Premium” has the meaning set forth in Section 3.1 of this Agreement.

 

“Assets” has the meaning set forth in Section 2.1 of this Agreement.

 

“Assignment of Contracts”.  An Assignment and Assumption of Service Contracts, Guaranties and Warranties and Other Intangible Property in the form of Exhibit H attached hereto.

 

“Assignment of Leases”.  An Assignment and Assumption of Leases in the form of Exhibit I attached hereto.

 

 “ATM” means automatic teller machine.

 

“Benefit Plan” means any pension, profit-sharing, or other employee benefit, fringe benefit, severance or welfare plan maintained by or with respect to which contributions are made by, Seller or any of its Affiliates with respect to Seller’s employees.

 

“Bill of Sale”.  A Bill of Sale in the form of Exhibit G attached hereto.

 

“Branches” means the branch offices of Seller located at 32 New Amwell Road. Hillsborough, New Jersey, 995 Route 518, Rocky Hill, New Jersey, and 86 East Broad Street, Hopewell, New Jersey.

 

  

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“Branch Cash” means cash on hand at the Branches, including vault cash, teller drawer cash, petty cash and ATM cash.

 

“Business Day” means any Monday, Tuesday, Wednesday, Thursday or Friday on which Seller is open for business.

 

“Closing” means the purchase of the Assets and the Property by Buyer and the assumption of the Liabilities by Buyer on the Closing Date.

 

“Closing Date” has the meaning set forth in Section 11.1 of this Agreement.

 

“Conditions Precedent”.  The Conditions Precedent described in Section 11.3, which are precedent to Buyer’s obligation to acquire the Close.

 

“Creditors’ Rights Laws”.  All bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally, as well as general equitable principles whether or not the enforcement thereof is considered to be a proceeding at law or in equity.

 

“Deed”.  A bargain and sale deed with covenants against grantor’s acts in the form attached hereto as Exhibit E.

 

“Delinquency Report”.  A report attached hereto as Schedule 5.23 setting forth the name of each Tenant as to which a delinquency exists as to the payment of Rent, and specifying the amount of each such delinquency, the period of time during which each such delinquency has been outstanding, and whether collection of such delinquency has been referred to legal counsel.

 

“Delivery Date”.  The date of any writing signed by the parties indicating that Seller has delivered all of the Due Diligence Materials as required by the Section entitled “Buyer’s Due Diligence.”

 

“Deposit Accounts” means the deposit accounts at the Branches, the balances of which are included in the Deposits or would be so included if the Deposit Account had a positive balance.

 

“Deposits” or “Deposit Liabilities” means all deposits (as defined in 12 U.S.C. Section 1813(l)) which are booked at the Branches on the Closing Date, including in each case accrued but unpaid interest and both collected and uncollected funds, but excluding (i) deposits held in accounts for which Seller acts as fiduciary and which are not transferring from Seller to Buyer (other than deposits held by Retirement Plans that are transferring from Seller to Buyer in accordance with this Agreement) and (ii) deposits constituting official checks, travelers checks, money orders or certified checks (“Excluded Deposits” shall refer to excluded deposits referred to at (i) and (ii)). A true and accurate list of the Deposits as of a date within 5 days prior to the date of this Agreement is attached hereto as Exhibit A.

 

“Depositor Credit Relationship” means any credit relationship between the owner of a Deposit Account and the Seller, other than a Loan.

 

“Dispute Resolver” means an independent accounting firm or other independent third-party mutually acceptable to Buyer and Seller to act as Dispute Resolver.

 

“Effective Date”.  The date this Agreement is signed by Seller or Buyer, whichever signs last, and an original of this Agreement is delivered to the other party.

 

“Environmental Laws”.  All federal, state, local or administrative agency ordinances, laws, rules, regulations, orders or requirements relating to Hazardous Materials.

 

  

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“Environmental Reports”.  All environmental reports and investigations relating to the Real Property which are available to Seller, which are listed on Schedule 2.15(n) attached hereto.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“ERISA Affiliate” means any entity that is considered one employer with Seller under Section 4001 of ERISA or Section 414 of the Internal Revenue Code of 1986, as amended.

 

“Equipment Leases” means all leases of the FF&E.

 

 “Expenses”.  All operating expenses normal to the operation and maintenance of the Property, including without limitation real property taxes and assessments; current installments of any improvement bonds or assessments which are a lien on the Real Property or which are pending and may become a lien on the Property; water, sewer and utility charges; amounts payable under any Contract for any period in which the Closing occurs; and permits, licenses and inspection fees.  Expenses shall not include expenses which are of a capital nature.

 

“FF&E. All furniture, fixtures and equipment used in the operations of the Branches including the ATM’s,  are listed on Schedule 2.1(d) hereto, which shall indicate whether such FF&E is owned by Seller or subject to an Equipment Lease.

 

“Fixed Rents”.  The fixed periodic rental payments under any Lease.

 

“Federal Funds Rate” means, for any day, the rate per annum (expressed on a basis of calculation of actual days in a year) equal to the “near closing bid” federal funds rate published in The Wall Street Journal on the Business Day following the Closing Date.

 

 “FDIC” means the Federal Deposit Insurance Corporation.

 

 “Governmental Entity” means any government or any agency, bureau, board, commission, court, department, official, political subdivision, tribunal or other instrumentality of any government having authority in the United States, whether federal, state or local.

 

“Hazardous Material” means any substance presently listed, defined, designated or classified as hazardous, toxic, radioactive or dangerous or otherwise regulated, under any applicable state or federal law relating to the protection, preservation or restoration of the environment, including, but not limited to, the following federal environmental laws: the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Superfund Amendment and Reauthorization Act, the Water Pollution Control Act of 1972, the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act of 1976, the Solid Waste Disposal Act, the Toxic Substances Control Act and the Insecticide, Fungicide and Rodenticide Act, each as amended.

 

“Laws”.  All restrictive covenants, building codes, Environmental Laws, zoning and land use laws and other local, state and federal laws and regulations applicable to the Real Property.

 

“Leases”.  The leases listed in on Schedule 2.3(b) hereto, whether such Lease be in writing  for a term or an unwritten month to month tenancy.

 

“Lease Rights”.  All of Seller’s right, title and interest in and to the Leases and any and all guarantees of the Leases.

 

“Liabilities” has the meaning set forth in Section 2.2 of this Agreement.

 

“Loans” means (i) loans pursuant to which Seller has a security interest in a Deposit transferred hereunder, and (ii) those lines of credit which are provided as overdraft protection by Seller for a Deposit transferred hereunder, which are identified on Schedule 2.1(h) hereto.

 

  

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 “Liabilities” has the meaning set forth in Section 2.2 of this Agreement.

 

“Major Loss” is defined as (i) any damage or destruction to the Real Property as to which the cost to repair, or the value of the portion taken, as the case may be, exceeds 10% of the Property Purchase Price, or (ii) any condemnation of the Real Property.

 

“Minor Loss” is defined as any such damage or destruction that is not a Major Loss.

 

“Permitted Exceptions”.  The exceptions to title as are agreed to by Buyer in writing.

 

“Property Purchase Price”.  The Property Purchase Price in total is $4,600,000.

 

“Rents”.  Fixed Rents and Additional Rents.

 

“Responsible Individuals”.  (i) with respect to Seller: George Scharpf, G. Gregory Scharpf and Stan Koreyva, (ii) with respect to Buyer: Robert Mangano.

 

“Retirement Plans” means those non-discretionary individual retirement accounts (IRAs) and Keogh retirement plan accounts relating to the Deposits for which Seller acts as custodian or trustee.

 

“Overdrafts” means those overdrafts of the book balance of any Deposit Accounts which are not overdrawn for more than seven days as of the Closing Date and which are not evidenced by a Loan.

 

“Person” means an association, a corporation, an individual, a partnership, a trust or any other entity or organization, including a Governmental Entity.

 

“Retirement Plans” means those non-discretionary individual retirement accounts (IRAs) and Keogh retirement plan accounts relating to the Deposits for which Seller acts as custodian or trustee.

 

“Safe Deposit Contracts” has the meaning set forth in Section 2.1(c) of this Agreement.

 

“Service Contracts”.  All contracts involving ongoing services for the Real Property and periodic payment therefor, as distinguished from franchise agreements, easements, guarantees, warranties and the like.

 

“Tenant(s)”.  Each tenant under each Lease.

 

“Tenant Estoppel Certificates”.  Tenant estoppel certificates in the form attached hereto as Exhibit F, to be provided by Seller as provided in the Section 11.3(c)(iv)entitled “Tenant Estoppel Certificates.”

 

“Title Company”.  First American Title Insurance Company, whose address is: 2 Research Way

 Princeton, New Jersey 08540, or such other reputable title company as Buyer may select.

 

“Title Policy”.  A policy of extended coverage American Land Title Association Policy of Owner’s Title Insurance issued by the Title Company in the amount of the Property Purchase Price, showing title vested in Buyer subject only to the Permitted Exceptions.

 

“Welfare Benefit Plans” means those Benefit Plans which are “welfare benefit plans” as defined by ERISA.

 

	
II. 

	
PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES; PURCHASE OF THE BRANCHES

 

2.1     Purchase of Assets.

 

  

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Subject to the terms and conditions of this Agreement, Seller agrees to sell, assign and transfer possession of and all right, title and interest of Seller in and to the following assets to Buyer (collectively, the “Assets”) and Buyer agrees to purchase the same from Seller, as of the close of business on the Closing Date:

 

(a)     the Branch Cash;

 

(b)     the Overdrafts;

 

(c)     all lease contracts related to rental of safe deposit boxes at the Branches (“Safe Deposit Contracts”) and the rented and unrented safe deposit boxes at the Branches;

 

(d)     the FF&E which is owned by Seller;

 

(e)              with regard to each Retirement Plan, all of Seller’s right, title and interest in and to the related plan or trustee or custodial arrangement, and in and to all assets held by Seller pursuant thereto;

 

(f)               those Depositor Credit Relationships  purchased pursuant to Section 2.10 hereof (the “Purchased Depositor Credit Relationships”);

 

(g)              All of Sellers rights under the Equipment Leases; and

 

(h)              the Loans.

 

2.2     Assumption of Liabilities.

 

Buyer agrees to assume, pay, perform and discharge the following liabilities of Seller (the “Liabilities”) as of the close of business on the Closing Date:

 

(a)     the Deposits and all terms and agreements relating to the Deposit Accounts, excluding the deposit accounts set forth at Schedule 2.2(a);

 

(b)     Seller’s duties and responsibilities relating to the Deposits arising after the Closing Date with respect to: (i) the abandoned property laws of any state, (ii) any legal process which is served on Seller on or before the Closing Date with respect to claims against or for the Deposits that is not against Seller or is over and above the amount of the Deposits; or (iii) any other applicable law;

 

(c)     Seller’s duties and responsibilities with respect to any Equipment Leases;

 

(d)     Seller’s duties and responsibilities with respect to the Safe Deposit Contracts;

 

(e)     Seller’s duties and responsibilities with respect to the Retirement Plans;

 

(f)      Seller’s duties and responsibilities regarding any Purchased Depositor Credit Relationships;

 

(g)     Seller’s duties and responsibilities with respect to each Lease; and

 

(h)     Seller’s duties and responsibilities with respect to the Loans.

 

  

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2.3     Purchase of the Branches

 

In addition to the purchase of the Assets as set forth in Section 2.1, and subject to and upon the terms and conditions of this Agreement,  Seller agrees to sell to Buyer, and Buyer agrees to acquire from Seller, all of Seller’s right, title and interest in and to the following:

 

(a)           Real Property.  The land described in Schedule 2.3(a) attached hereto commonly known as:

 

	
  

	
(i)

	
32 New Amwell Road, as shown on the tax map of the Township of Hillsborough, County of Somerset and State of New Jersey as Block 162, Lot 21;

 

	
  

	
(ii)

	
995 Route 518 as shown on the tax map of the Borough of Rocky Hill, County of Somerset, and State of New Jersey as Block 34001, Lot 80; and

 

	
  

	
(iii)

	
86 East Broad Street, as shown on the tax map of the Borough of Hopewell, County of Mercer and State of New Jersey as Block 23, Lot 9.

 

together with all appurtenances thereto, including without limitation, easements and mineral and water rights (the “Branches”), together with all buildings, parking lots, signs, walks and walkways, fixtures and equipment and all other improvements located at or on or affixed to the Branches to the full extent that such items are owned by Seller and constitute realty under the laws of the state of New Jersey (the “Improvements”) (the Branches and Improvements are collectively referred to herein as the “Real Property”);

 

(b)           Leases.  Seller  does hereby transfer, assign, convey and deliver to Buyer their respective entire right, title and interest in any Lease covering any part of the Real Property  (the “Leases”);

 

(c)           General Intangibles.  All general intangibles relating to design, development, operation, management and use of the Real Property; all certificates of occupancy, zoning variances, building, use or other permits, approvals, authorizations, licenses and consents obtained from any governmental authority or other person in connection with the development, use, operation or management of the Branches; all soil tests, engineering reports, appraisals, architectural drawings, plans and specifications relating to all or any portion of the Branches, and all payment and performance bonds or warranties or guarantees relating to the Branches (the “General Intangibles”); and

 

(d)           Contracts.  The Service Contracts, construction contracts for work in progress, any warranties thereunder, management contracts, unrecorded reciprocal easement agreements, operating agreements, maintenance agreements, franchise agreements and other similar agreements relating to the Property as listed on Schedule 2.3(d) attached hereto (the “Contracts”).

 

2.4     Transfer of Records.

 

(a)           At the Closing, Seller also shall transfer to Buyer possession and all right, title and interest of Seller in and to all books and records relating to the Assets and Liabilities.

 

(b)           All books and records relating to the Assets and Liabilities held by either Seller or Buyer after the Closing Date shall be maintained in accordance with (and for the period provided in) that party’s standard recordkeeping policies and procedures and subject to applicable laws and regulations governing records retention. Throughout such period, the party holding such books and records shall comply with the reasonable request of the other party to provide copies of specified documents, at the expense of the requesting party. The requesting party shall give reasonable notice of any such request.

 

  

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2.5     Tax Matters.

 

(a)           Each party shall be responsible for its sales and use taxes and any interest and penalties thereon which are payable or arise as a result of this Agreement or the consummation of any of the transactions contemplated by this Agreement. Seller shall be responsible for any taxes as a result of the sale and transfer of the Assets and the payment of any taxes or levies that may arise under the New Jersey Bulk Sales Act with respect to the Branches for all transactions occurring on or prior to the Closing Date.

 

(b)           Real estate and personal property taxes and installments of special assessments, if any, shall be prorated as of the Closing Date.  Seller shall pay all real estate and personal property taxes attributable to the Real Property to, but not including, the Closing Date and installments of special assessments due prior to or on the Closing Date.  If on the Closing Date, the final tax bills for the calendar year in which the Closing occurs are not available then the real estate tax adjustment will be based upon the preliminary tax bill, and a final tax adjustment shall be made within ten (10) days after the final tax bill is issued.  The provisions of this Section 2.4 shall survive the Closing.

 

 

2.6     Proration of Certain Items.

 

(a)           In General

 

	
  

	
(i)

	
Calculations.  For purposes of calculating prorations, Buyer shall be deemed to be in title to the Real Property, and, therefore entitled to the income therefrom and responsible for the expenses thereof for the entire day upon which the Closing occurs.  All such prorations shall be made on the basis of the actual number of days of the month which shall have elapsed as of the day of the Closing and based upon the actual number of days in the month and a three hundred sixty five (365) day year.  The amount of such prorations shall be initially performed at Closing but shall be subject to adjustment in cash after the Closing as and when complete and accurate information becomes available, if such information is not available at the Closing.  Seller and Buyer agree to cooperate and to the extent reasonably practicable shall make such adjustments no later than sixty (60) days after the Closing.  Except as set forth in this Section 2.5, all items of income and expense which accrue for the period prior to the Closing will be for the account of Seller and all items of income and expense which accrue for the period on and after the Closing will be for the account of Buyer.  The provisions of Section 2.5 shall survive the Closing.

 

	
  

	
(ii)

	
Prepaid Items.  Any prepaid items, including, without limitation, fees for licenses which are transferred to Buyer at the Closing and annual permit and inspection fees shall be apportioned between Seller and Buyer at the Closing.

 

	
  

	
(iii)

	
Basis of Prorations.  All prorations shall be calculated as of 12:01 a.m. on the Closing Date, on the basis of a 365-day year

 

(b)           The Assets and Liabilities.  Except as detailed at Section 2.5 herein, all rental income or expenses associated with the operation of the Branches (including, but not limited to safe deposit box rental fees actually collected, and rent from the Leases), personal property taxes (tangible or intangible), utility, water and sewer charges and assessments, and any and all other pre-paid charges related to the operation of the Branches shall be prorated between Buyer and Seller as of the close of business on the Closing Date. Seller shall attempt to have all utility meters read as of the Closing Date.  Buyer shall cause all utility services to be placed in Buyer’s name as of the Closing Date.  If permitted by the applicable utilities, all utility deposits in Seller’s name shall be assigned to Buyer as of the Closing Date and Seller shall receive a credit therefor at Closing. In addition, any quarterly assessments actually paid by Seller to the Deposit Insurance Fund of the FDIC prior to the Closing Date for the quarterly assessment period containing the Closing Date with respect to the Deposits, shall be prorated between Buyer and Seller as of the close of business on the Closing Date based upon the daily assessment rate in effect as of such assessment quarter with respect to Seller, the Deposits subject to assessment that actually transfer as of the Closing Date and the number of calendar days remaining until the end of such assessment quarter, such that Seller shall receive a reimbursement from Buyer for such number of calendar days remaining until the end of such assessment quarter.

 

  

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(c)           Insurance.  There shall be no proration of Seller’s insurance premiums or assignment of Seller’s insurance policies.  Buyer shall be obligated (at its own election, and in accordance with applicable law) to obtain any insurance coverage deemed necessary or appropriate by Buyer.

 

(d)           Rents. Rents collected by Seller prior to Closing (the “Rents”) shall be prorated as of the Closing Date.  During the period after Closing, Buyer shall deliver to Seller any and all Rents accrued but uncollected as of the Closing Date to the extent subsequently collected by Buyer, it being understood and agreed that Buyer shall not be required to institute any proceeding to collect any such delinquent Rents; provided, however, Buyer shall apply Rents received after Closing first to payment of amounts due and owing for rental periods accruing after the Closing Date, whether or not amounts are also due from such tenants for the period prior to Closing. After Closing Seller shall remit any payments received by Seller to Buyer promptly upon receipt.  Seller shall have the right, after Closing, to proceed against tenants for Rents allocable to the period of Seller’s ownership of the Property but shall in no event seek to evict such tenants. The amount of any unapplied security deposits under the Leases held by Seller as of the Effective Date shall be credited against the Purchase Price; accordingly, Seller shall retain the actual cash deposits. The provisions of this Section 2.5 shall survive the Closing.

 

(e)           Items Not to be Prorated. There shall be no prorations or adjustments of any kind with respect to:

 

	
  

	
(i)

	
Additional Rents relating to full or partial months prior to the Closing Date.  If Additional Rents relating to full or partial months prior to the Closing Date are not finally adjusted between Seller and any Tenant until after the Closing Date, then any refund to which any Tenant may be entitled shall be the obligation of Seller, and any additional amounts due from the Tenant for such period shall be the property of Seller.  Buyer shall have no obligation with respect to any such refund due to any Tenant and no claim to any such amounts due from any Tenant.  In seeking to collect any such amount due from any Tenant, Seller may take all appropriate collection measures (including litigation if deemed by Seller to be necessary or desirable), except that, in seeking to collect any such additional amounts due from any Tenant, Seller may not seek any remedy until six (6) months after the Closing Date or which would interfere with the Tenant’s continued occupancy and full use of its premises under such Tenant’s Lease, or Buyer’s rights to receive Rent with respect to any period beginning on the Closing Date.  If Seller receives any refund of expenses paid prior to the Closing and relating to a period prior to the Closing, and such expenses were reimbursed in whole or in part by any Tenant, Seller shall refund to each Tenant its share of any such refund.

 

 

(f)           Post-Closing Adjustments. After the Closing Date, Seller and Buyer shall meet from time to time to discuss adjustments in accordance with the following.

 

	
  

	
(i)

	
Non-delinquent Rents.  If Buyer collects any non-delinquent Rents applicable to the month in which the Closing occurred, Seller’s pro rata share of such Rents shall be credited to Seller;

 

	
  

	
(ii)

	
Delinquent Rents for month in which the Closing occurred.  If Buyer collects from any Tenant Rents that were delinquent as of the Closing Date and that relate to the period in which the Closing occurred, then such Rents shall be applied in the following order of priority: First, to reimburse Buyer for all out-of-pocket third-party collection costs actually incurred by Buyer in collecting such Rents (including the portion thereof relating to the period after the Closing Date); second, to satisfy such delinquent Rent obligations relating to the period before the Closing Date; and third to satisfy such Tenant’s Rent obligations relating to the period after the Closing Date;

 

  

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(iii)

	
Expenses.  With respect to any invoice received by Buyer after the Closing Date for Expenses that relate to the period in which the Closing occurred, Buyer will either, at Buyer’s option, (A) pay the entire amount of the invoice and either bill Seller for Seller’s share, or offset Seller’s share against any prorated Rents due to Seller under subsection (i) or (ii) above, or (B) compute Buyer’s pro rata share, write a check for that amount in favor of the vendor, and then send the invoice and check to Seller, in which case Seller agrees that it will pay for its share and forward the invoice and the two payments to the vendor.  If real property taxes and assessments payable for any period prior to Closing are determined to be more or less than the amounts prorated herein (in the case of the current year) or paid by Seller (in the case of any prior year), due to a reassessment of the Real Property or otherwise, Seller and Buyer shall promptly adjust the proration of such real property taxes and assessments after the determination of such amounts and Seller shall pay to Buyer any increase in the amount of such real property taxes and assessment applicable to any period prior to Closing or Buyer shall pay to Seller any decrease in the amount of such real property taxes and assessments applicable to any period prior to Closing ;

 

(g)           Survival of Obligations.  The obligations of Seller and Buyer under the Subsection entitled “Post-Closing Adjustments” shall survive the Closing.

 

(h)           Allocation of Closing Costs.  Buyer shall pay all charges and fees specified herein to be paid by Buyer, plus attorney’s fees incurred by Buyer in connection with the transaction, the cost of any survey(s), the costs of any inspections, the title insurance premium, including all charges for special endorsements or exclusions from the Title Policy issued to Buyer (other than those monetary encumbrances which Seller is required to satisfy prior to Closing pursuant to this Agreement), any fees or charges incurred as a result of recording any documents pertaining to the transaction (other than discharges of mortgages and termination statements).  Seller shall pay all charges and fees specified herein to be paid by Seller, all realty transfer fees, the costs of any discharges of mortgages and termination statements, plus attorney’s fees incurred by Seller.

 

2.7     Back Office Conversion.

 

Seller and Buyer shall cooperate with each other and shall use their reasonable best efforts (consistent with their internal day-to-day operations) in order to cause the timely transfer of information concerning the Assets and the Liabilities which is maintained on Seller’s data processing systems so that Buyer can incorporate such information into Buyer’s data processing systems no later than the opening of business on the Business Day following the Closing Date, including testing of such data transfers prior to the Closing Date. Buyer shall bear the costs of any third-party programming requirements related to such data processing efforts.

 

2.8     Certain Transitional Matters Following the Closing Date

 

(a)     Buyer agrees to honor in accordance with applicable law, up to the collected amount on deposit (and any other funds available by reason of any agreement between the depositor and Buyer), all properly drawn and presented checks, drafts, electronic debits and credits and withdrawal orders presented to Buyer by mail, over its counters, throughout the check clearing system, and Automated Clearing House of the banking industry, by depositors of the accounts assumed, whether drawn on the checks, withdrawal or draft forms provided by Seller, or by Buyer, and all other respects to discharge, in the usual course of the banking business, the duties and obligations of Seller with respect to the balances due and owing to the depositors whose accounts are assumed by Buyer. Buyer’s obligation under this Section to honor checks, withdrawal, draft forms and electronic debits and credits provided by Seller and carrying its imprint shall expire at the close of business on the 60th business day following the Closing Date or a date mutually agreeable to both parties.

 

(b)     If any of such depositors, instead of accepting the obligation of Buyer to pay the Deposit Liabilities assumed, shall demand payment from Seller for all or any part of any such assumed Deposit Liabilities, Seller shall not be liable or responsible for making such payment. Instead, Seller may, at its discretion, assume custody of the check or other item presented for payment, including electronic items, on an account which has been transferred with the Branches, batch such items and send them to Buyer by fax and by mail by the next business day after receipt thereof by Seller. Seller shall not, at any time, be liable or responsible for making payment on such items by reason of its obtaining custody of them for transmittal to Buyer. Nothing herein shall, however, be construed to relieve the Seller of any liability which it may have for accepting custody of any check or item presented for payment on a Deposit which Seller does not timely batch and send to Buyer in accordance with this Section 2.7(b), to the extent Buyer’s ability to satisfy such check or other item has been prejudiced by such delay.

 

  

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In order to reduce the continuing charges to Seller through the check clearing system of the banking industry which will result from check forms of Seller being used after the Closing Date by the depositors whose accounts are assumed, Buyer agrees, at its cost and expense within 30 days prior to the Closing Date, to notify depositors of Buyer’s assumption of Deposit Liabilities and notify holders of ATM cards that all ATM cards held by customers of the Branches will be void as of the Closing Date, and that they will receive new ATM cards on or immediately prior to the Closing Date. Within 10 days after the Closing Date, Buyer shall, at its sole cost and expense and without cost to depositors, furnish each depositor of an assumed account with not less than fifty (50) checks on the forms of Buyer, with instructions to utilize Buyer’s checks and to destroy unused checks of Seller. Buyer will send Seller a copy of notification letters forwarded to depositors by Buyer. Seller hereby agrees that after the 60th business day following the Closing Date or a date mutually agreeable to both parties, it shall, with respect to the Branches, at its sole option, either: (1) return such check or other item with reference to the maker thereof; or (2) assume custody thereof and deliver the same in the manner aforesaid.

 

(c)     Buyer agrees, no later than the start of the second business day after demand by Seller, to pay Seller an amount equivalent to the amount of any uncollected item included in a depositor’s balance on the Closing Date which is returned after the Closing Date as not collected to the extent that Buyer has not suffered a loss with respect thereto. Buyer shall be required to make such payment for an item only up to the amount on deposit with Buyer at the time Seller makes the demand aforesaid.

 

(d)     Buyer shall timely forward to Seller any mail, facsimile or other correspondence, received at the Branches after the Closing Date, that is (i) addressed to Seller, or (ii) addressed to Buyer but relating to an obligation of Seller that originated prior to the Closing Date.

 

(e)     Adjustments after the Closing Date shall be made daily as may be required. Such adjustments shall be by wire transfer.

 

2.9     Information Returns.

 

Buyer shall file all required information returns with the Internal Revenue Service with respect to interest paid on the Deposits after the Closing Date, interest received on Overdrafts after the Closing Date, and any other information returns required with respect to the Assets and the Liabilities for the periods beginning after the Closing Date. Seller will file all required information returns with the Internal Revenue Service and any information returns required by state or local tax authorities with respect to interest paid on the Deposits on or before the Closing Date, interest received on the Overdrafts on or before the Closing Date, and any other information returns required with respect to the Assets and the Liabilities for periods ending on or before the Closing Date.

 

	
  

	
2.10

	
Depositor Credit Relationships.

