Agreement for Health Information Services - MedStrong International Corp. and Trip Mate Insurance Agency Inc.
AGREEMENT FOR HEALTH INFORMATION SERVICES
THIS AGREEMENT ("Agreement"), effective as of the 1st day of July,
2002, is entered into by and between MEDSTRONG INTERNATIONAL CORPORATION
("MIC"), a Delaware corporation, with its principal office located at 500 Silver
Spur Road, Rancho Palos Verdes, California 90274, and TRIP MATE INSURANCE
AGENCY, INC. ("TMI"), a Kansas corporation, with its principal office located at
9225 Ward Parkway, 2nd Floor, Kansas City, MO 64114.
WHEREAS, MIC is a member-based provider of health information services
to consumers;
WHEREAS, among the services provided by MIC is Patient Data Quickly
("TRAVELER PDQ"), a membership program that allows individuals to store and
update their medical records online for confidential and instantaneous future
access;
WHEREAS, TMI is an administrator of travel insurance programs
("Plans") for the travel industry underwritten by certain insurance companies,
Monumental Life Insurance Company, Monumental General Casualty Company,
Stonebridge Casualty Insurance Company, Life Investors Insurance Company of
America and Kingsway General Insurance Company, hereinafter referred to as
"Insurers"; and
WHEREAS, TMI and MIC desire to make TRAVELER PDQ available to all
individuals that purchase Plans administered by TMI;
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, the parties hereto agree as follows:
1. OFFERING:
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Throughout the term of this Agreement, TMI will make available to all
persons who purchase a Plan a TRAVELER PDQ membership. The TRAVELER PDQ
membership shall commence on the date the membership is registered after a
Plan is purchased and shall terminate on the earlier of (i) the date the
trip covered by any such Plan is completed, or (ii) the termination of
coverage for an Insured under any such Plan.
2. PAYMENT:
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a) For the period from July 1, 2002 through and including December 31,
2002, TMI shall pay MIC an amount equal one-half of one percent (0.5%)
of the total written premiums received by TMI for all persons reported
to TMI as having purchased coverage under a Plan.
b) Beginning January 1, 2003, said amount shall automatically increase to
one percent (1.0%) of total written premiums as reported to TMI, subject
to adjustment as follows: commencing on January 1, 2003, and on each
January 1st and July 1st thereafter (individually, a "Review Date"), MIC
and TMI shall review the total number of Plan purchasers who have been
reported to TMI to determine the percentage of such purchasers who
actually registered their TRAVELER PDQ memberships with MIC. The initial
review shall include all Plan purchasers who reported to TMI between
July 1, 2002 and December 31, 2002.
All subsequent reviews shall include all Plan purchasers who were
reported to TMI between January 1, 2003 and the date of such review.
Upon determining such percentage, the amount paid by TMI to MIC for each
TRAVELER PDQ membership shall be adjusted in accordance with the
following:
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If registered memberships ratio is: Then the fee to MIC is:
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Less than 10% registered 1.0% of written premium
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At least 10% but less than 15% registered 1.5% of written premium
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15% or more registered 2.0% of written premium
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All payment adjustments shall be effective as of the applicable Review
Date forward and shall remain in full force and effect until the next
Review Date.
c) For all Plan purchases reported to TMI in a given calendar month,
payment for the corresponding TRAVELER PDQ memberships shall be made to
MIC not later than the thirty first (31st) day of the immediately
succeeding month. It is understood and agreed by both parties that all
such payments shall be made net of Plan cancellations reported to TMI.
d) In addition to the adjustments required under Section 2(b) above,
amounts to be paid to MIC by TMI may be further adjusted in accordance
with the provisions of Section 4(c) relating to call center services.
3. VOLUME ASSUMPTIONS:
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MIC has entered into this Agreement, and has agreed to the payment
structure set forth in Section 2 above, in reliance on the representation
by TMI that it expects to generate not less than Forty Million Dollars
($40,000,000) in annual written Plan premium for the 2003 calendar year. In
the event that TMI generates calendar year annual written Plan premium of
$35,000,000 or less for 2003, the parties agree to enter into good faith
discussions to re-negotiate the financial terms of this Agreement. In the
event the parties are unable to reach an agreement to renegotiate the
financial terms, MIC may elect to terminate the agreement under Section
6.c.
