Exhibit 10.33


 


Amendment
Number One to

Outsourcing Agreement


 


 


This Amendment Number One to Outsourcing
Agreement (“Amendment”) is entered into as of this 12th day of
December 2003 by and between Creditek MediFinancial, Inc., a Delaware
corporation (“OUTSOURCER”), and dj Orthopedics, LLC, a Delaware limited
liability company (“CLIENT”).


 


Whereas, the parties
have previously entered into that certain Outsourcing Agreement dated as of
December 30, 2002 (the “Original Agreement”) relating to the provision of outsourcing
services by OUTSOURCER to CLIENT;


 


Whereas, the parties
desire to set forth in this Amendment certain changes and modifications to the
Original Agreement;


 


Now, therefore, the
parties hereby agree to amend the Original Agreement in the following
manner.  Capitalized terms used herein
and not defined in this Amendment shall have the meanings ascribed to them in
the Original Agreement.


 


1.                                      Section
1.2


 


Section 1.2 of the Original Agreement is hereby
amended to provide in the list of Exhibits after Exhibit D the following:  “Exhibit E                                                 [Intentionally omitted]”.


 


2.                                      Section
2.1


 


The first sentence of
Section 2.1 is hereby amended in its entirety to read as follows:  “The term of this Agreement (the “Term”)
shall be from the Agreement Date through December 31, 2006 (hereinafter, the
“Expiration Date”), unless terminated pursuant to Article XVII”.


 


The following sentence shall be added as a
new third sentence to Section 2.1:  “At
the request of CLIENT made on or before November 30, 2004, OUTSOURCER agrees to
engage in good faith renegotiation of such of the terms of the Agreement as are
indicated in the request of CLIENT.”


 


3                                         Section
2.2 


 


The third sentence of Section 2.2 is hereby
amended in its entirety to read as follows: 
“Thereafter, commencing effective as of October 1, 2003, OUTSOURCER
shall bill CLIENT on the 5th day of each month for the Services
rendered the prior month under the Agreement, as set forth in Article XII.”


 


4.                                      Section
3.4b


 


Paragraph (b) of
Section 3.4 is hereby amended in its entirety as follows:  “(b) Effective on November 17, 2003,
OUTSOURCER shall transfer to the employment of CLIENT, and CLIENT shall
thereafter employ, the CLIENT Service Location staff


 

















 


performing OfficeCare
services. OUTSOURCER shall maintain operations at the CLIENT Service Location
until the transfer of employees is completed.”


 


5.                                      Section
3.12


 


Section 3.12 shall
be amended by adding the following new paragraph at the end thereof:  “Each month, OUTSOURCER shall


 


1)              Provide CLIENT with a project profit and
loss statement for the preceding month and cumulative for the calendar year,


 


2)              The monthly profit and loss statement
shall include detailed headcount and cost breakdown information for the
preceding month.


 


3)              The monthly profit and loss statement
shall be provided to CLIENT by the 30th day of the following month


 


4)              OUTSOURCER shall also provide CLIENT
quarterly with a forecast of anticipated revenues and expenses covering the
immediate next three-month period


 


5)              The above shall be presented to CLIENT no
later than the 15th day  of
the month immediately preceding the respective quarter.


 


6)              OUTSOURCER shall further provide CLIENT
every six months a profit and loss statement, balance sheet, and cash flow
statement reflecting OUTSOURCER’s 
entire operations.  The first
such set of statements will be provided for the month ended December 31, 2003
and include the previous 12 months. 
OUTSOURCER shall further supply CLIENT with audited financial statements
once per year .


 


6.                                      Section
4.3


 


Section 4.3 is hereby amended by adding a new
paragraph (d) as follows:


 


“(d) Rehired Employees.


 


(i) Effective as of October 10, 2003 (the Insurance Transfer Date), all
OUTSOURCER employees assigned to the Insurance/Custom Brace group at the
CLIENT’s Vista Service Location will become CLIENT employees. Effective on
November 17, 2003 (the OfficeCare Transfer Date), all OUTSOURCER staff assigned
to the OfficeCare group at the CLIENT’s Vista Service Location will become
CLIENT employees (collectively the “Rehired Employees”).


 


(ii) CLIENT shall offer employment on the above dates to the Rehired
Employees.  Such offers of employment
shall provide for compensation and benefits consistent with the compensation
and benefits in effect for such employees immediately preceding the Insurance
and OfficeCare Transfer Dates, giving effect to the level of seniority with
OUTSOURCER of such Rehired Employees immediately preceding their respective
Transfer Dates.


 


(iii) Nothing contained herein shall be deemed to create an employment
contract between CLIENT and any Rehired Employee or to cause any Rehired
Employee to be treated as other than an at will employee of CLIENT after the
Transfer Date.  CLIENT shall not be
obligated or deemed to employ any Rehired Employee who does not execute
CLIENT’s standard offer letter for similarly situated employees.


 

















 


(iv) OUTSOURCER shall be responsible, and CLIENT shall have no
liability, for any accrued wages, severance pay, sick leave or any other
benefits, or benefits under any of OUTSOURCER’s benefits plans, or any other
liability or claim of any type or nature arising from or on account of
OUTSOURCER’s employment of, or termination of employment of, the Rehired
Employees on or prior to the Transfer Dates. 
CLIENT shall not assume or be responsible for liabilities for unpaid,
accrued (and unused) vacation and bonuses of Rehired Employees as of the
Transfer Dates.”


 


7.                                      Section 6.1


 


Section 6.1 is amended by
adding the following sentence to the end thereof:  “The parties agree that Ms. Lise Goldstein shall be the
OUTSOURCER Contract Executive through at least December 31, 2004 and that Mr.
Chris Chinni shall be the backup OUTSOURCER Contract Executive during the
Term.”


 


8.                                      Section 6.2 (b)


 


Section
6.2(b) is hereby deleted in its entirety and replaced by the following section:


 


“(b) Dedicated Staff.  OUTSOURCER will provide CLIENT the services
of the following individuals (or their functional equivalents in the event any
of them leaves Creditek’s employment) whose dedication to the project shall be:


 


•                  Isabel Burghardt 2004=100%, 2005=50%


 


•                  Roger Lin 2004=100%, 2005=50%


 


•                  Steve Fulton 2004=75%, 2005=50%


 


•                  The combined efforts of Scott DeMarzio, Grace Lu, Ed
Dwyer and Lisa Graham (or their functional equivalents) shall be equal to that
of one full time equivalent person working 100% on the Services during 2004.


 


OUTSOURCER shall provide to CLIENT detailed timesheets for the above
individuals (or their functional equivalents) at the time of the monthly
invoice and charge to CLIENT the actual hours incurred.


 


CLIENT and OUTSOURCER
shall, from time to time, evaluate the need to maintain or to change the level
of dedication of the above staff


 


OUTSOURCER will continue
to provide the services of Brian McCann as On-Site Manager at CLIENT Service
Location through December 4, 2003 or earlier if requested by CLIENT.”