 

Within thirty (30) days after the date hereof, the Seller shall provide the Buyer with a schedule listing each Depositor Credit Relationship. At the request of Buyer, Seller shall allow Buyer to review the credit file for each Depositor Credit Relationship. Buyer shall then have the option to purchase one or more (or all) Depositor Credit Relationships at the following purchase price: for business or personal lines of credit, par value plus accrued and unpaid interest, and for all other credits, at such price as the parties shall mutually agree upon.

 

  

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III.           CONSIDERATION

 

3.1     Calculation for the Assets and the Liabilities.

 

In consideration of Buyer’s purchase of the Assets and its assumption of the Liabilities, Seller agrees to pay to Buyer in immediately available funds not later than 2:00 pm, New Jersey time, on the Closing Date an amount equal to the Deposits to be transferred under Section 2.2(a), plus accrued interest on such Deposits to be transferred, less the sum of the following, in each case calculated as of the close of business on the Closing Date (except as otherwise detailed herein):

 

(a)     the amount of Branch Cash;

 

(b)     the principal amount of the Overdrafts, provided however that Seller shall refund to Buyer the amount of such Overdrafts to the extent that such amount shall remain uncollected as of 30 days following the Closing Date, plus accrued interest from the Closing Date through the date of collection at the contract rate determined in accordance with the policies of Seller as detailed at Schedule 3.1(b);

 

(c)      The purchase price (calculated in accordance with Section 2.10 hereof) of the Purchased Depositor Credit Relationships;

 

(d)     the net amount (which may be a negative amount) of any adjustments under Section 2.5 (i.e., the amount payable by Buyer less the amount payable by Seller);

 

(e)     an amount equal to the Amount of Deposit Premium. The “Amount of Deposit Premium” shall be equal to $5,250,000, subject to adjustment as provided for under Section 3.3 hereof;

 

(f)     an amount in cash equal to prepaid safe deposit box rental fees actually collected, prorated for the period from the Closing Date to the end of the respective Safe Deposit Contract;

 

(g)     the Property Purchase Price; and

 

(h)     the aggregate outstanding principal and interest balances with respect to the Loans.

 

3.2     Settlement with respect to the Assets and the Liabilities.

 

 (a)     Not later than three (3) business days prior to the Closing Date, Seller shall deliver to Buyer a closing statement (the “Closing Statement”) prepared in accordance with Seller’s customary practices and procedures used in preparing financial statements, substantially in the form of Exhibit B to this Agreement, which shall be completed based upon information as of the close of business five business days prior to the Closing Date and shall be the basis of the payment made to Buyer’s account as of the Closing Date in the manner detailed at Section 3.1 herein (the “Settlement Payment”).

 

(b)     The parties shall cooperate in the preparation of an adjusted closing Statement (the “Adjusted Closing Statement”) within 30 days after the Closing Date, which shall be prepared in accordance with Seller’s customary practices and procedures used in preparing financial statements, substantially in the form of Exhibit C to this Agreement, which shall be completed as of the close of business on the Closing Date. On the Business Day after Buyer and Seller agree to the Adjusted Closing Statement, or Buyer and Seller receive notice of any determination of the Adjusted Closing Statement under subsection (e) (the “Adjusted Settlement Date”), Seller shall pay to Buyer (or Buyer shall pay to Seller, as the case may be) an amount (the “Adjustment Payment”) equal to the amount due as stated on the Adjusted Closing Statement, plus interest from the day after the Closing Date until the calendar day before the Adjustment Payment is made at a rate per annum (calculated daily based on a 360-day year) equal to the daily Federal Funds Rate.

 

  

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(c)     The Settlement Payment and the Adjustment Payment shall each be made in immediately available funds to the party entitled to receive the payment, to an account which shall be identified by the party entitled to receive the funds to the other party not less than two Business Days prior to such payment.

 

(d)     Any errors associated with the Deposits or other items or calculations as detailed on the Closing Statement or the Adjusted Closing Statement (“Mistakes-in-Fact”) which are determined as of the date of the Adjusted Closing Statement shall be reconciled as of such date and appropriate adjustments of payments shall be made to Seller or Buyer, as appropriate, at such time. Notwithstanding the foregoing, or anything else herein to the contrary, any Mistakes-in-Fact which shall be determined by Seller or Buyer thereafter shall nevertheless be reconciled by adjustment or payment to Seller or Buyer, as appropriate, within 30 days of such determination; provided that either party shall notify the other of any such alleged Mistakes-in-Fact within one year after the Closing Date in order for a claim to be made with respect thereto.

 

(e)     Seller and Buyer shall use their best efforts to resolve any disagreement related to the Adjusted Closing Statement during the thirty (30) day period following receipt by Seller of notice from Buyer as to any such disagreement. If the disagreement is not resolved during such thirty (30) day period, the dispute shall be referred to a Dispute Resolver, and such Adjusted Closing Statement shall be modified by any such resolution and thereupon such Adjusted Closing Statement shall become final and binding on Buyer and Seller provided, however, that for any claim that does not exceed $5,000, in the event the fees of such Dispute Resolver as estimated by such firm would exceed fifty percent (50%) of the net amount in dispute, the parties agree that such firm will not be engaged by either party and that such net amount in dispute will be equally apportioned between Seller, on the one hand, and Buyer, on the other hand. Such Dispute Resolver shall be instructed to resolve the disputed items within ten (10) Business Days of engagement, to the extent reasonably practicable. All determinations under this Agreement made by a Dispute Resolver shall be binding upon Buyer and Seller. Buyer and Seller shall share equally in the cost of any Dispute Resolver.

 

3.3           Adjustments to the Amount of the Deposit Premium.

 

Notwithstanding any other provision hereof, in the event the average closing daily Deposits attributable to the Branches for the thirty (30) calendar day period ending as of the Closing Date (the “Average Deposits”) is more than $115 million or less than $105 million (the “Target Range”), the Amount of the Deposit Premium will be increased or decreased by the same percentage as the excess or shortfall of the Average Deposits compared to the Target Range. For example, if the Average Deposits equaled $117,300,000 (i.e., exceeded the Target Range by 2%), then the Amount of the Deposit Premium would similarly increase by 2%, to $5,355,000. Similarly, if the Average Deposits totaled $101,850,000, the Amount of the Deposit Premium would total $5,092,500. Notwithstanding the forgoing, in no event may the Amount of the Deposit Premium exceed $5.4 million. Any adjustments required to reflect the actual Average Deposits through the Closing Date (as opposed to the Average Deposits calculated for purposes of the Closing Statement) will be made pursuant to the provisions of Section 3.2 hereof.

 

 

 

IV.       [Intentionally Omitted]

 

 

 

  

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V.            SELLER’S REPRESENTATIONS AND WARRANTIES

 

Seller makes the following representations and warranties to Buyer.

 

5.1     Power and Authority.

 

(a)     The execution and delivery of this Agreement has been duly authorized by all necessary corporate action by Seller. Upon execution and delivery by both parties, this Agreement will constitute a valid and binding obligation of Seller, enforceable in accordance with its terms, subject to conservatorship, receivership, and a court’s right under general principles of equity to refuse to direct specific performance.

 

(b)     The performance of this Agreement by Seller will not violate any provision of the Certificate of Incorporation or Bylaws of Seller, or any applicable law, rule, regulation, or any governmental permit or license or order or any contract or instrument by which Seller is bound, except for such violations which alone, or taken in the aggregate, would not reasonably be expected to have a material adverse effect on the consummation of the transactions contemplated by this Agreement (a “Seller Material Adverse Effect”).

 

(c)     The Seller is a New Jersey state chartered commercial bank duly organized and validly existing under the laws of New Jersey, and has full corporate power to sell the Branches, and to conduct the business of the Branches and to enter into and perform this Agreement.

 

5.2     Litigation and Regulatory Proceedings.

 

Except as disclosed on Schedule 5.2 hereof, there are no actions, complaints, petitions, suits or other proceedings, or any decree, injunction, judgment, order or ruling, entered, promulgated or pending or (to Seller’s knowledge) threatened against Seller or any of the Assets, the Liabilities, or the Real Property which alone, or taken in the aggregate, reasonably would be expected to have a Seller Material Adverse Effect. No governmental agency has notified Seller that it would oppose or not approve or consent to the transactions contemplated by this Agreement and Seller knows of no reason for any such opposition, disapproval or non-consent, including, but not limited to Seller’s compliance with the Community Reinvestment Act, the Bank Secrecy Act and the Truth-in-Lending Act.

 

5.3     Consents and Approvals.

 

Except for required regulatory approvals, no consents, approvals, filings or registrations with any third party or any public body, agency or authority are required in connection with Seller’s consummation of the transactions contemplated by this Agreement, and as may be required as a result of any facts or circumstances relating solely to Buyer. The Seller has no reason to believe that any governmental agency would oppose or not approve or consent to the transactions contemplated by this Agreement and Seller knows of no reason for any such opposition, disapproval or non-consent.

 

5.4     Loans.

 

(a)     Except for the Loans, no loans are being sold by Seller to Buyer in this transaction.

 

(b)     None of the Loans is void or voidable by any person as a matter of law, pursuant to any public policy, or otherwise;

 

(c)     Each of the Loans and the loan documents relating thereto are enforceable against the borrower in accordance with their respective terms;

 

  

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(d)     The Loans and the loan documents relating thereto are in compliance with all applicable laws; and

 

(e)     No notice of default or other failure (including breach, non-payment, or non-performance) has been sent by Seller and is outstanding and uncured with respect to any of the Loans or the loan documents relating thereto.

 

5.5     Compliance with Certain Laws.

 

The Deposit Accounts were opened, extended or made, and have been maintained, in accordance with all applicable federal and state laws, regulations, rules and orders, and the Branches has been operated in compliance with Seller’s policies and procedures and all applicable federal and state laws, regulations, rules and orders, except for such instances of noncompliance which do not have, and are not reasonably likely to have, a Seller Material Adverse Effect.

 

5.6     FDIC Insurance.

 

The Deposits are insured by the FDIC through the Deposit Insurance Fund to the extent permitted by law, and all premiums and assessments required to be paid in connection therewith have been paid when due by Seller.

 

5.7     Absence of Employment Agreements.

 

There are no employment agreements, contracts, incentive plans (other than such agreements, contracts and plans that will terminate automatically on the Closing Date) or disputes between Seller and the employees of Seller based at the Branches, whether written or otherwise, relating to wages, hours, terms of employment, benefits or working conditions.

 

5.8   Books and Records.

 

The books and records of Seller respecting the operations of the Branches accurately reflect, in accordance with Regulatory Accounting Principles consistently applied, the amount of Branch Cash and the total balance of each Deposit Account being transferred to Buyer.

 

5.9   Deposit Accounts.

 

To the best of Seller’s knowledge, all of the Deposit Accounts were originated and have been administered in compliance, in all material respects, with the document governing the relevant type of Deposit Account and all applicable laws. Seller has properly accrued interest on the Deposit Accounts and the records respecting the Deposit Accounts accurately reflect such accruals of interest. Seller has delivered to Buyer a true and complete copy of each of the documents governing the Deposit Accounts and a true and correct copy of the current Deposit Account forms for each of the types of Deposit Accounts offered by Seller at the Branches.

 

5.10   No Broker.

 

Except as disclosed on Schedule 5.10, no agent, broker, investment banker or other person acting on behalf or under the authority of Seller is or will be entitled to any broker’s or finder’s fee or any other commission or similar fee directly or indirectly in connection with this Agreement.

 

5.11  Community Reinvestment Act.

 

Seller is in compliance in all material respects with the Community Reinvestment Act (“CRA”) and its implementing regulations and there are no threatened or pending actions, proceedings, or allegations by any person or regulatory agency which may cause bank regulatory authorities to deny any application or non-objection required to be filed pursuant to this Agreement.

 

  

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5.12   Disclosure.

 

Exhibit A, attached hereto, is a comprehensive list of deposit accounts domiciled at each branch as of the date indicated thereon. Without limiting the generality of the foregoing, the information concerning the Loans and the Deposit Accounts contained in or delivered by the Seller pursuant to this Agreement, heretofore provided to Buyer fairly and accurately describes the liabilities to be assumed and purchased by Buyer pursuant to this Agreement, in all material respects.

 

5.13         Exhibits and Schedules

 

The Exhibits and Schedules attached hereto, as provided by or on behalf of Seller, completely and correctly present in all material respects the information required by this Agreement to be set forth therein.  No representation or warranty by Seller herein and no information disclosed in the Schedules hereto supplied by or on behalf of Seller contains any untrue statement of a material fact or omits to state a fact necessary to make the statements contained herein or therein not materially misleading. Seller has no Actual Knowledge of any events, transactions or other facts which, either individually or in the aggregate might reasonably give rise to circumstances or conditions which might have a material adverse effect on the Assets or the Deposits.

 

5.14         Title to the Real Property

 

 Seller  has good and marketable title to each parcel of the Real Property, insurable at ordinary rates by the Title Company, free and clear of all liens, restrictions, easements, encumbrances, claims or liens by contractors, subcontractors, mechanics and materialmen; leases and tenancies and other title objections except for (i) the Leases, (ii) the lien of real estate taxes for 2011 not yet due and payable, (ii) the exceptions to title set forth in Schedule 5.14 attached hereto and made a part hereof.  If Seller cannot or is unable to deliver title as set forth in the immediately preceding sentence, Seller shall be in default.  If between the date of this Agreement and the Closing Date, any new exceptions are raised which did not appear on the title commitment, or an updated survey shows any new encroachments or other survey matters not shown on the survey (collectively, “New Exceptions”), then Buyer shall have the right to give Seller written notice of same (provided that Buyer must notify Seller of such objection to title within five (5) business days of being made aware of the existence of such exception) and in such instance the Seller shall remove such title encumbrances and exceptions prior to the Closing Date.

 

5.15         Environmental Compliance.

 

(a)           There are no legal, administrative, arbitral or other proceedings, claims or actions or any private environmental investigations or remediation activities or governmental investigations of any nature affecting or related to the Real Property pending or to Seller’s knowledge threatened. To Seller’s Actual Knowledge, there is no reasonable basis for any such proceeding, claim, action or investigation Seller is not subject to any agreement, order, judgment or decree by or with any party related to or affecting the Real Property.

 

(b)           Seller has operated the Real Property, at all times during its ownership, in material compliance with all Environmental Laws.  Seller is not aware of nor has it received notice of, any past, present, or future conditions, events, activities, practices or incidents that may interfere with or prevent the compliance of Seller or Buyer with all Environmental Laws with regard to the Real Property.

 

(c)           Seller has obtained all material permits, licenses and authorizations that are required under all Environmental Laws for the operation and ownership of the Real Property.

 

(d)           To Seller’s Actual Knowledge, no Hazardous Materials exist on, about or within the Real Property, nor have any Hazardous Materials previously existed on, about or within or been used, generated, transported, disposed of, on or released from the Real Property.

 

(e)           To the Actual Knowledge of Seller, there are no underground storage tanks on, in or under any of the Real Properties and no underground storage tanks have been closed or removed from any of the Real Properties while the property was owned, operated or controlled by Seller or any subsidiary.

 

  

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(f)            Seller has delivered true and complete copies of all Environmental Reports to Buyer.

 

5.16         No Material Defects.  To Seller’s Actual Knowledge, there are no material defects with respect to the Real Property, including, without limitation, no material defects in the structural and load-bearing components of the Improvements, the roof(s), the parking lot(s), the plumbing, heating, air conditioning and electrical and life safety systems, and all such items are in good operating condition and repair.

 

5.17         Compliance with Laws.  To Seller’s Actual Knowledge, the use and operation of the Real Property is in compliance in all material respects with all applicable Laws, and Seller has received no notice that the use or operation of the Real Property is in violation of any applicable Laws.

 

5.18         No Regulatory Proceedings.  There are no condemnation, environmental, zoning or other land-use regulation proceedings that have been instituted and Seller has not received any notice of any such proceeding that is planned to be instituted, nor has Seller received notice of any special assessment proceedings affecting the Real Property.  Seller shall notify Buyer promptly of any such proceedings of which Seller becomes aware.

 

5.19          Utilities.  All water, sewer, gas, electric, telephone, and drainage facilities and all other utilities required, to Seller’s Actual Knowledge, by any Laws or by the normal use and operation of the Real Property are installed to the property lines of the Real Property, and are connected pursuant to valid permits, and are adequate to service the Real Property as presently operated and, to Seller’s Actual Knowledge, to permit compliance with all Laws. To Seller’s Actual Knowledge, no fact or condition exists which would result in the termination or impairment in the furnishing of utility services to the Real Property.

 

5.20         Licenses, Permits, Access, etc.  Seller has obtained all licenses, permits (specifically including construction permits for the installation of tenant improvements by whomever installed), variances, approvals, authorizations, easements and rights of way, including proof of dedication, required from all governmental authorities having jurisdiction over the Real Property or from private parties for the construction, development, present use, operation and occupancy of the Real Property and to insure vehicular and pedestrian ingress to and egress from the Real Property to and from the public streets and roads.

 

5.21         Use and Operation.  Seller knows of no facts nor has Seller failed to disclose any fact which would prevent Buyer from using and operating the  Real Property after Closing in the manner in which the Property is currently operated.

 

5.22         Enforceability of Leases.  To Seller’s Actual Knowledge, each of the Leases, including without limitation any guaranties thereof, is an enforceable Lease and is in full force and effect according to the terms set forth therein, except as the enforcement thereof may be limited by applicable Creditors’ Rights Laws.

 

5.23         No Tenant Delinquencies or Defaults.  Except as specifically disclosed on Schedule 5.23: (i) no Tenant is greater than fifteen (15) days delinquent in the payment of its rental and other sums due, (ii) no Tenant has abandoned or otherwise vacated the Real Property, (iii) to Seller’s Actual Knowledge, no Tenant or guarantor has filed a voluntary petition in bankruptcy, insolvency or similar proceedings, has been the subject of an involuntary bankruptcy petition, or otherwise been adjudged bankrupt or insolvent in any proceedings filed against such Tenant or guarantor; (iv) to Seller’s Actual Knowledge, no trustee or receiver has been appointed for any Tenant; (v) no written notice has been provided to any Tenant notifying the Tenant that it is in default under the Lease which default has not been remedied by such Tenant; and (vi) no Tenant, to Seller’s Actual Knowledge, is otherwise in default under any of the Leases.  Except as otherwise provided in the Lease, to Seller’s Actual Knowledge, each Tenant is legally required to pay all sums and perform all other material obligations set forth in its respective Lease, without concessions, abatements, offsets or other basis for relief or adjustment, subject to applicable Creditors’ Rights Laws.  No Tenant has indicated to Seller either orally or in writing its present intent to terminate its Lease prior to expiration of the term of such Lease.

 

5.24         No Lease Defaults by Seller.  To Seller’s Actual Knowledge, no material event of default on behalf of Seller, as lessor, exists under any Lease and no event or condition exists that, upon the giving of notice or lapse of time, or both, would constitute a default by Seller under any Lease.  Seller has not received any notice from any Tenant of any offsets, defenses or claims of overcharges, refunds or otherwise available against rent or other charges payable by such Tenant or other performance or obligations otherwise due from it under any Lease.

 

  

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 5.25        Commission Agreements and Payment of Lease Costs.  Seller has delivered complete and correct copies of all brokerage and commission agreements regarding the Real Property to Buyer.  Seller has paid in full any of landlord’s leasing costs or obligations, including without limitation any costs incurred by Seller in connection with any tenant improvements.  No brokerage or similar fee is due or unpaid by Seller with respect to the Leases, and no brokerage or similar fee shall be due or payable by Seller after the Closing in connection with the Leases, whether by installment payments or otherwise.

 

5.26         FF&E.  Seller owns good and marketable title to, or leases under valid and enforceable leases, all of the FF&E, free and clear of any liens or encumbrances, and (ii) the FF&E is in good order and repair. Seller has the right to assign all of the Equipment Leases.

 

5.27          No Contracts for Improvements.  At the time of Closing (i) there will be no outstanding written or oral contracts made by Seller for any improvements to the Real Property which have not been fully paid for and Seller shall cause to be discharged all construction, mechanics and materialmen’s liens arising from any labor or materials furnished to the Real Property prior to the time of Closing, and (ii) Seller shall have completed all punch-list items with respect to any tenant improvements constructed by Seller as landlord under the Leases.

 

5.28         Brokered Deposits.  None of the Deposits is a “brokered deposit” as such term is defined in 12 CFR Section 337.6(a)(2).

 

5.29         Additional Deposit Relationships.  Except as set forth on Schedule 5.29 hereto, no holder of a Deposit Account has any other deposit relationship with the Seller.

 

VI.           BUYER’S REPRESENTATIONS AND WARRANTIES

 

Buyer makes the following representations and warranties to Seller.

 

6.1     Power and Authority.

 

(a)     The execution and delivery of this Agreement has been duly authorized by all necessary corporate action by Buyer. Upon execution and delivery by both parties, this Agreement will constitute a valid and binding obligation of Buyer, enforceable in accordance with its terms subject to conservatorship, receivership, and a court’s right under general principles of equity to refuse to direct specific performance.

 

(b)     The performance of this Agreement by Buyer will not violate any provision of the Certificate of Incorporation, Bylaws or similar governing documents of Buyer, or any applicable law, rule, regulation, or order or any contract or instrument by which Buyer is bound except for such violations which alone, or taken in the aggregate, would not reasonably be expected to have a material adverse effect on the consummation of the transactions contemplated by this Agreement (a “Buyer Material Adverse Effect”).

 

(c)     The Buyer is a commercial bank duly organized and validly existing under the laws of the State of New Jersey, and has full corporate power to enter into and perform this Agreement.

 

6.2     Litigation and Regulatory Proceedings.

 

There are no actions, complaints, petitions, suits or other proceedings, or any decree, injunction, judgment, order or ruling, entered, promulgated or pending or (to Buyer’s knowledge) threatened against Buyer or any of its properties or assets which alone, or taken in the aggregate, reasonably would be expected to have a Buyer Material Adverse Effect. No governmental agency has notified Buyer that it would oppose or not approve or consent to the transactions contemplated by this Agreement, and Buyer knows of no reason for any such opposition, disapproval or non-consent, including, but not limited to Buyer’s compliance with the Community Reinvestment Act, the Bank Secrecy Act and the Truth-in-Lending Act.

 

  

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6.3     Consents and Approvals.

 

Except for required regulatory approvals, no consents, approvals, filings or registrations with any third party or any public body, agency or authority are required to be obtained by Buyer in connection with Buyer’s consummation of the transactions contemplated by this Agreement.

 

6.4     FDIC Insurance.

 

Buyer is authorized to hold deposits that are insured by the FDIC through the Deposit Insurance Fund to the extent permitted by law, and all premiums and assessments required to be paid in connection therewith have been paid when due.

 

6.5     No Broker.

 

Except for Raymond James & Associates, Inc., no agent, broker, investment banker or other person acting on behalf or under the authority of Buyer is or will be entitled to any broker’s or finder’s fee or any other commission or similar fee directly or indirectly in connection with this Agreement.

 

6.6     Community Reinvestment Act.

 

Buyer is in compliance in all material respects with the CRA and its implementing regulations and there are no threatened or pending actions, proceedings, or allegations by any person or regulatory agency that may cause bank regulatory authorities to deny any application or non-objection required to be filed pursuant to this Agreement. Buyer has received a rating of not less than “satisfactory” on its most recent CRA examination. In addition, Buyer has not been advised of any supervisory concerns regarding compliance with CRA.

 

 

 

VII.          ADDITIONAL AGREEMENTS OF SELLER

 

7.1     Access to Seller’s Premises, Records and Personnel.

 

(a)     Upon execution of this Agreement, Seller shall give Buyer and its representatives such access to the Branches as Buyer may reasonably request, provided that Buyer does not unreasonably interfere with the Branches’ business operations. Seller shall not be required to provide access to or to disclose information where such access or disclosure might violate or prejudice the rights of any customer or employee or would be contrary to law, rule, regulation or any legal or regulatory order or process or any fiduciary duty or binding agreement entered into prior to the date of this Agreement. To the extent the confidential and proprietary information consists of “non-public personal information” within the meaning of the Gramm-Leach-Bliley Act Section 509(4), each party receiving such information shall take reasonable measures to: (i) ensure the security and confidentiality of such non-public personal information; (ii) protect against any anticipated threats or hazards to the security or integrity of such non-public personal information; and (iii) protect against unauthorized access to or use of such non-public personal information.

 

(b)     Anything contained in this Agreement to the contrary notwithstanding, Seller shall not be required to disclose, or to cause the disclosure to Buyer or its representatives (or provide access to any offices, properties, books or records of Seller, that could result in the disclosure to such Persons or others), of any tax returns and/or any work papers relating thereto or any other confidential information relating to income or franchise taxes or other taxes of Seller, or trade secrets, patent or trademark applications, or product research and development belonging to or performed by or for Seller, nor shall Seller be required to permit or to cause others to permit Buyer or its representatives to copy or remove from the offices or properties of Seller any documents, drawings or other materials that might reveal any such confidential information; provided, however, Buyer shall have access to tax returns to the extent that liability for the taxes at issue could be imposed on Buyer.

 

  

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(c)           At Buyer’s request, Seller shall authorize and permit certain of its officers and members of management to engage in discussions with Buyer for the purposes of discussing the Branches business, and Buyer shall maintain the confidentiality of any information furnished by such officers or members of management of Seller pursuant to such discussions with Buyer.

 

(d)           At any time(s) reasonably requested by Buyer prior to Closing, Buyer may contact and interview the Tenants, provided that such contacts or interviews shall occur after reasonable oral or written notice to Seller.  Seller will be afforded a reasonable opportunity to be present during any interview.

 

 

7.2     Regulatory Approvals.

 

Seller agrees to use its reasonable best efforts to obtain promptly any regulatory approval on which its consummation of the transactions contemplated by this Agreement is conditioned. Seller also agrees to cooperate with Buyer in obtaining any regulatory approval that Buyer must obtain before the Closing. Seller shall notify Buyer promptly of any significant development with respect to any application it files under this Section. Seller also shall provide Buyer with a copy of any regulatory approval it receives under this Section, promptly after Seller’s receipt of the same.

 

 

 

7.3     Conduct of Business.

 

 

(a)            Except as provided in this Agreement or as may otherwise be agreed upon by Buyer, Seller will continue to carry on the business at the Branches until the Closing in the ordinary course of business, consistent with prudent business practices, and will use reasonable efforts to preserve the goodwill of all depositors at the Branches, all employees at the Branches and all others having business relations with the Branches. Seller shall not terminate the operation of the Branches, unless those operations cease due to events beyond Seller’s control. Seller will notify Buyer of any event of which Seller obtains knowledge that would make any of Seller’s representations under Article V of this Agreement false in any material respect.

 

(b)           In furtherance of the forgoing, Seller shall not, without the prior written approval of Buyer, take any of the following actions:

 

	
  

	
(i)

	
Leases.  Execute or renew any Lease; or consent to any assignment of or subletting of any Lease; or terminate any Lease; or modify or waive any material term of any Lease;

 

	
  

	
(ii)

	
Contracts.  Enter into, modify, execute or terminate any operating agreement, reciprocal easement agreement, management agreement or any lease, contract, agreement or other commitment of any sort (including any contract for capital items or expenditures), with respect to the Real Property;

 

	
  

	
(iii)

	
Employee Payroll. Increase the wages of any employee of the Branches, as detailed at Schedule 7.3, other than in accordance with the salary budget guidelines presently in effect, as detailed at Schedule 7.3.

