Services Agreement - Assistance Services of America Inc. and Medical Advisory Systems Inc.
SERVICES AGREEMENT
Services Agreement ("Services Agreement") dated as of July 30, 1999, by and
between Assistance Services of America, Inc. ("ASA") and Medical Advisory
Systems, Inc. ("MAS").
WITNESSETH
WHEREAS, ASA desires to hire the services of a service provider capable of
performing certain services in support of the businesses and services that ASA
provides, and
WHEREAS, MAS has the experience to perform the services required to be
performed by it under this Agreement, and has the organization, means, and
technical ability to fulfill all of its obligations under this Agreement.
NOW, THEREFORE, the parties hereto in consideration of the premises and the
mutual covenants and conditions hereinafter set forth do hereby agree as
follows:
ARTICLE 1
ENGAGEMENT AND SCOPE OF WORK
1.1 Subject to the terms and conditions of this Services Agreement,
ASA hereby engages MAS, and MAS hereby accepts such engagement, to provide those
services (the "Services") described in Appendix A. MAS hereby agrees to provide
Services in accordance with its current practices, which it hereby represents
are in accord with industry standards and practices. When requesting Services,
ASA shall provide MAS with written instructions on the Services to be provided
and access to updated Mondial Assistance networks information. Notwithstanding
the foregoing, ASA is not under any obligation whatsoever to request any
Services from MAS, and ASA shall not be prohibited from obtaining similar
services for ASA from a service provider other than MAS. In the event that ASA
decides to engage another service provider to handle the cases currently treated
by MAS, ASA will give MAS a 90 days' written notice prior to the transfer. It is
further understood that MAS is under no obligation to provide Service above
reasonable levels of support or beyond the reasonable capacity of its personnel
as existed as of March 8, 1999.
1.2 In addition to the Services, MAS will provide administrative
offices and support to ASA as specified in Appendix C.
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ARTICLE 2
COMPENSATION
The fees, commissions and other compensation to be paid by ASA to MAS for
Services performed by MAS hereunder shall be as set forth in Appendix B.
ARTICLE 3
TERM OF PAYMENT
3.1 Within thirty (30) days of the performance of any Services by MAS
hereunder, MAS shall submit to ASA an original statement therefor, supported by
one copy each of all expense reports and any other documentation necessary to
substantiate the statement. Within thirty (30) days after receipt of such
statements, ASA shall pay MAS all amounts that may be due.
3.2 Assistance Services of America Inc. is responsible for all
external supplier expenses incurred by Medical Advisory Systems, Inc. in
providing Services on behalf of Assistance Services of America, Inc in
accordance with the mutually agreed upon book of procedure. When provided by
ASA, MAS shall when reasonably possible use any supplier directed by ASA.
Failure to use ASA's supplier (except if not reasonably possible) shall result
in charge back of any overcharges to MAS. The parties acknowledge that ASA has
paid to MAS, as an advance against external supplier expenses --so called CADE
expenses-- the sum of $35,384. Every three months both parties agree to adjust
this advance to cover adequate CADE expenses of this period.. At the termination
of this contract MAS shall repay to ASA any remaining credit balance within 3
months of the termination. If MAS receives any CADE invoices after having
reimbursed ASA, MAS shall invoice ASA for the remaining balance, providing ASA
with the necessary documentation to substantiate the statement. Upon receipt of
such statement, ASA will have 30 days to pay MAS all amounts due.
3.3 Payment of rent for administrative offices in the MAS building is
due on the 1st day of the month for each month of occupancy.
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ARTICLE 4
INDEMNIFICATION
MAS shall indemnify, defend and hold harmless ASA, its directors, officers,
employees, and affiliated companies from and against any and all claims, suits
or proceedings, demands, liabilities, costs, damages, fines, and expenses
whatsoever, including reasonable attorney's fees, arising from or related in any
way to:
o Any breach by MAS of its agreements, obligations or representations
under this Service Agreement;
o Any violation by MAS of applicable law and regulation in connection with
the performance of the Company's obligations;
ASA shall indemnify, defend and hold harmless MAS, its directors, officers,
employees, and affiliated companies from and against any and all claims, suits
or proceedings, demands, liabilities, costs, damages, fines and expenses
whatsoever, including reasonable attorney's fees, arising from or related in any
way to:
o Any breach by ASA of its agreements, obligations or representations;
o Any violation of applicable law and regulation in connection with the
performance of ASA's obligations;
The parties hereto shall promptly notify each other of any suit or threat
of suit (except with respect to those which either party might institute against
the other) related in any way to the benefits provided which may give rise to
claim or indemnification against the other party.