 


9.                                      Section 6.5


 


Section 6.5 is
hereby amended by adding a new paragraph (c) as follows:


 


“(c) Effective as
of October 1, 2003, OUTSOURCER shall, from that date forward and for the
balance of the Term of the Agreement, cease paying CLIENT the Lease Rate
described above and previously set forth on former Exhibit E.”


 

















 


10.                               Section 12.1


 


Section 12.1 is hereby amended in its entirety to read
as follows:  “Effective as of October 1,
2003 and continuing throughout the Term of the Agreement, OUTSOURCER shall
issue an invoice to CLIENT on the 5th day of each month for the Fees
due for the prior month. The Fees shall be due and payable to OUTSOURCER by
check, wire funds transfer or other electronic means acceptable to OUTSOURCER
to an account specified by OUTSOURCER within 30 days.”


 


11.                               Section
17.1


 


Section 17.1, paragraph (a)(i), is hereby amended by replacing the
phrase “90 days” with the phrase “120 days”.


 


Section 17.1, paragraph (a)(ii), is hereby amended by replacing the
phrase “180 days” with the phrase “270 days”.


 


12.                               Section
17.2


 


Section 17.2 is hereby amended in its entirety to read as follows:


 


“(a) If this Agreement is terminated for convenience by CLIENT as set
forth in 17.1(a)(i) on or prior to February 28, 2006, then CLIENT shall pay to
OUTSOURCER in immediately available funds the unamortized fixed costs based on
the monthly amortization schedule set forth on Exhibit I.


 


“(b) If this Agreement is terminated for convenience by OUTSOURCER as
set forth in 17.1(a)(ii) prior to December 31, 2006, OUTSOURCER shall  pay to CLIENT in immediately available funds
the amount equal to the greater of Four Hundred Thousand Dollars ($400,000.00)
or two hundred percent (200%) of the average monthly Fees paid to OUTSOURCER
hereunder during the period that is the shorter of (i) the 12 months
immediately preceding the date of OUTSOURCER’s notice of termination (the
“Notice Date”) or (ii) the period between the Effective Date and the Notice
Date.”


 


13.                               Exhibit A, Section
A


 


Section A of
Exhibit A to the Agreement is hereby amended as follows:


 


The first sentence
following the title of Section A is hereby amended to read in its entirety as
follows:  “The following are Required
Services to be performed after the Effective Date:”


 


14.                               Exhibit A, Section B, Part III


 


Item
1 and all subparts thereof are hereby deleted.


 

















 


Items
2-5 are hereby amended to read in their entirety as follows:


 


“2)        Order Entry:


 


a)                                      The
following are CLIENT’s responsibilities regarding entry of Orders on
Outsourcer’s Systems:


i)                 Reviewing the PPA prior to entering
the data and, to the extent possible, identifying missing, incomplete or
incorrect information.


ii)              Implementing a process to communicate
with Physician Practices and/or CLIENT’s Agents to obtain missing and/or
correct the information necessary to bill for the services provided to
Patients.


iii)           Entering the content of the PPA forms into
the Systems.


iv)          Organizing and passing PPA forms to CLIENT’s
imaging department for timely imaging.


 


3)        Verification of insurance coverage:


 


a)                                      As
required by the Third Party Payer and based on the type of and charge for the
supply provided to Patients, CLIENT shall contact the Third Party Payer to
ascertain whether the Patient is covered for the OfficeCare and Insurance
Business DME products they have or shall receive, as well as the Patient’s and
Third Party Payer’s financial responsibilities.


 


b)                                     Required
verification of insurance coverage shall occur within 48 hours after an Order
is entered on the System.


 


4)                                                        Pre-Authorization
of insurance coverage:


 


a)                                      As
required by its managed care agreements, CLIENT will obtain insurance
Pre-Authorization for OfficeCare products that have already been dispensed to
Patients by Physician Offices. In those instances where the Pre-Authorization
is denied by the Third Party Payer, OUTSOURCER will seek payment from Patient.


 


b)                                     For
all Insurance Business products, CLIENT shall get prior approval from the
Patient’s Third Party Payer prior to the supply being delivered to the Patient.
If the service is denied, CLIENT intends to deliver Insurance Business supplies
only after payment for the service is received from Patient.


 


5)                                                        Billing:


 


a)                                      For
the Insurance Business only, CLIENT shall be responsible for submitting the
initial hard copy (paper) bill to Third Party Payers that do not accept
electronic billing. OUTSOURCER shall be responsible for submitting all
electronic bills for Insurance and OfficeCare business. OUTSOURCER  shall be responsible for rebilling all Third
Part Payers and/or Patients, for all Accounts, whether these happen
electronically or on paper. OUTSOURCER shall submit all OfficeCare invoices to
carriers that do not accept electronic billing.


 


b)                                     Except
as stated on Exhibit A, Section B, Part III, Item 5a, OUTSOURCER shall invoice
the appropriate Third Party Payers and/or Patients on CLIENT’s behalf in
accordance with payer specific requirements, including any additional required
documentation.”


 

















 


Item 18 of Part III of Section B of Exhibit A is hereby deleted in its
entirety and the items thereafter are renumbered accordingly.


 


Item 20 of Part III of Section B of Exhibit A is hereby deleted in its
entirety and the items thereafter are renumbered accordingly.


 


Item 21 of Part III of Section B of Exhibit A is hereby amended to add
the following paragraphs:


 


“b). Certify/Register
Program.  CLIENT shall pay directly
to supplier all cost associated with the certifying and registering of paper
claims mailed to insurance companies by OUTSOURCER.


 


c). Patient Product Agreements
(PPA’s).  CLIENT will pay directly
to supplier all costs to print, store and distribute PPA’s to customers.


 


d). Bank Charges.
Effective as of October 1, 2003, CLIENT shall pay directly to supplier all
costs related to PNC Bank (or its replacement).”


 


15.                               Exhibit
B, Section A


 


Section
A of Exhibit B is hereby amended by deleting Items 1(c)(vi) and 1(d) in their
entirety.


 


16.                               Exhibit
B, Section C


 


Items 1a and
1b of Section C of Exhibit B are hereby amended in their entirety to read as
follows:


 


“a)        Subject
to 1(b) below, OUTSOURCER shall survey a sample of Patients semi-annually
(survey to be developed by the Parties prior to the Effective Date).  The first semi-annual survey shall be
conducted in April, 2004 and every 6 months thereafter.  The survey may have a section relating to
the evaluation of CLIENT’s business practices and shall have a section related
to the evaluation of OUTSOURCER’s Services. 
Such survey shall be scored from 1 (lowest) to 6 (highest) in tenth of
point increments.  Patient responses
shall be directed to:


 


VP of
OfficeCare

dj Orthopedics, LLC

2985 Scott Street

Vista, CA  92083-8339


 


 


b)             OUTSOURCER
shall conduct a baseline Patient survey within the 1 month period after the
Effective Date.  For such baseline
survey, OUTSOURCER shall survey


 

















 


5% of the
Patient population for the preceding 12-month period.  Scores on the OUTSOURCER’s Services component of the baseline
survey shall be used as a baseline Patient satisfaction score.  The survey size for any  follow-up semi-annual surveys shall be
initially set up at 3% of the annual Patient population.  OUTSOURCER shall monitor the number of
returned surveys and increase (from 3% to up to 5%) or decrease the sample size
in order to receive approximately 1,000 responses; however, the maximum sample
size shall be limited to 5% of the total Patient population for the preceding
12 months.


i)                 In all cases OUTSOURCER shall review
survey results for the OUTSOURCER’s Services section of the survey to:


(1)          Investigate any decline in OUTSOURCER
performance.


