EXHIBIT 10.12
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AGREEMENT, DATED JULY 1, 2002, BETWEEN THE COMPANY 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 000 Xxxxxx
Xxxx Xxxx, Xxxxxx Xxxxx Xxxxxx, Xxxxxxxxxx 00000, and TRIP MATE INSURANCE
AGENCY, INC. ("TMI"), a Kansas corporation, with its principal office located at
0000 Xxxx Xxxxxxx, 0xx Xxxxx, Xxxxxx Xxxx, XX 00000 .
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, here inafter 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.
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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
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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 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;
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(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;
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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.
f) 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
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trade name, trademark, service xxxx 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.
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
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(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;
Xx. Xxxxx Xxxxxx, President/CEO Xx. Xxxxxxx X. Xxxxxx, President
Medstrong International Corporation Trip Mate Insurance Agency, Inc.
000 Xxxxxx Xxxx Xxxx, 0xx Xxxxx 0000 Xxxx Xxxxxxx, 0xx Xxxxx
Xxxxxx Xxxxx Xxxxxx, Xxxxxxxxxx 00000 Xxxxxx Xxxx, XX 00000.
Fax No: (000) 000-0000 Fax No: (000) 000-0000
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:
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Name:
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Title:
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Date:
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TRIP MATE INSURANCE AGENCY, INC.
By:
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Name:
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Title:
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Date:
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