The parties shall cooperate with and assist one another in connection with
any required response to or involvement in any legal proceeding, action, or
inquiry.
The indemnifying party may control any suit or proceeding; provided,
however, in instances where the indemnifying party elects to control, the
indemnified party may, at its own cost, engage its own attorney(s).
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ARTICLE 5
INSURANCE
5.1 MAS, (including staff physicians contracted to work in the MAS
response center) shall, at its own expense, maintain in force, during the term
of this Services Agreement, workers compensation and employer's liability
insurance (limit of One Million Dollars ($1,000,000) per occurrence) in
accordance with the laws having jurisdiction over MAS's employees (or, as the
case may be MAS contracted physicians) who are performing the Services. MAS
shall also maintain during such period commercial general bodily injury and
property damage liability, including automobile (owned, non-owned, or hired),
covering bodily injury to or death of any person, including without limitation
any employee of MAS, and/or loss of or damage to property in a combined single
amount of One Million Dollars ($1,000,000) for any one occurrence.
5.2 MAS shall make best effort to maintain ASA as an additional
insured on MAS professional liability insurance polices provided there is no
increase in premium. MAS will provide written notice to ASA within 5 days of a
receipt of a notice from its insurance carrier related to any amendment or
cancellation of each professional liability policy.
ARTICLE 6
COMPLIANCE WITH LAWS
In providing Services hereunder, MAS shall comply with all applicable
federal, state and local laws, it being understood that MAS physicians should
not be requested by ASA to practice medicine across states borders.
ARTICLE 7
ACCESS TO NETWORK
MAS shall have access to the Mondial Assistance networks, which include but
are not limited to the Mondial Assistance International network and the US PPO
network, for the term of this Agreement. MAS is obliged to utilize these
networks exclusively when handling an ASA case.
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ARTICLE 8
CONFIDENTIALITY
8.1 MAS shall be responsible for ensuring that all information, oral
or written obtained from ASA by MAS or by any MAS Agent, officer, director,
employee, agent or other representative thereof, and all of the conclusions and
recommendations reached or made by MAS, or any MAS Agent shall be kept
confidential and shall not be disclosed. This obligation of MAS shall be of a
continuing nature and shall not be canceled by the expiration, suspension, or
termination of the Services Agreement. MAS agrees that, upon the completion or
other termination of the Services, all network information, printed or
electronic, received by MAS shall promptly be delivered to ASA.
8.2 MAS shall also be responsible for ensuring that any MAS contracted
physician performing Services under this Agreement will comply with these
requirements. This obligation of confidentiality shall not apply to information:
(i) that is previously known, or available, to MAS on an unrestricted and non-
confidential basis; (ii) that is, or becomes a part of the public domain through
a third party; (iii) that is learned by MAS from a third party who has obtained
such information free of any obligation or confidentiality; or (iv) that must be
disclosed pursuant to legal requirements to which MAS is subject if such
disclosure is mandatory and failure to so disclose would subject MAS to civil or
criminal penalties. Notwithstanding the generality of the foregoing, MAS agrees
that within 15 days of the termination of this Agreement for any reason
whatsoever, MAS shall return to ASA all documents and things, files, or copies
of documents related to the Mondial Assistance International Network and will
undertake not to use this network except with the prior written consent of ASA.
ARTICLE 9
AUDIT
ASA may audit and inspect MAS's records and accounts with respect to the
Services performed at any time during MAS's performance of any Services and for
a period of two (2) years following the completion or termination of the
Services for the purpose of verifying any statement and underlying documentation
presented by MAS in accordance with the provisions of Article 3 hereof, it being
understood that MAS agrees to preserve all such documents respecting all
Services for a two (2) year period following the termination of this Agreement
or such longer period as may be required by applicable law or regulation.