(2)          Develop an action plan to improve OfficeCare
and Insurance Business Patient satisfaction score.


(3)          Report action plan and implementation
schedule to CLIENT Contract Executive within 30 days of survey results.


ii)              In all cases OUTSOURCER and CLIENT shall
work together using commercially reasonable efforts after each sampling to
increase Patient response rate.”


 


17.                               Exhibit
B, Section C


 


Item 2b of Section C of Exhibit B is hereby amended in
its entirety to read as follows:


 


“b) OUTSOURCER shall conduct a baseline survey for the
OfficeCare sales representatives (i) before the Effective Date and (ii) within
one month after the date which is twelve months after the Effective Date.  Scores for the OUTSOURCER’s Services section
of such baseline surveys shall be used as the baseline OfficeCare sales
representative satisfaction score for the next OfficeCare sales representative
survey, which shall be conducted 6 months after the second baseline survey and
thereafter conducted semi-annually.  Each
subsequent survey result shall become the baseline for the next semi-annual
survey.


i)                 During the semi-annual surveys after
the 2 initial baseline surveys, if the aggregate OfficeCare sales
representative satisfaction score, on the OUTSOURCER’s Services section of the
survey, is less than the baseline aggregate OfficeCare sales representative
satisfaction score, OUTSOURCER shall:


(1)          Investigate decline in performance.


(2)          Develop an action plan to improve OfficeCare
sales representative satisfaction score.


(3)          Report action plan and implementation
schedule to CLIENT Contract Executive within 30 days of survey results.


(4)          For any OfficeCare sales representatives who
score OUTSOURCER as less than three (3), on the OUTSOURCER’s Services section
of the survey, OUTSOURCER will:


(a)          Contact OfficeCare sales representative by
phone.


(b)         Understand the nature of the complaint.


(c)          Develop an action plan to resolve the
problem.”


 

















 


18.                               Exhibit
B, Section C


 


Item 2e of Section C of Exhibit B is hereby amended in
its entirety to read as follows:


 


“e)  OUTSOURCER shall conduct a baseline survey
for the Insurance Business sales representatives (i) before the Effective Date
and (ii) within one month after the date which is twelve months after the
Effective Date.  Scores for the
OUTSOURCER’s Services section of such baseline surveys shall be used as the
baseline Insurance Business sales representative satisfaction score for the
next Insurance Business sales representative survey, which shall be conducted 6
months after the second baseline survey and thereafter conducted
semi-annually.  Each subsequent survey
result shall become the baseline for the next semi-annual survey.


i)                 During the semi-annual surveys after
the 2 initial baseline surveys, if the aggregate Insurance Business sales
representative satisfaction score, on the OUTSOURCER’s Services section of the
survey, is less than the aggregate baseline Insurance Business sales
representative satisfaction score, OUTSOURCER shall:


(1)          Investigate decline in performance.


(2)          Develop an action plan to improve Insurance
Business sales representative satisfaction score.


(3)          Report action plan and implementation
schedule to CLIENT Contract Executive within 30 days of survey results.


(4)           For any Insurance Business sales representatives
who score OUTSOURCER as less than three (3), OUTSOURCER will:


(a)          Contact such Insurance Business sales
representative by phone.


(b)         Understand the nature of the complaint.


(c)          Develop an action plan to resolve the
problem.”


 


Items 3(a)(i)(1), 3(b)(i)(1),
and 3(b)(iii) of Section C of Exhibit B are hereby deleted in their entirety.


 


19.                               Exhibit
B, Section E


 


Item
1(a)(i)(3) of Section E of Exhibit B is hereby amended to read in its entirety
as follows:


 


“3) If system outage is discovered by CLIENT, CLIENT shall use the
following escalation plan to notify OUTSOURCER of the downtime:


 


(a)          Call
to OUTSOURCER help desk at 866-671-3955


(b)         Call to Chris Chinni                                         c:
908-581-5488


(c)          Call Bruce Blair                                                               c:
908 304 4265


or to
such other numbers as designated in writing by OUTSOURCER Contract Executive
from time to time.”


 

















 


20.                               Exhibit C


 


Exhibit C is hereby
amended in its entirety to read as follows:


 


“1)        No later than December first of each year, the Parties
will agree on a projected monthly headcount and costs (the “Target Operations
and Costs”) for OUTSOURCER to carry out the requirements of the Agreement
during the next calendar year. Current Target Operations and Costs are
incorporated herewith as Exhibit 1.


 


2)              From October 1, 2003 through December 31, 2003,
OUTSOURCER’s fees shall be equal to its actual costs of providing the Services
described in the Agreement, as amended herewith. OUTSOURCER costs shall include
those at OUTSOURCER and at CLIENT Service Locations, as well as required travel
between locations


 


3)              Starting on January 1, 2004 and until the termination
of the Agreement, as amended herewith, OUTSOURCER fees shall be determined by
adding a 10% Service Fee to the OUTSOURCER’s actual costs of providing the
Services described in the Agreement, as amended herewith. OUTSOURCER costs
shall include those at OUTSOURCER and at CLIENT Service Locations, as well as
required travel between locations.


 


4)              No later than the 5th day of each month,
OUTSOURCER will submit an invoice to CLIENT detailing total estimated costs for
the prior month plus the 10% Service Fee (the Estimated Fees). On or about the
30th day of each month, OUTSOURCER will provide CLIENT with the
actual costs for the prior month, as well as a final invoice (based on actual
costs) for the prior month (the Final Fees). Any difference between Estimated
and Final Fees shall be added or netted out of OUTSOURCER’s next invoice to
CLIENT.


 


5)              For the month of October 2003 only, OUTSOURCER shall
deduct $ 75,000 (seventy five thousand Dollars) from the Fees computed under
the methodology outlined in 2) above. The amount deducted is what completes
OUTSOURCER’s planned loss of $ 1.695 million for 2003.


 


6)              OUTSOURCER shall submit a written justification to
CLIENT each time the cumulative difference for a quarter, between actual and
Target Operations and Costs, is greater than 5%.


 


7)              OUTSOURCER and CLIENT shall meet prior to the end of
each calendar quarter to review the Target Operations and Costs for the
remainder of the calendar year and, if necessary, adjust these. Changes to
Target Operations and Costs can include but not be limited to staffing (number
and type of FTEs, management/employee ratios, etc) and non-staffing costs.


