Fill and Sign the Novation Form

NOVATION AGREEMENT Blue Cross and Blue Shield of Missouri, a corporation duly organized and existing under the laws of the State of Missouri, with its principal office in St. Louis, Missouri ("Transferor"); Healthy Alliance Life Insurance Company, a life and health insurance company duly organized and existing under the laws of the State of Missouri, with its principal office in St. Louis, Missouri ("Transferee"); the Blue Cross and Blue Shield Association, a not-for-profit corporation duly organized and existing under the laws of the State of Illinois, with its principal offices in Chicago, Illinois and Washington, D.C. ("Association"); and the United States Of America ("Government") enter into this Agreement as of ___________________, ____ ("Effective Date"). (a) THE PARTIES AGREE TO THE FOLLOWING FACTS: (1) The Government, represented by various Contracting Officers of the U.S. Office of Personnel Management ("OPM"), has entered into a certain contract with Transferor through the Association; namely, Contract No. CS 1039 pursuant to the Federal Employee Health Benefits Program. The term "the Contract" as used in this Agreement, means Contract No. CS 1039, including all modification, made between the Government and Transferor before the effective date of this Agreement (whether or not performance and payment have been completed and releases executed if the Government or Transferor has any remaining rights, duties, or obligations under this contract). Included in the term "the Contract" are also all modifications made under the terms and conditions of this Contract and purchase orders between the Government and Transferee, on or after the effective date of this Agreement. (2) As of the Effective Date, Transferor has transferred to Transferee all of its existing contracts of insurance, on an assumption reinsurance basis, as part of a settlement agreement in order to resolve certain litigation and disputes with the Missouri Attorney General, Missouri Department of Insurance, and others. (3) Transferee has acquired all the existing contracts of insurance of Transferor by virtue of the above transfer. (4) Transferee has assumed all obligations and liabilities of Transferor under the Contract by virtue of the above transfer. (5) Transferee is in a position to fully perform all obligations that may exist under the Contract. (6) It is consistent with the Government's interest to recognize Transferee as the successor party to the Contract. (7) Evidence of the above transfer has been filed with the Government. (b) IN CONSIDERATION OF THESE FACTS, THE PARTIES AGREE THAT BY THIS AGREEMENT - (1) Transferor confirms the transfer to Transferee. Transferor also waives any claims and rights against the Government that it now has or may have in the future in connection with the Contract, with the exception of the following claims and/or rights (which are also transferred to Transferee): (a) outstanding claims related to the audits of Transferor's performance under the Contract conducted prior to Effective Date; (b) claims arising from audits conducted after the Effective Date of Transferor's performance prior to the Effective Date; (c) claims arising from any adjustment by OPM to Transferor's 1996 annual cost submission report; and (d) adjustments for other party liability to claims paid prior to the Effective Date. (2) Transferee agrees to be bound by and to perform the Contract in accordance with the conditions contained in the Contract. Transferee also assumes all obligations and liabilities of, and all claims against, Transferor under the Contract as if Transferee were the original party to the Contract. (3) Transferee ratifies all previous actions taken by Transferor with respect to the Contract, with the same force and effect as if the action had been taken by Transferee. (4) The Government recognizes Transferee as Transferor's successor on interest in and to the Contract. Transferee by this Agreement becomes entitled to all rights, titles, and interests of Transferor in and to the Contract as if Transferee were the original party to the Contract. Following the Effective Date of this Agreement, the term "Contractor," as used in the Contract, shall refer to Transferee. (5) Except as expressly provided in this Agreement, nothing in it shall be construed as a waiver of any rights of the Government against Transferor. (6) All payments and reimbursements previously made by the Government to Transferor, and all other previous actions taken by the Government under the Contract, shall be considered to have discharged those parts of the Government's obligations under the Contract. All payments and reimbursements made by the Government after the date of this Agreement in the name of or to the Transferor shall have the same force and effect as if made to Transferee, and shall constitute a complete discharge of the Government's obligations under the Contract, to the extent of the amounts paid or reimbursed. (7) Transferor and Transferee agree that the Government is not obligated to pay or reimburse either of them for, or otherwise give effect to, any costs, taxes, or other expenses, or any related increase, directly or indirectly arising out of or resulting from the transfer to this Agreement, other than those that the Government in the absence of this transfer or Agreement would have been obligated to pay or reimburse under the terms of the Contract. (8) Transferor guarantees payment of all liabilities and the performance of all obligations that the Transferee (a) assumes under this Agreement or (b) may undertake in the future should the Contract be modified under its terms and conditions. Transferor waives notice of, and consents to, any such future modifications. (9) The Contract shall remain in full force and effect, except as modified by this Agreement. Each party has executed this Agreement as of the day and year first above written. BLUE CROSS AND BLUE SHIELD ASSOCIATION By: Print Name: Title: BLUE CROSS AND BLUE SHIELD OF MISSOURI By: Print Name: Title: HEALTHY ALLIANCE LIFE INSURANCE COMPANY By: Print Name: Title: Certificate I, _________________________________, certify that I am Secretary of Transferor; that __________________________________, who signed this Agreement for this corporation, was then of this corporation; and that this Agreement was duly signed for and on behalf of this corporation and within the scope of its corporate powers. Witness my hand and the seal of this corporation ____ day of ______________, ___. By [CORPORATE SEAL] Certificate I, __________________________________, certify that I am Secretary of Transferee; that _____________________________________, who signed this Agreement for this corporation, was then of this corporation; and that this Agreement was duly signed for and on behalf of this corporation and within the scope of its corporate powers. Witness my hand and the seal of this corporation ____ day of ________________, ___. By [CORPORATE SEAL]