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ARTICLE 10
PROPRIETARY INFORMATION
Upon the termination of this agreement, MAS shall promptly return to ASA
all ASA proprietary information, including but not limited to, ASA Books of
Procedures, ASA client databases, any equipment loaned to MAS by ASA or ASA
clients and ASA files on electronic media, it being understood that no party
shall be required to return to any other party any medical records that must as
a matter of law and in accordance with an opinion of legal counsel (which
opinion shall be delivered in writing to any party hereto upon any other party's
reasonable request) be retained by such party. Except as provided in the
foregoing sentence, no party shall retain any copies of any such records without
the express written consent of the other. Upon termination of this agreement ASA
shall return promptly to MAS all proprietary information files and equipment
belonging to MAS.
ARTICLE 11
FORCE MAJEURE
Any delay in or failure of performance of ASA or MAS shall not constitute
default hereunder if and to the extent such delay or failure of performance is
caused by occurrences beyond the reasonable control of ASA or MAS, as the case
may be, including but not limited to: Acts of God or the public enemy;
compliance with any order or request of any governmental authority; act of war;
rebellion or sabotage or damage resulting therefrom; fires; floods; release of
hazardous or toxic substances; explosions; accidents; riots or strikes or other
concerted acts of workmen, whether direct or indirect; or any other causes
whether or not of the same class or kind as those specifically above named,
which are not within the reasonable control of ASA or MAS, as the case may be.
ARTICLE 12
TERM AND TERMINATION
This Services Agreement shall terminate on July 31, 2000 unless extended by
mutual agreement of the parties or terminated sooner, at the sole discretion by
either party, upon 90 day's written notice to the other party. Should the
parties agree to extend the Agreement beyond July 31, 2000, they agree to
negotiate new case fees and office lease rates at least 90 days prior to
termination.
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ARTICLE 13
DISCLAIMERS
13.1 MAS shall be an independent contractor and neither MAS nor ASA
shall act as the agent for the other, except as set forth in this Services
Agreement. MAS undertakes to provide medical and travel assistance, insurance
claims handling and cost containment services, including medical monitoring and
advice by staff physicians.
13.2 The parties understand that the medical personnel who shall
provide medical consultation as referenced herein, are not agents or employees
of MAS, but are independently licensed and insured medical contractors. Subject
to the provisions of Article 14, it is understood that MAS does not have any
control over the medical judgement exercised by any of these independent medical
contractors and shares no liability for same.
13.3 The communications equipment used by MAS (as with any
communications equipment) has limitations to its capacity. The parties hereto
recognize that these limitations may restrict the capability of MAS to
communicate beyond certain distances or in certain areas of the world.
Additionally, the parties hereto recognize that effective communications may be
dependent upon third party interfacing systems. The parties hereto agree MAS is
not obligated to provide communications beyond the capacity of its equipment.
ARTICLE 14
SUBCONTRACTORS
MAS may subcontract the performance of Services under this Service
Agreement with any agent. For services outside the US and for PPO repricing
services MAS shall use when reasonably possible representatives of the SACNAS
International network or the ASA PPO network, such networks being maintened by
SI and ASA respectively. Notwithstanding any subcontracting by MAS outside the
network provided by ASA or Sacnas International, MAS shall remain liable and
responsible to ASA, and ASA to MAS, for all of the parties' respective
obligations under this Service Agreement. MAS shall, for the protection of ASA,
demand from all MAS agents from which MAS procures services, reasonable
guarantees which shall be made available to ASA to the full extent of the terms
thereof.
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ARTICLE 15
ASSIGNMENT
This Services Agreement may not be assigned by any party without the
express written consent of the other party.
ARTICLE 16
NOTICES
Unless otherwise expressly provided in this Agreement all notices and other
communications given under this Agreement shall be in writing and shall be
deemed effective upon receipt of the addressee at its address listed below or at
such other address as such party shall have notified the other in writing.
