Sample Business Contracts


Agreement - MedStrong Corp. and Discount Development Services LLC

Services Forms


                                   AGREEMENT

      THIS AGREEMENT is made with an effective date of January 29, 2001 between
MEDSTRONG CORPORATION, a corporation organized under the laws of the State of
Deleware and its affiliates, (herein referred to as "COMPANY"), and DISCOUNT
DEVELOPMENT SERVICES, L.L.C., a Limited Liability Company organized under the
laws of the State of Illinois (herein referred to as "DDS").

      WHEREAS, COMPANY desires to establish and maintain a discount health
benefit program for COMPANY'S members and their families (hereinafter
collectively referred to as the "Members"); and

      WHEREAS, COMPANY desires that DDS provide services as the
Provider/Administrator of COMPANY'S discount health benefit program to be known
as the Best Benefits Program (the "Program") offered by DDS, which COMPANY will
offer to its Members; and

      WHEREAS, COMPANY desires that DDS develop other benefits to be offered to
Members as may be mutually agreed to by the parties; and

      WHEREAS, DDS has agreed to provide and administer COMPANY's Program; and;

      WHEREAS, the Program referred to in this Agreement is identified in
Exhibit "A" attached hereto and by this reference incorporated herein.

      NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
the parties mutually agree to the following:


1.    DUTIES AND RESPONSIBILITIES OF DDS:

      a.    DDS shall provide the Program as described in Exhibit A on the terms
            set forth therein. DDS agrees that the fees provided in Exhibit B
            will not be changed for a twelve month period. Future changes in
            fees will require a six-month notification period to COMPANY. DDS
            shall provide customer service support with a toll-free telephone
            number to help assure quality of service by providing a direct and
            immediate point of contact and a source of information for Members.
            DDS shall, on average, in any calendar month, maintain an abandoned
            call rate of 7% or less.

      b.    DDS shall assist the COMPANY with the development of materials
            necessary to promote the Program and enroll membership in the
            Program.

      c.    Periodically, review with COMPANY the Program presently being
            offered to Members and recommend to COMPANY any changes in the
            program which DDS deems desirable and in the best interest of
            COMPANY and its Members.

<PAGE>   2

      d.    DDS shall comply with all federal, state and local statutes,
            ordinances, laws, rules, and regulations applicable to the services
            provided by DDS under this Agreement.

      e.    DDS shall, within 14 working days of receipt of membership
            information from COMPANY, personalize and issue a membership card
            and materials evidencing an individual's membership.

2.    DUTIES AND RESPONSIBILITIES OF COMPANY:

      a.    COMPANY shall enroll Members in the Program and shall bill and
            collect from Members the appropriate fee for such enrollment.

      b.    COMPANY shall, as requested by DDS, provide DDS with a list of
            enrolled Members, for use by DDS, in a media and format agreed upon
            by the parties, which shall include the name, address, phone number
            and identification number, if any, of each member to be included in
            the Program.

      c.    Pay DDS the fees indicated in Exhibit B by the 30th day of the month
            following the month for which the Member was eligible.

3.    CONFIDENTIALITY

      Except in the performance of this Agreement or as authorized in writing by
      COMPANY, DDS shall not disclose to any person, institution, or company not
      authorized by COMPANY, any information directly or indirectly related to
      Members; including, but not limited to, membership lists or the names of
      Members under the Program sponsored by COMPANY for the duration of this
      Agreement and for a period of two years following termination.

4.    OWNERSHIP AND INSPECTION OF BOOKS AND RECORDS

      All documents, books, and records furnished to DDS by COMPANY shall remain
      the property of COMPANY, and all documents, books and records of DDS
      pertaining to the Program, membership activities or services, whether
      original records of DDS or furnished by COMPANY, shall be open for
      inspection at DDS's principal place of business at reasonable times. DDS
      may store any or all documents, books, and records in microfilm or other
      similar medium.

5.    EXCLUSIVITY

      COMPANY agrees that during the term of this Agreement, and for a period of
      two years after the termination of this Agreement, unless terminated for
      material breach, it shall not contract directly or indirectly with the
      vendors utilized by DDS to fulfill its obligations under this Agreement.

