SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 21, 2000
Medical Advisory Systems, Inc.
(Exact name of registrant as specified in its charter)
DELEWARE 2-98314-W 52-1233960
(State or other (Commission (IRS Employer
Jurisdiction of File Name Identification No.)
8050 Southern Maryland Blvd., Owings, Maryland 20736
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (301) 855-8070
ITEM 5. Other Events.
MEDICAL ADVISORY SYSTEMS, INC. (MAS)
AMENDS CONTRACT WITH AMERICASDOCTOR.COM, INC.
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MAS TO NATIONALLY SYNDICATE ITS INTERNET CHAT
FOR IMMEDIATE RELEASE
Contact: Ron Pickett, Matthew Hayden
Medical Advisory Systems, Inc. Hayden Communications, Inc.
(910) 509-1433 (843) 272-4653
Owings, Maryland (September 25, 2000) - Medical Advisory Systems, Inc.
(AMEX:DOC) announced today the amending of its Call Center Service Agreement
with AmericasDoctor.com (AmDoc). Medical Advisory Systems (MAS) has been
released from its exclusive agreement with AmDoc and is now afforded the
opportunity to pursue offering its famous, real-time physician based Internet
chat domestically to new customers. Earlier this year, MAS modified this
agreement to permit the offering of its chat services overseas, which is
currently being pursued through a strategic relationship with CORIS Group
International. To date, MAS has performed over 1.5 million real-time chats for
AmDoc and will continue to provide this unique service through its contract
period, which runs through July 2, 2003. As part of this agreement, AmDoc will
begin promoting Medical Advisory's telephone-based DocTalk program on a
revenue share basis. MAS agreed to purchase AmDoc's communication and computer
equipment that support the Internet chat, further assisting in its effort
to upgrade and expand the Company's technology infrastructure.
Dr. Tom Hall, CEO of Medical Advisory Systems commented, "This is one of the
most pivotal agreements that we have reached since initially contracting to
offer the real-time, physician based Internet chat. While working together
for approximately 2 years, we have formed an excellent working relationship
with AmericasDoctor.com. We look forward to assisting them as they continue to
execute their business plan. The amendment provisions are in total harmony
with our corporate plans for both national and international expansion."
"This amendment now paves the way for us to combine our chat service offerings.
By integrating both the Internet and telephone
interfacing capabilities of our specialty trained physician staff, we will be
able to provide a full suite of services to both domestic and international
healthcare programs. Potential customers for our combined service offering
include; other e-health Internet sites which need customized services to
increase both traffic and customer retention, managed care service providers,
both international and domestic travel insurance providers, as well as
companies who facilitate the recruitment of participants for clinical trial.
We believe that the uses for our real-time, interactive physician chats
(both via the Internet and phone) are far reaching and the benefits to the
user, quite considerable. Information is the key to facilitating adequate
health care, and by leveraging our knowledge and expertise in this arena, MAS
has a substantial value proposition to offer its customers. By empowering
people with knowledge, MAS can help mitigate costs and provide a better
quality of healthcare service for the consumer," Dr. Hall went on to say.
Medical Advisory Systems, Inc., (AMEX-DOC) (www.mas1.com) is a telemedicine
pioneer that has operated a 24/7, physician-staffed call center in Owings, MD
for almost 20 years. Through a worldwide telecommunications network, MAS
provides health care to ships-at-sea and other remote locations, and medical
and non-medical services for the travel industry. With its staff of 120
physicians, MAS has become the leader in consumer medical information services,
providing over one-and-a-half-million live, personalized, medical information
"chats" via the Internet for AmericasDoctor.com. It also operates a
telephone-based medical information service, DocTalk, Inc.
As Application Service Provider (ASP) for eResearchTechnology, Inc. (eRT)
(www.ert.com), a subsidiary of PRWW, Ltd. (NASDAQ:PRWW), MAS will deploy and
support a suite of integrated clinical research software marketed to the
pharmaceutical, medical device and biotechnology industries. MAS' medical call
center capabilities will be utilized for adverse event and ECG analysis and
reporting. Through a 12% stake in CORIS Group International of Paris, France,
a network of 24-hour call centers in 38 countries, MAS is positioned to
provide technical and physician-staffed call center support to
internationally-based clinical researchers using eRT software. MAS will also
market its international travel medicine and medical information programs
through CORIS.