4. REGISTRATION:
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a) MIC shall offer Plan purchasers the option of online registration
through MIC's website. Purchasers electing to use this option shall
receive their membership numbers and membership cards directly from MIC
in electronic format.
b) For purchasers electing not to use online registration, TMI will offer
telephonic service through TMI's call center facilities at TMI's
expense. For each Plan purchaser electing this option to register
his/her membership, MIC will receive registration materials directly
from the member to be registered and will input the information into its
database and shall electronically, or by mail or fax, send membership
numbers and membership cards directly to the so registered member.
This method of registration and the corresponding responsibilities of
each party under Section 4 (b) may be revised from time to time by the
mutual written agreement of both parties.
c) In the event that TMI is unable to provide the services detailed in
Section 4 (b), and TMI requests MIC to use its call center for such
purpose, amounts being paid by TMI to MIC for TRAVELER PDQ memberships
in accordance with Section 2 hereof shall be doubled for so long as MIC
shall be required to use its call center (i.e. if MIC was receiving 1.5%
of written premiums for each membership, it shall receive 3.0% of
written premiums during such period).
5. ANNUAL MEMBERSHIPS:
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a) MIC will solicit all Plan purchasers for annual memberships and upgrades
of their TRAVELER PDQ memberships at MIC's expense. The benefits,
services and content of any such annual memberships or upgrades of
memberships must be approved by TMI before its use by MIC to solicit
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Plan purchasers. Subject to the provisions of Section 5(b) below, MIC
shall pay TMI an amount equal to twenty percent (20%) of the purchase
price of any membership and/or upgrade of a TRAVELER PDQ membership by a
Plan purchaser ("Membership Fee"). This Membership Fee shall be payable
for any such memberships or upgrades for which payment in full was
received by MIC during the term of this Agreement.
b) TMI agrees that monies due TMI under Section 5, item (a) above will be
subject to adjustment as follows:
(i) MIC will deposit monies due TMI under the provisions of Section 5
(a) for the period July 1, 2002 to December 31, 2003, and each
successive calendar year, in a fiduciary bank account in trust
for the benefit of TMI;
(ii) The parties shall compute the "Desired Amount" which is defined
as follows: "Desired Amount" means the total amount derived by
multiplying the number of registered members by $5.00.
(iii) MIC will deduct from any amount due under Section 5 item (a)
above, any negative difference derived when subtracting the
Desired Amount, as defined herein, from the compensation provided
MIC under Section 2 hereof, for the period July 1, 2002 to
December 31, 2003, and each successive calendar year;
(iv) Any balance due after adjustment as detailed in Section 5, items
(b) (i) and (ii) shall be paid to TMI on or before February 15,
2004 and on or before each successive February 15th.
6. TERM AND TERMINATION:
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a) The initial term ("Initial Term") of this Agreement shall from July 1,
2002 to June 30, 2005. Unless otherwise terminated pursuant to the terms
hereof, this Agreement shall automatically renew for additional one-year
periods beginning July 1, 2005.
b) Either party may terminate this Agreement, without cause, as of the end
of the Initial Term or any renewal term by giving written notice of such
termination not less than ninety (90) days prior to the end of such
term.
c) MIC may terminate this Agreement in the event that TMI fails to generate
calendar year annual written Plan premium of $35,000,000 or add for
2003, or for a subsequent calendar year period, by giving TMI ninety
(90) days written notice of such termination.
d) TMI may terminate this Agreement in the event that the ratio of
registered memberships to the total number of Plan purchasers is 2.50%
or less for the twelve-month period ending June 30, 2004 by giving MIC
ninety (90) days written notice of such termination.
e) this Agreement may also be terminated immediately upon written notice as
follows:
1) by mutual written agreement of the parties;
2) If a party commits a material breach of this Agreement, and such
breach is not cured for a period of 30 days after written notice is
given to the breaching party specifying the nature of the breach and
requesting that it be cured within the thirty (30) day period to the
satisfaction of the non-breaching party;
3) In the event any party files bankruptcy, becomes insolvent, has a
receiver of its assets appointed, make a general assignment for the
benefit of creditors, or has any procedure commenced for
reorganization of its affairs.
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d) Upon termination of this Agreement by either party, all obligations
hereunder shall cease, except as follows:
1) that MIC will provide the contracted member services until such time
as all memberships hereunder expire, and
2) that each party shall be entitled to receive any and all
compensation that became due the party prior to such termination.
7. EXCLUSIVITY:
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MIC hereby grants to TMI, throughout the Initial Term of this Agreement,
and each successive term thereof the exclusive right to represent, sell and
implement the TRAVELER PDQ program to the travel industry so long as TMI
maintains the premium volumes set forth below.
