Now, therefore, in consideration of the promises and mutual covenants contained herein, the parties hereto, agree as follows:

1.  Nature of Arrangement:

SHC shall provide disposable medical products and supplies ("soft goods") for Contractor and Contractor's patients in consideration for service pricing. 

2.  Duties and Obligations of SHC:

         A)  Availability of Services:

SHC shall and hereby agrees to provide any item of normally stocked soft goods under this

Agreement within its normal response time.  In the event that the Contractor requires faster than normal response time, SHC will use its best efforts to accommodate such a request.  If the Contractor requests a special courier, the Contractor agrees to pay any additional expenses incurred by SHC for such service.

         B)  Inventory:

SHC agrees to maintain in its distribution center a level of inventory of those items of soft goods as SHC reasonably deems sufficient, based upon market demand.

         C)  Customer Service:

SHC Service Representatives will be available during regular business hours to aid in product identification, problem solving and order intake.

         D)  Standards of Service:

SHC agrees to advise Contractor, from time to time, on new products or services that might be applicable to the home care market.  All supplies ordered by Contractor will be clean and in saleable condition, or they will be replaced or the cost will be refunded.  This shall be the only remedy available to Contractor in the event Contractor deems any supplies to be unsuitable.

         F)  Pricing:

SHC agrees to offer Contractor Partnership Pricing rates.  Contractor understands that Partnership Pricing is a structure rather than a fixed price.  Manufacturers' price increases will be incorporated into the annual price schedule.  

         G)  Freight:

SHC pays standard ground freight for orders over $100.00. The Contractor pays freight for orders under $100.00.

         H)  Exclusions:

The Contractor will be responsible for placing all orders by phone, fax, or EDI with all appropriate shipping and billing information.    SHC will not make available to Contractor monthly client follow-up program or accept orders directly from Contractor's patients.

         I)  Sales Tax:

Contractor shall be liable for all applicable sales tax as required by law.  In the event that Contractor is exempt for sales tax, Contractor must submit a hard copy ÒResale CertificateÓ to SHC prior to the shipment of any order that may fall under the exemption.

         J)      Authorization:

Contractor will submit to SHC a hard copy authorization as applicable prior to shipment of requested services.

         K)  Billing:

Contractor acknowledges understanding that the provision of CMS 1500 claim forms (or any other type of claim form that may be requested by the Contractor) is expressly excluded from this agreement. In no event, either at the time of order, or at a later date, will SHC provide any billing other than a standard private pay invoice. SHC will bill Contractor at contractual rate plus any applicable freight and sales tax as set forth in this agreement.  SHC will indicate authorization number as applicable on all invoices. 

         L)  

Contractor agrees to provide SHC with record of an order from appropriately licensed medical professional in the event of a request to dispense any controlled dangerous medical device directly to Contractor's patient prior to SHC providing such device.

3.  Payment Terms and Conditions:

         A)     Terms:

Payment terms are DUE UPON RECEIPT.  Open invoices greater than 30 days old will be deemed past due.  Contractor agrees to pay SHC within 30 days of receipt of invoice(s).

         B)     Credit Limit:

SHC reserves the right to establish a credit limit based on current financial condition and payment trends of Contractor.  Notification of the initial credit limit will be in writing via certified mail from SHC's Finance Department. Credit limit implementation will be effective seventy-two (72) hours after receipt of said notification.  Purchases exceeding the established credit limit must be paid in advance or via C.O.D.  Credit limit increases are available after a payment history has been established with SHC (normally six months).

         C)  Credit Hold:

SHC reserves the right to place Contractor on credit hold for non-compliance to payment terms.  Past due balances more than 30 days will cause the account to be placed on credit hold.  Accounts on credit hold must pay advance or via C.O.D. for all orders until the account is brought to within terms.  Two credit holds within a six-month period are the basis for permanently changing terms to pay in advance or C.O.D.