If to ASA:
Attention: Carol AVENEL
8050 Southern Maryland Blvd.
Owings, Maryland 20736 USA
Phone: (410) 257-9542
Fax: (410) 257-5285
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with copy to:
Yves Lepage, Esq. And Herve Deboutidre, Chairman,
Curtis, Mallet-Prevost, Colt & Mosle Helene Meyniac, President
101 Park Avenue c/o Sacnas International
New York, New York 10178 2, rue Fragonard 75017 PARIS - FRANCE
Phone: (212) 696-6000 phone: (33) 1 53 06 15 32
Fax: (212) 697-1559 fax (33) 1 53 06 15 32
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If to MAS:
Attention: Thomas M. Hall. M.D., M.I.M.
8050 Southern Maryland Blvd.
Owings, Maryland 20736 USA
Phone: (301) 855-8070
Fax: (301) 855-4958
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With copy to:
Ronald W. Pickett
2321 Ocean Point Drive
Wilmnigton, NC 28405
Phone: (910) 509-1433
Fax: (910) 509-1702
ARTICLE 17
ARBITRATION
Any controversy or claim arising out of or relating to this Services
Agreement or any breach thereof, shall be settled by arbitration in Maryland in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association and judgement upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.
ARTICLE 18
GOVERNING LAWS
This Agreement shall be governed by and construed in accordance with the
laws of the state of Maryland.
ARTICLE 19
MISCELLANEOUS
19.1 HEADINGS AND TITLES OF ARTICLES. Headings and titles of
paragraphs and other subparts of this Agreement are for convenience of reference
only and shall not be considered in interpreting the text of this Services
Agreement. Modifications or amendments to this Services Agreement must be in
writing and executed by duly authorized representatives of each part.
19.2 COUNTERPARTS. This Services Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and either of the parties hereto may execute this Services
Agreement by signing any such counterpart.
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19.3 ENTIRE AGREEMENT. This Services Agreement and the attached
Appendices noted above constitute the entire agreement of the parties with
respect to the subject matter hereof.
19.4 CONFLICTS WITH THE STOCK PURCHASE AGREEMENT. In the event that
any term, condition or other aspect of this Services Agreement conflicts with
any portion of the Stock Purchase Agreement dated July 30, 1999 between SACNAS
International and MAS, the Stock Purchase Agreement shall be the controlling
document and govern the resolution of the conflict.
19.5 CONFLICTS WITH THE LETTER OF AGREEMENT. In the event that any
term, condition or other aspect of the this Services Agreement conflicts with
any portion of the Letter of Agreement dated March 8, 1999 between SACNAS
International and MAS, this Services Agreement shall be the controlling document
and govern the resolution of the conflict.
19.6 CONFLICTS WITH THE ADMINISTRATIVE AND MEDICAL CORRESPONDENT
AGREEMENT. In the event that any term, condition or other aspect of the this
Services Agreement conflicts with any portion of the Administrative and Medical
Correspondent Agreement dated August 2, 1990 between SACNAS International and
MAS, this Services Agreement shall be the controlling document and govern the
resolution of the conflict.
IN WITNESS WHEREOF, the parties hereto have executed this Service Agreement
as of the date first above written:
ACCEPTED AND AGREED:
ASSISTANCE SERVICES OF AMERICA, INC.
By: /s/ Helene Meyniac
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Name: Helene Meyniac
Title: President
MEDICAL ADVISORY SYSTEMS, INC.
By: /s/ Thomas M. Hall
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Name: Thomas M. Hall, M.D., M.I.M.
Title: Chief Executive Officer
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APPENDIX A
MAS will provide the following Services linked to the call center Services
rendered to ASA clients:
1. Provision of 24-hour telephone handling and assistance including timely
provision of ASA case summaries and case logs;
2. Provision of 24-hour medical consultation by telephone;
3. Coordination of transportation services including medical escorts;
4. Medical cost containment services;
5. Advance of funds to subscribers
6. Coordination of examination by an independent physician;
7. Dossier administration ("gestion") and PPO repricing. The MAS accounting
department will assist with financial case file reconciliation, data needed
for billing of cases, and signature on impressed accounts for cases handled
by MAS;
8. Timely support in handling ASA customer complaints as they relate to cases
handled by MAS as per the urgency of ASA's clients request;
9. Maintenance of ASA client databases that are required for the verification
of subscriber eligibility when MAS handles cases. Databases are to be
provided to MAS in electronic format compatible with existing MAS databases.
Maintenance of the Sacnas International network database (period Master
updates from Sacnas International).