Statements included in this release may constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such statements involve a number of risks and uncertainties such as
competitive factors, technological development, market demand and the
Company's ability to obtain new contracts and accurately estimate net revenues
due to variability in size, scope and duration of projects, and internal
issues in the sponsoring client further information on potential factors that
could affect the Company's financial results, can be found in the Company's
Registration Statement and in its Reports on Forms 10-K and 10Q filed with the
Securities and Exchange Commission (SEC).
ITEM 7. Financial Statements and Exhibits.
ADDENDUM NO. 4
TO THE CALL CENTER SERVICE AGREEMENT
dated as of September 21, 2000 by and between AmericasDoctor Internet
Operations, Inc. and Medical Advisory Systems, Inc.
ADDENDUM NO. 4, dated as of September 21, 2000 (the"Effective Date"), by
and between AmericasDoctor Internet Operations, Inc., a Delaware corporation
("AD"), and Medical Advisory Systems, Inc., a Delaware corporation ("MAS").
The parties hereto entered into the Call Center Service Agreement dated
July 2, 1998, as amended by Addenda Nos. 1, 2 and 3 thereto (the "Agreement"),
and wish to amend the Agreement as provided herein. Accordingly, the parties
hereto agree as follows:
1. During the Term of the Agreement, MAS may enter into agreements or
arrangements with web sites or vendors other than AD to provide
real-time Internet one-on-one medical chat services. AD shall obtain
real-time Internet one-on-one medical chat services from licensed
health care providers exclusively from MAS during the Term of this
Agreement; provided, however, that nothing herein will require AD to
use MAS in the provision of its "Expert Chat" service. In the event
that MAS provides real-time Internet one-on-one medical chat
services to U.S. residents that are not derived from AD pursuant to
this Agreement ("Non-AD U.S. Chats"), MAS shall pay AD a royalty of
$(confidential) per Non-AD U.S. Chat for each chat in excess of
(confidential) per month. The royalty will be payable to AD 30 days
after receipt of payment by MAS.
2. MAS shall purchase the Equipment listed on Schedule A, attached hereto
and made a part hereof, from AD for $(confidential). Payment will be
made to AD within thirty days of the Effective Date (the "Closing
Date"). As of the Closing Date, Section 11 of the Agreement will be
deleted in its entirety and replaced with the following: "All
equipment, including connections, furnishings and software purchased
by MAS for the AD Call Center (the "Equipment"), shall be titled in
the name of and owned by MAS."
3. MAS hereby has the option, in its sole discretion and subject to
receipt of the requisite approvals from third parties and completion
of due diligence satisfactory to MAS within sixty (60) days of the
date hereof, to obtain from AD a nontransferable sublicense to use the
software created by Jaspin Interactive, Inc. and currently utilized by
AD in the provision of real time Internet one-on-one medical chat
services (the "Chat Tool") in exchange for an aggregate of
$(confidential). The sublicense shall expire on December
31, 2001. Such sublicense will be evidenced by a sublicense agreement
to be entered into between the parties upon exercise of MAS' option and
acceptable to both parties. AD agrees to authorize Jaspin to release
to MAS information about the number of chats being performed by MAS
on behalf of AD. AD represents and warrants to MAS that it is not
required to use the software licensed to it by Jaspin for its
real-time Internet one-on-one medical chat services to U.S. residents.
If MAS decides not to purchase the above-referenced sublicense, it may
select another software provider to provide real time Internet
one-on-one medical chat services, which software provides a
substantially similar level of quality and functionality as presently
provided by the Chat Tool.