<PAGE>   3

6.    INDEMNIFICATION

      Each party agrees to indemnify and hold the other harmless with respect to
      any and all losses, damages, or expenses (including reasonable attorney's
      fees) which either party shall sustain by reason of the other's negligence
      or willful misconduct in carrying out the respective responsibilities in
      the Agreement.

7.    REPRESENTATIONS AND WARRANTIES:

      a.    Each of the parties hereto represents and warrants that:

            (i)   It has all necessary power and authority to execute and
                  deliver this Agreement and to carry out its obligations
                  hereunder; and

            (ii)  That this Agreement constitutes the valid and legally binding
                  obligation of such party and is enforceable against each of
                  them in accordance with its terms, except as may be limited by
                  bankruptcy, reorganization, insolvency, and similar laws of
                  general application relating to or affecting the enforcement
                  of rights of creditor; and

            (iii) The execution and delivery of this Agreement and the
                  consummation of the transactions contemplated hereby does not
                  and shall not result in or constitute a default, breach or
                  violation of any agreement, contract or instrument to which it
                  or any of its officers, directors, employees or shareholders
                  is or has been a party or by which any of them may be bound or
                  a violation of any statute, ordinance, judgment, order,
                  decree, regulation or rule of any court, or governmental
                  authority applicable or relating to its or their business.

<PAGE>   4

8.    TERM AND TERMINATION:

      a.    This Agreement shall be effective for one three (3) year term
            commencing on January 29, 2001 and ending on January 29, 2004 and
            shall automatically be renewed for successive twelve (12) month
            terms unless either party to this Agreement gives written notice of
            termination to the other party to this Agreement not less than one
            hundred twenty (120) days prior to the expiration date of the
            initial term or any renewal term.

      b.    This Agreement may be terminated by either party by giving a thirty
            (30) day written notice to the other party of a material breach of
            this Agreement, giving the other party a thirty (30) day opportunity
            to cure said breach.

      c.    The obligation, if any, of COMPANY to pay the fees as specified in
            Exhibit B, shall survive the termination of this Agreement unless
            otherwise mutually agreed to by the parties.

9.    COMPLIANCE WITH LAW

      The parties agree to comply with all applicable federal, state or local
      laws or regulations that apply to their business operations, and to
      maintain all federal, state or local licenses or permits required by law
      and necessary to carrying out the provisions of this Agreement.

10.   ASSIGNMENT

      This Agreement may not be assigned by any of the parties hereto without
      the prior written reasonable consent of the others. DDS's use of discount
      providers in the performance of certain functions shall not be deemed to
      be an assignment nor shall it relieve DDS of any responsibility to COMPANY
      under the terms of this Agreement. Any merger, consolidation or
      reorganization of COMPANY or DDS shall not be deemed an assignment
      requiring approval of the other party.

11.   ENTIRE AGREEMENT

      This Agreement represents the complete agreement of the parties concerning
      the subject matter hereof, and all prior or contemporaneous negotiations,
      covenants, promises or agreements are merged herewith. This Agreement may
      not be modified except by a written document executed by all parties
      hereto.

12.   BINDING EFFECT

      This Agreement shall inure to the benefit of and be binding upon the
      parties hereto, their successors and assigns.

<PAGE>   5

13.   RELATIONSHIP OF PARTIES

      Nothing contained herein shall be construed to create the relationship of
      employer and employee between COMPANY and DDS. DDS is acting as an
      independent contractor only and not as an employee or agent of COMPANY.
      DDS may exercise its own judgment as to the time and manner of performance
      of its services.

14.   NOTICES

      Any notice or other communications required or which may be given pursuant
      to this Agreement shall be in writing, and shall be delivered personally
      or sent by facsimile with a copy sent contemporaneously by mail, or sent
      by certified or registered, return receipt requested, or express mail,
      postage prepaid, to the relevant address as set forth below or such other
      address as may be designated from time to time by a party hereto and
      delivered to the other party. Any such notice or communication shall be
      deemed given when so delivered personally, sent by facsimile, or if
      mailed, on the earlier of the date of receipt or two (2) days after the
      date of mailing.