 

(c)           Except as otherwise contemplated or permitted by this Agreement or approved by Buyer in writing,  Seller will maintain and repair the Real Property in a prudent manner, in the ordinary course of business, on an arm’s-length basis and consistent with its past practices, and without limiting the foregoing, Seller shall, in the ordinary course, enforce leases in all material respects including eviction proceedings against all Tenants with delinquencies in excess of thirty (30) days, pay all costs and expenses of the Real Property, including, without limitation, debt service, real estate taxes and assessments and maintain insurance, and will not (i) mortgage, pledge, hypothecate, transfer or dispose of all or any part of the Real Property or any interest therein, (ii) make any alterations or changes to the Real Property, or any part thereof other than ordinary and necessary maintenance and repairs.

 

  

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7.4     Returned Items.

 

If Seller accepts an item before the Closing Date, which item is returned as uncollectible, and no offset of funds is available to Buyer, then Seller shall be liable for such item in an amount equal to the portion not covered by offset. Adjustment to the Settlement Payment will be made as necessary to reflect Seller’s liability.

 

7.5    Branch Operations.

 

Seller shall not materially alter the products or services presently offered at the Branches or materially alter the pricing policy applicable to such products without prior notice to Buyer.

 

7.6    Final Payroll.

 

Seller shall pay all of its employees not later than as of the close of business on the Closing Date all sums due for all wages earned, including overtime pay, and all accrued vacation leave as of such time.

 

7.7    Customer Records.

 

At or prior to the execution of this Agreement, and monthly thereafter until the Closing Date, or as otherwise agreed, Seller agrees to provide to Buyer a list of all Deposits, identifying the types of each such deposit, the amount thereof, the interest rate(s) paid thereon, the name(s) and address(es) of each deposit as well as all other pertinent information regarding each depositor and his or her Deposit. Buyer shall have the right, prior to the Closing Date, to review the books and records of Seller relating to such Deposits for the purpose of verifying the accuracy of the foregoing list.

 

7.8   IRA and Keogh Plan Deposits.

 

(a)     On or before the Closing Date, to the extent that such accounts will transfer to Buyer, Seller shall: (i) resign as of the close of business on the Closing Date as the trustee or custodian, as applicable, of each IRA and Keogh Plan of which it is the trustee or custodian; (ii) to the extent permitted by the documentation governing each such IRA or Keogh Plan and applicable law, appoint Buyer as successor trustee or custodian, as applicable, of each such IRA or Keogh Plan, and Buyer hereby accepts each such trusteeship or custodianship under the terms and conditions of Buyer’s plan documents for its IRA and Keogh Plans, and assumes all fiduciary and custodial obligations with respect thereto as of the close of business on the Closing Date; and (iii) deliver to the IRA grantor or Keogh Plan named fiduciary, of each such IRA or Keogh Plan such notice of the foregoing as is required by the documentation governing such IRA or Keogh Plan or applicable law. Buyer shall be solely responsible for delivering its IRA and Keogh Plan documents to the applicable IRA grantor and Keogh Plan named fiduciary, including, but not limited to, a beneficiary designation form to be completed by the applicable IRA grantor or Keogh Plan participant; provided, however that in the event the IRA grantor or Keogh Plan participant dies before such time as Buyer receives a properly completed beneficiary designation form, Seller shall make available to Buyer such information as may exist in Seller’s files regarding any beneficiary designation it may have regarding such decedent. If, pursuant to the terms of the documentation governing any such IRA or Keogh Plan or applicable law; (x) Seller is not permitted to appoint Buyer as successor trustee or custodian, or the IRA grantor or Keogh Plan or named fiduciary objects in writing to such designation, or is entitled to, and does, in fact, name a successor trustee or custodian other than Buyer; or (y) such IRA or Keogh Plan includes assets that are not Deposits and are not being transferred to Buyer or the assumption of such deposit liabilities included in such IRA or Keogh Plan or would result in a loss of qualification of such IRA or Keogh Plan under the Code, all deposit liabilities of Seller held under such IRA or Keogh Plan shall be excluded from the Deposits. Upon appointment as a successor custodian for such IRAs or as a successor trustee for such Keogh Plans, Buyer shall perform the services and carry out the duties and obligations required of it under the applicable plans, the Code and applicable federal and state laws and regulations.

 

  

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(b)     To the extent the Deposits include certain IRAs and Keogh Plans that are required to make certain periodic distributions to the IRA account owner or Keogh Plan participant (or beneficiary) either at the account owner’s or participant’s request or because the account owner or participant has attained age 70-1/2, effective as of the Closing Date, Buyer agrees to continue to make such periodic distributions in accordance with the reasonable distribution instructions forwarded by Seller to Buyer. Buyer hereby assumes the obligation to pay each minimum distribution required by federal law by December 31 of the calendar year in which the Closing occurs and, in consideration thereof, Seller agrees not to withhold the amount of such distributions from the aggregate amount of the Deposits.

 

(c)     Prior to the Closing Date, Seller shall provide to Buyer copies of all plan documents and beneficiary designation forms in Seller’s possession with respect to the IRAs and Keogh Plans.

 

 7.9    Non-Solicitation After Closing.

 

(a)     Seller agrees that, for a period of two (2) years after the Closing, neither the Seller nor its Affiliates shall directly or indirectly solicit Bank Deposits (as hereinafter defined) from customers of the Branches maintaining Deposits transferred to the Buyer pursuant to this Agreement, except that (a) nothing herein shall prevent Seller from making general solicitations of the public (or any segment of the public), through advertising campaigns or otherwise, for the purpose of having the public establish Bank Deposits of the Seller, so long as such solicitations are not specifically directed toward customers of the Branches, (b) nothing herein shall prevent Seller from soliciting so-called “brokered” certificates of deposit, and (c) nothing herein shall prevent Seller from displaying brochures and other marketing materials with respect to Bank Deposits at Seller’s offices. As used herein, “Bank Deposits” means demand deposits, time deposits and certificates of deposit insured by the FDIC.

 

(b)     Seller agrees that, for a period of two (2) years after the Closing, Seller shall not, within the “Restricted Area” described below, open or maintain any banking branch office or purchase any single banking branch office from a third-party, other than an office operated by the Seller as of the date of the Agreement. For the purposes of this Agreement, the Restricted Area shall be defined as the geographic area within a five mile radius of each of the Branches.

 

(c)     Notwithstanding the foregoing, the provisions in this Section 7.9 shall not apply to Seller or its successors or assigns if the Seller (a) is acquired in a merger or asset sale transaction with a third-party, or (b) Seller acquires another bank, thrift or financial institution by merger or asset sale consisting of at least two retail banking offices and one or more of such offices falls within the Restricted Area.

 

7.10      Depositor Credit Relationships

 

In the event any Depositor Credit Relationships exist which are not transferred to Buyer at the Closing, Buyer shall have the option, for a period of ninety (90) days after the Closing, to purchase such Depositor Credit Relationship from Seller at a purchase price calculated in accordance with Section 2.10 hereof.

 

VIII.         ADDITIONAL AGREEMENTS OF BUYER

 

8.1     Regulatory Approvals.

 

Buyer agrees to use its reasonable best efforts to obtain promptly any regulatory approval on which its consummation of the transactions contemplated by this Agreement is conditioned. Buyer shall prepare and file all necessary regulatory notices and applications related to the transaction contemplated by the Agreement within thirty (30) calendar days of the execution date of the Agreement. Buyer also agrees to cooperate with Seller in obtaining any regulatory approval which Seller must obtain before the Closing. Buyer shall notify Seller promptly of any significant development with respect to any application it files under this Section. Buyer also shall provide Seller with a copy of any regulatory approval it receives under this Section, promptly after Buyer’s receipt of the same.

 

  

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8.2     Change of Name, Etc.

 

Immediately after the Closing, Buyer will (a) change the name and logo on all documents and facilities relating to the Assets, Liabilities and the Real Property to Buyer’s name and logo, and (b) provide all appropriate notices to the FDIC and any other regulatory authorities required as a result of the consummation of such transactions. Buyer agrees not to use any forms or other documents bearing Seller’s name or logo after the Closing without the prior written consent of Seller, and, if such consent is given, Buyer agrees that all such forms or other documents to which such consent relates will be stamped or otherwise marked in such a way that identifies Buyer as the party using the form or other document. Buyer shall use its best efforts to encourage these customers to begin using such checks and cease using checks bearing Seller’s name.

 

 

IX.           CASUALTY AND CONDEMNATION

 

9.1           Notice of Loss.  If, prior to the Closing Date, any portion of the Real Property suffers a Minor or Major Loss, Seller shall immediately notify Buyer of that fact, which notice shall include sufficient detail to inform Buyer of the current status of the Real Property following such loss.  Seller agrees not to settle or compromise any claim for any condemnation award without the prior written consent of Buyer.  Buyer shall have the right to participate in any condemnation proceeding.

 

9.2           Minor Loss.  Buyer’s obligations hereunder shall not be affected by the occurrence of a Minor Loss, provided that upon the Closing, there shall be a credit against the Property Purchase Price equal to the amount of any insurance proceeds collected by Seller as a result of such Minor Loss, plus the amount of any insurance deductible.  If the proceeds have not been collected as of the Closing, then Seller’s right, title and interest to such proceeds shall be assigned to Buyer at the Closing, together with a credit against the Property Purchase Price in the amount of any insurance deductible.  This provision shall not limit any of the Seller’s repair obligations under the Leases.  If there is a Minor Loss and insurance coverage as set forth above is not available, Buyer shall have the same rights as if it was a Major Loss.

 

9.3           Major Loss.  In the event of a Major Loss, Buyer may, at its option to be exercised by written notice to Seller within twenty (20) days of Seller’s notice to Buyer of the occurrence thereof, elect to either (i) terminate this Agreement or (ii) consummate the transactions contemplated hereby, without restoration of the Real Property by Seller, subject to the following.  If Buyer elects to proceed, then the Closing shall be postponed to the later of the Closing Date or the date which is five (5) days after Buyer makes such election and, upon the Closing, Buyer shall be given a credit against the Property Purchase Price equal to the amount of any insurance proceeds or condemnation awards collected by Seller as a result of such Major Loss, plus the amount of any insurance deductible.  If the proceeds or awards have not been collected as of the Closing, then provided the insurance carrier has acknowledged its obligation to pay on the loss (in the event of any damage), Seller’s right, title and interest to such proceeds or awards shall be assigned to Buyer (in the amount of the insurance carrier’s acknowledgment in the event of any damage), Buyer shall receive a credit against the Property Purchase Price due at Closing in the amount of any insurance deductible (in the event of any damage), and Seller will cooperate with Buyer as reasonably requested by Buyer in the collection of such proceeds or award.  If Buyer fails to give Seller notice within such 20-day period, then Buyer will be deemed to have elected to terminate this Agreement.

 

X.       SELLER’S EMPLOYEES

 

10.1     Transferred Employees.

 

(a)     Buyer will offer employment to all branch personnel employed at the Branches immediately prior to Closing and who have not been suspended, placed on leave or been subject to disciplinary actions within the 90 days prior to the Closing Date and who otherwise meet Buyer’s pre-employment screening criteria. Buyer shall be granted access to Seller’s personnel files with regard to such employees.  Buyer shall notify the Seller in writing not less than thirty days prior to the Closing Date detailing by name any employees at the Branches to whom the Buyer shall not offer employment. Seller’s employees who become employees of Buyer after the Closing shall be referred to as “Transferred Employees.”

 

  

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(b)     Seller is responsible for the filing of Forms W-2 with the Internal Revenue Service and any required filing with state tax authorities, with respect to wages and benefits paid to each Transferred Employee for periods ending on or prior to the Closing Date.

 

10.2     Employee Benefits.

 

(a)     From and after the Closing Date, Buyer shall provide the Transferred Employees with the employee benefits, if any, provided to employees of Buyer and its Affiliates, subject to the terms of Buyer’s benefit plans;

 

(b)     Buyer will grant for purposes of determination of vacation benefits, severance pay and all welfare benefit plans (as defined in ERISA) past service credit to all Transferred Employees for periods of time credited to such Transferred Employees as employees of Seller. To the extent that any Transferred Employee has satisfied in whole or in part any annual deductible under a Welfare Benefit Plan, or has paid any out-of-pocket expenses pursuant to any Welfare Benefit Plan co-insurance provision, such amount shall be counted toward the satisfaction of any applicable deductible or out-of-pocket expense maximum, respectively, under the benefit plans and programs provided to Transferred Employees by Buyer, and such plans and programs shall be applied without regard to any limitations relating to preexisting conditions or required physical examinations that would not otherwise apply under the respective Welfare Benefit Plans to the extent that such Transferred Employees are covered by the Welfare Benefit Plans on the Closing Date; provided, however, such treatment shall be contingent on Buyer obtaining the consent of its Insurers for Buyer’s Insured Welfare Benefit Plans. Seller agrees to furnish Buyer with information regarding Transferred Employees’ deductibles and out-of-pocket maximums within one week after the Closing Date.

 

(c)     Buyer shall take whatever action is necessary, if any, including amendment of its defined contribution pension plan, to grant to each Transferred Employee past service credit for purposes of eligibility and vesting under Buyer’s defined contribution pension plan for all periods of service credited to each such Transferred Employee under Seller’s defined contribution pension plan. Within 30 days before the anticipated Closing Date, Seller shall provide to Buyer such information as Buyer reasonably requires to establish the service for the Transferred Employees credited under Seller’s defined contribution pension plan; and

 

(d)     Buyer agrees to cause its 401(k) plan to accept eligible rollover distributions from the Seller’s 401(k) plan with respect to the Transferred Employees.

 

10.3     Training.

 

Seller shall permit Buyer to train the Transferred Employees during the 30-day period before Closing with regard to Buyer’s operations, policies and procedures at Buyer’s sole cost and expense. This training shall take place at the Buyer’s location, and shall be scheduled so that it does not disrupt the operations of the Branches.

 

XI.          CLOSING AND CONDITIONS TO CLOSING

 

11.1     Time and Place of Closing.

 

The Closing shall be on a date mutually agreed upon by the parties (the “Closing Date”), which shall be no more than 45 days after the last regulatory approval or non-objection necessary for the Closing has been obtained (without regard to any statutory waiting periods following such approval), but in no event later than March 31, 2011, to the extent feasible and acceptable to Seller’s and Buyer’s respective data processing services, but subject to the right of either Buyer or Seller to extend such date by up to sixty (60) days. The Closing shall take place at the offices of the Buyer at 10:00 a.m. on the Closing Date, or at a time and place otherwise determined by mutual agreement of the parties.

 

  

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11.2     Exchange of Closing Documents.

 

(a)           Seller’s Deliveries On or Prior to Closing.  At least three Business Days prior to the Closing, Seller shall deliver to Buyer the following, to the extent they have not already been delivered (a) originals of the Contracts not previously delivered to Buyer; (b) originals of the Leases; and (c) any other instruments, records or correspondence called for hereunder which have not previously been delivered.

 

(b)           Seller’s Deliveries at Closing.  At or before the Closing, Seller shall deliver to Buyer the following to Buyer, to the extent they have not already been delivered:

 

	
  

	
(i)

	
a duly executed and acknowledged Deed for each parcel of Real Property;

 

	
  

	
(ii)

	
a duly executed Assignment of Leases for each Lease;

 

	
  

	
(iii)

	
a duly executed Bill of Sale for the Assets;

 

	
  

	
(iv)

	
a duly executed Assignment of Contracts for the Property;

 

	
  

	
(v)

	
a FIRPTA affidavit (in the form attached as Exhibit D) from the Seller pursuant to Section 1445(b)(2) of the Internal Revenue Code of 1986, and on which Buyer is entitled to rely, that Seller is not a foreign person within the meaning of Section 1445(f)(3) of the Internal Revenue Code;

 

	
  

	
(vi)

	
an owner’s/seller’s affidavit in form and substance reasonably acceptable to the Title Company which is sufficient to cause the Title Company to remove those standard exceptions in the title policy relating to possession of the Real Property (except as to tenants under the Leases), construction liens and other similar matters;

 

	
  

	
(vii)

	
a Closing Certificate in the form attached hereto as Exhibit J;

 

	
  

	
(viii)

	
duly executed original Tenant Estoppel Certificates in the form attached hereto as Exhibit F;

 

	
  

	
(ix)

	
an original signed notice in the form of Exhibit K attached hereto for each of the Tenants;

 

	
  

	
(x)

	
Certificate(s) of Occupancy and Smoke Detector Certificates, if required, together with originals (if in Seller’s possession) or copies of those licenses, permits, authorizations and approvals required by ordinance, statute, law, rule or regulation of any governmental authority for the operation or transfer of the Real Property;

 

	
  

	
(xi)

	
all keys to the Real Property, which shall be personally delivered by a representative of Seller to a representative of Buyer;

 

	
  

	
(xii)

	
Internal Revenue Service 1099-S form;

 

	
  

	
(xiii)

	

such original resolutions, authorizations, bylaws or other corporate and/or partnership documents or agreements relating to Seller as shall be reasonably required by Buyer and/or the Title Company;

 

  

24

  

 

	
  

	
(xiv)

	
any other instruments, records or correspondence called for hereunder which have not previously been delivered; and

 

	
  

	
(xv)

	
funds as required under Section 3.1 hereof.

 

(c)           Buyer’s Deliveries to Seller.  At or before the Closing, Buyer shall deliver or cause to be delivered the following:

 

	
  

	
(i)

	
a duly executed Assignment of Leases for the Property;

 

	
  

	
(ii)

	
a duly executed Assignment of Contracts for the Property; and

 

	
  

	
(iii)

	
an original signed notice in the form of Exhibit F attached hereto for each of the Tenants.

 

(d)           Deposit of Other Instruments.  Seller and Buyer shall each deposit with the other or the Title Company, as the case may be, such other instruments as are reasonably required by Title Company or otherwise required to consummate the transactions described herein in accordance with the terms hereof. Seller and Buyer hereby designate the Title Company as the “Reporting Person” for the transaction pursuant to Section 6045(e) of the Internal Revenue Code and the regulations promulgated thereunder and agree to execute such documentation as is reasonably necessary to effectuate such designation.

 

11.3     Buyer’s Conditions to Closing.

 

Buyer’s obligation to purchase the Assets and the Real Property and assume the Liabilities is contingent upon and subject to the fulfillment of the following conditions in all material respects (collectively the “Conditions Precedent”):

 

(a)            the parties obtaining all regulatory approvals which are required in order for them to proceed with the transactions contemplated by this Agreement and the expiration of any required waiting period(s) without the commencement of adverse proceedings by any governmental authority with jurisdiction over the transactions contemplated by this Agreement;

 

(b)           each representation and warranty of Seller in this Agreement being true and correct in all material respects as of the Closing Date and all covenants and conditions of Seller to be performed or met by Seller on or before the Closing Date having been performed or met in all material respects;

 

(c)            Seller’s delivery to Buyer of the documents set forth in Section 11.2(a) and (b);

 

(d)           The Title Company shall be committed to issue the Title Policy at Closing;

 

(e)            If so requested in writing by Buyer, Seller shall have notified each Tenant who occupies any portion of the Branches pursuant to a Lease with a term that has expired or which has a month to month term to vacate their leasehold, and such Tenet(s) shall have so vacated their leasehold, without any liability to Seller or Buyer;

 

(f)            The Average Deposits shall be at least $90million, without giving effect to municipal deposits.

 

11.4       Seller’s Conditions to Closing.

 

Seller’s obligation to sell the Assets and the Real Property and transfer the Liabilities to Buyer is contingent upon and subject to the fulfillment of the following conditions in all material respects:

 

  

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 (a)     the parties obtaining all regulatory approvals which are required in order for them to proceed with the transactions contemplated by this Agreement and the expiration of any required waiting period(s) without the commencement of adverse proceedings by any governmental authority with jurisdiction over the transactions contemplated by this Agreement;

 

(b)     each representation and warranty of Buyer in this Agreement being true and correct in all material respects as of the Closing Date and all covenants and conditions of Buyer to be performed or met by Buyer on or before the Closing Date having been performed or met in all material respects;

 

(c)     Buyer’s delivery to Seller of the following documents in form and substance reasonably satisfactory to Seller:

 

	
  

	
(i)

	one or more executed instruments assuming the Deposits and all other Liabilities;

 

	
  

	
(ii)

	a certificate executed by a Responsible Individual of Buyer attesting, to such person’s best knowledge, to Buyer’s compliance with the conditions set forth in Section 11.4(b).

 

11.5     Survival of Representations and Warranties.

 

Unless provided otherwise in this Agreement, Buyer’s and Seller’s representations and warranties under this Agreement or contained in any certificate or instrument delivered by either party at the Closing shall survive the Closing Date for a period of one year.

 

XII.            TERMINATION

 

12.1  Termination by Either Party.

 

Either party may terminate this Agreement upon written notice to the other if:

 

(a)     as a result of any material breach of any representation, warranty or covenant by the other party, the party terminating this Agreement has given the other party written notice of such breach and such breach is not cured within 30 days thereafter;

 

(b)     the Closing does not occur on or before May 31, 2011;

 

(c)     the other party so agrees in writing;

 

(d)     either party is unable to obtain the required regulatory approvals without any condition that, in such party’s good faith belief, materially diminishes the value of the benefits to be obtained by such party pursuant to this Agreement, or either party becomes subject to receivership or similar proceeding involving the assignment of such party’s assets for the benefit of creditors.

 

(e)     The default of the Seller or the Buyer.

 

The termination of this Agreement under subsection (a) shall not absolve the breaching party from any liability to the other party arising out of its breach of this Agreement

 

  

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XIII.         MISCELLANEOUS

 

13.1   Continuing Cooperation.

 

(a)     On and after the Closing Date, Seller agrees to execute, acknowledge and deliver such documents and instruments as Buyer may reasonably request to vest in Buyer the full legal and equitable title to the Assets, the Real Property and Liabilities.

 

(b)     On and after the Closing Date, Buyer shall execute, acknowledge and deliver such documents and instruments as Seller may reasonably request to relieve and discharge Seller from its obligations with respect to the Liabilities.

 

(c)     Seller and Buyer shall cooperate with each other in connection with any examination conducted by any tax authority subsequent to the Closing Date by promptly providing upon request information relating to the tax liability of any business operated by Seller or Buyer with respect to the Branches and promptly informing the other of the institution of, any material developments concerning, and the outcome of, the same.

 

(d)     Except as provided in Section 8.2, no interest in or right to use Seller’s logo or its name, or any other similar word, name, symbol or device in which Seller has any interest by itself or in combination with any other word, name, symbol or device, or any similar variation of any of the foregoing (collectively, the “Retained Names and Marks”) is being transferred to Buyer pursuant to the transactions contemplated hereby. Unless permitted pursuant to Section 8.2, Buyer shall not after the Closing Date in any way knowingly use any materials or property, whether or not in existence on the Closing Date, that bear any Retained Name or Mark; provided, however, that nothing herein shall prevent Buyer from utilizing the Retained Name or Mark in any materials delivered to customers of the Branches in accordance with this Agreement or de minimus uses within 30 days following the Closing Date. Buyer agrees that Seller shall have no responsibility for claims by third parties arising out of, or relating to, the use by Buyer of any Retained Name or Mark after the Closing Date, and Buyer agrees to indemnify and hold harmless Seller from any and all claims (and all expenses, including reasonable attorneys’ fees and disbursements incurred in connection with any such claim) that may arise out of the use thereof by Buyer.

 

13.2   Merger and Amendment.

 

This Agreement sets out the complete agreement of the parties with respect to the matters discussed in this Agreement, and it supersedes all prior agreements between the parties, whether written or oral, which apply to these matters. No provision of this Agreement may be changed or waived except as expressly stated in a document executed by both parties.

 

13.3   Indemnification.

 

After the Closing Date, and unless otherwise provided in the Agreement:

 

(a)     Buyer shall indemnify and hold Seller harmless from and against all claims, lawsuits, costs (including reasonable counsel fees) and liabilities which arise out of or relate to transactions or operations at the Branches after the Closing Date, and from any loss or damage resulting from any breach by Buyer of any representation, warranty or covenant of Buyer contained in this Agreement. If any claim or lawsuit is made or commenced as to which Seller proposes to demand such indemnification, it shall notify Buyer with reasonable promptness; provided, however, that any failure by Seller to notify Buyer shall not relieve Buyer from its obligations hereunder, except to the extent that Buyer is actually prejudiced by such failure to give notice. Buyer shall have the option of defending such claim or lawsuit with counsel of its own choosing at its own cost and expense and such counsel shall, to the extent consistent with its professional responsibilities, cooperate with Seller and any counsel designated by Seller. Buyer shall be liable for any settlement of any claim or lawsuit against Seller made with Buyer’s written consent, which consent shall not be unreasonably withheld.

 

  

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(b)     Seller shall indemnify and hold Buyer harmless from and against all claims, lawsuits, costs (including reasonable counsel fees) and liabilities which arise out of or relate to transactions or operations at the Branches on or before the Closing Date, and from any loss or damage resulting from any breach by Seller of any representation, warranty or covenant of Seller contained in this Agreement. If any claim or lawsuit is made or commenced as to which Buyer proposes to demand such indemnification, it shall notify Seller with reasonable promptness; provided, however, that any failure by Buyer to notify Seller shall not relieve Seller from its obligations hereunder, except to the extent Seller is actually prejudiced by such failure to give notice. Seller shall have the option of defending such claim or lawsuit with counsel of its own choosing at its own cost and expense and such counsel shall, to the extent consistent with its professional responsibilities, cooperate with Buyer and any counsel designated by Buyer. Seller shall be liable for any settlement of any claim or lawsuit against Buyer made with Seller’s written consent, which consent shall not be unreasonably withheld.

 

(c)     Notwithstanding anything to the contrary contained in this Section 13.3, no indemnification shall be required to be made by either party until the aggregate amount of all such claims by a party exceeds $10,000.

 

13.4   Counterparts.

 

This Agreement may be executed in any number of counterparts, each of which will constitute an original, but all of which taken together shall constitute one and the same instrument.

 

13.5   Exhibits and Schedules.

 

All exhibits and schedules referred to in this Agreement shall constitute a part of this Agreement.

 

13.6   Assignment.

 

This Agreement is not assignable by either party without the written consent of the other party, which shall not be unreasonably withheld.

 

13.7   Headings.

 

The headings contained in this Agreement are inserted for convenience only and shall not affect the meaning of this Agreement or any of its provisions.

 

13.8   Notices.

 

Any notice under this Agreement shall be made in writing and shall be deemed given when delivered in person, when delivered by first class mail postage prepaid (in which case the notice shall be deemed given on the third Business Day following the date on which the notice is postmarked), or when delivered by facsimile transmission, which transmission also shall be sent by first class mail, postage prepaid before the second Business Day following the transmission (in which case the notice shall be deemed given on the day transmitted if transmitted before or during normal business hours or, otherwise, on the next succeeding Business Day) to the parties at the respective addresses set forth below or at such other addresses as each party shall inform the other in writing.

 

	
If to Buyer to: 

	
Robert F. Mangano 

	  	
President and Chief Executive Officer 

	  	
1st Constitution Bank 

	  	
2650 Route 130 

	  	
Cranbury, New Jersey 08512 

 

  

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With a copy to: 

	
Windels Marx Lane & Mittendorf, LLP 

	  	
120 Albany Street Plaza, FL 6 

	  	
New Brunswick, NJ 08901 

	  	
Attention: Robert A. Schwartz, Esq. 

 

 

 

 

	
If to Seller to: 

	
Amboy Bank

	  	
3590 U.S. Highway 9 South

	  	
Old Bridge, NJ 08857

	  	
Attention: George Scharpf

	  	  
	  
	
With a copy to: 

	
 Hill Wallack LLP

	  	
202 Carnegie Center

	  	
P.O. Box 5226

	  	
Princeton, NJ 08543

	  	
Attention: Robert Basco, Esq.