4. Section 15 of the Agreement is deleted in its entirety.
5. Section 16(a) of the Agreement is deleted in its entirety and replaced
with the following: "MAS shall bill AD monthly for services provided
to AD under the terms of this Agreement. Payment shall be due ten
(10) days after receipt of MAS' invoice by AD. If and when MAS' total
monthly bills to AD exceed $(confidential),
MAS may, at its option, bill AD every two (2) weeks." Section 16(b)
of the Agreement is deleted in its entirety and replaced with the
following: "AD shall pay MAS a monthly access fee of $(confidential)
which shall include payment for 1,000 Call Center chats ("Call Center
Chat") to be performed during that month by MAS or $(confidential) of
value of other medical-related, mutually agreed upon services provided
by MAS to AD (collectively, the "Services"). Call Center Chats shall
consist of one-on-one chats regarding general medical information,
averaging approximately seven minutes in duration. The $(confidential)
fee referred to above shall be the sole administrative or overhead fee
payable by AD to MAS during the Term. In the event that AD does not use
the Services in any calendar month, AD shall not receive a credit for
any Services not provided, including, but not limited to, chats not
used by AD. In addition to the monthly access fee, for all Call Center
Chats performed for AD from 1,001 up to and including 35,000 per month,
AD shall pay MAS a per-chat fee of $(confidential). For each Call
Center Chat performed for AD in excess of 35,000, AD shall pay MAS a
per-chat fee of $(confidential). AD shall not be required to order any
minimum number of chats from MAS. MAS shall not, during the Term,
sell real time Internet one-on-one medical chat services to any third
party on a per chat basis for a price that is less than the per chat
price charged to AD unless MAS lowers the price per chat charged to
AD to the same level as that charged by MAS to the third party being
charged the lowest per chat price on a per chat basis." Sections
16(c), 16(d), 16(e) and 16(f) of the Agreement are deleted in their
entireties.
6. AD will use its reasonable best efforts to give a good faith estimate
of its Call Center Chat volume to MAS at least thirty (30) days in
advance of the month on which such Call Center Chats are to be
performed, and MAS shall use its reasonable best efforts to
accommodate AD's estimated volume. If, within six (6) business
days following receipt of notice from AD pursuant to the foregoing
sentence, MAS notifies AD that it will be unable, despite using its
reasonable best efforts, to accommodate a portion of AD's estimated
volume (the "Unfulfilled Call Volume"), MAS shall not be liable to
AD for its failure to provide such Unfulfilled Call Volume; provided,
however, that notwithstanding anything to the contrary in this
Agreement (including, without limitation, in Section 1 of this
Addendum or Section 18(a) of the Agreement), AD shall be permitted
to enter into agreements or arrangements with web sites or vendors
other than MAS to provide such Unfulfilled Call Volume. MAS shall not
be liable for its failure to perform any Call Center Chats in excess
of 110% of the number of Call Center Chats ordered by AD for any
month during the Term and AD shall pay MAS for 90% of the number of
Call Center Chats ordered in writing by AD for any month during the
Term regardless of whether such Call Center Chats are actually used
during such month.
7. AD agrees to promote MAS' DocTalk services through its website,
www.americasdoctor.com. In the event that DocTalk receives calls
derived from AD's promotion of the DocTalk services (as determined by
MAS through the user's use of a dedicated telephone number and/or a
PIN code), MAS shall pay AD a commission equal to (confidential)% of
the revenue received by MAS for each call. The commission will be
payable to AD 30 days after receipt of notice of payment by MAS.
8. During the Term of this Agreement, AD may resell MAS' real time
Internet one-on-one medical chat services to third parties on such
terms as it may elect and may retain all revenues received for MAS'
provision of such services, subject to compliance by AD with the
payment and notice requirements of this Agreement as set forth
in Sections 5 and 6 of this Addendum.
9. Section 18(a) of the Agreement is hereby amended to delete the words
"Call Center services" and replace them with the words "real-time
Internet one-on-one medical chat services from licensed health care
providers."
10. Section 20(a) of the Agreement (as set forth in Addendum No. 2) is
hereby amended and restated in its entirety to read as follows:
"AD hereby agrees to indemnify, hold harmless and defend MAS, any
affiliate or subsidiary of MAS which engages the Physicians and/or the
Health Staff, the Physicians and the Health Staff (collectively, the
"Indemnified Persons") from and against any and all claims of any
nature arising directly from MAS' provision of services to AD under
this Agreement brought against the Indemnified Persons provided that
there is no finding that any Indemnified Person did not comply with
all of the protocols and procedures for operating the Call Center
agreed to between MAS and AD."
11. Section 20(c) of the Agreement (as set forth in Addendum No. 2) is
hereby deleted in its entirety.
12. Section 21 of the Agreement is hereby amended and restated to read in
its entirety as follows: "RESERVED."
13. Section 2 of the Agreement (as set forth in Addendum No. 1) is hereby
deleted in its entirety and Section 22(a) of the Agreement is hereby
amended and restated to read in its entirety as follows: "The failure
of either party to comply with any material term of this Service
Agreement shall constitute a material breach of this Service Agreement
as follows: (i) if AD or MAS believes that the other party hereto has
materially breached the terms of this Service Agreement, it shall
promptly so notify the other party in writing and such notice shall
specify the nature of such noncompliance (the "Noncompliance Notice"),
(ii) the party so notified shall have fifteen (15) days following
receipt of the Noncompliance Notice to cure or contest such
noncompliance, and (iii) if such party fails to cure such noncompliance
within such 15-day period, it shall be deemed to have materially
breached the terms of the Service Agreement."