      If to COMPANY:                MEDSTRONG CORPORATION
                                    500 Silver Spur Rd., Suite 303
                                    Rancho Palos Verdes, CA 90274
                                    Attn: President

      to DDS:                       DISCOUNT DEVELOPMENT SERVICES, L.L.C.
                                    8420 W. Bryn Mawr, Suite 700
                                    Chicago, IL 60631
                                    Attn: President

15.   CAPTIONS

      The captions and headings of paragraphs and subparagraphs are inserted for
      convenience of reference only and are not a part hereof and shall not
      affect the construction or interpretation of any of the provisions in this
      Agreement.

16.   COUNTERPARTS

      This Agreement may be executed simultaneously in several counterparts,
      each of which shall be an original, and all of which shall constitute but
      one and the same instrument.

<PAGE>   6

17.   SEVERABILTY

      In the event that any paragraph, subparagraph or provision of this
      Agreement shall be determined to be contrary to governing law or otherwise
      unenforceable, all remaining portions of this Agreement shall be enforced
      to the maximum extent permitted by law; the unenforceable paragraph,
      subparagraph or provision shall first be construed or interpreted, if
      possible, to render it enforceable, and, if that is not possible, then the
      provision shall be severed and disregarded, and the remainder of this
      Agreement shall be enforced to the maximum extent permitted by law.

18.   CONSTRUCTION

      Whenever any words are used in this Agreement in the masculine gender,
      they shall be construed as though they were also used in the feminine or
      neuter gender in all situations where they would so apply, and wherever
      any words are used in this Agreement in the plural form, they shall be
      construed as though they were also used in the singular form in all
      situations where they would so apply.

19.   DISPUTE RESOLUTION:

      a.    Governing Law. This Agreement and the relations between the parties
            under it shall be construed in accordance with the substantive law
            of the State of Illinois.

      b.    Informal Negotiation. The parties shall attempt to resolve any
            dispute arising under or relating to this Agreement informally
            before resorting to any tribunal. With the exception of cases where
            irreparable harm is imminent, each party shall first identify an
            individual to negotiate in good faith with the representative of the
            other party. In the event a dispute is identified, the identifying
            party must notify the other party in writing, specifically
            identifying the dispute and listing the remedy(s) sought. Within ten
            (10) days of such notice being provided, the representatives
            identified shall begin to negotiate a settlement and shall have an
            ongoing responsibility to continue to negotiate in order to achieve
            a mediated settlement during the next thirty (30) day period.

      c.    Arbitration. If the parties to this Agreement do not voluntarily
            settle any dispute within sixty (60) calendar days after the
            initiation of negotiation, then all disputes and claims arising out
            of or relating to this Agreement and the transaction contemplated
            hereunder to which the Agreement relates, including any amendment or
            extension thereof and also including any breach, termination,
            interpretation, validity or enforcement thereof, shall be resolved
            by arbitration in accordance with the procedures of the American
            Arbitration Association ("AAA"). The arbitration shall be conducted
            by one arbitrator skilled in the business, legal and technical
            aspects of this Agreement.

<PAGE>   7

            The arbitrator shall allow each party to conduct limited discovery
            regarding the dispute, including a complete exchange of relevant
            documents and oral depositions under oath of key witnesses. The
            arbitrator is not empowered to award punitive damages. The
            arbitration award shall be final and binding upon the parties to the
            arbitration and judgment thereon may be entered in any court having
            jurisdiction. Costs and expenses of arbitration shall be determined
            by the arbitrator, but in no event shall either party be required to
            post security. Nothing herein contained shall in any way deprive
            either party of its right to seek a temporary restraining order,
            preliminary or permanent injunction or other equitable relief in a
            court of competent jurisdiction. Arbitration shall take place in
            Chicago, Illinois.

      IN WITNESS WHEREOF, the parties have affixed their hands and seals as of
the date first above written.