 

13.9   Expenses.

 

Unless specifically stated to the contrary in this Agreement, each party will assume and pay for the expenses it incurs with respect to the purchase and sale of the Assets and assumption of the Liabilities under this Agreement; provided, however, that each party shall pay all fees and expenses associated with obtaining the required regulatory approvals with respect to such party. Each party shall be responsible for any fee payable to any agent, broker or finder acting on its behalf in this transaction.

 

13.10 Public Disclosures.

 

 (a)     Any press release, public notice or notice to local officials regarding this Agreement or the transactions contemplated herein to be made prior to the Closing Date shall be approved in writing by both parties prior to its release, unless the form and content of such release or notice are mandated by law, regulations or regulatory authority or required under the terms of this Agreement. Where required, the approval of either party shall not be unreasonably withheld or delayed. Where approval is not required, the parties, nevertheless agree to confer prior to any such release or notice.

 

(b)     After all applicable regulatory approvals have been received, Seller shall mail a notice to all depositors of the Branches whose accounts are to be assumed for the purpose of advising them of the transactions contemplated by this Agreement. Prior to mailing, Seller shall submit the proposed form of such notice to Buyer for review and approval, which approval shall not be unreasonably withheld. Alternatively, Seller may, at no expense to Seller, fulfill its obligations under this subsection (b) by joining in the notice to be mailed by Buyer pursuant to this Agreement.

 

13.11 Governing Law; Jurisdiction.

 

This Agreement and the legal relations between the parties shall be governed by and construed in accordance with the laws of the State of New Jersey applicable to contracts made and to be performed entirely within the State of New Jersey, except to the extent that federal law shall be deemed to apply.

 

  

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13.12 No Third Party Beneficiaries.

 

The parties intend that this Agreement shall not benefit or create any right or cause of action in or on behalf of any Person other than Seller and Buyer.

 

IN WITNESS WHEREOF, each of the parties to this Agreement has caused this Agreement to be executed by a duly authorized officer as of the date first written on page one of this Agreement.

 

	 	
Amboy Bank (Seller)

	 	  
	 	  
	 	  
	 	/s/ George Scharpf
	 	
By: 

	
George Scharpf

	 	
Its: 

	
President and Chief Executive Officer

	 	  	  
	 	  
	 	
1st Constitution Bank (Buyer)

	 	  
	 	  
	 	  
	 	/s/ Robert F. Mangano 
	 	
By: 

	
Robert F. Mangano 

	 	
Its: 

	
President and Chief Executive Officer 

 

 

 

 

 

 

30

 

 

BRANCH PURCHASE AND ASSUMPTION AGREEMENT

AND

AGREEMENT FOR PURCHASE

 

 

List of Schedules:

 

Schedule 2.1(d) – Furniture, fixtures and equipment

 

Schedule 2.1(h) – Loans

 

Schedule 2.2 – Excluded Deposits

 

Schedule 2.3(a) – Real Property

 

Schedule 2.3(d) – Service Contracts

 

Schedule 2.3(b) – Leases

 

Schedule 2.15(n) – Environmental Reports

 

Schedule 3.1(b) – Policies with respect to Overdrafts

 

Schedule 5.2 – Litigation and Regulatory Proceedings

 

Schedule 5.10 – Brokers

 

Schedule 5.14 – Exceptions to Title

 

Schedule 5.23 – Tenant Delinquencies

 

Schedule 5.29 – Additional Deposit Relationships

 

Schedule 7.3 – Employee Wages

 

 

 

  

  

  

 

List of Exhibits:

 

Exhibit A – Deposits

 

Exhibit B – Closing Statement

 

Exhibit C – Adjusted Closing Statement

 

Exhibit D - FIRPTA affidavit

 

Exhibit E – Deed

 

Exhibit F – Tenant Estoppel Certificates

 

Exhibit G – Bill of Sale

 

Exhibit H – Assignment and Assumption of Service Contracts, Guaranties and Warranties and Other Intangible Property

 

Exhibit I – Closing Certificate

 

Exhibit J – Notice to Tenantsfhk2010contractreplacement.htm

Back to Form 8-K

Exhibit 10.1

MEDICAL SERVICES CONTRACT

 

FLORIDA HEALTHY KIDS CORPORATION

 

AND

 

HEALTHEASE

 

FOR

 

	
Bay, Citrus, Clay, Duval, Martin, Nassau and 

Washington Counties

 

AND

 

WELLCARE HMO/STAYWELL HEALTHPLAN

 

FOR

 

Broward, Miami-Dade, Hernando, Hillsborough, Lee, 

Orange, Osceola, Palm Beach, Pasco, Pinellas and St. 

Lucie Counties

 

Effective Date: October 1, 2010

 

 

 

 

	 October 1, 2010 Replacement Contract         	 	 Page 1 of 76	 	 RR	  FHKC
	 	 	 	 	 CC	  INSURER

                                                                                    

  

  

  

 

	
FLORIDA HEALTHY KIDS CORPORATION 

CONTRACT FOR MEDICAL SERVICES

 

TABLE OF CONTENTS

 

	

SECTION 1

	

DEFINITIONS

	

1-1 

	

Applicant

	

1-2

	

Children’s Health Insurance Program

	

1-3

	

Children’s Health Insurance Program Re-Authorization Act of 2009

	

1-4 

	

Children’s Medical Services network

	

1-5 

	

Commencement Date

	

1-6 

	

Comprehensive Medical Care Services

	

1-7 

	

Contract Year

	

1-8 

	

Co-Payment

	

1-9 

	

Effective Date

	

1-10

	

Emergency medical condition

	

1-11

	

Emergency services

	

1-12

	

Enrollee

	

1-13

	

Executive Director

	

1-14

	

Federally Qualified Health Care

	

1-15

	

Florida Statutes

	

1-16

	

Invitation to Negotiate

	

1-17

	

Primary Care

	

1-18

	

Primary Care Providers

	

1-19

	

Post Stabilization Services

	

1-20

	

Program

	

1-21

	

Providers

	

1-22

	

Rural Health Clinic

	

1-23

	

Service Area

	

1-24

	

Subcontractor

 

	

SECTION 2

	  
	

FLORIDA HEALTHY KIDS CORPORATION RESPONSIBILITIES (FHKC)

	

2-1

	

Coordination of Benefits

	

2-2

	

Enrollee Identification

	

2-3

	

Payment to Insurer

	

2-4

	

Insurer Assignment Process

	

2-5

	

Monitoring by FHKC

 

	

SECTION 3

	

INSURER RESPONSIBILITIES

	

3-1

	

General Responsibilities

	

3-2

	

Access to Care

3-2-1      Enrollment with a Primary Care Provider (PCP) 

3-2-2      Provider Credentialing 

3-2-3      Geographic Access 

3-2-4      Appointment Access 

	 3-3	Failure to Provide Access

 

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3-4       

	
Integrity of Professional Advice

	
3-5       

	
Benefits

	
3-6       

	
Claims Payment

	
3-7       

	
Continuation of Coverage Upon Termination of Contract

	
3-8       

	
Effective Date of Enrollee Coverage

	
3-9       

	
Eligibility

	
3-10      

	
Enrollee Protections from Collection

	
3-11      

	
Enrollment Procedures

	
3-12      

	
Extended Coverage

	
3-13      

	
Fraud and Abuse

3-13-1    Definition of Fraud and Abuse

3-13-2    Fraud Prevention

	
3-14      

	
Grievances and Complaints

	
3-15      

	
Indemnification

	
3-16      

	
Insurance

	
3-17      

	
Lobbying Disclosure

	
3-18      

	
Medical Records Requirements

	
3-19      

	
Membership and Marketing Materials

3-19-1    Use of FHKC and Florida KidCare Marketing Materials

3-19-2    Requirements for Member Materials

	
3-20      

	
Notification Requirements

	
3-21      

	
Premium Rate Provisions

3-21-1    Premium Rate

3-21-2    Additional Requirements for Premium Rates

3-21-3    Experience Adjustment

3-21-4    Annual Experience Adjustment Reporting Requirements

3-21-5    Quarterly Medical Loss Ratio Reporting Requirements

	
3-22      

	
Premium Rate Modifications

3-22-1    Annual Adjustment Request   

3-22-2    Annual Premium Rate Adjustment Denials

3-22-3    Change in Benefit Schedule  

3-22-4    Specialty Fee Arrangements

	
3-23      

	
Program Integrity

3-23-1    Excluded Providers

3-23-2    Physician Identifiers – National Provider Identifier (NPI)

3-23-3    Conflict of Interest Safeguards

	
3-24      

	
Quality Management

3-24-1    Quality Improvement Plans

3-24-2    Quality Improvement Plan Committee

3-24-3    External Quality Review

	
3-25      

	
Records Retention and Accessibility

	
3-26      

	
Refusal of Coverage

	
3-27      

	
Regulatory Filings

	
3-28      

	
Reporting Requirements

	
3-29      

	
Subrogation Rights

	
3-30      

	
Termination of Participation

	
3-31      

	
Use of Subcontractors and Affiliates

	
3-32      

	
Reimbursement Requirements

 

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3-32-1    Out of Network Providers

	  	
3-32-2    Reimbursement to Federally Qualified Health Centers and Rural Health Clinics

	  	  
	
SECTION 4          

	
TERMS AND CONDITIONS

	
4-1           

	
Amendment

	
4-2           

	
Assignment

	
4-3           

	
Attachments

	
4-4           

	
Attorney Fees

	
4-5           

	
Bankruptcy

	
4-6           

	
Change of Controlling Interest

	
4-7           

	
Confidentiality

	
4-8           

	
Conflicts of Interest

4-8-1      Conflicts of Interest

4-8-2      Gift Prohibitions

4-8-3      Non-Solicitation

	
4-9           

	
Effective Dates

	
4-10          

	
Entire Understanding

	
4-11          

	
Force Majeure

	
4-12          

	
Governing Law; Venue

	
4-13          

	
Independent Contractor

	
4-14          

	
Name and Address of Payee

	
4-15          

	
Notice and Contact

	
4-16          

	
Severability

	
4-17          

	
Survival

	
4-18           

	
Termination of Contract

	  	  
	
ATTACHMENTS

	  
	
A.           

	
Certification Regarding Debarment

	
B.           

	
Certification Regarding Lobbying

	
C.           

	
HIPAA\HITECH Business Associate (BA) Agreement

	
C-1          

	
Notification to FHKC of Breach of PHI Form

	
D.           

	
Enrollee Benefit Schedule

	
E.           

	
List of Required Reports

	
F.           

	
Conflict of Interest Disclosure Form

	  	  

 

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CONTRACT TO PROVIDE COMPREHENSIVE MEDICAL SERVICES

 

THIS Contract is entered into between the Florida Healthy Kids Corporation (“FHKC”) and WELLCARE OF FLORIDA, INC. (“INSURER”) and supersedes all prior contracts, negotiations, representations, or agreements either written or oral between the Parties relating to this Contract.

 

SECTION 1       DEFINITIONS

 

As used in this Contract, the term:

 

	
1-1

	
“Applicant”   means   a  parent   or   guardian   of   a   child   or   a   child  whose  disability   of nonage had been removed under chapter 743, F.S. who applies for determination of eligibility for health benefits coverage under ss. 409.810-820 F.S.

 

	
1-2

	
Children’s    Health    Insurance    Program    (“CHIP)”    or    “Title    XXI”    shall    mean    the program created by the federal Balanced Budget Act of 1997 as Title XXI of the Social Security Act and subsequently amended and re-authorized.

 

	
1-3

	
“Children’s Health Insurance Program Re-Authorization Act of 2009” or “CHIPRA” means the federal legislation (Public Law 111-3) approved February 4, 2009 that re-authorized the children’s health insurance program through September 30, 2013.

 

	
1-4

	
“Children’s    Medical    Services    network”    (“CMS    network”)    means    the    statewide managed care system which includes health care providers, as defined in Section 391.021(1), F.S., which is financed by Title XXI. CMS network as used under this Contract does not include any additional programs and services by or through CMS network or which are not funded by Title XXI (such services colloquially and collectively known in the regular course of business as “the CMS Safety Net Program”).

 

	
1-5

	
“Commencement     Date”     means     that     date     on     which     INSURER     commenced performance of Comprehensive Medical Care Services to Enrollees.

 

	
1-6

	
“Comprehensive       Medical       Care       Services”       means       those       services,       medical equipment and supplies to be provided by INSURER in accordance with the standards set by FHKC and further described in Attachment D.

 

1-7           “Contract Year” means October 1 through September 30th.

 

	
1-8

	
“Co-Payment”    means    the    payment    required    of    the    Enrollee    at    the    time    of obtaining service.

 

	
1-9

	
“Effective   Date”   means   the   last   date   on   which   the   last   Party   to   this   Contract signed.

  

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1-10

	
“Emergency   medical   condition”   means   a   medical   condition   manifesting   itself   by acute symptoms of sufficient severity (including severe pain) that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in placing the health of an individual (or, with respect to a pregnant woman, the health of the woman or the unborn child) in serious jeopardy, serious impairments to bodily functions, or serious dysfunction of any bodily organ or part.

 

	
1-11

	
“Emergency   services”   means   covered   inpatient   and   outpatient   services   that   are furnished by a provider that is qualified to furnish these services under Section 1932 (b)(2) and 42 CFR 438.114(a) and that are needed to evaluate or stabilize an emergency medical condition.

 

	
1-12

	
“Enrollee”  means  an  individual   who   meets   FHKC   standards   of   eligibility   and  has been enrolled in the Program.

 

	
1-13

	
“Executive  Director”  means   the  Executive  Director  of  FHKC  as  appointed  by  the FHKC Board of Directors.

 

	
1-14

	
“Federally  Qualified  Health  Center”  (“FQHC”)  means  an  entity  that  is  receiving  a grant under section 330 of the Public Health Service Act, as amended, and Section 1905(1)(2)(B) of the Social Security Act. FQHCs provide primary health care and related diagnostic services and may provide dental, optometric, podiatry, chiropractic and mental health services.

 

	
1-15

	
“Florida   Statutes”   (“F.S.”)   means   the   Florida   Statutes   as   amended  from   time  to time by the Florida Legislature during the term of this Contract.

 

	
1-16

	
“Invitation to Negotiate” (“ITN”) means the  procurement  documents  released by the FHKC to competitively secure comprehensive health care services for FHKC enrollees.

 

	
1-17

	
“Primary      Care”      means      comprehensive,      coordinated      and      readily-accessible medical care including: health promotion and maintenance; treatment of illness or injury; early detection of disease; and referral to specialists when appropriate.

 

	
1-18

	
“Primary  Care  Providers”  means  those  physicians  licensed  in  the  State  of  Florida and included in INSURER’s network that are also board certified in Pediatrics or Family Medicine or who have received an exemption from such standards from FHKC.

 

	
1-19

	
“Post   stabilization   services”   means   covered   services,   related   to   an   emergency medical condition that are provided after an Enrollee is stabilized in order to maintain the stabilized condition, or, under the circumstances described in 42 CFR 438.114(e) to improve or resolve the Enrollee’s condition.

 

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1-20

	
“Program”     means     the     program     administered     by     FHKC     as     created     by     and governed under section 624.91, F.S. and related state and federal laws.

 

	
1-21

	
“Providers”    means    those    providers    set    forth    in    INSURER’s    Response    to    the Invitation to Negotiate (“ITN”) and the Enrollee handbook as from time to time may be amended.

 

	
1-22

	
“Rural  Health  Clinic”  (“RHC”)  means  a  clinic  that is  located in  an area  that  has a health-care provider shortage. An RHC provides primary health care and related diagnostic services and may provide optometric, podiatry, chiropractic and mental health services. An RHC employs, contracts or obtains volunteer services from licensed health care practitioners to provide services.

 

	
1-23

	
“Service     Area”     means     the     designated     geographical     area     within     which     the INSURER is authorized by the Contract to provide services.

 

	
1-24

	
“Subcontractor” means any entity or person with whom INSURER has executed a contract to perform services covered under this Contract that may have otherwise been provided for directly by INSURER.

 

 

*END OF SECTION ONE* 

REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

 

  

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SECTION 2 

FLORIDA HEALTHY KIDS CORPORATION (FHKC) RESPONSBILITIES

 

2-1           Coordination of Benefits

 

FHKC agrees that INSURER may coordinate health benefits with other insurers as provided for in section 624.91 (5)(c), F.S. and this Contract. INSURER also agrees to coordinate benefits with any other insurer under contract with FHKC to provide comprehensive dental care benefits to Enrollees, including the provision of prescription coverage by the Enrollee’s health insurer if prescribed by the Enrollee’s dental provider.

 

If INSURER identifies an Enrollee covered through another health benefits program, INSURER shall notify FHKC.  FHKC shall decide whether the Enrollee may continue coverage through FHKC in accordance with the eligibility standards adopted by FHKC and in accordance with any applicable state or federal laws.

 

2-2           Enrollee Identification

 

FHKC shall promptly furnish to INSURER enrollment information to sufficiently identify Enrollees in the Comprehensive Medical Care Services Plan authorized by this Contract in accordance with the following:

 

	
A.

	
Not less than seven (7) working days prior to the start of the coverage month, FHKC shall provide INSURER a listing of Enrollees eligible for coverage that month.

 

	
B.

	
By the fifth (5th) day after the effective date of coverage, FHKC shall also furnish INSURER a supplemental listing of eligible Enrollees for that coverage month. INSURER shall adjust enrollment retroactively to the first (1st) day of that month.

 

	
C.

	
FHKC may request INSURER accept additional Enrollees after the supplemental listing for enrollment retroactive to the first (1st) of that coverage month. Such additions will be limited to those Enrollees who made timely payments but were not included on the previous enrollment reports. If such additions exceed more than one percent (1%) of that month’s enrollment, INSURER reserves the right to deny FHKC’s request.

 

2-3           Payment to INSURER

 

FHKC will promptly forward the authorized premiums established under Section 3-21 on or before the first (1st) day of each month this Contract is in force beginning October 1, 2010. Premiums are past due if not paid by the fifteenth (15th) day of each month. If premiums are past due, INSURER may terminate coverage under this Contract after giving    FHKC    notice    of    the    intent    to    terminate.Termination    of    coverage    shall    be retroactive to the last day for which premium payment has been made.

 

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2-4           Insurer Assignment Process

 

Upon receipt of an application, FHKC shall assign each potential Enrollee to one of the available plans in the Enrollee’s county of residence based upon factors designated by FHKC. Enrollees will have a ninety (90) day free look period beginning with the Enrollee’s first coverage month with their assigned plan during which time, the Applicant or Enrollee may select another available plan without cause. After this ninety (90) day free look period, Enrollees will be locked into their plan until the Enrollee’s renewal period.

 

FHKC will also notify Enrollees of their right to request disenrollment from their plan and to select another plan outside of the free look period, if such choice is available in their county, as follows:

 

                 A.                For Cause, at the following times:

 

	 	
1.

	
The Enrollee has moved out of INSURER’s service area under this Contract;

 

	 	
2.

	
The Provider does not, because of moral or religious obligations, provide the service that the Enrollee needs;

 

	 	
3.

	
The Enrollee needs related services to be performed at the same time; not all related services are available within the INSURER’s network; and the Enrollee’s primary care provider determines that receiving the services separately would subject the Enrollee to unnecessary risk;

 

	 	
4.

	
The Enrollee has an active relationship with a health care provider who is not on the INSURER’s network but is in the network of another participating health plan that is open to new enrollees;

 

	 	
5.

	
The INSURER no longer participates in the county in which the Enrollee resides;

 

	 	
6.

	
The Enrollee’s health plan is under a quality improvement plan or corrective action plan relating to quality of care with FHKC; or,

 

	 	
7.

	
Other reasons, including but not limited to, poor quality of care, lack of access to services or lack of access to providers experienced in providing care needed by Enrollee.

 

                 B.                 At least every twelve (12) months;

 

	
                 C.

	
When FHKC grants the Enrollee the right to change health plans without cause, FHKC shall determine the Enrollee’s right to change plans on a case- by-case basis.

 

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2-5           Monitoring by FHKC

 

FHKC will directly or indirectly conduct periodic monitoring of the INSURER’s operations for compliance with the provisions of the Contract and applicable federal and state laws and regulations.

 

*END OF SECTION 2* 

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SECTION 3       INSURER RESPONSIBILITIES

 

3-1           General Responsibilities

 

INSURER shall comply with all provisions of this Contract and its amendments, if any, and shall act in good faith in the performance of the Contract’s provisions. The INSURER shall develop and maintain written policies and procedures to implement all provisions of this Contract. INSURER agrees that failure to comply with all provisions of this Contract, applicable federal and state laws and regulations, shall result in the termination of the Contract, in whole or in part, as set forth in this Contract.

 

3-2           Access to Care

 

INSURER shall meet or exceed the appointment and geographic access standards for pediatric medical care existing in the community and as specifically provided in this Contract.

 

INSURER shall maintain a medical network, under staff or contract, sufficient to permit reasonably prompt medical services to all Enrollees in accordance with the terms of this Contract.

 

INSURER may not discriminate for the participation, reimbursement, or indemnification of any provider who is acting within the scope of his or her license or certification under applicable state law, solely on the basis of that license or certification.

 

                 3-2-1         Enrollment with a Primary Care Provider (PCP)

 

INSURER shall offer each Enrollee a choice of Primary Care Providers that meet the credentialing, access and appointment standards of this Contract. INSURER may auto-assign the Enrollee to a PCP that meets these requirements upon notification of enrollment; however if auto-assignment is utilized, the Enrollee must be permitted the opportunity to select another PCP within INSURER’s network that meets these requirements.

 

INSURER shall take into consideration, at a minimum, the Enrollee’s last PCP assignment, if known, closest PCP to Enrollee’s home address, zip code location, sibling assignments, and age.

 

INSURER shall provide each enrollee the following minimum information within five (5) business days of notification of enrollment:

 

	 	
A.

	
Notification of Enrollee’s PCP assignment, including contact information for the PCP;

 

	 	
B.

	
The Enrollee’s ability to select another PCP from INSURER’s network;

 

	 	
C.

	
A provider directory; and,

                                   

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                                    D.               The procedures for changing PCPs.

 

 3-2-2         Provider Credentialing

 

                                    A.              Primary Care Providers

 

INSURER’s primary care Provider network shall include only board certified pediatricians and family practice physicians or physician extenders working under the direct supervision of a board certified practitioner to serve as primary care physicians in its provider network.

 

    All primary care physicians must provide covered immunizations to Enrollees.

 

INSURER may request that an individual Provider be granted an exemption to this requirement by making such a request in writing to FHKC and submitting the proposed Provider’s curriculum vitae and stating a reason why the Provider should be granted an exception. Such requests will be reviewed by FHKC on a case by case basis and a written response will be made to INSURER on the outcome of the request.

 

A medical home, as defined by the American Academy of Pediatrics, with a board certified pediatrician or family practice physician or an exemption provider, must be identified for each Enrollee.

 

B.               Facility Standards

 

Facilities used for Enrollees shall meet applicable accreditation and licensure requirements and meet facility regulations specified by the Agency for Health Care Administration.

 

C.               Behavioral Health Care and Substance Abuse Providers

 

INSURER must maintain a provider network either directly or indirectly that includes qualified providers for child and adolescent substance abuse and behavioral health care services.

 

INSURER and its subcontractors agree to adopt section 394.491, F.S. and Chapter 397, F.S. as guiding principles in the delivery of services and supports to Enrollees with mental health and substance abuse disorders.

 

INSURER shall ensure that all direct behavioral health services provided to children and adolescents under this Contract are delivered by individuals or entities who meet the minimal licensure and credentialing standards set forth in statutes and rules of the Department of Children and Family Services, the Department of Health, and the Division of Medical   Quality  Assurance  of  the   Agency  for   Health  Care  Administration,

  

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                                    pertinent to the treatment and prevention of mental health and substance abuse disorders in children and adolescents.

 

INSURER, at a minimum, shall include within its subcontracted behavioral health care resources a psychiatric hospital licensed under Chapter 395, F. S., a crisis stabilization unit licensed under Chapter 394, F. S., and an addiction receiving facility, licensed under Chapter 397, F. S., which an enrolled child or adolescent may access as needed.

 

INSURER’s provider network shall also include board certified child psychiatrists or practitioners licensed to practice medicine, osteopathic medicine, psychology, clinical social work, mental health counseling, or marriage and family therapy with a minimum of 2 (two) years full-time, post graduate, paid experience providing mental health and/or substance abuse services in a setting that specializes in providing mental health and/or substance abuse services to children and/or adolescents.

 

3-2-3          Geographical Access

 

A.              Primary Care Medical Providers

 

Geographical access to board certified family practice physicians, pediatric physicians, primary care providers or Advanced Registered Nurse Practitioners (ARNP), experienced in child health care, of approximately twenty (20) minutes driving time from residence to Provider. This driving time limitation may be reasonably extended in those areas where such limitation    with    respect    to    rural    residences    is    unreasonable.In    such instance, INSURER shall provide access for urgent care through contracts with the closest available Providers.

 

B.               Specialty Care Medical Providers

 

Specialty medical services, ancillary services and hospital services are to be available within sixty (60) minutes driving time from Enrollee’s residence to Provider. The driving time limitation may be reasonably extended or waived in those areas where such limitation with respect to rural residences is unreasonable.

 

3-2-4          Appointment Standards

 

A.              Definitions

 

For the purposes of this Section, the following definitions shall apply:

 

1.                “Emergency care” means the level of care required for the treatment of an injury or acute illness that, if not treated immediately, could reasonably result in

                   serious or permanent damage to the Enrollee’s health.

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2.

	
“Urgently needed care” or “Urgent Care” means the level of care that is required within a twenty-four (24) hour period to prevent a condition from requiring emergency care.

 

	 	
3.

	
“Routine care” means the level of care can be delayed without anticipated deterioration in the Enrollee’s condition for a period of seven (7) calendar days.

 

	 	
4.

	
“Routine physical examinations” means the Enrollee’s annual physical examination by the Enrollee’s primary care provider in accordance with the schedule established by the American Academy of Pediatrics.

 

B.               Appointment Access

 

INSURER shall provide timely treatment for Enrollees in accordance with the following standards:

 

1.                Emergency care shall be provided immediately.

 

	 	
2.

	
Urgently needed care shall be provided within twenty-four (24) hours.

 

	 	
3.

	
Routine care of Enrollees who do not require emergency or urgent care shall be provided within seven (7) calendar days of the Enrollee’s request for services.

 

	 	
4.

	
Routine physical examinations shall be provided within four (4) weeks of the Enrollee’s request.

 

5.                Follow-up care shall be provided as medically appropriate.

 

By utilization of the foregoing standards, FHKC does not intend to create standards of care or access to care different than those deemed acceptable within INSURER’s service area. Rather, FHKC intends that INSURER and its Providers timely and appropriately respond to Enrollee needs, as they are presented, in accordance with standards of care existing within the service area. In applying these standards, INSURER and Provider shall give due regard to the level of discomfort and anxiety of the Enrollees and their families.

 

3-3          Failure to Provide Access

 

In the event FHKC determines that INSURER or its Providers, has failed to meet the access standards established in this Contract, FHKC shall notify INSURER of its non-compliance. Such notice may be provided via facsimile or other means, specifying the failure in such detail as will reasonably allow INSURER to investigate and respond within

 

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five (5) business days for non-emergency care. Response to emergency or urgent non-compliance issues must be immediate upon receipt of notice.