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For calendar year: Premium volume:
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2003 $40,000,000
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2004 $44,000,000
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2005 $48,400,000
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Each successive calendar year 10% increase in premium volume
from prior year
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Notwithstanding the foregoing, TMI acknowledges that, from time to time,
MIC may seek TMI's written approval to offer the TRAVELER PDQ program
through certain travel organizations. TMI hereby agrees to consider and
respond to all such requests, in writing, within 20 days of receipt by TMI.
8. PROMOTIONAL MATERIALS:
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a) All promotional and point of sale materials to be used by TMI with
respect to the TRAVELER PDQ program shall be produced at the sole cost
and expense of TMI. MIC shall participate with TMI in the development of
such promotional materials as TMI shall reasonably request.
b) Any scripts, advertising copy, brochures, and other marketing materials
of any kind whatsoever, whether written or oral, that include the name
or any trade name, trademark, service mark or other proprietary
intellectual property of a party shall be approved by such party, in
writing, prior to the use thereof, except that no such material shall
include any reference to the Insurers or their products.
9. INDEMNIFICATION:
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TMI agrees to indemnify and hold harmless MIC, its officers, employees,
affiliates and agents, from any and all claims, lawsuits or damages,
(including any punitive or extra contractual damages) or other liabilities
resulting from the acts or omissions of TMI, its affiliates, or its
officers, employees or representatives, in connection with this Agreement
whether or not negligent, grossly negligent, intentional or otherwise.
MIC agrees to indemnify and hold harmless TMI, its officers, employees,
affiliates, and agents from any and all claims, lawsuits, damages
(including any punitive or extra contractual damages) or other liabilities
resulting from the acts or omissions of MIC, its affiliates or its
officers, employees or representatives in connection with this Agreement,
whether or not negligent, grossly negligent, intentional or otherwise.
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10. CONFIDENTIALITY OF INFORMATION:
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Under this Agreement, MIC will receive information from TMI or TMI
customers which is personal and private information such as customer names,
addresses and personal medical information ("Confidential Information").
MIC agrees that all Confidential Information shall be maintained with due
regard for the individuals' right of confidentiality and in compliance with
applicable federal and state privacy laws.
11. INFORMATION AND REPORTS:
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a) Each payment made to MIC pursuant to Section 2(d) hereof shall be
accompanied by a report prepared by TMI, in a format reasonably
acceptable to MIC, containing such information as MIC shall reasonably
request with respect to the purchasers of Plans for the corresponding
month.
b) Each payment made to TMI pursuant to Section 5 hereof shall be
accompanied by a report prepared by MIC, in a format reasonably
acceptable to TMI, containing such information as TMI shall reasonably
request with respect to the annual memberships and/or upgrades of
TRAVELER PDQ memberships by Plan purchasers for the corresponding period
including, but not limited to:
(i) memberships and upgrades, by month, for which MIC received
payment in full during such period;
(ii) cancellations, by month, of previously reported memberships
and upgrades processed during such period; and
(iii) details of the calculation set forth in Section 5(b) herein.
12. NOTICES:
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Any and all notices required to be given under this Agreement or which
either of the parties may desire to give shall be in writing and shall be
served by (i) registered or certified mail, postage prepaid, return receipt
requested, (ii) any recognized national or international overnight delivery
service to the addresses set forth below, or (iii) via facsimile;
Mr. Jerry Farrar, President/CEO Mr. Bradley G. Finkle, President
Medstrong International Corporation Trip Mate Insurance Agency, Inc.
500 Silver Spur Road, 3rd Floor 9225 Ward Parkway, 2nd Floor
Rancho Palos Verdes, California 90274 Kansas City, MO 64114.
Fax No: (310) 544-7100 Fax No: (816) 523-3379
13. ASSIGNMENT:
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This Agreement shall not be assignable by either party without the express
written consent of the other party, which consent may denied at the sole
discretion of such other party.
14. GOVERNING LAW; SECTION HEADINGS:
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The laws of the State of Kansas shall govern this Agreement. The section
headings are for purposes of convenience only, and shall not be deemed to
constitute a part of this Agreement or to affect the meaning of this
Agreement in any way.
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IN WITNESS WHEREOF, the duly authorized representatives of the parties
hereto have executed this Agreement, effective as of the date first set forth
above.
MEDSTRONG INTERNATIONAL CORPORATION
By: /s/ JERRY R. FARRAR
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Name: Jerry R. Farrar
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Title: President & Chief Executive Officer
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Date:
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TRIP MATE INSURANCE AGENCY, INC.
By: /s/ BRAD FINKLE
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Name: Brad Finkle
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Title: President
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Date:
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