10. Production of standard monthly ASA reports for cases handled by MAS, as
defined between MAS and ASA;
11. Tape back up of and access to ASA databases used by MAS to handle cases.
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Appendix B
Medical Advisory Systems, Inc. Fees For Case Handling
Case Handling Fees
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1. TRANSPORTATION / EVACUATION $485.00
1.1 Evacuation / Air Ambulance
1.2 Escorted transport
1.3 Pre-payment of transportation expenses
1.4 Repatriation of remains
2. MEDICAL $257.00
2.1 Medical contact
2.2 Medical Advisory Systems, Inc.Doctor involved
3. TRAVEL / TECHNICAL $170.00
3.1. Plane ticket assistance with travel agency
3.2. Lost luggage
3.3. Car / driver arrangements
3.4 Doctor referral with no medical report
3.5. Immunisation information
3.6. Travel / hotel arrangements
4. PERMATEL - MEDICAL
4.1. One time medical contact with no follow-up $ 47.00
5. PERMATEL - NON MEDICAL $ 18.00
5.1. Flight information
5.2. Claims assistance
5.3. Conference call
5.4. Travel information
5.5. Lost Passport
5.6. Report of theft
6. CUSTOMER SERVICE I QUESTION ONLY $ 2.45
6.1. Maximum 5 minute call
6.2. Request claims forms
6.3. Advise correct telephone number to call
7. ADMINISTRATIVE $ 75.00
7.1. Guarantee of expenses
7.2. Billing service with no referral
7.3. Billing service with no medical report
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Medical Advisory Systems, Inc fees for case handling services not covered by one
of the above categories shall be negotiated between the parties at the time
service is requested.
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APPENDIX C: PROVISION OF ADMINISTRATIVE SERVICES
In addition to the services provided in Appendix A, MAS will provide ASA with
the following administrative services:
A. ADMINISTRATIVE OFFICES
The use of the office building includes access to the common parking lot to the
conference room and common areas of the building. It also includes unlimited
access to any available copier, postage meter, and door lock key codes.
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Monthly Fee
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o 4 currently occupied offices and the office currently
occupied by MAS's Chief Accountant $1,600
o electricity & grounds maintenance 500
o office cleaning services 545
o phone system lease 850
o use of computer network, Solomon's accounting
license & maintenance 375
o build out 130
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$4,000
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MAS will give ASA a 10% rebate on the total monthly office rental provided a.)
payment is made no later than the first of the month, b.) float account is in
order, c.) no outstanding invoices owed to MAS exceed 30 days and d.) previous
monthly billing from MAS to ASA for medical cases exceeded $15,000.
B. ADMINISTRATIVE SUPPORT
1. Use of the computer network includes routine maintenance of the existing ASA
IT network cables and server(s) used for Internet access and e-mail. It
includes routine tape back up of server files and network anti-virus and
security upgrades. It does not include installation of new software or
workstations required by ASA, extensive shutdowns or work required for
eradication of viruses imported by ASA employees, nor extensive or unusual
repairs or upgrades of equipment.
2. Use of the telephone system includes existing use of phone lines and
equipment. It does not include upgrades required to handle a high influx of
calls from new services or contracts. Upon termination of this Agreement, MAS
shall cooperate with ASA to ensure that all ASA telephone lines are properly
transferred.
3. Rental of administrative offices includes reasonable use of the postage meter
at cost plus reasonable access to MAS shipping and receiving areas.
4. Additional Information Technology services are available as time permits from
the Medical Advisory Systems, Inc. Information Technology department at
current billing
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rates. The current billing rate for Mr. Lawrence Horsemen is $160.00 per hour
and $85.00 per hour for Mr. Thomas Moran. Rates are subject to periodic
change as for other clients.
5. Printing services are available from MAS at the following rates
Color Printer $1.95 per page
Document Scan $9.00 per page
6. Copier Services
For copier services the fee is $100.00 per month lease fee plus $0.03 per
page copied. A log sheet will be maintained next to the copier so that the
number of copies made can be documented using an honor system. Periodically the
log sheet totals will be compared to the master counter inside the copier
machine. MAS reserves the right upon 30 days notice to request that ASA obtain
its own copier should this log sheet documentation system prove inaccurate or
unmanageable.