 

If any such failure to provide access constitutes a material breach of this Contract, as determined by FHKC in its sole discretion, such material breach shall entitle FHKC to unilaterally terminate this Contract. Termination for material breach shall proceed pursuant to Section 4-18(C).

 

Upon FHKC identifying a material breach by INSURER, to address the ongoing health care needs of Enrollees, FHKC may direct Enrollees to seek such services outside of INSURER’s Provider network. Should FHKC direct such action, INSURER shall be financially responsible for all such services.

 

3-4          Integrity of Professional Advice to Enrollees

 

INSURER must comply with 42 CFR Section 457.985, Code of Federal Regulation which prohibits INSURER from interfering with the advice of health care professionals to Enrollees and requires that professionals engaged in the performance of INSURER’s duties under this Contract give information about treatments to Enrollees and their families as provided by law.

 

INSURER may not prohibit, or otherwise restrict, a health care professional, acting within the lawful scope of practice, from advising or advocating on behalf of an Enrollee who is his or her patient:

 

	 	 ▪	For the Enrollee’s health status, medical care or treatment options, including any alternative treatment that may be self-administered.
	 	 ▪	For any treatment the Enrollee needs in order to decide among all relevant treatment options.
	 	 ▪	For the risks, benefits, and consequences of treatment or non-treatment.
	 	 ▪	For the Enrollee’s right to participate in decisions regarding his or her health care, including the right to refuse treatment, and to express preference about future treatment decisions.

 

Likewise, INSURER agrees to comply with 42 CFR, Section 457.985, and any other applicable federal or state laws and regulations related to physician incentive plans including any disclosure requirements related to such incentive plans.

 

3-5          Benefits

 

INSURER agrees to make its provider network available to Enrollees in those counties designated under Section 3-21 and to provide the Comprehensive Medical Care Services in this Contract.

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INSURER shall not avoid costs for services covered under this Contract by referring Enrollees to publicly supported health care resources and requiring the Enrollee to utilize those resources.

 

INSURER may not object or otherwise refuse to provide a benefit or service covered under this Contract on moral or religious grounds.

 

3-6          Claims Payment

 

INSURER will pay any claims from its offices located at 8735 Henderson Road, Ren 2, Tampa, Florida 33634 or any other designated claims office located in its service area. INSURER will pay clean claims filed within thirty (30) business days or request additional information of the claimant necessary to process the claim.

 

3-7          Continuation of Coverage upon Termination of this Contract

 

INSURER agrees that, upon termination of this Contract for any reason, unless instructed otherwise by FHKC, it will continue to provide inpatient services to Enrollees who are then inpatients until such time as Enrollees have been appropriately discharged. However, INSURER shall not be required to provide such extended benefits beyond twelve (12) calendar months from the date the Contract is terminated.

 

If INSURER terminates this Contract at its sole option and through no fault of FHKC, and if on the date of termination an Enrollee is totally disabled and such disability commenced while coverage was in effect, that Enrollee shall continue to receive all benefits otherwise available under this Contract for the condition under treatment which caused such total disability until the earlier of:

 

A.              Expiration of the contract benefit period for such benefits;

 

	 	
B.

	
Determination   by   the   Medical   Director   of   INSURER   that   treatment   is   no longer medically necessary;

 

	 	
C.

	
Expiration     of     twelve     (12)     months     from     the     date     of     termination     of coverage; or,

 

	 	
D.

	
Election by a succeeding carrier to provide replacement coverage without limitation as to the disabling condition.

 

However, these benefits will be provided only so long as the Enrollee is continuously totally disabled and only for the illness or injury which caused the total disability.

 

For purposes of this section, an Enrollee who is “totally disabled” shall mean an Enrollee who is physically unable to work, as determined by the Medical Director of INSURER, due to an illness or injury at any gainful job for which the Enrollee is suited by education, training, experience or ability. Pregnancy, childbirth or hospitalization in and of themselves does not constitute “total disability”. In the case of maternity coverage, when   an   Enrollee   is   eligible   for   such   coverage   and   when   not   covered   by   a   succeeding

 

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carrier, a reasonable period of extension of benefits shall be granted. The extension of benefits shall be limited to the maternity services and newborn care benefits provided under this Contract and shall not be based on total disability.

 

3-8      Effective Date of Enrollee Coverage

 

Coverage for every Enrollee shall become effective at 12:01 a.m. EST/EDT, on the first day of the Enrollee’s first coverage month, as determined by FHKC.

 

3-9      Eligibility

 

INSURER shall accept those Enrollees which FHKC has determined meet the Program’s eligibility requirements.

 

A.           Program Eligibility

 

The following eligibility criteria for participation in the Program must be met:

 

	 	
1.

	
Enrollees must be children who are age five (5) years through eighteen (18) years. Age eligibility shall end on the last day of the month in which the Enrollee attains age nineteen (19). Age eligibility is based on the Enrollee’s age as of the first day of the coverage month.

 

	 	
2.

	
Enrollees must meet the eligibility criteria established under section 624.91, F.S. and as implemented by the FHKC Board of Directors.

 

	 	
3.

	
Eligible Applicants may enroll during time periods established by FHKC Board of Directors in accordance with section 624.91, F.S.

 

	 	
4.

	
Determination of eligibility for the Program is made solely by FHKC.

 

            B.            Requests for Eligibility Review

 

If INSURER has reasonable cause to believe that an Enrollee is not eligible for the Program because that Enrollee should in fact be placed in a different state or federal program for such services which eligibility would render that Enrollee ineligible for the Program, INSURER may request in writing that FHKC review the eligibility of that Enrollee. FHKC shall ensure that all records and findings maintained by FHKC concerning a particular eligibility determination will be made available to INSURER with reasonable promptness to the extent permitted under sections 624.91 and 409.821, F.S. regarding confidentiality of information held by FHKC and the Florida KidCare program.

 

            C.            Eligibility Dispute Process

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If after review under this section, INSURER and FHKC dispute whether or not an Enrollee is eligible for the Program, upon payment of a one hundred dollar ($100.00) fee to FHKC from INSURER, FHKC will seek an independent determination of eligibility from the entity administering the comparable federal or state insurance program for which INSURER alleges the Enrollee is eligible. Both INSURER and FHKC agree to be bound by the response of the entity receiving the request under this provision. INSURER and FHKC agree that the rights and remedies provided under this section shall be exclusive as to eligibility disputes.

 

If an Enrollee is determined not to be eligible for the Program and INSURER included that Enrollee in an actuarial memorandum to support a premium or rate modification request under this Contract, then INSURER shall submit to FHKC a revised supporting actuarial memorandum which excludes that Enrollee.

 

3-10    Enrollee Protections from Collection

 

Neither INSURER nor any representative of INSURER shall collect or attempt to collect from an Enrollee any money for services covered by the Program or any monies owed by FHKC to INSURER.

 

If the Enrollee receives a covered service under this Contract in accordance with the Covered Benefits under Attachment D from a Provider but the Provider is not paid by INSURER, the Enrollee shall not be held liable for monies owed to the Provider by the INSURER. If the Provider is paid less than billed charges, neither the Provider nor the INSURER may hold the Enrollee liable for the rest of the fee except for any co-payment as specified in Attachment D of this Contract.

 

3-11    Enrollment Procedures

 

Within five (5) business days of receipt of an enrollment file specified under Section 2-2, INSURER shall provide each Enrollee with an enrollment package. The enrollment package shall include, at a minimum, the following items:

 

	 	
A.

	
A membership card displaying the Enrollee’s name, identification number and effective date of coverage as well as any other information required by state or federal law.

 

	 	
B.

	
An Enrollee handbook that complies with any federal or state requirements and has been approved by FHKC. The handbook shall include the following minimum elements:

 

	 	 ▪	 A description of how to access services including any requirements for prior authorization of any services, including specialty care.
	 	 ▪	 A listing of benefits and any associated Co-Payment requirements. The description of the benefits and co-payments must be in

 

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sufficient detail as to the amount, duration and scope to ensure that Enrollees understand the benefits covered by this Contract. Co-Payment requirements shall specifically explain that in the event the Enrollee fails to pay the required Co-Payment, INSURER may decline to provide non-emergency or non-urgently needed care unless the Enrollee meets the conditions of waiver of Co-Payments described in Attachment D.

 

	 	 ▪	A description of what constitutes an emergency medical condition, emergency services and post-stabilization services and that prior authorization is not required for emergency services. The handbook should also cover the locations of emergency settings and the process for obtaining services, including use of the local 911 service.
	 	 	 
	 	 ▪	INSURER’s grievance process; and,
	 	 	 
	 	 ▪	Enrollee’s Rights and Responsibilities and Enrollee Protections.

 

	 	
C.

	
A current listing of all participating Primary Care Providers, specialists and other medical providers that includes the following minimum information for each primary care physician, specialist and hospital:

 

	 	 ▪	Address and Telephone Number;
	 	 	 
	 	 ▪	
Office hours;

	 	 	 
	 	 ▪	Any age limitations
	 	 	 
	 	 ▪	Non-English languages spoken; and,
	 	 	 
	 	 ▪	Whether the provider is accepting new patients.

 

Any cancellation of Enrollees from coverage shall be processed timely by INSURER upon receipt of the monthly enrollment files. INSURER will provide written notice of the effective date of cancellation, by regular mail, to each affected Enrollee within five (5) business days of receipt of such information.

 

INSURER must also comply with the guidance issued by the Office of Civil Rights of the United States Department of Health and Human Services (“Policy Guidance on Title VI Prohibition against National Origin Discrimination as it Effects Persons with Limited English Proficiency) regarding the availability of information and assistance for persons with limited English proficiency.

 

3-12    Extended Coverage

 

Except for terminations resulting from fraud, INSURER agrees to offer individual coverage to all terminated Enrollees without regard to health condition status.

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3-13           Fraud and Abuse

 

                    3-13-1                      Definition of Fraud and Abuse

 

The  following  acts  by  a  FHKC  Applicant,  Enrollee  or  other  person  are considered Fraud:

 

	 	
A.

	
Knowingly failing by an false statement, misrepresentation, impersonation, or other fraudulent means, to disclose any material fact necessarily used in making the determination as to such person’s qualification to receive Comprehensive Medical Care Services coverage under the Program;

 

	 	
B.

	
Knowingly failing to disclose a change in circumstances in order to obtain or continue to receive Comprehensive Medical Care Services under the Program to which he or she is not entitled or in an amount larger than that to which he or she is entitled.

 

	 	
C.

	
Using or attempting to use, transfer, acquire, traffic, alter, forge, or possess a FHKC identification card to which he or she is not entitled.

 

	 	
D.

	
Committing any act subject to prosecution under Section 409.814, F.S.

 

	 	
E.

	
Aiding or abetting another person in the commission of any act under this definition.

 

3-13-2                      Fraud Prevention

 

INSURER shall have in place appropriate preventative and detection measures which ensure against fraud and abuse as defined in this Contract that complies with all state and federal laws and regulatory requirements, including the applicable provisions of 42 CFR 438.608, 42 CFR 4559(a)(2) and Section 409.814, F.S.

 

FHKC shall have access to monitor such fraud and abuse prevention activities conducted by INSURER. If INSURER obtains information demonstrating or indicating fraud by subcontractors, Applicants or Enrollees, INSURER shall report its findings to FHKC for investigation.

 

At a minimum, INSURER’s fraud and abuse program shall include:

 

                                     A.             A compliance officer with sufficient experience in health care, who shall    have    the   responsibility    and   authority   for   carrying   out    the

 

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                                                      provisions    of    the    Fraud    and    Abuse    policies    of    procedures    of INSURER.

 

	 	
B.

	
Adequate staffing and resources to investigate unusual incidents and to develop corrective action plans to assist INSURER with preventing and detecting potential Fraud and Abuse activities.

 

	 	
C.

	
Submission of INSURER’s Fraud and Abuse policies to FHKC within thirty (30) calendar days of initial execution of this Contract and then annually thereafter by July 1st.

 

	 	
D.

	
Internal controls and policies and procedures that are designed to prevent, detect, and report known or suspected Fraud and Abuse activities.

 

	 	
E.

	
Provisions for the investigation and follow-up of any reports notification to FHKC of, including but not limited to, any fraud by subcontractors, Applicants, or Enrollees.

 

	 	
F.

	
Cooperation in any investigation by FHKC, State, or Federal entities or any subsequent legal action that may result from such an investigation.

 

	 	
G.

	
Non-retaliation policies against any individual that reports violations of INSURER’s Fraud and Abuse policies and procedures or suspected Fraud and Abuse.

 

	 	
H.

	
Distribute   written   Fraud   and   Abuse   policies   to   its   employees   in accordance with Section 6032 of the federal Deficit Reduction Act of 2005, including the rights of employees to be protected as whistleblowers.

 

3-14           Grievances and Complaints

 

INSURER agrees to provide a grievance process for all Enrollees. Any such grievance process shall be governed by applicable federal and state laws and regulations.

 

INSURER shall provide to FHKC a copy of INSURER’s current grievance process for Enrollees upon execution of this Contract and then annually by July 1st. Additionally, INSURER shall provide FHKC with advance notice of any proposed changes to the process. Such changes must be reviewed and approved by FHKC prior to implementation.

 

INSURER shall maintain a record of all formal and informal grievances that includes the date, name, nature and disposition of each grievance. INSURER shall provide FHKC with a quarterly report of all grievances and complaints received by INSURER involving Enrollees. The report shall list the number of grievances received during the quarter and the disposition of those grievances.

 

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INSURER   shall   also   inform   FHKC   of   any   grievances   that   are   referred   to   the   Statewide Subscriber Assistance Panel or its successor prior to their presentation at the panel.

 

A provider, acting on behalf of the Enrollee and with the Enrollee’s written consent, may also file an appeal.

 

3-15           Indemnification

 

INSURER agrees to indemnify and hold FHKC harmless from any losses resulting from negligent, dishonest, fraudulent or criminal acts of INSURER, its officers, its directors or its employees, whether acting alone or in collusion with others.

 

INSURER shall indemnify, defend and hold FHKC and its officers, employees and agents harmless from all claims, suits, judgments or damages, including court costs and attorney fees, arising out of negligence or intentional torts by INSURER.

 

INSURER shall hold Enrollees harmless from all claims for payments of covered services, except Co-Payments, including court costs and attorney fees arising out of or in the course of this Contract pertaining to covered services. In no case will FHKC or Enrollees be liable for any debts of INSURER.

 

INSURER agrees to indemnify, defend and hold harmless FHKC, its officers, agents and employees from:

 

	 	
A.

	
Any claims or losses attributable to a service rendered by any subcontractor, person or firm performing or supplying services, materials, or supplies in connection with the performing or supplying of services, materials or supplies in connection with the performance of this Contract regardless of whether or not FHKC knew or should have known of such improper service, performance, materials or supplies.

 

	 	
B.

	
Any failure of INSURER, its officers, employees or subcontractors to observe Florida law, including but not limited to labor laws and minimum wage laws, regardless of whether FHKC knew or should have known of such failure.

 

	 	
 

	
With respect to the rights of indemnification given herein, INSURER agrees to provide FHKC, if known to INSURER, timely written notice of any loss or claim and the opportunity to mitigate, defend and settle such loss or claim as a condition of indemnification. With respect to the right of indemnification given herein, FHKC agrees to provide to INSURER, if known, timely written notice of any loss or claim and the opportunity to mitigate, defend and settle such loss or claim as a condition to indemnification.

 

  

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3-16           Insurance

 

INSURER shall not commit any work in connection with this Contract until it has obtained all types and levels of insurance required and approved by the appropriate state regulatory agencies. The required insurance includes but is not limited to worker’s compensation, liability, fire insurance and property insurance. FHKC shall be provided proof of coverage of insurance by a certificate of insurance within ten (10) business days of contract execution. Continuing evidence of insurance coverage must be provided to FHKC by July 1st  of each year.

 

FHKC shall be exempt from and in no way liable for any sums of money that may represent a deductible in any insurance policy. The payment of such deductible shall be the sole responsibility of INSURER or subcontractor holding such insurance. The same holds true of any premiums paid on any insurance policy pursuant to this Contract. Failure to provide proof of coverage shall constitute a material breach under Section 4-18(C).

 

3-17           Lobbying Disclosure

 

INSURER shall comply with applicable state and federal requirements for the disclosure of information regarding lobbying activities of INSURER, subcontractors or any authorized agent. Certification forms shall be filed by INSURER certifying that no state or federal funds have been or will be used in lobbying activities at contract execution and updated annually each July 1st.

 

3-18           Medical Records Requirements

 

INSURER shall require Providers to maintain medical records for each Enrollee under this Contract in accordance with applicable federal and state law.

 

	 	
A.

	
Medical Quality Review and Audit

 

	 	
INSURER is subject to an annual independent external medical quality review or other performance review during this Contract term. The independent auditor’s report will include a written review and evaluation of care provided to Enrollees. INSURER agrees to cooperate in all evaluation and review efforts conducted or authorized by FHKC.

 

	 	
B.

	
Privacy of Medical Records

 

	 	
INSURER shall maintain all individual medical records with confidentiality and in accordance with state and federal guidelines. INSURER agrees to abide by all applicable state and federal laws governing the confidentiality of minors and the privacy of individually identifiable health information. INSURER’s policies and procedures for handling medical records and protected health information shall comply with the Health Insurance Portability and Accountability Act of 1996 (HIPAA), as amended from time to time, and shall include provisions for when an

 

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Enrollee’s protected health information may be used or disclosed without consent or authorization.

 

	 	
C.

	
Requests by Enrollees for Medical Records

 

	 	
INSURER will guarantee that each Enrollee or Applicant for the Enrollee may request and receive a copy of records and information pertaining to that Enrollee in a timely manner. Additionally, the Enrollee or Applicant may request that such records be corrected or supplemented.

 

3-19           Membership and Marketing Materials

 

                    3-19-1    Use of FHKC and Florida KidCare Marketing Materials

 

INSURER shall not utilize the marketing materials, logos, trade names, service marks or other materials belonging to FHKC without FHKC’s written consent. Written authorization must be received for each individual use or activity.

 

INSURER also may not utilize any marketing materials, logos, trade names, service marks or other materials identifying the Florida KidCare program without obtaining prior written authorization from the state agency holding the rights to such names or marks.

 

3-19-2    Requirements for Member Materials

 

INSURER is responsible for all preparation, cost and distribution of member handbooks, plan documents and other membership materials, as well as orientation for Enrollees. Information must be provided at a reading level of not greater than a fourth (4th) grade comprehensive level and be provided in a manner and format that is easily understood. Suggested reference materials to determine whether the written materials meet this requirement are:

 

	 	 ▪	Fry readability index;
	 	 	 
	 	 ▪	
PROSE The Readability Analyst (software developed by Education Activities, Inc.);

	 	 	 
	 	 ▪	Gunning FOG Index;
	 	 	 
	 	 ▪	McLaughlin SMOG Index;
	 	 	 
	 	 ▪	The Flesch-Kincaid Index; and/or
	 	 	 
	 	 ▪	Other software approved by FHKC.

 

INSURER shall make all written materials available in alternative formats and in a manner that takes into consideration the Enrollee’s special needs, including those who are visually impaired or have limited reading proficiency. INSURER shall

 

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notify all Enrollees that information is available in alternative formats and how to access those formats.

 

INSURER   shall   also   include   information   on   how  Enrollees   access   other   program services not covered by INSURER such as dental services.

 

A.            Cultural Competency

 

Materials must be appropriate to the population served including, but not limited to, alternate language access in accordance with federal requirements, and must be unique to the Program.

 

In accordance with 42 CFR 438.206, INSURER shall have a comprehensive written Cultural Competency Plan describing how INSURER will ensure that services are provided in a culturally competent manner to all Enrollees, including those with limited English proficiency. The Cultural Competency Plan must describe how the INSURER, its providers, employees and systems will effectively provide services to people of all cultures, races, ethnic backgrounds, and religions in a manner that recognizes, affirms, and respects the worth of the Enrollee and protects and preserves the dignity of each.

 

INSURER shall submit its initial plan under this Section upon execution of this Contract for approval by FHKC and annually thereafter by July 1st.

 

B.             Other Languages and Translation Services

 

INSURER is required to provide oral translation services of information to any Enrollee who speaks any non-English language regardless of whether an Enrollee speaks a language that meets the threshold of a prevalent non-English language. INSURER is required to notify Enrollees of the availability of oral interpretation services and to inform them of how to access such services. There shall be no charge to the Enrollee for translation services.

 

INSURER shall make all written materials available in English, Spanish, and all other appropriate foreign languages. The appropriate foreign languages comprise all languages in INSURER’s counties covered by this Contract spoken by approximately five percent (5%) or more of the INSURER’s total FHKC population.

 

C.             Minimum Requirements for Member Notifications

 

At a minimum, INSURER shall ensure that all Enrollees are made aware of the following:

 

1.           The rights and responsibilities of both the Enrollee and INSURER;

  

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2.           The role of the PCP;

 

3.           What to do in an emergency or urgent medical situation;

 

	 	
4.

	
How to request a Grievance, Appeal or contact the Subscriber Assistance Panel;

 

5.           How to report Fraud and Abuse;

 

	 	
6.

	
Procedures for referrals and prior authorizations, including prescription coverage;

 

	 	
7.

	
How to acquire behavioral health and substance abuse services;

 

	 	
8.

	
Any additional telephone numbers or contact information for reaching INSURER; and,

 

	 	
9.

	
Eligibility compliance requirements under the Program, specifically for payment of premiums and renewal.

 

D.            FHKC Approval and Review

 

All Enrollee handbooks, forms and member materials must be approved by FHKC prior to distribution. In addition, INSURER agrees to annually provide FHKC with a copy of all previously approved membership materials, including the Cultural Competency Plan, for review by July 1st.

 

E.             Direct Marketing Restrictions

 

INSURER may engage in marketing activities subject to the prior written review and approval of any such events, materials and activities by FHKC. INSURER will submit scheduled events at least one (1) week in advance of the event if materials for such event have not been previously approved by FHKC. All other events must be approved at least twenty-four (24) hours in advance. INSURER will use only marketing materials which have been approved in writing by FHKC.

 

INSURER may also implement retention efforts directed at its current Enrollees subject to the review and written approval of FHKC.

 

In any marketing activities, INSURER is required to distribute any approved materials to its entire service area as covered by this Contract. INSURER may not seek to influence enrollment in conjunction with the sale or offering of any private insurance and the INSURER may not engage, directly or indirectly, in door-to-door, telephone or any cold-call marketing activities.

 

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F.               Use of Insurer’s Name

 

INSURER consents to the use of its name in any marketing and advertising or media presentations describing FHKC which are developed and disseminated by FHKC. INSURER reserves the right to review and concur in any such marketing materials prior to dissemination.

 

3-20           Notification Requirements

 

           A.     Immediate Notification Requirements

 

            INSURER shall immediately notify FHKC in writing of:

 

	 	
1.

	
Any judgment, decree or order rendered by any court of any jurisdiction or Florida administrative agency enjoining INSURER from the sale or provision of services under Chapter 641, Part II, F.S.

 

	 	
2.

	
Any petition by INSURER in bankruptcy or for approval of a plan of reorganization or arrangement under the Bankruptcy Act or Chapter 631, Part I, F.S. or an admission seeking relief provided therein.

 

	 	
3.

	
Any petition or order of rehabilitation or liquidation as provided in Chapter 631 or 641, F.S.

 

                            4.     Any order revoking INSURER’s Certificate of Authority.

 

	 	
5.

	
Any administrative action taken by the Department of Financial Services, Office of Insurance Regulation or the Agency for Health Care Administration in regard to INSURER.

 

	 	
6.

	
Any medical malpractice action filed in a court of law in which an Enrollee is a party (or in which Enrollee’s allegations are to be litigated).

 

	 	
7.

	
The filing of an application for change in ownership that is greater than five percent (5%) with the Florida Department of Financial Services or the Office of Insurance Regulation.

 

	 	
8.

	
Any pending litigation or commencement of legal action involving INSURER in which liability for or INSURER’s obligation to pay could exceed five hundred thousand dollars ($500,000.00) or ten percent (10%) of INSURER’s surplus.

 

                    B.    Monthly Notification Requirements

 

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INSURER shall inform FHKC monthly of any changes to the provider network that differ from the network presented in the original bid proposal, including discontinuation of any primary care providers or physician practice associations or groups with Enrollees on its panels. FHKC may require INSURER to provide FHKC with evidence that its provider network continues to meet the access to care requirements under this Contract.

 

3-21            Premium Rate Provisions

 

                    3-21-1    Premium Rate

 

The premium rate charged for the provision of Comprehensive Medical Care Services for October 1, 2010 through September 30, 2011 shall be as follows:

 

As to HEALTHEASE:

 

	

COUNTY

	

PER MEMBER PER MONTH

	

Bay

	

$106.29

	

Citrus

	

$103.00

	

Clay

	

$98.82

	

Duval

	

$84.04

	

Martin

	

$101.56

	

Nassau

	

$107.15

	

Washington

	

$109.04

 

As to STAYWELL:

 

	

COUNTY

	

PER MEMBER PER MONTH

	

Broward

	

$136.75

	

Miami-Dade

	

$113.47

	

Hernando

	

$106.55

	

Hillsborough

	

$94.37

	

Lee

	

$115.43

	

Orange

	

$121.14

	

Osceola

	

$92.84

	

Palm Beach

	

$95.12

	

St. Lucie

	

$78.52

 

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The premium rate charged for the provision of Comprehensive Medical Care Services for January 1, 2011 through September 30, 2011 shall be as follows:

 

As to STAYWELL:

 

	

COUNTY

	

PER MEMBER PER MONTH

	

Pasco

	

$99.13

	

Pinellas

	

$94.18

 

3-21-2    Additional Requirements for Premium Rates

 

A.           Minimum Medical Loss Ratio

 

The minimum medical loss ratio shall be eighty-five (85%) percent.

 

The medical loss ratio calculations shall include rebates, discounts or other adjustments to the medical costs received by the INSURER.

 

INSURER shall also identify in its submission all medical expense payments to affiliated and related companies and explain any such affiliations.

 

FHKC may issue additional written guidance on the definition of medical expenses to INSURER. Federal and state regulations on the definition of medical loss ratios may also be applicable, once adopted. Should such guidelines be applied, FHKC shall notify INSURER in writing.

B.            Maximum Administrative Component

 

The maximum administrative component shall not exceed fifteen (15%) percent. INSURER shall identify what components and subcomponents have been included in its administrative expenses. FHKC may provide additional written guidance on the definition of administrative expense. Federal and state regulations on the definition of administrative expense may also be applicable once adopted. Should such guidelines be applied, FHKC shall notify INSURER in writing.

 

                    3-21-3    Experience Adjustment

 

In the event that the actual medical loss ratio (MLR) that the INSURER achieves for this Contract is better than eighty five percent (85%), calculated in the same manner as the premium development and allocation methodology utilized in INSURER’s   ITN   response,   INSURER   shall   return   to   FHKC   a   share   of   the   dollar

 

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difference between the INSURER’s actual MLR for said period and the projected minimum MLR of eighty five percent (85%) based on the following tiered Experience Adjustment schedule:

 

	 	
A.

	
Tier I:    MLR of 84.99 to 82.00 Percent:

 (84.99% to 82.00%)

	
50% to FHKC

 

 

	 	
B.

	
Tier II:    MLR of 81.99 Percent or Less:

 (81.99% or less)

	
100% to FHKC

 

 

If INSURER’s actual MLR is less than eighty-five percent (85%) during a Contract Year, but not lower than eighty-two percent (82%), INSURER shall return to FHKC fifty percent (50%) of the difference between the actual MLR and the projected minimum MLR of eighty-five percent (85%), pursuant to sub-paragraph 3-21-3A Tier I.