 


8)              The Parties shall work together to develop, by
November 30, 2003, an incentive system for the OUTSOURCER’s staff that provides
the Services.


 


9)              With the exception of item 7 above, OUTSOURCER staff
that provides the Services shall be under the same human resource policies that
OUTSOURCER utilizes for its other clients. These policies shall include, but
not be limited to, salary ranges, seniority, performance review process,
promotions, benefits, vacations, raises, etc. OUTSOURCER shall seek approval
from CLIENT prior to granting salary increases greater than 4% per year for the
employees performing the Services; CLIENT’s approval shall not be unreasonably
withheld.


 


10)        OUTSOURCER monthly invoices shall include the
following information:


 

















 


•                  FTE’s who
provide the Services, by function (i.e.: cash application, CSR, analyst, etc.)


 


•                  A/R worked for
each project below (month and year to date dollars and touches)


•                  Dates of Entry
prior to or equal to 12/1/02


•                  Dates of Entry
between 12/1/02 and 6/30/03


•                  Dates on Entry
on or after 7/1/03 and prior to 10/1/03


 


•                  A comparison between
actual and planned collection rate by each one of the three projects above.
Planned collection rates are presented on Exhibit 2 and 3.


 


•                  Detailed
timecards listing projects and hours spent for the individuals mentioned in
section 6.2(b)


 


11)        OUTSOURCER costs shall include:


 


a)              Staff salaries and benefits


 


b)             Per diem staff (as required)


 


c)              Subcontractors


 


d)             Production and distribution (OUTSOURCER’S cost to
print and mail hard copy invoices and letters to patients and payers)


 


e)              Travel and lodging in connection with the Services
(for OUTSOURCER’s management and staff)


 


f)                Telecommunications


 


g)             Desktop support for OUTSOURCER’s and CLIENT’s staff
who perform the Services (Creditek’s actual quarterly costs to maintain its
network, terminals and systems, divided by the average number of terminals in
operation for the quarter. These shall include such expenses as staff, hardware
and software)


 


h)             IT maintenance fees in connection with the Services
(actual license fees paid to Medical Manager, plus 50% of the database
licensing fees (Oracle) paid for the MaxPro application)


 


i)                 IT team (salaries and benefits for the staff
referenced on Section 6.2.3 of this Amendment)


 


j)                 Medical Manager licenses in connection with the
Services (the one time, per user license paid to Medical Manager to increase
the number of users beyond the 85 currently available)


 


k)              Wilkes-Barre overhead (includes prorated cost of
space, utilities, maintenance, security, plus the salary and benefits costs,
through December 31, 2004, of: 10% of Chris Chinni, 100% of Lise Goldstein’s,
10% of a receptionist and 100% of Shelly Weiss)


 


l)                 Computer supplies in connection with the Services


 


m)           Office supplies in connection with the Services


 


n)             Recruiting/temporary agencies and related advertising
expenses in connection with the Services


 


o)             Forms (for September 2003 only)


 

















 


7)              OUTSOURCER shall maintain a timecard or equivalent
monitoring system to record the hours devoted by the entire staff that provides
the Services, including the individuals listed on 6.2(b) above


 


8)              OUTSOURCER’s invoices and Target Operations and Costs
schedules shall follow CLIENTS manufacturing calendar


 


9)              OUTSOURCER agrees to use best efforts to either
continue to improve MaxPro or to replace it by a system that provides
equivalent or better functionality


 


10)        OUTSOURCER shall follow the operational standards
presented on Exhibit 4”


 


21.                               Exhibit E


 


Exhibit E is hereby
deleted in its entirety.


 


 


IN WITNESS WHEREOF, the
parties have hereunto executed this Amendment as of the first date above
mentioned.


 


 


	
  Creditek MediFinancial, Inc.

  	
  dj Orthopedics, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
  Name:

  	
  Name:

  
	
  Title:

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  



 

















 


Exhibit 1


 


Staffing
Levels for Oct-Dec 2003 and for 2004


 


	
  Oct

  	
   

  	
  Nov

  	
   

  	
  Dec

  	
   

  	
  Jan

  	
   

  	
  Feb

  	
   

  	
  Mar

  	
   

  	
  Apr

  	
   

  	
  Ongoing

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.5

  	
   

  	
  1.5

  	
   

  	
  1.5

  	
   

  	
  1.5

  	
   

  	
  1.5

  	
   

  	
  1.5

  	
   

  	
  1.5

  	
   

  	
  1.5

  	
   

  
	
  2.0

  	
   

  	
  2.0

  	
   

  	
  2.0

  	
   

  	
  2.0

  	
   

  	
  2.0

  	
   

  	
  2.0

  	
   

  	
  2.0

  	
   

  	
  2.0

  	
   

  
	
  3.0

  	
   

  	
  3.0

  	
   

  	
  3.0

  	
   

  	
  3.0

  	
   

  	
  3.0

  	
   

  	
  3.0

  	
   

  	
  3.0

  	
   

  	
  3.0

  	
   

  
	
  8.0

  	
   

  	
  7.0

  	
   

  	
  6.0

  	
   

  	
  5.0

  	
   

  	
  5.0

  	
   

  	
  5.0

  	
   

  	
  5.0

  	
   

  	
  3.0

  	
   

  
	
  3.0

  	
   

  	
  3.0

  	
   

  	
  3.0

  	
   

  	
  3.0

  	
   

  	
  3.0

  	
   

  	
  3.0

  	
   

  	
  3.0

  	
   

  	
  2.0

  	
   

  
	
  6.0

  	
   

  	
  6.0

  	
   

  	
  6.0

  	
   

  	
  6.0

  	
   

  	
  6.0

  	
   

  	
  4.0

  	
   

  	
  4.0

  	
   

  	
  4.0

  	
   

  
	
  10.0

  	
   

  	
  10.0

  	
   

  	
  10.0

  	
   

  	
  10.0

  	
   

  	
  10.0

  	
   

  	
  10.0

  	
   

  	
  10.0

  	
   

  	
  7.0

  	
   

  
	
  2.0

  	
   

  	
  1.0

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.0

  	
   

  	
  32.0

  	
   

  	
  46.0

  	
   

  	
  47.0

  	
   

  	
  47.0

  	
   

  	
  38.0

  	
   

  	
  20.0

  	
   

  	
  10.0

  	
   

  
	
  52.5

  	
   

  	
  65.5

  	
   

  	
  77.5

  	
   

  	
  77.5

  	
   

  	
  77.5

  	
   

  	
  66.5

  	
   

  	
  48.5

  	
   

  	
  32.5

  	
   

  



 


Profit and Loss Statement


 


	
  Revenue ($/1000)

  	
   

  	
  Jan-Aug’03

  	
   

  	
  Sept

  	
   

  	
  Oct

  	
   

  	
  Nov

  	
   

  	
  Dec’03

  	
   

  	
  Sept-Dec’03

  	
   

  	
  2003

  	
   