                                        MEDSTRONG CORPORATION
ATTEST:
                                        By: /s/ Jerry R. Farrar
                                            ------------------------------------
---------                               Name: JERRY R. FARRAR
                                              ----------------------------------
                                        Title: CEO
                                               ---------------------------------


                                        DISCOUNT DEVELOPMENT SERVICES, L.L.C.
ATTEST:

                                        By: /s/ V. S. Benedetto
                                            ------------------------------------
---------                               Name: V. S. Benedetto
                                              ----------------------------------
                                        Title: President
                                               ---------------------------------

<PAGE>   8

                                   Exhibit A

The Best Benefits Program

DDS shall provide a program that contains each of the below listed benefits.
Benefits shall be provided by reputable suppliers of such services. DDS will
advise Company of any changes in suppliers of the benefits described. Changes in
suppliers shall not result in a substantial change in the benefit itself or the
availability of that benefit. Vendors selected to provide benefits under the
program shall be competent, reliable and provide the benefits in a manner that
equals or exceeds the goods and services provided by suppliers of similar
benefits.

1.    DENTAL. The Dental Benefit will provide nationwide coverage through a
      network of credentialled practitioners. Participating dentists must be
      licensed, insured under an appropriate malpractice policy and agree to
      abide by OSHA and CDC Guidelines on sterilization and disinfectant
      protocols. Although discounts may vary based on geographic region, fees in
      any geographic region will be at least 10% less than average dental
      charges in that geographic area. Those fees will be applicable to most
      dental services.

2.    VISION. The Vision Benefit will provide nationwide coverage for purchase
      of corrective eyewear, contact lenses and related sundries. Network
      providers will be appropriately licensed and certified or otherwise
      qualified under state law. Network locations will include several
      nationwide retail outlets. Members will have an unlimited right to
      purchase the products they desire from any provider in the network.
      Members will receive discounts on eyewear products of at least 10% and
      substantial discounts on mail order replacement contact lenses and
      designer sunglasses.

3.    HEARING. The Hearing Benefit will provide nationwide coverage through a
      network of licensed audiologists. All network providers will have
      appropriate malpractice insurance. The Benefit will include:

      o     Basic Audiologic Testing at base prices under $65.00, including air
            conduction, bone conduction and word recognition tests.

      o     Hearing Aids. 20% discount from providers ordinary and customary
            fees for hearing aids. 10% discount on programmable hearing aids.
            Warranty on hearing aids.

      o     Maintenance. Free annual cleaning and check of hearing aids
            purchased through the program.

4.    PRESCRIPTION DRUGS. The Prescription Drug Benefit will be offered through
      a nationwide network of pharmacies, including major chains. The benefit
      will provide an average of 15% discount on most branded and generic
      prescription drugs at those pharmacies. In addition, a mail order
      prescription drug service will be available, offering up to 50% discount
      on most prescription drugs.

<PAGE>   9

5.    CHIROPRACTIC. The Chiropractic Benefit will provide nationwide coverage
      through a network of licensed and insured chiropractors. The Benefit
      includes:

      o     Fifty percent (50%) savings on consultation and diagnostic services.
      o     Fifty percent (50%) savings on X-rays.
      o     Twenty percent (20%) savings on other services.
      o     No limit on the number of visits.

6.    VITAMINS AND NUTRITIONAL SUPPLEMENTS. The Vitamin and Nutritional
      Supplement Benefit will be offered nationwide through a mail order
      service. Discounts will be at least twenty percent (20%) on vitamins,
      non-prescription medications, beauty supplies and nutritional supplements.

7.    HOME MEDICAL EQUIPMENT. The Home Medical Equipment Benefit will provide a
      nationwide network of independent providers of medical equipment. Network
      firms will provide equipment and services at a 15% discount off of retail
      prices.

8.    LEGAL AND FINANCIAL REFERRAL SERVICE. Provides referral to qualified
      attorneys, CPA's and financial planners who provide their services at a
      25% discount from their usual fees.