 

If INSURER’S actual MLR is less than eighty-two percent (82%) during any Contract Year, INSURER shall return to FHKC the sum of the Tier I and Tier II experience adjustment pursuant to sub- paragraph 3-21-3A and B, as follows:

 

	 	
1)

	
fifty percent (50%) of the difference between INSURER’s actual MLR of eighty-two percent (82%) and the minimum MLR of eighty-five percent (85%), and

 

	 	
2)

	
one hundred percent (100%) of the difference between INSURER’s actual MLR and the Tier II maximum MLR of eighty-two percent (82%).

 

The Experience Adjustment calculations of Section 3-21-3, Experience Adjustment, shall be based on a twenty-four (24) month period beginning on October 1, 2009 and ending on September 30, 2011. The calculations are based on a single contract year for all other contract periods.

 

3-21-4    Annual Experience Adjustment Reporting Requirements

 

For the Annual Experience Adjustment Report, INSURER shall provide FHKC with a written copy of its findings for each Contract year by April 1st (first). If any payments are due under this provision, INSURER shall forward such payment to FHKC no later than May 1st. INSURER may be subject to audit or verification by FHKC or its designated agents and shall maintain all records necessary to conduct such examinations throughout the contract term.

 

Any estimates included in such reports must be self-correcting such as for incurred by not yet realized claims (IBNR), as determined by FHKC, or if not determined to be self-correcting. FHKC shall require INSURER to conduct a true-up of medical loss ratio calculations twenty-four (24) months after each contract period or experience adjustment reporting period where such an event has occurred.    If    any    payments    are    due    under    this    final    true-up,    INSURER    shall

 

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                    forward   such   payment   to   FHKC   no   later   than   November   1st   of   the   end   of   that twenty-four month period.

 

Submission for any Experience Adjustment report shall be in a format established by FHKC and include sufficient documentation, as determined by FHKC, to support the medical loss ratio calculation and to allow FHKC to evaluate the component and subcomponent expenses that have been included in the calculations.

 

FHKC shall determine the adequacy of the information supplied under this section and whether or not the calculation has been accurately performed.

 

After receipt of INSURER’S submission, FHKC may request that the calculation also be provided on a county by county basis.

 

INSURER’S submission must include the following minimum information:

 

Insurer Name: 

Contract Year: 

Counties Included in Calculation:

 

Total Premiums Paid to INSURER during Contract Year: $

Actual Incurred Claims for Contract Year:                                      $

Medical Loss Ratio Achieved:                                                         %

 

Apply adjustment percentage in accordance with Section 3-21-3.

 

Amount Due to FHKC:                                                                       $

3-21-5    Quarterly Medical Loss Ratio Reporting Requirements

 

INSURER must submit a quarterly medical loss ratio report with results presented by month with claims incurred to date, by county as well as for INSURER’s entire book of business covered under this Contract. The format for the quarterly report shall be established by FHKC.

 

This ongoing report should be updated each quarter to include any updated claims information received since the prior quarterly report.

 

The report is due by the end of the second month following the close of the quarter as follows:

 

January 1 – March 30:                                  May 31st

April 1 – June 30:                                          August 31st

July 1 – September 30:                                 November 30th

October 1 – December 31:                           February 28th

 

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                    If the reporting deadline falls on a holiday or weekend, the report is due on the next business day.

 

 3-22          Premium Rate Modifications

 

INSURER shall provide an actuarial memorandum to FHKC supporting any premium rate adjustment requested under this Section prior to any adjustment taking effect.

 

3-22-1    Annual Adjustment Request

 

Upon request by INSURER, the Board of Directors of FHKC may approve an annual adjustment to the premium rate. Prior to any submission deadline, FHKC will provide INSURER with any trend information or other actuarial standards that may be applied to any rate requests by FHKC’s consulting actuary during the review process.

 

Each adjustment request must meet all of the following conditions:

 

	 	
A.

	
Any request to adjust the premium rate for the upcoming Contract Year must be received by FHKC by April 1st (first).

 

	 	
B.

	
INSURER’S request for an adjustment must be accompanied by a supporting actuarial memorandum which includes a breakdown of the rate utilizing the following categories:

 

Primary Care Physicians

Specialty Care

Hospital Inpatient

Hospital Outpatient

Pharmacy

Durable Medical Equipment

Behavioral Health

Substance Abuse

Other Services (Provide details)

Administration

 

	 	
C.

	
Any proposed premium rate adjustment must include all counties covered by the currently approved premium rate and be presented in the same format as submitted by INSURER under the ITN process.

 

	 	
D.

	
The proposed premium rate shall not be excessive or inadequate in accordance with the standards established by the Department of Financial Services or the Office of Insurance Regulation for such determination.

 

	 	
E.

	
All approved rate adjustment requests under this Section are effective October 1st (first) through September 30th (thirtieth).

 

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F.

	
Non-compliance      with      any      reporting      requirements      under      this Contract may result in the denial of a rate adjustment request submitted by INSURER at FHKC’s sole discretion, and such denial is not subject to the provisions of Section 3-22-2.

 

3-22-2    Annual Premium Rate Adjustment Denials

 

In the event that INSURER’s annual premium rate adjustment is denied by the Board of Directors of FHKC, and INSURER desires to appeal such decision, INSURER may request that an independent actuary be retained to determine whether or not the proposed rate is excessive or inadequate.

 

	 	
A.

	
Any request for a review of a denied premium rate must be submitted by INSURER to FHKC in writing within fourteen (14) calendar days of the date of the board meeting in which the Board of Directors denied the premium rate request.

 

	 	
B.

	
Within fourteen (14) calendar days of receipt of such request, FHKC shall provide INSURER with a list of three (3) qualified, independent actuaries and also provide the curriculum vitae for each proposed independent actuary. INSURER shall select an independent actuary from the list provided by FHKC no later than fourteen (14) calendar days following receipt of all information from FHKC.

 

	 	
 

	
FHKC shall ensure that none of the three (3) qualified independent actuaries offered for selection has a working or personal relationship with FHKC’s contracted actuary. INSURER shall ensure that the actuary selected from the three (3) qualified, independent actuaries received from FHKC does not have a historical or current working relationship with INSURER or any working or personal relationship with an employee of INSURER or a Consultant/Contractor of INSURER involved in the course of this review or the original filing for a rate increase outside the scope of this project.

 

	 	
C.

	
The Letter of Engagement will be executed by the selected independent actuary, FHKC and INSURER.

 

	 	
D.

	
FHKC and INSURER are financially responsible for the fees incurred by the independent actuary for this dispute process and shall each pay fifty percent (50%) of the total costs.

 

	 	
E.

	
All communications after execution of the Letter of Engagement and up through the submission of the final report by the independent actuary shall include both FHKC and INSURER, no communication may take place between the contracted

  

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independent actuary and just one (1) of the other parties. If such communication takes place, the independent actuary will be disqualified and the Letter of Engagement terminated, immediately, and the review process begins again with a different independent actuary, pursuant to this Section.

 

	 	
F.

	
The selected independent actuary will only review the original rate request as filed by INSURER, any reports developed by FHKC or FHKC’s consulting actuary and any supplemental communications regarding the proposed rate in existence prior to denial of the rate by the FHKC board of directors. No new information may be considered during the review process, unless both FHKC and INSURER in writing agree to the provision of such information.

 

	 	
G.

	
In conducting the review, the independent actuary may:

 

a.      Uphold the rate requested by INSURER; or

 

b.      Deny the rate requested by INSURER.

 

If the independent actuary denies the rate requested by the INSURER, the independent actuary may recommend a revised rate. In no event may the independent actuary’s recommended rate be higher than the original rate requested by the INSURER.

 

Acceptance of the revised rate is at the discretion of the FHKC Executive Director after consulting with FHKC’s actuary. If the revised rate is denied by the Executive Director, the premium rate shall continue at the previous, most recently approved rate. INSURER may submit a written request for a review of that determination at the next regularly scheduled meeting of the FHKC Board of Directors following the Executive Director’s decision.

 

	 	
H.

	
The independent actuary’s findings as described in Paragraph G of this Section must be in writing and communicated to both FHKC and INSURER within thirty (30) calendar days after execution of the Letter of Engagement by all parties.

 

	 	
I.

	
The   effective   date   of   any   premium   rate   adjustment   based   upon the actuary’s determination shall be October 1st (first) or the first of the month following receipt of the independent actuary’s findings, whichever occurs first.

 

	 	
J.

	
The  findings  of  the  independent  actuary  to  either  uphold  or  deny the rate will be binding. However, if the independent actuary finds that the rate should be denied, then at the discretion of the Executive Director:

 

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1.

	
If the independent actuary provides a new recommended rate, the recommended revised rate may be implemented; or

 

	 	
2.

	
The previous, most recently approved rate may be continued for the upcoming Contract Year.

 

3-22-3    Change in Benefit Schedule

 

INSURER understands that changes in federal and state law may require amendments to the Enrollee Benefit Schedule during the Contract term. Should such changes be necessary, FHKC shall notify INSURER in writing of the required change and INSURER shall have thirty (30) days to agree to the amended Benefit Schedule.

 

If the change in the benefit schedule results in a reduction in a benefit level or increases in co-payments, FHKC may require that INSURER reduce its premium rate by an amount actuarially equivalent to the benefit reduction.

 

If benefits or co-payments are modified under this Section, INSURER may submit a request for a rate adjustment to accommodate this modification. Final determination of the INSURER’s compliance under this Section shall be made by FHKC and shall not be subject to the provisions of Section 3-22-2.

 

If INSURER elects not to implement the necessary change, FHKC may terminate this Contract by providing INSURER with a written notice of intent to terminate and include

a include a termination date of not less than ninety (90) days from the date of the written notification or earlier if required by law.

 

3-22-4   Specialty Fee Arrangements

 

FHKC shall have the right to negotiate specialty fee arrangements with non-INSURER affiliated providers and make such rates available to INSURER. In such cases, if there is a material impact on the premium rate, it will be adjusted by INSURER in a manner consistent with sound actuarial practices.

 

3-23           Program Integrity

 

3-23-1   Excluded Providers

 

INSURER may not knowingly have a relationship with the following:

 

	 	
A.

	
An    individual   who   is   debarred,    suspended,    or   otherwise excluded from participating in procurement activities under the Federal Acquisition Regulation or from participating in non-procurement activities under regulations issued under Executive Order No.12549 or under guidelines implementing Executive Order No. 12549.

 

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B.

	
An   individual  who  is  an  affiliate,   as   defined   in  the  Federal Acquisition Regulation, of a person described above.

 

The relationship is described as follows:

 

1.           A director, officer, or partner of the INSURER.

 

	 	
2.

	
A person with beneficial ownership of five percent (5%) or more of the INSURER’s equity.

 

	 	
3.

	
A person with employment, consulting or other arrangement with the INSURER under its contract with FHKC or the State.

 

INSURER’s network may not include any providers excluded for participation by Medicare, Medicaid or CHIP, except for emergency services.

 

3-23-2    Physician Identifiers – National Provider Identifier (NPI)

 

INSURER must require each physician included within its network to have a unique identifier when such a system has been implemented.

 

3-23-3   Conflict of Interest Safeguards

 

Annually, INSURER shall complete and submit Attachment F of this Contract identifying any Conflict of Interests or affirming that no conflicts exist. INSURER affirms that it meets or exceeds the federal safeguards of 41 U.S.C. 423, section 27.

 

3-24      Quality Management

 

3-24-1   Quality Improvement Plans

 

INSURER shall have an ongoing Quality Improvement Plan (QIP) that objectively and systematically monitors and evaluates the quality and appropriateness of care and services rendered, thereby promoting Quality of Care and quality patient outcomes in service performance to its Enrollees. QIP’s must meet all of the following minimum requirements:

 

	 	
A.

	
INSURER shall develop and submit to FHKC a written QIP within thirty (30) calendar days from execution of the initial Contract and resubmit such plan by July 1st of each year for written approval.

 

	 	
B.

	
INSURER’s written policies and procedures shall address components of effective health care management including, but not limited to, anticipation, identification, 

monitoring, measurement, evaluation of Enrollees’ health care needs, and effective action to promote quality of care.

 

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C.

	
INSURER shall define and implement improvements in processes that enhance clinical efficiency, provide effective utilization, and focus on improved outcome management achieving the highest- level of success.

 

	 	
D.

	
INSURER’s QIP shall demonstrate in its care management, specific interventions to better manage the care and promote healthier Enrollee outcomes.

 

	 	
E.

	
INSURER shall cooperate with FHKC and any external quality review organization or entity contracted with FHKC for such reviews. FHKC shall establish the methodology and standards for quality improvement that comply with any federal and state laws or regulations.

 

3-24-2   Quality Improvement Plan Committee

 

INSURER shall have QIP Committee. INSURER’s Medical Director shall serve as either the Chairman or Co-Chairman of the QIP Committee. Other Committee members shall be selected by INSURER but must include:

 

1)     The Quality Director;

2)     The Grievance Coordinator;

3)     The Utilization Review Manager;

4)     The Credentialing Manager;

5)     The Risk Manager\Infection Control Profession (if applicable);

6)     Advocate Representation (if applicable);

7)     Provider Representation, either through providers serving on the Committee or through a provider liaison position such as a representative from the network 

        management department.

 

The Committee shall meet on a regular periodic basis, no less than quarterly.

 

3-24-3   External Quality Review

 

FHKC shall also conduct annual external quality review activities during the Contract term. INSURER shall cooperate in all such activities and provide records, files and access in a timely manner to FHKC or agents acting on FHKC’s behalf. Performance Improvement Projects (PIPs) specific to INSURER and to the overall Program resulting from such reviews may also be required from INSURER as a result of these activities and INSURER agrees to also cooperate and participate in these activities.

 

3-25           Records Retention and Accessibility

 

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A.

	
INSURER agrees to maintain books, records and documents in accordance with generally acceptable accounting principles which sufficiently    and    properly    reflect    all    expenditures    of    funds    provided    by FHKC under this Contract.

 

	 	
B.

	
INSURER shall have all records used or produced in the course of the performance of this Contract available at all reasonable times for inspection, review, audit or copying to FHKC, any vendor contracted with FHKC or any state or federal regulatory agency as authorized by law or FHKC. Access to such records will be during normal business hours and will be either through on-site review of records or through the mail. These records shall be retained for a period of at least five (5) years following the term of this Contract, except if an audit is in progress or audit findings are yet unresolved, in which case records shall be kept until all tasks are completed.

 

	 	
C.

	
INSURER agrees to cooperate in any evaluative efforts conducted by FHKC or an authorized subcontractor of FHKC both during and for a period of at least five (5) years following the term of this Contract. These efforts may include a post-Contract audit.

 

	 	
D.

	
Additionally, INSURER agrees to provide to FHKC, by July 1st (first) each year, an audited financial statement for INSURER’S preceding fiscal year. If such is not customarily available in the ordinary course of INSURER’S business, then a written statement from an accountant verifying the financial stability of INSURER shall be submitted and be subject to the approval of the FHKC Board of Directors.

 

	 	
E.

	
INSURER shall include all the requirements of this subsection in all approved subcontracts and assignments and INSURER agrees to require subcontractors and assignees to meet these requirements.

 

It is expressly understood that evidence of INSURER’S refusal to substantially comply with this provision or such failure by INSURER’S subcontractors, assignees or affiliates performing under this Contract shall constitute a material breach and renders this Contract subject to unilateral cancellation by FHKC.

 

3-26           Refusal of Coverage

 

INSURER shall not refuse to provide coverage to any Enrollee on the basis of past or present health status.

 

3-27           Regulatory Filings

 

INSURER will forward all regulatory filings relating to this Contract to FHKC for its review and approval. Once such regulatory filings are approved, FHKC will submit such filings to the extent required by law or as desired by FHKC to the Department of Financial Services or other appropriate regulatory entity on INSURER’s behalf.

 

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3-28           Reporting Requirements

 

INSURER shall comply with all reporting requirements under this Contract in the manner and timeframes specified for each report and as listed under Attachment E.

 

INSURER shall also provide quarterly encounter and claims data for all services rendered under this Contract including any services provided by contracted Providers. Such data shall be submitted on a quarterly basis utilizing a process and format established by FHKC. FHKC may amend the process, format or requirements during the Contract term and INSURER shall incorporate any such changes no later than the third (3rd) quarter’s report after notification of such changes by FHKC.

 

INSURER is responsible for guaranteeing that all subcontractors comply with these reporting requirements. INSURER also agrees to attest to the accuracy, completeness and truthfulness of claims and payment data that are submitted to FHKC under penalty of perjury. Access to Enrollee claims data by FHKC, the State of Florida, the federal Centers for Medicare and Medicaid Services and the Department of Health and Human Services Inspector General will be allowed to the extent permitted by law. The timetable for the delivery of quarterly statistical reports is as follows:

 

	

Encounters   and   Claims   Processed During:

	

Claims   Data   Due   to FHKC by:

	

January 1st   – March 31st

	

April 15th

	

April 1st   – June 30th

	

July  15th

	

July 1st  –  September 30th

	

October  15th

	

October 1st  –  December  31st

	

January 15th

 

Failure to provide these reports in a timely manner shall constitute a material breach as defined under Section 4-18(C).

 

INSURER may be required to provide FHKC information or data that is not specified under this Contract in order to comply with federal or state law or regulatory requirements. In such instances, and at the direction of FHKC, INSURER shall fully cooperate with such requests and furnish all information in a timely manner, in the format in which it is requested. INSURER shall have at least thirty (30) calendar days to fulfill such ad hoc reporting requests.

 

3-29           Subrogation Rights

 

In the event INSURER provides medical services or benefits to Enrollees who suffer injury, disease or illness by virtue of the negligent act or omission of a third party, INSURER shall be entitled to seek reimbursement from the Enrollee or third party, at the prevailing rate, for the reasonable value of the services or benefits provided. INSURER shall not be entitled to reimbursement in excess of the Enrollee’s monetary recovery for medical expenses provided from the third party. INSURER is solely responsible for the coordination of benefits with any other third party payor in accordance with section 624.91, F.S. Nothing in this section as to coordination of benefits shall limit the Enrollee’s right to receive direct health services under this Contract.

 

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3-30           Termination of Participation

 

An  Enrollee’s  coverage  under this  Program  shall  terminate  on  the  last  day of  the  month in which the Enrollee:

 

A.           Ceases to be eligible to participate in the Program;

 

B.            Establishes residence outside of the Service Area; or

 

	
                    C.

	
Is determined to have acted fraudulently as fraud is defined in this Contract.

Termination  of  coverage  and  the  effective  date  of  that  termination  shall  be  determined solely by FHKC.

 

3-31           Use of Subcontractors or Affiliates

 

INSURER   may   contract   with   subcontractors   or   affiliates   to   deliver   services   under   this Contract subject to the following conditions.

 

	 	
A.

	
INSURER identified the subcontractor or affiliate in its response to the ITN for the services covered by this Contract.

 

	 	
B.

	
INSURER has provided FHKC with a copy of the current contract or other written agreement and any amendments for services under this Contract between INSURER and the subcontractor or affiliate. FHKC shall have the right to withhold its approval of any such contracts, agreements and amendments.

 

	 	
C.

	
INSURER’s Contract with the subcontractor or affiliate fully complies with all terms and conditions of this Contract between INSURER and FHKC.

 

	 	
D.

	
INSURER agrees to provide FHKC with timely notice of termination of such agreements with any subcontractor or affiliate. On a quarterly basis, INSURER shall provide FHKC with an attestation as to the adequacy of the INSURER’s network.

 

	 	
E.

	
INSURER shall provide FHKC with timely notice of INSURER’S intent to contract with any new subcontractors or affiliates for services covered under this Contract. Prior to execution, INSURER shall forward for FHKC’s review and approval any proposed agreement for services with subcontractors or affiliates.

 

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F.

	
By July 1st each year, INSURER agrees to provide FHKC with an annual report listing, for the previous calendar year, all subcontractors or affiliates that performed services under this Contract for INSURER.

 

All agreements between INSURER and its subcontractor or affiliates to provide services under this Contract shall be reduced to writing and shall be executed by both parties. All such agreements shall also be available to FHKC within seven (7) business days of request for production.

 

Failure of INSURER to comply with the provisions of this section shall constitute a material breach as provided under Section 4-18(C) of this Contract.

 

3-32           Reimbursement Requirements

 

3-32-1   Out of Network Providers

 

Unless otherwise provided for under this Contract, where an Enrollee utilizes services available under this Contract other than emergency services from a non-contract Provider, INSURER shall not be liable for the cost of such utilization unless INSURER has referred the Enrollee to the non-contract or out of network Provider or authorized such out of network services. INSURER shall provide Enrollee with timely approval or denial of authorization of out of network use through the assignment of a prior authorization number or other such process as may be approved by FHKC. Enrollee shall be liable for the cost of such unauthorized use of contract-covered services from non-contract providers.

 

If INSURER has granted prior authorization for out of network services that are covered under this Contract or in the case of emergency services, INSURER is responsible for the payment of claims incurred as a result of those services. Enrollee shall be responsible only for any applicable co-payment as provided for under Attachment D.

 

INSURER shall also be responsible for any claims or costs incurred for services rendered by out of network providers to Enrollees that have been directed by FHKC to seek such services under Section 3-3.

 

3-32-2    Reimbursement  to Federally  Qualified  Health  Centers  and Rural Health Clinics

 

As required under the federal Children’s Health Insurance Program re-Authorization Act of 2009, to the extent that INSURER contracts for covered services with a FQHC or RHC, INSURER shall reimburse such entities at an amount not less than the reimbursement level provided under the Medicaid Prospective Payment System for a FQHC or RHC.

 

*END OF SECTION 3*

 

REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

 

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SECTION 4       GENERAL TERMS AND CONDITIONS

 

4-1           Amendment

 

This Contract may be amended by mutual written consent of the parties at any time. This Contract shall automatically be amended to the extent necessary from time to time to comply with state or federal laws or regulations or the requirements of FHKC’s contract with the Agency for Health Care Administration (AHCA) upon notice by FHKC to INSURER to that effect.

 

4-2           Assignment

 

This Contract and the monies that may become due under it may not be assigned by INSURER without the prior written consent of FHKC. Any purported assignment without such consent shall be deemed null and void.

 

FHKC may assign this Contract and the monies that may become due under it. Prior to any such assignment, FHKC shall provide at least ninety (90) days written notice to INSURER indicating its intention to assign the Contract. INSURER may elect to terminate the Contract at the end of the next Contract term by providing written notice to FHKC at least one-hundred and twenty (120) calendar days before the end of the Contract term unless otherwise required by law.

 

4-3           Attachments

 

Attachments A through F are all incorporated into this Contract by reference. In any conflict between these Attachments and this Contract, the Contract provision shall control.

4-4           Attorney Fees

 

In the event of any legal action, dispute, litigation or other proceeding with relation to this Contract, FHKC shall be entitled to recover from INSURER its attorney fees and costs incurred, whether or not suit is filed, and if filed, at both trial and appellate levels. Legal actions are defined to include administrative proceedings. It is understood that the intent of this provision is to protect the Enrollees who receive health insurance benefits through the Program and rely upon the continuation of the Program.

 

4-5           Bankruptcy

 

FHKC shall have the absolute right to elect to continue or terminate this Contract, at its sole discretion, in the event INSURER or any of its approved subcontractors file a petition for bankruptcy or for approval of a plan of reorganization or arrangement under the Bankruptcy Act. INSURER shall give FHKC notice of the intent to petition for bankruptcy or reorganization or 

 

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arrangement at the time of the filing and immediately provide a copy of such filing to FHKC. FHKC shall have thirty (30) calendar days upon receipt of such notice to elect continuation or termination of this Contract.

 

4-6           Change of Controlling Interest

 

FHKC shall have the absolute right to elect to continue or terminate this Contract, at its sole discretion, in the event of a change in the ownership or controlling interest of INSURER or any of its approved subcontractors. INSURER shall give FHKC notice of regulatory agency approval, if applicable, prior to any transfer or change in control. FHKC shall have thirty (30) calendar days to elect continuation or termination of this Contract upon receipt of such notice.

 

4-7           Confidentiality

 

INSURER shall treat all information, particularly personal or identifying information relating to Applicants or Enrollees that is obtained through its performance under this Contract, as confidential information to the extent confidential treatment is provided under state and federal laws including sections 624.91 and 409.821, F.S. regarding confidentiality of information held by FHKC and    the    Florida    KidCare    Program.INSURER    shall    not    use    any    information obtained in any manner except as necessary for the proper discharge of its obligations and to secure its rights under this Contract. Such information shall not be divulged without written consent of FHKC, the Applicant or the Enrollee. This provision does not prohibit the disclosure of information in summary, statistical or other form which does not identify particular individuals.

 

INSURER and FHKC mutually agree to maintain the integrity of all proprietary information to the extent provided under the law. Neither party will disclose or allow others to disclose proprietary information as determined by law by any means to any person without prior written approval of the other party. All proprietary information will be so designated. This requirement does not extend to routine reports and membership disclosure necessary for efficient management of the Program.

 

INSURER understands that FHKC may be subject to the Florida Public Records Act, Section 119.07, F.S. and therefore all such information may be considered a public record and open to inspection. Thus, unless otherwise confidential or exempted by law, INSURER shall allow public access to all documents, papers, letters, electronic correspondence or other material subject to the provisions of Chapter 119, F.S. and made or received by INSURER in conjunction with this Contract. However, INSURER agrees to advise FHKC prior to the release of any such information.

 

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4-8             Conflicts of Interest; Non-Solicitation

 

4-8-1     Conflicts of Interest

 

In addition to the requirements of Section 3-23-3 and Attachment F of this Contract, INSURER confirms that to the best of its knowledge, the responsibilities and duties assumed pursuant to this Contract are not in conflict with any other interest to which INSURER is obligated or from which INSURER benefits. Further, INSURER agrees to inform FHKC immediately after becoming aware of any conflicts of interest which it may have with the interests of FHKC, as set forth in this Contract and which may occur in the future.

 

Within ten (10) days of contract execution, INSURER shall submit the attached disclosure form (Attachment F) identifying any relationships, financial or otherwise with any FHKC Board Member, FHKC Ad Hoc Board Member or any employee of FHKC.

 

4-8-2     Gift Prohibitions

 

In accordance with FHKC Corporate Policies, INSURER affirms its understanding that FHKC Board Members, FHKC Ad Hoc Board Members and FHKC Employees are prohibited from accepting any gifts, including but not limited to, any meal, service or item of value even de minimus from those entities that conduct or seek to conduct business with FHKC.

 

4-8-3   Non-Solicitation

 

INSURER recognizes and acknowledges that as a result of this Contract INSURER will come into contact with employees of FHKC and that these employees have received considerable training by FHKC. INSURER agrees not to solicit, recruit or hire any individual who is employed by FHKC during the term of this Contract. This prohibition shall be in effect for both the term of this Contract and twelve (12) months immediately following its termination.

 

4-9              Effective Dates

 

1.                 This Contract shall begin on October 1, 2010 (“Commencement Date”).

 

2.                 This Contract shall end on September 30, 2011.

 

This Contract may be extended at FHKC’s discretion for a maximum of one (1) additional period beyond the initial term indicated above. FHKC agrees to notify INSURER by July 1, 2011 if FHKC does not intend to exercise the extension option. In no event shall this contract extend beyond September 30, 2012.

 

FHKC may exercise the renewal options of this Contract either in whole or in part.