  	
  2004

  	
   

  	
  2005

  	
   

  	
  2006

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total
  Revenue

  	
   

  	
  $

  	
  1,074.90

  	
   

  	
  $

  	
  162.83

  	
   

  	
  $

  	
  229.76

  	
   

  	
  $

  	
  280.79

  	
   

  	
  $

  	
  310.52

  	
   

  	
  $

  	
  983.90

  	
   

  	
  $

  	
  2,058.80

  	
   

  	
  $

  	
  2,993.16

  	
   

  	
  $

  	
  2,393.58

  	
   

  	
  $

  	
  2,334.54

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Expenses

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Salaries

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  WB

  	
   

  	
   

  	
   

  	
  93.93

  	
   

  	
  97.65

  	
   

  	
  121.83

  	
   

  	
  144.15

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1,073.82

  	
   

  	
  830.10

  	
   

  	
  850.86

  	
   

  
	
  Vista

  	
   

  	
   

  	
   

  	
  62.65

  	
   

  	
  56.13

  	
   

  	
  11.52

  	
   

  	
  11.52

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  
	
  Total
  Salaries

  	
   

  	
   

  	
   

  	
  156.58

  	
   

  	
  153.77

  	
   

  	
  133.35

  	
   

  	
  155.67

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1,073.82

  	
   

  	
  830.10

  	
   

  	
  850.86

  	
   

  
	
  Fringe
  @ 22%

  	
   

  	
   

  	
   

  	
  34.45

  	
   

  	
  33.83

  	
   

  	
  29.34

  	
   

  	
  34.25

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  236.24

  	
   

  	
  182.62

  	
   

  	
  187.19

  	
   

  
	
  Total
  Salaries & Benefits

  	
   

  	
  $

  	
  1,555.02

  	
   

  	
  $

  	
  191.03

  	
   

  	
  $

  	
  187.61

  	
   

  	
  $

  	
  162.68

  	
   

  	
  $

  	
  189.91

  	
   

  	
  $

  	
  731.23

  	
   

  	
  $

  	
  2,286.25

  	
   

  	
  $

  	
  1,310.06

  	
   

  	
  $

  	
  1,012.73

  	
   

  	
  $

  	
  1,038.04

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Subcontractors

  	
   

  	
  120.02

  	
   

  	
  5.00

  	
   

  	
  5.00

  	
   

  	
  5.00

  	
   

  	
  5.00

  	
   

  	
  20.00

  	
   

  	
  140.02

  	
   

  	
  21.00

  	
   

  	
  —

  	
   

  	
  —

  	
   

  
	
  Production/Distribution

  	
   

  	
  164.60

  	
   

  	
  34.00

  	
   

  	
  32.50

  	
   

  	
  32.50

  	
   

  	
  32.50

  	
   

  	
  131.50

  	
   

  	
  296.10

  	
   

  	
  441.84

  	
   

  	
  441.84

  	
   

  	
  441.84

  	
   

  
	
  Travel
  & Lodging

  	
   

  	
  38.39

  	
   

  	
  3.00

  	
   

  	
  3.00

  	
   

  	
  1.25

  	
   

  	
  1.25

  	
   

  	
  8.50

  	
   

  	
  46.89

  	
   

  	
  15.00

  	
   

  	
  15.00

  	
   

  	
  15.38

  	
   

  
	
  Bank
  Charges

  	
   

  	
  42.30

  	
   

  	
  6.02

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  6.02

  	
   

  	
  48.32

  	
   

  	
  —

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telco
  (Set-Up Fees)

  	
   

  	
  16.90

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  16.90

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  
	
  Telecommunications

  	
   

  	
  41.95

  	
   

  	
  5.24

  	
   

  	
  5.24

  	
   

  	
  5.24

  	
   

  	
  5.24

  	
   

  	
  20.98

  	
   

  	
  62.93

  	
   

  	
  41.67

  	
   

  	
  42.71

  	
   

  	
  43.78

  	
   

  
	
  Desktop
  support

  	
   

  	
  60.00

  	
   

  	
  6.29

  	
   

  	
  6.46

  	
   

  	
  7.54

  	
   

  	
  8.54

  	
   

  	
  28.83

  	
   

  	
  88.83

  	
   

  	
  79.13

  	
   

  	
  67.42

  	
   

  	
  69.11

  	
   

  
	
  IT
  maintenance fees

  	
   

  	
  26.67

  	
   

  	
  3.33

  	
   

  	
  3.33

  	
   

  	
  3.33

  	
   

  	
  3.33

  	
   

  	
  13.33

  	
   

  	
  40.00

  	
   

  	
  40.00

  	
   

  	
  41.00

  	
   

  	
  42.03

  	
   

  
	
  IT
  Team

  	
   

  	
  188.20

  	
   

  	
  29.60

  	
   

  	
  29.60

  	
   

  	
  29.60

  	
   

  	
  29.60

  	
   

  	
  118.40

  	
   

  	
  306.60

  	
   

  	
  362.30

  	
   

  	
  189.32

  	
   

  	
  97.03

  	
   

  
	
  MM
  licenses

  	
   

  	
  42.50

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  42.50

  	
   

  	
  27.00

  	
   

  	
  —

  	
   

  	
  —

  	
   

  
	
  W/B
  overhead

  	
   

  	
  162.83

  	
   

  	
  21.77

  	
   

  	
  22.02

  	
   

  	
  23.64

  	
   

  	
  25.14

  	
   

  	
  92.56

  	
   

  	
  255.39

  	
   

  	
  261.23

  	
   

  	
  247.24

  	
   

  	
  253.42

  	
   

  
	
  Computer
  Supplies

  	
   

  	
  19.73

  	
   

  	
  2.00

  	
   

  	
  2.00

  	
   

  	
  2.00

  	
   

  	
  2.00

  	
   

  	
  8.00

  	
   

  	
  27.73

  	
   

  	
  27.46

  	
   

  	
  28.14

  	
   

  	
  28.85

  	
   

  
	
  0ffice
  Supplies

  	
   

  	
  18.77

  	
   

  	
  6.00

  	
   

  	
  6.00

  	
   

  	
  6.00

  	
   

  	
  6.00

  	
   

  	
  24.00

  	
   

  	
  42.77

  	
   

  	
  82.37

  	
   

  	
  84.43

  	
   

  	
  86.54

  	
   

  
	
  Recruiting/Temp/Adv

  	
   

  	
  11.41

  	
   

  	
  2.00

  	
   

  	
  2.00

  	
   

  	
  2.00

  	
   

  	
  2.00

  	
   

  	
  8.00

  	
   

  	
  19.41

  	
   

  	
  12.00

  	
   

  	
  6.15

  	
   

  	
  6.30

  	
   

  
	
  Forms

  	
   

  	
   

  	
   

  	
  15.00

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  15.00

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Rent
  to dj Ortho

  	
   

  	
  12.00

  	
   

  	
  1.50

  	
   

  	
   

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  1.50

  	
   