14. Section 22(b) of the Agreement is hereby amended to delete subsection
(ii) thereof in its entirety.
15. Section 22(e) of the Agreement is hereby deleted in its entirety.
16. Section 23(a) of the Agreement is hereby amended to add the following
sentence: "This section is applicable in its entirety for the time
period prior to the effective date of Addendum No. 4."
17. Section 23(b) of the Agreement is hereby deleted in its entirety.
18. Section 26 of the Agreement is hereby amended and restated in its
entirety to read as follows: "RESERVED."
19. MAS agrees to keep accurate books and records with regard to the
number of chats it performs for AD, the number of Non-AD US Chats it
performs and the amount of revenue received by MAS for DocTalk
services derived from AD's promotion thereof on its website. The
aforementioned books and records of MAS shall be available for
inspection at the reasonable request of AD on reasonable notice during
normal business hours during the Term and for six months thereafter.
20. AD agrees to pay MAS no later than one business day after the date on
which MAS executes this Addendum and delivers an executed copy to AD
$(confidential) for monthly charges through August 31, 2000 and chat
fee charges through September 10, 2000 at midnight.
21. Section 31 of the Agreement is hereby amended to replace the address
of AD set forth therein with the following: "AmericasDoctor Internet
Operations, Inc., 1325 Tri-State Parkway, Suite 300, Gurnee, Illinois
60031, Attn: Chief Financial Officer and Chief Information Officer."
22. All other terms of the Agreement shall remain in full force and effect.
23. This Addendum may be executed in counterparts, each of which shall
constitute an original and all of which, when taken together, shall
constitute one and the same instrument. This Addendum shall become
effective when signed by each party hereto and delivered to the other
party. This Addendum, once executed by a party, may be delivered to
the other party hereto by facsimile transmission of a copy of this
Addendum bearing the signature of the party so delivering this
Addendum. In the event any signature is delivered by facsimile
transmission, the party using such means of delivery shall cause the
manually executed execution page(s) to be physically delivered to the
other party within five (5) days of the execution hereof.
24. Terms used with initial capitals but not defined in this Addendum are
used as defined in the Agreement.
25. The parties confirm that the Agreement will be in effect until July 1,
2003 and will thereafter automatically terminate unless extended by
the mutual agreement of the parties.
26. This Addendum shall be governed by and construed in accordance with
the laws of the State of Maryland without application to principles of
conflicts of law. This Addendum shall be binding upon each of the
parties, their respective successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Addendum No. 4 to be
effective as of the 21st day of September, 2000.
ATTEST: AMERICASDOCTOR INTERNET
OPERATIONS, INC.
_________________________ By: /s/ Steven M. Rauscher
Name: Steven M. Rauscher
Title: President
ATTEST: MEDICAL ADVISORY SYSTEMS, INC.
_________________________ By: /s/ Ronald W. Pickett
Name: Ronald W. Pickett
Title: President
SCHEDULE A
Qty Description: Manufacturer:
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28 PC. with Windows 98 Lic. McClair, Dell & Compaq
20 21" Monitors NEC, KDS & Mitsubishi
21 Backups 500 UPS APC
2 Laserjet 5000 printer Hewlett Packard
8 17" Monitors Dell & Compaq
2 File Server McClair Multimedia
2 15" server monitors Viewsonic
1 Laserjet 3150 Hewlett Packard
1 Intel 51CT Switch Intel
3 Intel 24 port 10/100 hub Intel
3 Fiber Module
2 Smart UPS 2200 APC
1 APC Backups 700 APC
1 DEC 15/30 Backup Unit
1 4.3 GB Hard Drive WD
1 7 Bay CD Tower McClair Multimedia
2 Firewall PCS McClair Multimedia
1 APC Smart UPS 700 APC
1 Firewall Plus Software Network-1
1 Cisco 2514 Router Cisco
2 Intel 12 Port 10/100 hubs Intel
1 NT Server with 25 Licenses Microsoft
15 56K Modem BocaResearch
8 Used 72" Cubicles
3 Used 6' Tables
18 Various Used Cubicle Chairs
1 Remainder of the STATREF Lic
1 Remainder of the PDR Lic.
1 Windows NT Workstation Software