 

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Upon   the   expiration   of   the   Contract,   should   FHKC   choose   to   use   another   INSURER, INSURER shall ensure a smooth transition.

 

4-10           Entire Understanding

 

This Contract with all Attachments incorporated by reference embodies the entire understanding of the parties relating to the subject matter of this Contract, and supersedes all other agreements, negotiations, understanding, or representations, verbal or written, between the parties relative to the subject matter hereof.

 

4-11           Force Majeure

 

Neither party shall be responsible for delays of failure in performance of its obligations under this Contract resulting from acts beyond the control of the party. Such acts shall include, but are not limited to, blackouts, riots, acts of war, terrorism, epidemics, government regulations or statutory amendments adopted following the date of execution of this Contract, fire communication line failure, computer hardware failure, computer executive software failure, power failure or shortage, fuel shortages, hurricanes or other natural disasters.

 

4-12           Governing Law; Venue

 

This Contract shall be governed by applicable state and federal laws and regulations as such may be amended during the term of the Contract, whether or not expressly included or referenced in this Contract.

 

INSURER agrees to comply with the following provisions as such may from time to time be amended during the term of this Contract:

 

	 	
A.

	
Title VI of the Civil Rights Act of 1964, as amended, 42 U.S.C. 2000d et seq., which prohibits discrimination on the basis of race, color or national origin.

 

	 	
B.

	
Section 504 of the Rehabilitation Act of 1973, as amended, 29 U.S.C. 794, which prohibits discrimination on the basis of handicap.

 

	 	
C.

	
Title XI of the Education Amendments of 1972, as amended 29, U.S.C. 601 et seq., which prohibits discrimination on the basis of sex.

 

	 	
D.

	
The Age Discrimination Act of 1975, as amended, 42 U.S.C. 6101 et seq., which prohibits discrimination on the basis of age.

 

	 	
E.

	
Section 654 of the Omnibus Budget Reconciliation Act of 1981, as amended, 42 U.S.C. 9848, which prohibits discrimination on the basis of race, creed, color, national origin, sex, handicap, political affiliation or beliefs.

 

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F.

	
The American Disabilities Act of 1990, P.L. 101-336, which prohibits discrimination on the basis of disability and requires accommodation for persons with disabilities.

 

	 	
G.

	
Section 274A (e) of the Immigration and Nationalization Act, FHKC shall consider the employment by any contractor of unauthorized aliens a violation of this Act.

 

	 	
H.

	
OMB      Circular      A-110      (Appendix      A-4)      which      identifies      procurement procedures which conform to applicable federal law and regulations with regard to debarment, suspension, ineligibility, and involuntary exclusion of contracts and subcontracts and as contained in Attachment A of this Contract. Covered      transactions      include      procurement      contracts      for services equal to or in excess of one hundred thousand dollars ($100,000.00) and all non-procurement transactions.

 

	 	
I.

	
Title XXI of the federal Social Security Act.

 

	 	
J.

	
All applicable state and federal laws and regulations governing FHKC.

 

	 	
K.

	
All   regulations,   guidelines   and   standards   as   are   now   or   may   be   lawfully adopted under the above statutes.

 

INSURER agrees that compliance with this assurance constitutes a condition of continued receipt of or benefit from funds provided through this Contract and such compliance is binding upon INSURER, its successors, transferees and assignees for the period during which services are provided. INSURER further agrees that all contractors, subcontractors, subgrantees or others with whom it arranges to provide goods, services or benefits in connection with any of its programs and activities are not discriminating against either those whom they employ nor those to whom they provide goods, services or benefits in violation of the above statutes, regulations, guidelines and standards.

 

It is expressly understood that evidence of INSURER’S refusal or failure to substantially comply with this section or such failure by INSURER’S subcontractors or anyone with whom INSURER affiliates in performing under this Contract shall constitute a material breach and renders this Contract subject to unilateral cancellation by FHKC.

 

Any legal action with respect to the provisions of this Contract shall be brought in federal or state court in Leon County, Florida.

 

4-13           Independent Contractor

 

The relationship of INSURER to FHKC shall be solely that of an independent contractor. The parties acknowledge and agree that neither party has the authority to make any representation, warranty or binding commitment on behalf of the other party, except as expressly provided in this Contract or as otherwise agreed to in writing by the parties, and nothing contained in this Contract shall be deemed or construed to (i) create a partnership or joint venture between the parties or any affiliate, employee or agent of a

 

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party; or (ii) constitute any party or any employee or agent of a party as an employee or agent of the other party.

 

 

4-14           Name and Address of Payee

 

The name and address of the official payee to whom the payment shall be made:

 

For INSURER:

Insurer:               Wellcare of Florida, Inc.

Name:                  Robert Diaz, Vice President

Address:             8735 Henderson Road, Ren 2, Tampa, Florida 33634

Email:                   robert.diaz@wellcare.com

 

4-15           Notice and Contact

 

All notices required under this section shall be in writing and may be delivered by certified mail with return receipt requested, by facsimile with proof of receipt, by electronic mail with proof of receipt or in person with proof of delivery.

 

Notice required or permitted under this Contract shall be directed as follows:

 

For FHKC:

Jennifer Kiser Lloyd

Florida Healthy Kids Corporation

661 East Jefferson Street, 2nd Floor

Tallahassee, FL    32301

(850) 224-5437\(850) 701-6108 (Phone)

(850) 224-0615 (Fax)

lloydj@healthykids.org

For INSURER:

Insurer:                      Wellcare of Florida, Inc.

Name:                         Robert Diaz, Vice President, Regulatory Affairs and Quality Assurance

Address:                   8735 Henderson Road, Ren 2, Tampa, Florida 33634

Email:                         robert.diaz@wellcare.com

 

In the event that different contact persons are designated by either party after execution of this Contract, notice of the name and address of the new contact will be sent to the other party and be attached to the originals of this Contract.

 

4-16           Severability

 

If any of the provisions of this Contract are held to be inoperative by a court of competent jurisdiction, such provision shall be severed from the remaining provisions of the Contract which shall remain in full force and effect.

 

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4-17           Survival

 

The provisions of the following sections: Records Retention and Accessibility; Attorney Fees; Confidentiality; Conflicts of Interest; Non-Solicitation and Governing Law; Venue shall survive any termination of this Contract.

 

4-18           Termination of Contract

 

A.           Termination for Lack of Funding

 

This Contract is subject to the continuation and approval of funding to FHKC from state, federal and other sources. FHKC shall have the absolute right, in its sole discretion, to terminate this Contract if funding for the Program is to be changed or terminated such that this Contract should not be sustained. FHKC shall send INSURER notice of termination and include a termination date of not less than thirty (30) calendar days from the date of the notice.

 

B.           Termination for Lack of Payment

 

If FHKC fails to make payments in accordance with the schedule included in this Contract, INSURER may suspend work and pursue the appropriate remedies for FHKC’s breach of its payment obligations. INSURER must provide FHKC at least thirty (30) calendar days written notice of any suspension due to lack of payment and allow FHKC an opportunity to correct the default prior to suspension of work.

 

C.           Termination for Lack of Performance or Breach

 

The continuation of this Contract is contingent upon the satisfactory performance of the INSURER and corresponding evaluations by FHKC. If INSURER fails to make timely progress on the objectives of this Contract or fails to meet the deliverables described under this Contract in the time and manner prescribed, FHKC reserves the right to terminate this Contract, or any part herein, at its discretion and such termination shall be effective at such times as is determined by     FHKC.In    its     sole    discretion,     FHKC     may    allow     INSURER     to     cure    any performance deficiencies prior to termination.

 

FHKC further reserves the right to immediately terminate this Contract by written notice to the INSURER for breach of any provision of the Contract by the INSURER, for the INSURER’s failure to perform satisfactorily any requirement of this Contract, or for any defaults in performance of this Contract, as determined in FHKC’s sole discretion.

Waiver of the failure to perform satisfactorily or of breach of any provision of this Contract shall not be deemed to be a waiver of any other failure to perform or breach and shall not be construed to be a modification of the terms of this Contract.

 

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D.            Termination upon Revision of Applicable Law

 

FHKC and INSURER agree if federal or state revisions of any applicable laws or regulations restrict FHKC’s ability to comply with the Contract, make such compliance impracticable, frustrate the purpose of the Contract or place the Contract in conflict with FHKC’s ability to adhere to its statutory purpose, FHKC may unilaterally terminate this Contract. FHKC shall send INSURER notice of termination and include a termination date of not less than thirty (30) calendar days from the date of notice.

E.            Termination upon Mutual Agreement

 

With mutual agreement of both parties, this Contract, or any part herein, may be terminated on an agreed date prior to the end of the Contract without penalty to either party.

 

F.            Termination by FHKC

 

Notwithstanding any other termination provisions, FHKC may terminate this Agreement or any part of this Agreement, without penalty or cost to FHKC, at its convenience, and such termination will be effective at such time as is determined by FHKC.

 

*END OF SECTION FOUR*

 

TWO (2) SIGNATURE PAGES FOLLOW 

 

THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK

 

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IN WITNESS WHEREOF, the parties have caused this Contract, to be executed by their undersigned officials as duly authorized.

 

 

FOR

WELLCARE OF FLORIDA, INC. and HealthEase of Florida, Inc.

 

	/s/ Christina C. Cooper

NAME: Christina C. Cooper

TITLE: President, Florida and Hawaii Division

DATE SIGNED: 9/30/10

The foregoing instrument was acknowledged me before this 30th day of September, 2010, by Christina C. Cooper, as President on behalf of WellCare of Florida, Inc.  He/She is personally known to me or has produced ______________________ as identification. 

 

 

 

	/s/ Betsy Cortes	 [Notary Seal]	 

Notary Public

	1/29/2014	 	 

My Commission Expires

 

	/s/ Robert Diaz

WITNESS #1 SIGNATURE

 

	Robert Diaz

WITNESS #1 PRINT NAME

 

	/s/ Jennifer Osbourn

WITNESS #2 SIGNATURE

 

	Jennifer Osbourn

WITNESS #2 PRINT NAME

 

 

 

 

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FOR

 

FLORIDA HEALTHY KIDS CORPORATION:

 

	/s/ Rich Robleto

NAME:                      Rich Robleto

TITLE:                      Executive Director

DATE SIGNED:

The foregoing instrument was acknowledged me before this 4th day of November, 2010, by Rich Robleto, as Executive Director on behalf of FHKC  He/She is personally known to me or has produced ______________________ as identification. 

 

 

	/s/ Amber N. Floyd	 [Notary Seal]	 

Notary Public

	Nov. 14, 2013	 	 

My Commission Expires

 

	/s/ Amber N. Floyd

WITNESS #1 SIGNATURE

 

	Amber N. Floyd

WITNESS #1 PRINT NAME

 

	/s/ Jennifer K. Lloyd

WITNESS #2 SIGNATURE

 

	Jennifer K. Lloyd

WITNESS #2 PRINT NAME

 

Reviewed by:

	/s/ Jennifer K. Lloyd	Date: 11/3 /10	 

Signature of: Jennifer K. Lloyd 

Chief External Affairs Officer

	/s/  Joan Humphrey Anderson 	Date: 10/31/10	 

Printed Name: Joan Humphrey Anderson 

FHKC General Counsel 

Florida Bar Number: 0294063

 

 

  

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 ATTACHMENT A

 CERTIFICATION REGARDING DEBARMENT, SUSPENSION, INELIGIBILITY and VOLUNTARY

EXCLUSION CONTRACTS AND SUBCONTRACTS

 

This certification is required by the regulations implementing Executive Order 12549, Debarment and Suspension, signed February 18, 1986. The guidelines were published in the May 29, 1987, Federal Register (52 Fed. Reg., pages 20360-20369).

 

INSTRUCTIONS

 

	
A.

	
Each entity whose contract\subcontract equals or exceeds twenty five thousand dollars ($25,000) in federal monies must sign this certification prior to execution of each contract\subcontract. Additionally, entities who audit federal programs must also sign, regardless of the contract amount. The Florida Healthy Kids Corporation cannot contract with these types of Entities if they are debarred or suspended by the federal government.

 

	
B.

	
This certification is a material representation of fact upon which reliance is placed when this contract\subcontract is entered into. If it is later determined that the signer knowingly rendered an erroneous certification, the Federal Government may pursue available remedies, including suspension and/or debarment.

 

	
C.

	
INSURER shall provide immediate written notice to the contract manager at any time INSURER learns that its certification was erroneous when submitted or has become erroneous by reason of changed circumstances.

 

	
D.

	
The terms “debarred,” “suspended,” “ineligible,” “person,” “principal,” and “voluntarily excluded,” as used in this certification, have the meanings set out in the Definitions and Coverage sections of rules implementing Executive Order 12549. You may contact the Contract manager for assistance in obtaining a copy of those regulations.

 

	
E.

	
INSURER agrees by submitting this certification that, it shall not knowingly enter into any subcontract with a person who is debarred, suspended, declared ineligible, or voluntarily excluded from participation in this contract/subcontract unless authorized by the Federal Government.

 

	
F.

	
INSURER further agrees by submitting this certification that it will require each subcontractor of this contract/subcontract whose payment will equal or exceed twenty five thousand dollars ($25,000) in federal monies, to submit a signed copy of this certification.

 

	
G.

	
The Florida Healthy Kids Corporation may rely upon a certification of INSURER that it is not debarred, suspended, ineligible, or voluntarily excluded from contracting\subcontracting unless it knows that the certification is erroneous.

 

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H.            This signed certification must be kept in the contract manager’s file.  Sucontractor’s certifications must be kept at the contractor’s business location.

                

CERTIFICATION

 

INSURER certifies, by signing this certification, that neither INSURER nor its principals is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this contract/subcontract by any federal agency.

 

Where INSURER is unable to certify to any of the statements in this certification, INSURER shall attach an explanation to this certification.

 

 

	/s/ Christina C. Cooper	 	 9/30/10	 
	Signature of Insurer Representative       	 	Date Signed	 
	 	 	 	 

 

REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK

 

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ATTACHMENT B

CERTIFICATION REGARDING LOBBYING CERTIFICATION FOR CONTRACTS, GRANTS, LOANS AND COOPERATIVE CONTRACTS

 

The undersigned certifies, to the best of his or her knowledge and belief, that:

 

	
(1)

	
No federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any agency, a member of congress, an officer or employee of congress or an employee of a member of congress in connection with the awarding of any federal contract, the making of any federal grant, the making of any federal loan, the entering into of any cooperative Contract and the extension, continuation, renewal, amendment or modification of any federal contract, grant, loan or cooperative Contract.

 

	
(2)

	
If any funds other than federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a member of congress, an officer or employee of congress or an employee of a member of congress in connection with this federal contract, grant, loan or cooperative Contract, the undersigned shall complete and submit Standard Form-LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions.

 

	
(3)

	
The undersigned shall require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants and contracts under grants, loans and cooperative Contracts) and that all subrecipients shall certify and disclose accordingly.

 

This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352, Title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than ten thousand dollars ($10,000.00) and not more than one hundred thousand dollars ($100,000.00) for each such failure.

 

 

	/s/ Christina C. Cooper	 	 9/30/10	 
	Signature of Insurer Representative       	 	Date Signed	 
	 

 

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ATTACHMENT C 

REGARDING HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT 

OF 1996 COMPLIANCE: 

BUSINESS ASSOCIATE (BA) AGREEMENT

 

THIS BA AGREEMENT (“Attachment C”), is entered into and made between Florida Healthy Kids Corporation, a Florida non-profit corporation, (“FHKC”) (the “Covered Entity”) and INSURER (the “BA”) and is incorporated in the Services Contract (“Contract”) between FHKC and INSURER.

 

HIPAA Compliance

 

FHKC and BA agree to comply with the Health Insurance Portability and Accountability Act of 1996, Public Law No. 104-191, as amended from time to time (“HIPAA”) and the Health Information Technology for Economic and Clinical Health Act (“HITECH”).

 

FHKC and BA enter into this Agreement to comply with the requirements of the implementing regulations at 45 Code of Federal Regulations (C.F.R) Parts 160-164 for the Administrative Simplification Provisions of title II, Subtitle F of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), and the requirements of the Health Information Technology for Economic and Clinical Health Act, as incorporated in the American Recovery and Reinvestment Act of 2009 (HITECH Act), that are applicable to business associates, along with any guidance and/or regulations issued by Department of Health and Human Services (DHHS). FHKC and BA agree to incorporate into this agreement any regulations issued with respect to the HITECH Act that relate to the obligations of business associates. BA recognizes and agrees that it is obligated by law through a written contract or other written agreement such as this Attachment to meet the applicable provisions of the HITECH Act.

 

Definitions for use in this attachment

 

FHKC   and   Terms   used,   but   not   otherwise   defined,   in   this   Attachment   and   the   Contract   shall have the same meaning as those terms in 45 C.F.R. Parts 160, 162 and 164.

Obligations and Activities of Business Associate (Privacy Rule)

 

Operation on Behalf of FHKC

 

The BA shall use and disclose Protected Health Information (PHI) only as shall be permitted by the Agreement and BA shall have the same duty to protect PHI as FHKC’s Protected Health Information as such term is used in the Parties' Agreement, and in furtherance of the Parties' duties therein.

 

Compliance with the Privacy Rule

 

BA agrees to fully comply with the requirements under the Privacy Rule applicable to "business associates," as that term is defined in the Privacy Rule and not use or further disclose PHI other than as permitted or required by this Agreement or as Required by Law.

 

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BA shall create and/or adopt policies and procedures to periodically audit adherence to all HIPAA regulations, and for which BA acknowledges and promises to perform pursuant to the terms and conditions set out herein. BA shall make such policies and procedures available to FHKC for review.

 

Privacy Safeguards and Policies

BA agrees to use appropriate safeguards to prevent use or disclosure of PHI other than as provided for by the Ancillary Agreement(s), this Agreement or as required by Law.

 

Mitigation of Harmful Effect of Violations

BA agrees to inform FHKC in advance and mitigate, to the extent practicable, any harmful effect that is known to BA of a use or disclosure of PHI by BA or by a subcontractor or agent of BA resulting from a violation of the requirements of this Agreement.

 

Privacy Obligations Breach and Security Incidents

 

Privacy Breach

BA will report to FHKC any use or disclosure of FHKC’s PHI not permitted by this Agreement or in writing by FHKC. In addition, BA will report, following discovery and without unreasonable delay, but in no event later than seven (7) business days following discovery, any "Breach" of "Unsecured Protected Health Information" as these terms are defined by the HITECH Act and any implementing regulations. BA shall cooperate with FHKC in investigating the breach and in meeting FHKC’s obligations under the HITECH Act and any other security breach notification laws. In the event of a breach, BA and FHKC will work together to comply with any required regulatory filings.

 

Any such report shall include the identification (if known) of each individual whose Unsecured Protected Health Information has been, or is reasonably believed by BA to have been, accessed, acquired, or disclosed during such breach. BA will make the report to FHKC’s Privacy Officer not more than seven (7) business days after BA learns of such non-permitted use or disclosure.

 

Any items not known at the time of the initial report will be subsequently reported to FHKC as answers are determined. All elements will be reported no later than 30 (thirty) days after the date of the initial report, or as soon as feasible, whichever is sooner.

 

Access of Individual to PHI and other Requests to Business Associate

If BA receives PHI from FHKC in a Designated Record Set, BA agrees to provide access to PHI in a Designated Record Set to FHKC in order to meet its requirements under 45 CFR § 164.524. If BA receives a request from an Individual for a copy of the individual's PHI, and the PHI is in the sole possession of the BA, BA will provide the requested copies to the individual and notify FHKC of such action within five (5) business days of completion of the request. If BA receives a request for PHI in the possession of FHKC, or receives a request to exercise other individual rights as set forth in the Privacy Rule, BA shall promptly forward the request to FHKC within two (2) business days. BA shall then assist FHKC as necessary in responding to the request in a timely manner. If a BA provides copies of PHI to the individual, it may charge a reasonable fee for the copies as the regulations shall permit.

 

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Recording of Designated Disclosures of PHI

BA agrees to document disclosures of PHI and information related to such disclosures as would be required for FHKC to respond to a request by an Individual for an accounting of disclosures of PHI in accordance with 45 CFR § 164.528.

 

Security and Privacy Compliance Review upon Request

 

HHS Inspection

BA shall make its internal practices, books and records relating to the Use and Disclosure of PHI available to the Secretary for purposes of determining Covered Entity’s compliance with the HIPAA Regulations and the HITECH Act. Except to the extent prohibited by law, BA agrees to notify FHKC of all requests served upon BA for information or documentation by or on behalf of the Secretary. BA shall provide to FHKC a copy of any PHI that BA provides to the Secretary concurrently with providing such PHI to the Secretary.

 

FHKC Inspection

Upon written request, to make available to FHKC during normal business hours BA’s internal practices, books, and records relating to the use and disclosure of PHI or electronic PHI received from, or created or received on behalf of, FHKC in a time and manner designated by FHKC for the purposes of FHKC determining compliance with the HIPAA Privacy and Security Requirements.

 

Obligations and Activities of Business Associate (Security Rule)

Compliance with Security Rule

BA shall ensure compliance with the HIPAA Security Standards for the Protection of Electronic Protected Health Information (“EPHI”), 45 C.F.R. Part 160 and Part 164, Subparts A and C (the “Security Rule”), with respect to Electronic Protected Health Information covered by this Contract effective on the compliance date for initial implementation of the security standards set for in 45 C.F.R. §164.318.

 

Security Safeguards and Policies

BA agrees to implement administrative, physical, and technical safeguards that reasonably and appropriately protect the confidentiality, integrity, and availability of the electronic PHI that it creates, receives, maintains, or transmits on behalf of FHKC as required by the Security Rule. The BA will maintain appropriate documentation of its compliance with the Security Rule.

 

Security Provisions in Business Associate Contracts

BA shall ensure that any agent, including a subcontractor, to whom it provides EPHI received from, maintained, or created for FHKC or that carries out any duties for the BA involving the use, custody, disclosure, creation of, or access to PHI supplied by FHKC, shall execute a bilateral contract (or the appropriate equivalent if the agent is a government entity) with BA, incorporating the same restrictions and conditions in this Agreement with BA regarding PHI.

 

Florida Consumer Notice of System Breach

BA understands that FHKC or its customers may be a “information holder” (as may be Business Associate) under the terms of Florida Statutes Ann title 46 § 817.5681, and that in the event of

 

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a breach of the BA’s security system as defined by that statute, the BA shall indemnify and hold FHKC harmless for expenses and/or damages related to the breach. Such obligation shall include, but is not limited to, the mailed notification to any Florida resident whose personal information is reasonably believed to have been acquired by an unauthorized individual. In the event that the BA discovers circumstances requiring notification of more than one thousand (1,000) persons at one time, the person shall also notify, without unreasonable delay, all consumer reporting agencies and credit bureaus that compile and maintain files on consumers on a nationwide basis, as defined by 46 817.5681(12), of the timing, distribution and content of the notices. Substitute notice, as defined by Florida Statutes Ann title 46 § 817.5681 (6) (c), shall not be permitted except as approved in writing in advance by FHKC. The parties agree that PHI includes data elements in addition to those included by “personal information” under Florida Statutes Ann title 46 § 817.5681, and agree that BA’s responsibilities under this paragraph shall include all PHI.

Reporting of Security Incidents

The BA shall track all security incidents as defined by HIPAA and shall periodically report such security incidents in summary fashion as may be requested by FHKC, but not less than annually within sixty (60) days of the anniversary of this Agreement. The BA shall reasonably use its own vulnerability assessment of damage potential and monitoring to define levels of Security Incidents and responses for BA’s operations. However, the BA shall expediently notify FHKC’s Privacy Officer of any Security Incident which would constitute a Security Event as defined by this Agreement, including any “breach of the security of the system" under Florida Statutes Ann title 46 § 817.5681, in a preliminary report within two (2) business days with a full report of the incident not less than five (5) business days of the time it became aware of the incident. The BA shall likewise notify FHKC in a preliminary report within two (2) business days of any unauthorized acquisition including but not limited to internal user access to non-test records reported to BA’s privacy manager, and any use, disclosure, modification, or destruction of PHI by an employee or otherwise authorized user of its system of which it becomes aware with a full report of the incident not less than five (5) business days of the time it became aware of the incident.

 

BA shall identify in writing key contact persons for administration, data processing, Marketing, Information Systems and, Audit Reporting and within thirty (30) days of execution of this Agreement execution. BA shall notify FHKC of any reduction of in-house staff persons during the term of this Agreement in writing within ten (10) business days.

 

HITECH Act

BA will adhere to all Privacy and Security provisions in the HITECH Act as passed as part of the American Recovery and Reinvestment Act of 2009 (“ARRA”) under Sections 13401 and 13404.

 

Unsecured Protected Health Information

BA shall notify each individual whose Unsecured Protected Health Information has been or is reasonably believed by the BA to have been accessed, acquired, used, or disclosed as a result of such breach, except when law enforcement requires a delay pursuant to 45 CFR 164.412: Without unreasonable delay and in no case later than sixty (60) days after discovery of the breach.

 

	
•

	
By notice in plain language including and to the extent possible:

	
•

	
A brief description of what happened, including the date of the breach and the date of the discovery of the breach, if known;

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	 	 	 	 	 CC	  INSURER

 

  

  

  

	 	
  o 

	
A description of the types of Unsecured Protected Health Information that were involved in the breach (including but not limited to items such as whether full name, social security number, date of birth, home address, account number, diagnosis, disability code, or other types of information were involved.

	 	
  o 

	
Any steps individuals should take to protect themselves from potential harm resulting from the breach.

	 	
  o 

	
A brief description of what FHKC is doing to investigate the breach, to mitigate the harm to individuals, and to protect against further breaches.

	 	
  o 

	
Contact procedures for individuals to ask questions or learn additional information, which shall include a toll-free telephone number, an email address, website or postal address.

	    •	
Use a method of notification that meets the requirements of 45 CFR 164.404(d).

	    •	

Provide notice to the media when required under 45 CFR 164.406 and to the Secretary of Health and Human Services pursuant to 45 CFR 164.408.

 

Electronic Transaction and Code Sets

 

To the extent that the services performed by BA pursuant to the Agreement involve transactions that are subject to the HIPAA Standards for Electronic Transactions and Code Sets, 45 C.F.R. Parts 160 and 162, with respect to EPHI covered by this Contract, BA shall conduct such transactions in conformance with such regulations as amended from time to time. Without limiting the generality of the foregoing, BA agrees that it will, in accordance with 45 C.F.R. § 162.923(c):

	
  

	

•       Comply with all applicable requirements of 45 C.F.R. Part 162; and require any agent or subcontractor to comply with all applicable requirements of 45 C.F.R. Part 162.

 

Permitted Uses and Disclosures by BA – General Use and Disclosure Provisions

 

Use of PHI for Operations on Behalf of FHKC

Except as otherwise limited in this Attachment, BA may use or disclose PHI to perform functions, activities, or services for, or on behalf of, FHKC as specified in the Contract, provided that such use or disclosure would not violate HIPAA if done by FHKC or the minimum necessary policies and procedures of FHKC.

Permitted Uses and Disclosures by BA – Specific Use and Disclosure Provisions

Third Party Disclosure Confidentiality

Except as otherwise limited in this Agreement, BA may disclose PHI for the proper management and administration of the BA, provided that disclosures are Required By Law, or, if permitted by law, this Agreement, and the Ancillary Agreements, provided that, if BA discloses any PHI to a third party for such a purpose, BA shall enter into a written agreement with such third party requiring the third party to: (a) maintain the confidentiality, integrity, and availability of PHI and not to use or further disclose such information except as Required By Law or for the purpose for which it was disclosed, and (b) notify BA of any instances in which it becomes aware in which the confidentiality, integrity, and/or availability of the PHI is breached in a preliminary report within two (2) business days with a full report of the incident not less than five (5) business days of the time it became aware of the incident.