  	
  13.50

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  
	
  Total
  Other Operating Exp

  	
   

  	
  966.26

  	
   

  	
  140.76

  	
   

  	
  117.15

  	
   

  	
  118.11

  	
   

  	
  120.61

  	
   

  	
  496.63

  	
   

  	
  1,462.89

  	
   

  	
  1,410.99

  	
   

  	
  1,163.26

  	
   

  	
  1,084.27

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Expenses

  	
   

  	
  2,521.27

  	
   

  	
  331.79

  	
   

  	
  304.76

  	
   

  	
  280.79

  	
   

  	
  310.52

  	
   

  	
  1,227.86

  	
   

  	
  3,749.13

  	
   

  	
  2,721.05

  	
   

  	
  2,175.98

  	
   

  	
  2,122.31

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Contribution

  	
   

  	
  $

  	
  (1,446.37

  	
  )

  	
  $

  	
  (168.96

  	
  )

  	
  $

  	
  (75.00

  	
  )

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  (243.96

  	
  )

  	
  $

  	
  (1,690.34

  	
  )

  	
  $

  	
  272.11

  	
   

  	
  $

  	
  217.60

  	
   

  	
  $

  	
  212.23

  	
   

  



 

















 


Exhibit 2


 


Collection
Expectations by Backlog Project by Month


 


 


	
  OfficeCare Collections

  	
   

  	
  Oct

  	
   

  	
  Nov

  	
   

  	
  Dec

  	
   

  	
  Oct-Dec'03

  	
   

  	
  Jan'04

  	
   

  	
  Feb

  	
   

  	
  Mar

  	
   

  	
  Apr

  	
   

  	
  May

  	
   

  	
  June

  	
   

  	
  July

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dates of Entry on/after 10/1/03

  	
   

  	
  $

  	
  97

  	
   

  	
  $

  	
  699

  	
   

  	
  $

  	
  1,009

  	
   

  	
  $

  	
  1,805

  	
   

  	
  $

  	
  1,389

  	
   

  	
  $

  	
  1,280

  	
   

  	
  $

  	
  1,425

  	
   

  	
  $

  	
  1,963

  	
   

  	
  $

  	
  1,570

  	
   

  	
  $

  	
  1,570

  	
   

  	
  $

  	
  1,963

  	
   

  
	
  Dates of Entry after 12/1/02, before 10/1/03

  	
   

  	
  $

  	
  1,495

  	
   

  	
  $

  	
  797

  	
   

  	
  $

  	
  760

  	
   

  	
  $

  	
  3,053

  	
   

  	
  $

  	
  1,087

  	
   

  	
  $

  	
  1,087

  	
   

  	
  $

  	
  1,087

  	
   

  	
  $

  	
  1,268

  	
   

  	
  $

  	
  435

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  Dates of Entry prior to 12/1/02

  	
   

  	
  $

  	
  91

  	
   

  	
  $

  	
  80

  	
   

  	
  $

  	
  95

  	
   

  	
  $

  	
  267

  	
   

  	
  $

  	
  137

  	
   

  	
  $

  	
  132

  	
   

  	
  $

  	
  132

  	
   

  	
  $

  	
  91

  	
   

  	
  $

  	
  37

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
  1,684

  	
   

  	
  $

  	
  1,576

  	
   

  	
  $

  	
  1,865

  	
   

  	
  $

  	
  5,124

  	
   

  	
  $

  	
  2,613

  	
   

  	
  $

  	
  2,499

  	
   

  	
  $

  	
  2,644

  	
   

  	
  $

  	
  3,322

  	
   

  	
  $

  	
  2,042

  	
   

  	
  $

  	
  1,570

  	
   

  	
  $

  	
  1,963

  	
   

  



 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Aug'04

  	
   

  	
  Sep

  	
   

  	
  Oct

  	
   

  	
  Nov

  	
   

  	
  Dec

  	
   

  	
  2004

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dates of Entry on/after 10/1/03

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  1,570

  	
   

  	
  $

  	
  1,570

  	
   

  	
  $

  	
  1,963

  	
   

  	
  $

  	
  1,570

  	
   

  	
  $

  	
  1,570

  	
   

  	
  $

  	
  19,406

  	
   

  
	
  Dates of Entry after 12/1/02, before 10/1/03

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  4,964

  	
   

  
	
  Dates of Entry prior to 12/1/02

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  528

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  1,570

  	
   

  	
  $

  	
  1,570

  	
   

  	
  $

  	
  1,963

  	
   

  	
  $

  	
  1,570

  	
   

  	
  $

  	
  1,570

  	
   

  	
  $

  	
  24,898

  	
   

  



 


	
  Insurance Collections

  	
   

  	
  Oct

  	
   

  	
  Nov

  	
   

  	
  Dec

  	
   

  	
  Oct-Dec'03

  	
   

  	
  Jan'04

  	
   

  	
  Feb

  	
   

  	
  Mar

  	
   

  	
  Apr

  	
   

  	
  May

  	
   

  	
  June

  	
   

  	
  July

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dates of Entry on/after 10/1/03

  	
   

  	
  $

  	
  31

  	
   

  	
  $

  	
  221

  	
   

  	
  $

  	
  319

  	
   

  	
  $

  	
  570

  	
   

  	
  $

  	
  439

  	
   

  	
  $

  	
  404

  	
   

  	
  $

  	
  450

  	
   

  	
  $

  	
  620

  	
   

  	
  $

  	
  496

  	
   

  	
  $

  	
  496

  	
   

  	
  $

  	
  620

  	
   

  
	
  Dates of Entry after 12/1/02, before 10/1/03

  	
   

  	
  $

  	
  472

  	
   

  	
  $

  	
  252

  	
   

  	
  $

  	
  240

  	
   

  	
  $

  	
  964

  	
   

  	
  $

  	
  343

  	
   

  	
  $

  	
  343

  	
   

  	
  $

  	
  343

  	
   

  	
  $

  	
  400

  	
   

  	
  $

  	
  137

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  Dates of Entry prior to 12/1/02

  	
   

  	
  $

  	
  20

  	
   

  	
  $

  	
  18

  	
   

  	
  $

  	
  21

  	
   

  	
  $

  	
  59

  	
   

  	
  $

  	
  30

  	
   

  	
  $

  	
  29

  	
   

  	
  $

  	
  29

  	
   

  	
  $

  	
  20

  	
   

  	
  $

  	
  8

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
  $

  	
  523

  	
   

  	
  $

  	
  490

  	
   

  	
  $

  	
  580

  	
   

  	
  $

  	
  1,593

  	
   

  	
  $

  	
  812

  	
   

  	
  $

  	
  776

  	
   

  	
  $

  	
  822

  	
   

  	
  $

  	
  1,040

  	
   

  	
  $

  	
  641

  	
   

  	
  $

  	
  496

  	
   

  	
  $

  	
  620

  	
   

  



 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Aug'04

  	
   

  	
  Sep

  	
   

  	
  Oct

  	
   

  	
  Nov

  	
   