9.    MEDICAL INFORMATION TELEPHONE SERVICE. 24-hour toll-free access for non
      directive medical information. This information center is staffed by
      Registered Nurses currently averaging more than 15 years experience.
      Counseling protocols used are continuously reviewed by the College of
      Physicians and Surgeons at Columbia University.

10.   HOTEL AND AUTO RENTAL. Provides a 50% discount at over 5,000 hotels and
      motels across the United States and a 20% discount on car rentals from
      several national rental agencies. There is also a travel club, which
      provides substantial discounts on vacation packages, which are booked
      through local travel agencies.

11.   EMERGENCY TRAVEL. Provides 24-hour access to multilingual representatives
      to assist members with a wide variety of travel related situations such as
      emergency air evacuation and assistance in obtaining medical care both
      within the United States and abroad. The program also includes services
      such as emergency legal assistance, emergency message service, insurance
      coordination, lost baggage, passport assistance, and travel agency
      services.

12.   PHYSICIAN SERVICES. Provides referral to qualified, credentialled
      physician through a network of over 310,000 general practitioners and
      specialists with fee reductions of 15 to 30%.

<PAGE>   10

13.   MEDICAL RECORDS STORAGE AND RETRIEVAL SERVICE. Provides a "safe deposit
      box" for vital health information and documents including medical
      conditions, allergies, medications, emergency contacts, physician
      contacts, insurance information and advanced directories such as living
      will and organ donation authorizations. Information can be updated at
      anytime. Information will be released to member or qualified health care
      provider via a 24-hour toll-free number.

14.   COMPLEMENTARY/ALTERNATIVE MEDICINE REFERRAL SERVICE. Provides referral to
      qualified, credentialled alternative medicine practitioners including
      acupuncturists, herbologists, massage therapists, nutritionists.

15.   EXTENDED HOME HEALTH CARE. Provides access to over 3,000 high quality
      medical providers of long term services. Network providers offer a minimum
      of 5% savings from their usual and customary fees.

16.   PODIATRY. Provides a 50% discount on the initial exam and 20% discounts on
      all other services and products. The network is comprised of over 3,000
      podiatrists.

<PAGE>   11

                                    Exhibit B

                             MEDSTRONG CORPORATION

                              Pricing Information

The following pricing is based on the "Basic" package of five products
consisting of: Dental, Vision, Hearing, Prescription Drugs, and Chiropractic
services.

Purchase stated quantity with all cards effective as of the date of purchase.

                         COST PER CARDHOLDER PER MONTH



--------------------------------------------------------------------------------
Quantity           5 Products  4 Products   3 Products   2 Products   1 Products
--------------------------------------------------------------------------------
                                                            
1 - 50,000              1.35        1.22         1.15         1.07         1.00
--------------------------------------------------------------------------------
50,000 - 200,000        1.25        1.17         1.10         1.05          .95
--------------------------------------------------------------------------------
200,000 & Greater       1.20        1.12         1.05         1.00          .90
--------------------------------------------------------------------------------


o     Due to regulatory requirements:
      The Program is currently not available in Washington State or California.

o     Pricing includes response to customer service inquiries via a single
      toll-free telephone number, the personalization and distribution of
      fulfillment material. A private label program would require a set-up fee
      of $10,000.

o     Pricing excludes all marketing expenses, commissions, billing and
      collecting.

                        OPTIONAL GROUP PRODUCTS & COSTS
                 AVAILABLE WITH PACKAGES OF 2 OR MORE BENEFITS



                 Product                                Monthly Cost
                 ---------------------------------------------------
                                                            
                  Vitamins                                     $.05
                  Durable Medical Equipment                     .07
                  Emergency Travel Benefit                      .22
                  Medical Information Telephone Service         .51
                  Hotel/Auto Rental                             .22
                  Legal/Financial Referral Service              .26
                  Medical Records Storage & Retrieval           .30
                  Physician Referral Program                   5.10
                  Podiatry                                      .22
                  Complementary/Alternative Medicine            .73
                  Extended Care/Home Health Care                .73


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