  

	 October 1, 2010 Replacement Contract         	 	 Page 59 of 76	 	 RR	  FHKC
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Data Aggregation Services

Except   as   otherwise   limited   in   this   Agreement,   BA   may   use   PHI   to   provide   Data   Aggregation Services to FHKC as permitted by 42 CFR § 164.504(e)(2)(I)(B).

Provisions for FHKC to Inform BA of Privacy Practices and Restrictions

 

Notice of Privacy Practices

FHKC shall provide BA with the notice of Privacy Practices produced by FHKC or provided to FHKC as a result of FHKC’s obligations with other organizations in accordance with 45 CFR § 164.520, as well as any changes to such notice.

 

Notice of Changes in Individual’s Access or PHI

FHKC shall provide BA with any changes in, or revocation of, permission by an Individual to use or disclose PHI, if such changes affect Business Associate’s permitted or required uses.

 

Notice of Restriction in Individual’s Access or PHI

FHKC shall notify BA of any restriction to the use or disclosure of PHI that FHKC has agreed to in accordance with 45 CFR § 164.522, to the extent that such restriction may affect BA's use of PHI.

 

Term and Termination

Term

The Term of this Attachment shall be effective concurrent with the Contract, and shall terminate when all of the PHI provided by FHKC to BA, or created or received by BA on behalf of FHKC, is destroyed or returned to FHKC, or, if it is infeasible to return or destroy PHI, protections are extended to such information, in accordance with the termination provisions in this Section.

 

Termination for Cause

This Agreement authorizes and BA acknowledges and agrees FHKC shall have the right to immediately terminate this Agreement in the event Business Associate fails to comply with, or violates a material provision of this Agreement and any provision of the Privacy and Security Rules. Notwithstanding the aforementioned, Business Associate shall not be relieved of liability to FHKC for damages sustained by virtue of any breach of this Agreement by Business Associate.

 

Effect of Termination

Upon termination of this Agreement for any reason, except as provided in subsections below, Business Associate shall at its own expense either return and/or destroy all PHI and other confidential information received, from FHKC or created or received by Business Associate on behalf of FHKC. This provision applies to all confidential information regardless of form, including but not limited to electronic or paper format. This provision shall also apply to PHI and other confidential information in the possession of sub-contractors or agents of BA.

 

	
•    The BA shall consult with FHKC as necessary to assure an appropriate means of return and/or destruction and shall notify FHKC in writing when such destruction is complete. If 

      information is to be returned, the Parties shall document when all information has been received by FHKC.

 

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The BA shall notify FHKC whether it intends to return and/or destroy the confidential information with such additional detail as requested. In the event BA determines that returning or destroying the PHI and other confidential information received by or created for FHKC at the end or other termination of this Agreement is not feasible, BA shall provide to FHKC notification of the conditions that make return or destruction unfeasible.

 

Miscellaneous

Regulatory Reference

A reference in this Agreement to a section in the Privacy and/or Security Rule means the section as in effect or as amended.

 

Modification and Amendment

This Agreement may be modified only by express written amendment executed by all Parties hereto. The Parties agree to take such action to amend this Agreement from time to time as is necessary for FHKC to comply with the requirements of the Privacy and Security Rules and the Health Insurance Portability and Accountability Act, Public Law 104-191.

Survival

The respective rights and obligations of BA under Paragraph VIII.,” “Term and Termination” of this Attachment shall survive the termination of this Attachment and the Contract.

 

Interpretation

Any ambiguity in this Attachment and the Contract shall be resolved to permit FHKC to comply with HIPAA and HITECH.

	 October 1, 2010 Replacement Contract         	 	 Page 61 of 76	 	 RR	  FHKC
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IN   WITNESS   WHEREOF,   the   parties   have   caused   this   Attachment   C,   BA   AGREEMENT,   to   be executed by their undersigned officials as duly authorized.

 

FOR

WELLCARE OF FLORIDA, INC. (“INSURER”) and HealthEase of Florida, Inc.

 

	/s/ Christina C. Cooper

NAME: Christina C. Cooper

TITLE: President, Florida and Hawaii Division

DATE SIGNED: 9/30/10

 

	/s/ Robert Diaz

WITNESS #1 SIGNATURE

 

 

	Robert Diaz

WITNESS #1 PRINT NAME

 

	/s/ Jennifer Osbourn

WITNESS #2 SIGNATURE

 

	Jennifer Osbourn

WITNESS #2 PRINT NAME

  

 

 

	 October 1, 2010 Replacement Contract         	 	 Page 62 of 76	 	 RR	  FHKC
	 	 	 	 	 CC	  INSURER

  

  

  

FOR

FLORIDA HEALTHY KIDS CORPORATION:

 

	/s/ Rich Robleto

NAME: Rich Robleto

TITLE: Executive Director

DATE SIGNED: 

 

 

	/s/ Amber N. Floyd

WITNESS #1 SIGNATURE

 

 

	Amber N. Floyd

WITNESS #1 PRINT NAME

 

 

	/s/ Jennifer K. Lloyd

WITNESS #2 SIGNATURE

 

 

	Jennifer K. Lloyd

WITNESS #2 PRINT NAME

 

 

 

 

	 October 1, 2010 Replacement Contract         	 	 Page 63 of 76	 	 RR	  FHKC
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Exhibit C-1:    NOTIFICATION TO THE FHKC OF BREACH OF UNSECURED

PROTECTED HEALTH INFORMATION

 

 

	 Contract Information

	

Contract Number

	

Contract Title

 

	 	                                                             Contract Contact Information
	

Contact   Person   For This Incident:

	 
	

Contact Person’s Title:

	  
	

Contact’s Address:

	  
	

Contact’s Email:

	  
	
Contact’s Telephone No.:

	 

 

Business Associate hereby notifies FHKC that there has been a Breach of Unsecured (unencrypted) Protected Health Information that Business Associate has used or has had access to under the terms of the Business Associate Agreement, as described in detail below:

 

	 

	 	 
	 	 

	 
	
Type of Breach:

 o Lost or stolen laptop, computer, flash drive, disk, etc.

    o     Stolen password or credentials

    o Unauthorized access by an employee or contractor

    o    Unauthorized access by an outsider

    o    Other (describe)

 

 

 

	 
	
 

 

 

 

 

 

 

 

 

 

 

 

	 

	
Personal Information:

 

	Health Information:

 

	 October 1, 2010 Replacement Contract         	 	 Page 64 of 76	 	 RR	  FHKC
	 	 	 	 	 CC	  INSURER

 

  

  

  

 

 

	
o  Name

o  Address

o  Date of birth

o  Social Security number

o  Drivers license or identification card number

o  Financial insurance information (credit card number, bank account number, etc)

o  Health insurance information (insurance carrier, insurance card number, etc)

o  Other Personal or Health Information (describe):

	
o  Basic information (age, sex, height, etc)

o  Disease or medical conditions

o  Medications

o  Treatments or procedures

o  Immunizations

o  Allergies

o  Information about children

o  Test results

o  Hereditary conditions

o  Mental health information

o  Information about diet, exercise, weight, etc)

o  Correspondence between patient, or medical power of attorney

o  Organ donor authorization

	
 

 

	
 

 

 

	 
	 

	 	 
	 	 Yes	 No

	 

	
 

 

	 

	         Yes   	   No	 

	
Have you notified the people whose information was breached? DYES. We notified them on:

	 	
o Yes. We notified then on:

Attach a copy of the letter to this form.  Don't include any personally indentifiable information, other than your own contract information.

 

o No. Our investigation isn't complete.

 

	 Comments
	
 

 

 

 

 

 

 

 

 

	Signature: 	 	 Date:	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 

 

 

 

	 October 1, 2010 Replacement Contract         	 	 Page 65 of 76	 	 RR	  FHKC
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ATTACHMENT D – ENROLLEE BENEFIT SCHEDULE

I.        Minimum Enrollee Benefits Schedule

 

INSURER agrees to provide, at a minimum, those benefits that are prescribed by state law for the Program. If INSURER requires clarification of any coverage or co-payment requirements, INSURER shall consult with FHKC to confirm coverage requirements.

 

INSURER shall pay an Enrollee’s covered expenses up to a lifetime maximum of one million dollars ($1,000,000.00) per covered Enrollee.

	 October 1, 2010 Replacement Contract         	 	 Page 66 of 76	 	 RR	  FHKC
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II.    Health Care Benefits

The following health care benefits are included under this Contract:

 

 

	BENEFIT	LIMITATIONS	 CO-PAYMENTS
	
A.    Inpatient Services

All covered services provided for the medical care and

treatment of an Enrollee who is admitted as an inpatient  

to a hospital licensed under part I of Chapter 395.

Covered services include:

physician’s services; room and board; general nursing care; patient meals; use of operating room and related facilities; use of intensive care unit and services;  

radiological, laboratory and other diagnostic tests: drugs:

medications; biologicals; anesthesia and oxygen services; 

special duty nursing; radiation and chemotherapy; 

respiratory therapy; administration of whole blood plasma;

physical, speech and occupational therapy; medically necessary services of other health professionals.

 

 

 

 

 

 

 

 

 

	  

All admissions must be authorized by INSURER.

The length of the patient stay shall be determined based on the medical condition of the Enrollee in relation to the necessary and appropriate level of care.

 

Room and board may be limited to semi-private accommodations, unless a private room is considered medically necessary or semi-private accommodations are not available.

 

Private duty nursing limited to circumstances where such care is medically necessary.

 

Admissions for rehabilitation and physical therapy are limited to fifteen (15)  days per contract year.

 

Shall not include experimental or investigational procedures defined as a drug, biological product, device, medical treatment or procedure that meets any one of the following criteria, as determined by INSURER:

 

1.      Reliable evidence shows the drug, biological product, device, medical treatment, or procedure when applied to the circumstances of a particular patient is the subject of ongoing phase I, II or III clinical trials; or,

2.      Reliable evidence shows the drug, biological product, device, medical treatment or procedure when applied to the circumstances of a particular patient is under study with a written protocol to determine maximum tolerated dose, toxicity, safety, efficacy, or efficacy in comparison to conventional alternatives; or,

3.      Reliable evidence shows the drug, biological product, device, medical treatment, or procedure is being delivered or should be delivered subject to the approval and supervision of an Institutional Review Board (IRB) as required and defined by federal regulations, particularly those of the U.S. Food and Drug Administration or the Department of Health and Human Services.

	  

 NONE

 

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	BENEFIT         	LIMITATIONS  	CO-PAYMENTS
	

B.    Emergency Services

 

Covered Services include visits to an  emergency  room  or  other licensed facility if needed immediately  due to an injury or illness and delay means risk of permanent damage to the Enrollee’s health.

Covered services also means inpatient and 

outpatient services  that  are furnished by  

a provider that is qualified to furnish these services under §1932(b)(2) 

and 42 CFR 438.114(a) and that are needed to evaluate or stabilize an emergency medical condition.

	

INSURER must also comply with the provisions of s. 641.513, Florida Statutes.

 

Subject to the provisions of federal and state law, Enrollee has the right to use any hospital or other setting for emergency care.

 

INSURER is responsible for any post-stabilization services obtained   within   or   outside   of   INSURER’s  network  that  are pre-approved  by  INSURER or INSURER’s representative or where such approval has been sought by the facility or provider and INSURER has failed to respond within one (1) hour of such request for further post-stabilization services that are administered to maintain, improve or resolve the Enrollee’s 

stabilized position.

 

INSURER must limit non-covered charges to Enrollees for post-stabilization care services to an amount not greater than what the facility or provider would charge the Enrollee if the 

Enrollee had obtained the services through INSURER.

 

INSURER’s financial responsibility for post-stabilization care

services it has not pre-approved ends when:

-a participating provider with INSURER with privileges at

the treating facility assumes responsibility for the Enrollee’s

care;

-a participating provider assumes responsibility for the

Enrollee’s care through transfer; or,

-the Enrollee is discharged.

	

Ten dollars ($10.00) per visit waived if admitted or authorized by primary care physician.

	

C. Maternity Services and Newborn Care

 

Covered services include maternity and newborn care, prenatal and postnatal care, initial 

inpatient care of adolescent participants, including nursery charges  and initial pediatric or neonatal examination.

 

	

Infant is covered for up to three (3) days following birth or until the infant is transferred to another medical facility, whichever occurs first.

 

Coverage may be limited to the fee for vaginal deliveries.

	

NONE

	

D.    Organ Transplantation Services

 

Covered services include pre-transplant, transplant, post discharge services and treatment of complications after transplantation.

	

Coverage is available for transplants and medically related services if deemed necessary and appropriate within the guidelines set by the Organ Transplant Advisory Council or 

the Bone Marrow Transplant Advisory Council.

	

NONE

  

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	BENEFIT	LIMITATIONS	
CO-PAYMENTS

	
E.  Outpatient Services

Preventive, diagnostic, therapeutic, palliative care, and

other services provided to an Enrollee in the outpatient

portion of a health facility licensed under Chapter 395.

 

Covered services include well-child care, including 

those services recommended in the Guidelines for 

Health Supervision of Children and Youth as

developed by Academy of Pediatrics; immunizations

and injections as recommended by the Advisory

Committee on Immunization Practices; health 

education counseling and clinical services; 

family planning services, vision screening; 

hearing screening; clinical radiological, laboratory 

and other outpatient diagnostic tests; 

ambulatory surgical procedures; splints and 

casts; consultation with and treatment by 

referral physicians; radiation and chemotherapy;

chiropractic services; and podiatric services.

	  

Services must be provided directly by INSURER or through 

pre-approved referrals.

 

Routine hearing screening must be provided by primary 

care physician.

 

Family planning limited to one annual visit and one 

supply visit each ninety (90) days.

 

Chiropractic services shall be provided in the same manner 

as in the Florida Medicaid program.

 

Podiatric services are limited to one (1) visit per day 

totaling two

(2) visits per month for specific foot disorders. Dental 

services  must be provided by an oral surgeon for medically 

necessary reconstructive dental surgery due to injury.

 

Immunizations are to be provided by the primary 

care physician.

 

Treatment for temporomandibular joint (TMJ) disease is 

specifically excluded.

 

Abortions may only be provided in the following situations:

If   the   pregnancy   is   the   result   of   an   act   of   rape   or   

incest; or, When  a  physician  has  found  that  the  abortion  is  

necessary to save the life of the mother.

 

Shall not include experimental or investigational 

procedures defined as a drug, biological product, 

device, medical treatment or procedure that meets any 

one of the following criteria, as determined by INSURER:

1.      Reliable evidence shows the drug, biological 

product, device, medical treatment, or procedure when a

pplied to the circumstances of a particular Enrollee 

is the subject of ongoing phase I, II or III clinical trials; or,

2.      Reliable evidence shows the drug, biological 

product, device, medical treatment or procedure when 

applied to the circumstances of a particular Enrollee is 

under study with a written protocol to determine 

maximum tolerated dose, toxicity, safety, efficacy, or 

efficacy in comparison to conventional alternatives; or,

3.      Reliable evidence shows the drug, biological 

product, device, medical treatment, or procedure is 

being delivered or should be delivered subject to the 

approval and supervision of an Institutional Review 

Board (IRB) as required and defined by federal 

regulations, particularly those of the U.S. Food a

nd Drug Administration or the Department of 

Health and Human Services.

	  

No Co-Payment for well child care, preventive care or

for routine vision and hearing screenings. Five 

dollars ($5.00) per office visit.

 

	 October 1, 2010 Replacement Contract         	 	 Page 69 of 76	 	 RR	  FHKC
	 	 	 	 	 CC	  INSURER

 

  

  

  

 

	 BENEFIT	  LIMITATIONS	 CO-PAYMENTS
	  

F. Behavioral Health Services

 

Covered services include inpatient and outpatient care for psychological or psychiatric evaluation, diagnosis and treatment by a licensed mental health professional.

	  

All services must be provided directly by INSURER or 

upon approved referral.

 

Covered services include inpatient and outpatient services for mental and nervous disorders as defined in the most recent edition of the Diagnostic and Statistical Manual of Mental Disorders published by the American Psychiatric Association.

 

Such benefits include psychological or psychiatric evaluation, diagnosis and treatment by a licensed mental health professional meeting the requirements of Section 

3-21 of this Contract.

 

Any benefit limitations, including duration of 

services, number of visits, or number of days for

hospitalization or residential services, shall not be 

any less favorable than those for physical 

illnesses generally.

INSURER may also implement appropriate financial

incentives, peer review, utilization requirements, and 

other methods used for the management of 

benefits provided for other medical conditions in order 

to reduce service costs and utilization without 

compromising quality of care subject to the prior review 

and approval of FHKC.

	  

INPATIENT: NONE

 

OUTPATIENT: 

Five

dollars

($5.00) per visit.

 

	
 

G.     Substance Abuse Services

 

Includes coverage for inpatient and outpatient care 

for drug and alcohol abuse including

counseling and placement assistance.

Outpatient services include evaluation, diagnosis and treatment by a licensed practitioner.

	  

All services must be provided directly by   

INSURER or upon approved referral.

Covered services include inpatient, outpatient 

residential services for substance disorders.

 

Such benefits include evaluation, diagnosis and 

treatment by a licensed professional meeting 

the requirements of Section 3-21 of this Contract.

 

Any benefit limitations, including duration of services, number of visits, or number of days for hospitalization or residential services, shall not be any less favorable than those for physical illnesses generally.

 

INSURER may also implement appropriate financial incentives, peer review, utilization requirements, and 

other methods used for the management of benefits 

provided for other medical conditions in order to reduce service costs and utilization without compromising 

quality of care subject to the prior review and approval 

of FHKC.

	  

INPATIENT: NONE

 

OUTPATIENT:

Five   dollars   ($5.00)

per visit.

 

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	 BENEFIT    	 LIMITATIONS  	 CO-PAYMENTS
	

H.  Therapy Services

 

Covered services include physical, occupational, respiratory and speech therapies for short-term rehabilitation where significant improvement    in    the    Enrollee’s condition will result.

	

All   treatments   must   be   performed   directly   or   as   authorized by INSURER.

 

Limited  to  up  to  twenty-four  (24)  treatment  sessions  within a  sixty  (60)  day  period  per  episode   or  injury,  with  the  sixty 

(60) day period beginning with the first (1st) treatment.

	

Five   dollars   ($5.00) per visit.

	

I.     Home Health Services

 

Includes  prescribed  home  visits by  both  registered  and  licensed practical nurses to provide skilled nursing services on a part-time intermittent basis.

	

Coverage is limited to skilled nursing services only.

Meals, housekeeping and personal comfort items are

excluded.

Services must be provided directly by INSURER.

Private  duty  nursing  is  limited  to  circumstances  where  such

care is medically appropriate.

	

Five   dollars   ($5.00) per visit.

	

J.     Hospice Services

 

Covered services include reasonable and necessary services for palliation or management of an Enrollee’s terminal illness.

	

Once a family elects to receive hospice care for  an Enrollee, other services that treat the terminal condition will not be covered.

Services required for conditions totally unrelated to the terminal condition are covered to the extent that such services are 

otherwise covered under this contract.

	

Five   dollars   ($5.00) per visit.

	

K.  Nursing Facility Services

 

Covered services include regular nursing services, rehabilitation services, drugs and biologicals,  

medical supplies, and the use of appliances and equipment furnished by the facility.

	

All admissions must be authorized by INSURER and

provided by an INSURER affiliated facility.

Participant must require and receive skilled services on a

daily basis as ordered by an INSURER physician.

The length of the Enrollee’s stay shall be determined by  the

medical condition of the Enrollee in relation to the

necessary and appropriate level of care, but may be no

more than one hundred (100) days per contract year.

 

Room and board is limited to semi-private accommodations

unless a private room is considered medically necessary or

semi-private accommodations are not available.

Specialized treatment centers and independent kidney

disease treatment centers are excluded.

Private duty nurses, television, and custodial care are

excluded.

Admissions for rehabilitation and physical therapy are

limited to fifteen (15)  days per contract year.

	

NONE

	

L.  Durable Medical Equipment and Prosthetic Devices

 

Equipment and devices that are medically indicated to assist in the treatment of a medical condition 

and specifically prescribed as medically necessary by Enrollee’s INSURER physician.

	

Equipment and devices must be provided by authorized INSURER supplier.

 

Covered prosthetic devices include artificial eyes, limbs, braces and other artificial aids.

 

Low vision and telescopic lenses are not included.

 

Hearing aids are covered only when medically indicated to assist in the treatment of a medical condition.

	

NONE

  

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	BENEFIT                 	 LIMITATIONS  	 CO-PAYMENTS
	

M. Refractions

Examination by a INSURER optometrist to determine the need for and to prescribe corrective lenses as medically indicated.

	

Enrollee must have failed vision screening by primary care physician.

Corrective lenses and frames are limited to one (1) pair every two (2) years unless head size or prescription changes.

Coverage is limited to Medicaid frames with plastic or  SYL non-tinted lenses.

	

Five   dollars   ($5.00) 

per visit.

 

Ten dollars ($10.00) for corrective lenses.

	

M. Pharmacy

Prescribed drugs for the treatment of illness or injury.

	

Prescribed drugs covered under this Agreement shall include all prescribed drugs covered under the Florida Medicaid program.  INSURER is responsible for the coverage any drugs prescribed by Enrollee’s dental  provider under Healthy Kids.

INSURER may  implement cost utilization controls or a

pharmacy benefit  management program if FHKC so

authorizes.

Brand name products are covered if a generic substitution is

not available or where the prescribing physician indicates

that a brand name is medically necessary.

All medications must be dispensed through INSURER or an INSURER designated pharmacy.

All prescriptions must be written by the Enrollee’s primary care physician, INSURER approved specialist or consultant physician or Enrollee’s dental provider.

	

Five dollars ($5.00) per prescription  for up to a thirty-one (31) day supply.

	

N. Transportation Services

Emergency transportation as determined to be medically necessary in response to an emergency situation.

	

Must be in response to an emergency situation.

	

Ten dollars ($10.00) per service.

 

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	 	 	 	 	 CC	  INSURER

 

  

  

  

III.           Cost Sharing Provisions

 

INSURER  shall  comply  with  all  cost  sharing  restrictions  imposed  on  Enrollees  by  federal or state laws and regulations, including the following specific provisions:

 

A.           Special Populations

 

FHKC shall provide to INSURER on a monthly basis those Enrollees identified as Native Americans or Alaskan Natives who are prohibited from paying any cost sharing amounts, including co-payments.

 

B.           Cost Sharing Limited to No More than Five Percent (5%) of Family’s Income

FHKC will also identify to INSURER other Enrollees who have met federal requirements regarding maximum out of pocket expenditures. Enrollees identified by FHKC as having met this threshold are not required to pay any further cost sharing for covered services for a time specified by FHKC.

 

INSURER is responsible for informing its Providers of these provisions and ensuring that such Enrollees incur no further out of pocket costs for covered services and are not denied access to services. FHKC will provide these Enrollees with a letter indicating that they may not incur any cost sharing obligations.

 

INSURER shall track an ENROLLEE’s total co-payments so as to identify to FHKC or to ENROLLEE, upon request, the total amount of out of pocket costs incurred by the ENROLLEE through co-payments for covered services in a particular time period.

 

IV.           Prior Authorization Requirements

 

All requirements for prior authorizations must conform to federal and state regulations and must be completed within fourteen (14) days of request by the Enrollee. Extensions to this process may be granted in accordance with federal or state regulations.

 

	 October 1, 2010 Replacement Contract         	 	 Page 73 of 76	 	 RR	  FHKC
	 	 	 	 	 CC	  INSURER

  

  

  

  

 

	 ATTACHMENT E – LIST OF REQUIRED REPORTS

 

The following chart summarizes the reports required under this Contract according to the frequency of submission. Monthly reports are due on the fifteenth (15th) of each month for the prior month; quarterly reports are due by the fifteenth (15th) of each month following the end of each quarter and annual reports are due by July 1st (first) unless otherwise noted.

 

This chart is provided for reference purposes only; the provisions of the Contract and any reporting requirements included herein will control.

 

	

At Contract Execution

	

Immediately

	

Monthly

	

Quarterly

	

Annually

	

Insurance Coverages 

(Section 3-16)

	

Section 3-20 Requirements 

(Section 3-20)

	

Provider Network Changes (Section 3-20)

	

Statistical Claims Data Reporting (Section 3-28)

	

Grievance Process (Section 3-14)

	

Lobbying Disclosures

 (Section 3-17)

	

Grievances before the Subscriber Assistance Panel (Section 3-14)

	  	

Reports of filed Grievances 

(Section 3-14)

	

Lobbying Certification (Section 3-17)

	

Quality Assurance Plan 

(Section 3-24)

	

Termination of subcontractors or affiliates (Section 3-31)

	  	

Medical Loss Ratio Reports 

(Section 3-21-2)

	

Experience Adjustment                – April 1st (Section 3-21-3)

	

Conflicts  of Interest

Disclosure Form (Section 4-8) (Section 3-23-3) Attachment F

	

Changes of ownership or controlling interest (Section 4-6)

	  	

Network Adequacy Attestations (Section 3-31)

	

Audited financial statements 

(Section 3-24)

	

Fraud and Abuse Preventions (Section 3-13)

	

Changes of Notice and Contract Contact (Section 4-15)

	  	  	

Listing of Subcontractors and affiliates (Section 3-31)

	

Quality Improvement

Plan (Section 3-24)

	

Changes to Conflicts of Interest

Disclosure Form (Section 4-8) (Section 3-23-3) Attachment F

	  	  	

Member materials (Section 3-19)

 

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	 	 	 	 	 CC	  INSURER

  

  

  

 

	

At Contract Execution

	

Immediately

	

Monthly

	

Quarterly

	

Annually

	

Cultural Competency

Plan (Section 3-19)

	

Regulatory Filings (Section 3-27)

	  	  	

Proof of insurance coverage (3-16)

	  	  	  	  	

Fraud and Abuse Preventions (Section 3-13)

	  	  	  	  	

Quality Improvement

Plan (Section 3-24-1)

	  	  	  	  	

Cultural Competency Plan 

(Section 3-19)

	  	  	  	  	

Updated Conflict of Interest Form Attachment F (Section 3-23-3)

 

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ATTACHMENT F – DISCLOSURE FORM 

 

INSURER NAME:      WELLCARE OF FLORIDA, INC.

 

The   following   are   relationships,   business   and   personal,   that   may   create   a   conflict   of   interest that INSURER is hereby disclosing:

 

	

Type of Relationship 

(Business, Personal)

 

NONE

	

Name of Organization 

or Individual

	

Status of  Organization or

Individual (Current Contractor, Applicant, Enrollee, etc.)

	

Term of Relationship

	  	  	  	  
	  	  	  	  
	  	  	  	  
	  	  	  	  

 

By my signature, I certify that the information contained in this report and any attachments to this document are true representations. INSURER understands that if any information is found to be false that the Contract between FHKC and INSURER may be terminated at FHKC’s sole discretion.

 

 

	
 Submitted By:  

 

	 	
 Date of Submission:

 

	 
	/s/ Christina C. Cooper	 	9/30/10 	 
	
(Signature Above)

Name: Christina C. Cooper

Title: President, Florida and Hawaii Division

	 	 	 

 

	 October 1, 2010 Replacement Contract         	 	 Page 76 of 76	 	 RR	  FHKC
	 	 	 	 	 CC	  INSURER

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