  	
  Dec

  	
   

  	
  2004

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dates of Entry on/after 10/1/03

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  496

  	
   

  	
  $

  	
  496

  	
   

  	
  $

  	
  620

  	
   

  	
  $

  	
  496

  	
   

  	
  $

  	
  496

  	
   

  	
  $

  	
  6,128

  	
   

  
	
  Dates of Entry after 12/1/02, before 10/1/03

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1,567

  	
   

  
	
  Dates of Entry prior to 12/1/02

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  116

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  496

  	
   

  	
  $

  	
  496

  	
   

  	
  $

  	
  620

  	
   

  	
  $

  	
  496

  	
   

  	
  $

  	
  496

  	
   

  	
  $

  	
  7,812

  	
   

  



 

















 


Exhibit 3


 


Collection
Expectations by Backlog Project by Receivable Bucket


 


	
  Self Pay - Old

  	
   

  	
  <30

  	
   

  	
  31-60

  	
   

  	
  61-90

  	
   

  	
  91-120

  	
   

  	
  121-150

  	
   

  	
  151-180

  	
   

  	
  181-270

  	
   

  	
  271-365

  	
   

  	
  366-546

  	
   

  	
  547-730

  	
   

  
	
  12/1/02 prior A/R

  	
   

  	
  $

  	
  116

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  25

  	
   

  	
  $

  	
  391

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  74

  	
   

  	
  $

  	
  356,891

  	
   

  	
  $

  	
  1,076,038

  	
   

  	
  $

  	
  810,625

  	
   

  
	
  est.
  # of accts

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  1

  	
   

  	
  1

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  1

  	
   

  	
  2455

  	
   

  	
  6,622

  	
   

  	
  6,384

  	
   

  
	
  Est.
  # of accts to touch

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  982

  	
   

  	
  2,649

  	
   

  	
  2,554

  	
   

  
	
  Est.
  Collection %

  	
   

  	
  50

  	
  %

  	
  0

  	
  %

  	
  50

  	
  %

  	
  50

  	
  %

  	
  50

  	
  %

  	
  0

  	
  %

  	
  50

  	
  %

  	
  30

  	
  %

  	
  20

  	
  %

  	
  10

  	
  %

  
	
  Est
  Collection $

  	
   

  	
  $

  	
  58

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  13

  	
   

  	
  $

  	
  196

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  37

  	
   

  	
  $

  	
  107,067

  	
   

  	
  $

  	
  215,208

  	
   

  	
  $

  	
  81,063

  	
   

  



 


	
  Billing Project -Old

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12/1/02
  prior A/R

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  1,510

  	
   

  	
  $

  	
  1,397,436

  	
   

  	
  $

  	
  1,819,726

  	
   

  	
  $

  	
  585,002

  	
   

  
	
  est.
  # of accts

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  2

  	
   

  	
  11,305

  	
   

  	
  15,725

  	
   

  	
  6,519

  	
   

  
	
  Est.
  # of accts to touch

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1

  	
   

  	
  5,653

  	
   

  	
  7,863

  	
   

  	
  978

  	
   

  
	
  Est.
  Collection %

  	
   

  	
  0

  	
  %

  	
  0

  	
  %

  	
  0

  	
  %

  	
  0

  	
  %

  	
  0

  	
  %

  	
  0

  	
  %

  	
  50

  	
  %

  	
  20

  	
  %

  	
  10

  	
  %

  	
  10

  	
  %

  
	
  Est
  Collection $

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  755

  	
   

  	
  $

  	
  279,487

  	
   

  	
  $

  	
  181,973

  	
   

  	
  $

  	
  58,500

  	
   

  



 


	
  Self Pay - Mid

  	
   

  	
  <30

  	
   

  	
  31-60

  	
   

  	
  61-90

  	
   

  	
  91-120

  	
   

  	
  121-150

  	
   

  	
  151-180

  	
   

  	
  181-270

  	
   

  	
  271-365

  	
   

  	
  366-546

  	
   

  	
  547-730

  	
   

  
	
  12/2/02
  -6/30/03 A/R

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  96

  	
   

  	
  $

  	
  115

  	
   

  	
  $

  	
  586,451

  	
   

  	
  $

  	
  524,388

  	
   

  	
  $

  	
  485,122

  	
   

  	
  $

  	
  1,308,875

  	
   

  	
  $

  	
  230,388

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  
	
  est.
  # of accts

  	
   

  	
  0

  	
   

  	
  1

  	
   

  	
  1

  	
   

  	
  6203

  	
   

  	
  5426

  	
   

  	
  4776

  	
   

  	
  12156

  	
   

  	
  1608

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Est.
  # of accts to touch

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  2481

  	
   

  	
  2170

  	
   

  	
  1910

  	
   

  	
  4862

  	
   

  	
  643

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Est.
  Collection %

  	
   

  	
  0

  	
  %

  	
  80

  	
  %

  	
  80

  	
  %

  	
  80

  	
  %

  	
  70

  	
  %

  	
  60

  	
  %

  	
  50

  	
  %

  	
  30

  	
  %

  	
  0

  	
  %

  	
  0

  	
  %

  
	
  Est
  Collection $

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  77

  	
   

  	
  $

  	
  92

  	
   

  	
  $

  	
  469,161

  	
   

  	
  $

  	
  367,072

  	
   

  	
  $

  	
  291,073

  	
   

  	
  $

  	
  654,438

  	
   

  	
  $

  	
  69,116

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  



 


	
  Billing Project -Mid

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12/2/02
  -6/30/03 A/R

  	
   

  	
  $

  	
  1,150

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  1,250,271

  	
   

  	
  $

  	
  1,287,237

  	
   

  	
  $

  	
  1,388,708

  	
   

  	
  $

  	
  3,514,611

  	
   

  	
  $

  	
  867,563

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  
	
  est.
  # of accts

  	
   

  	
  1

  	
   

  	
  0

  	
   

  	
  —

  	
   

  	
  7,328

  	
   

  	
  7,614

  	
   

  	
  8,656

  	
   

  	
  23,561

  	
   

  	
  6,792

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Est.
  # of accts to touch

  	
   

  	
  1

  	
   

  	
  0

  	
   

  	
  —

  	
   

  	
  5,130

  	
   

  	
  6,091

  	
   

  	
  6,925

  	
   

  	
  21,205

  	
   

  	
  6,113

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Est.
  Collection %

  	
   

  	
  60

  	
  %

  	
  0

  	
  %

  	
  61

  	
  %

  	
  61

  	
  %

  	
  58

  	
  %

  	
  55

  	
  %

  	
  45

  	
  %

  	
  35

  	
  %

  	
  0

  	
  %

  	
  0

  	
  %

  
	
  Est
  Collection $

  	
   

  	
  $

  	
  695

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  765,541

  	
   

  	
  $

  	
  748,766

  	
   

  	
  $

  	
  765,275

  	
   

  	
  $

  	
  1,581,575

  	
   

  	
  $

  	
  303,647

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  



 