         D)  Valid Business License:

In order to qualify for Partnership Pricing, Contractor must provide a copy of its license to do business.  Examples of acceptable documents include a City Business License, Business Tax Receipt, State Board of Equalization Resale Certificate or other document issued by the City, State or Federal government indicating Contractor is a properly licensed business.

4.  Attorney Fees:

In the event that legal proceedings are necessary to enforce this Agreement, each party shall be responsible for their own attorney fees.

5.  Indemnification:

Each party shall indemnify and hold harmless the other party to this Agreement from and against any and all claims, losses, liabilities, costs and other expenses imposed or claimed, including attorney's fees and other legal expenses, arising directly or indirectly from any act or failure by the party or its assistants, employees or agents under this Agreement.

6.  Term and Termination:

         A)  Term:

The term of this agreement shall commence as of the date hereof, shall continue in force and effective for an initial term of twelve (12) months, and shall be automatically renewed for successive twelve (12) month terms unless(i) either party gives the other party written notice of termination at least thirty (30) days prior to the expiration of the term; or (ii) this Agreement is otherwise terminated as provided in this Section 7. 

         B)  Termination Without Cause:

This Agreement can be terminated by either party with thirty (30) days written notice, to the other party, by certified mail at the address set forth below under Section 8 for Notices.  In the event of termination, SHC will complete any services previously ordered by Contractor for existing patients even if the completion extends beyond the termination date.   In addition, Contractor shall pay all amounts owing prior to the termination and for all outstanding orders fulfilled by SHC.

         C)     Termination With Cause:

If either, SHC or Contractor is in material breach of this Agreement, either in full or in part, the non-breaching party may terminate this agreement immediately upon receipt of written notification sent via certified mail to the other party.

7.   Notices:

Any notices required to be given pursuant to the terms and provisions of this Agreement shall be in writing, and shall be sent to the addresses of the parties listed below.

To SHC:                          Shield HealthCare

                                           Attention: Corporate Contracts

                                           27911 Franklin Parkway

                                           Valencia, CA  91355

To Contractor:         

8.   Disclosures:

To the extent that this service pricing is deemed to be "discounts or other reductions in price" under Section 1128B (b) (3) (A) of the Social Security Act [42 U.S.C. §1320a-7b (b) (A) or under any other analogous local, state, or federal law, Contractor shall disclose these discounts or other reductions in price as legally required.

9.   Disclaimer of All Warranties:

SHC MAKES NO REPRESENTATIONS, CONDITIONS, OR WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.  ALL PRODUCTS ARE PROVIDED ON AN "AS IS" BASIS ONLY.

10.  Limitation of Liabilities:

SHC SHALL NOT BE LIABLE TO CONTRACTOR OR TO CONTRACTOR'S PATIENTS FOR ANY CLAIMS, DEMANDS, OR DAMAGES WHATSOEVER, INCLUDING WITHOUT LIMITATION DIRECT, INDIRECT, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT AND THE USE OR FAILURE OF ANY SHC's SERVICES AND/OR PRODUCTS PROVIDED PURSUANT TO THIS AGREEMENT.

11.  Waiver:

Failure of any party to require the performance by the other of any provision of this Agreement shall not be deemed to be a continuing waiver of the provision or any other provision.

12.  Confidentiality:

The parties and their respective attorneys, accountants, auditors, and consultants agree to keep this Agreement and its contents confidential and not to disclose this Agreement or its contents to any third party (except regulatory authorities) without prior written consent of the other party.

13.  Governing Law and Venue:

This Agreement shall be construed and enforced in accordance with the laws of the State of California without regard to conflict of law principles.  The venue and jurisdiction for any action arising under this Agreement will be in the state or federal courts in California.  The parties consent to jurisdiction and venue of the state or federal courts in California and waive any objections to such jurisdiction and venue.

14.  Entire Agreement:

This Agreement (including any attachments) embodies the entire agreement and understanding  between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof.  Any modifications to this Agreement must be made in writing and must be signed by both parties within thirty (30) days from each other in order for the agreement to be binding.