	
  Self Pay - New

  	
   

  	
  <30

  	
   

  	
  31-60

  	
   

  	
  61-90

  	
   

  	
  91-120

  	
   

  	
  121-150

  	
   

  	
  151-180

  	
   

  	
  181-270

  	
   

  	
  271-365

  	
   

  	
  366-546

  	
   

  	
  547-730

  	
   

  
	
  7/1/2003
  +

  	
   

  	
  $

  	
  209,220

  	
   

  	
  $

  	
  482,071

  	
   

  	
  $

  	
  658,968

  	
   

  	
  $

  	
  86,350

  	
   

  	
  $

  	
  6,373

  	
   

  	
  $

  	
  2,845

  	
   

  	
  $

  	
  2,272

  	
   

  	
  $

  	
  805

  	
   

  	
  $

  	
  793

  	
   

  	
  $

  	
  0

  	
   

  
	
  est.
  # of accts

  	
   

  	
  2949

  	
   

  	
  6121

  	
   

  	
  7703

  	
   

  	
  949

  	
   

  	
  91

  	
   

  	
  34

  	
   

  	
  38

  	
   

  	
  4

  	
   

  	
  5

  	
   

  	
  —

  	
   

  
	
  Est.
  # of accts to touch

  	
   

  	
  295

  	
   

  	
  1224

  	
   

  	
  3081

  	
   

  	
  380

  	
   

  	
  36

  	
   

  	
  14

  	
   

  	
  15

  	
   

  	
  2

  	
   

  	
  2

  	
   

  	
  0

  	
   

  
	
  Est.
  Collection %

  	
   

  	
  80

  	
  %

  	
  80

  	
  %

  	
  80

  	
  %

  	
  70

  	
  %

  	
  60

  	
  %

  	
  50

  	
  %

  	
  40

  	
  %

  	
  30

  	
  %

  	
  20

  	
  %

  	
  10

  	
  %

  
	
  Est
  Collection $

  	
   

  	
  $

  	
  167,376

  	
   

  	
  $

  	
  385,657

  	
   

  	
  $

  	
  527,174

  	
   

  	
  $

  	
  60,445

  	
   

  	
  $

  	
  3,824

  	
   

  	
  $

  	
  1,423

  	
   

  	
  $

  	
  909

  	
   

  	
  $

  	
  242

  	
   

  	
  $

  	
  159

  	
   

  	
  $

  	
  0

  	
   

  



 


	
  Billing Project -New

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7/1/2003
  +

  	
   

  	
  $

  	
  1,979,182

  	
   

  	
  $

  	
  2,461,546

  	
   

  	
  $

  	
  1,713,652

  	
   

  	
  $

  	
  210,108

  	
   

  	
  $

  	
  36,280

  	
   

  	
  $

  	
  14,678

  	
   

  	
  $

  	
  14,823

  	
   

  	
  $

  	
  2,146

  	
   

  	
  $

  	
  2,261

  	
   

  	
  $

  	
  122

  	
   

  
	
  est.
  # of accts

  	
   

  	
  8,893

  	
   

  	
  12,808

  	
   

  	
  9,638

  	
   

  	
  1,243

  	
   

  	
  225

  	
   

  	
  94

  	
   

  	
  93

  	
   

  	
  15

  	
   

  	
  13

  	
   

  	
  2

  	
   

  
	
  Est.
  # of accts to touch

  	
   

  	
  3557

  	
   

  	
  6,404

  	
   

  	
  4,819

  	
   

  	
  870

  	
   

  	
  180

  	
   

  	
  75

  	
   

  	
  84

  	
   

  	
  14

  	
   

  	
  7

  	
   

  	
  1

  	
   

  
	
  Est.
  Collection %

  	
   

  	
  57

  	
  %

  	
  57

  	
  %

  	
  57

  	
  %

  	
  57

  	
  %

  	
  55

  	
  %

  	
  52

  	
  %

  	
  43

  	
  %

  	
  31

  	
  %

  	
  24

  	
  %

  	
  13

  	
  %

  
	
  Est
  Collection $

  	
   

  	
  $

  	
  1,129,717

  	
   

  	
  $

  	
  1,405,050

  	
   

  	
  $

  	
  978,153

  	
   

  	
  $

  	
  119,930

  	
   

  	
  $

  	
  19,993

  	
   

  	
  $

  	
  7,639

  	
   

  	
  $

  	
  6,353

  	
   

  	
  $

  	
  657

  	
   

  	
  $

  	
  554

  	
   

  	
  $

  	
  16

  	
   

  



 


	
  Summary Analysis (9/29/03
  A/R)

  	
   

  	
   

  	
  Total Open Bal

  
	
   

  	
   

  	
  Total Est Col

  
	
   

  	
   

  	
  Total open Est Col %

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total accts to work

  



 


	
  Est “old”Collections

  	
   

  	
  $

  	
  985,203

  	
   

  
	
  Est “mid” Collections(*)

  	
   

  	
  $

  	
  5,866,528

  	
   

  
	
  Est “new”Collections(*)

  	
   

  	
  $

  	
  4,665,353

  	
   

  
	
  Total estimate for 9/29/03
  A/

  	
   

  	
  $

  	
  11,517,084

  	
   

  



 











(*)  reduced by a total of $300K to account for unapplied
cash


 

















 


Exhibit 4:  CREDITEK OPERATIONAL
STANDARDS


 


 


Creditek Standard


 


Cash
Application


•                  If EOB identifies Patient Responsible that appears
normal, Cash App sends to MaxPro for letter series


 


Collection
Agency


•                  Once Account has completed all Insurance and Self Pay
steps, file is generated and sent to Collections


•                  No follow-up after Account sent to collections


 


Paper
Claims


•                  Regular Mail


 


CSR
Patient Response


•                  Immediate for: Pay Plan, Credit Card Pay, or general
info or any sales consultant or distributor
call


 


•                  <48 hour average response time for other outbound
calls


 


Denial
Appeals


•                  No appeal if EOB = Deductible Applied, Max Ben Reached,
Not eligible DOS


•                  Appealed if EOB = Non cov service, etc


 


REP/Carrier
Complaint


•                  Mary G & Sherry P handle


 


Analyst
FTE Assumptions


•                  30% Accounts require touches @ 12 minutes to resolve =
10 analysts


 


 


Actions


 


•                  Standard OK.  Lise audit Cash App group regularly to
achieve <1.5% target error rate (eg no more than 1.5 errors/100 accounts
posted)


 


•                  Standard OK.  Lise audit and djOrtho to approve all
transfers


 


•                  Collect Data.  Lise report FTE requirements


 


•                  Standard = Notarize/Certify
for batches of 10 or more claims/week


 


•                  Standard OK.  Lise to provide target date to achieve CSR
standard


 


•                  Standard OK.  Controlled by Denial Instruction Procedures


 


•                  Standard OK


 


•                  Standard OK


 


•                  Standard OK.  Lise
report quarterly on 30% and 12 minute assumptions