**Exhibit 10.33**

** **

**AmendmentNumber One toOutsourcing Agreement**

 

 

This Amendment Number One to OutsourcingAgreement (“Amendment”) is entered into as of this 12th day ofDecember 2003 by and between Creditek MediFinancial, Inc., a Delawarecorporation (“OUTSOURCER”), and dj Orthopedics, LLC, a Delaware limitedliability company (“CLIENT”).

 

**Whereas,** the partieshave previously entered into that certain Outsourcing Agreement dated as ofDecember 30, 2002 (the “Original Agreement”) relating to the provision of outsourcingservices by OUTSOURCER to CLIENT;

 

**Whereas,** the partiesdesire to set forth in this Amendment certain changes and modifications to theOriginal Agreement;

 

**Now, therefore,** theparties hereby agree to amend the Original Agreement in the followingmanner.  Capitalized terms used hereinand not defined in this Amendment shall have the meanings ascribed to them inthe Original Agreement.

 

**1.****                                      *Section1.2***

 

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

 

***2.******                                      Section2.1***

 

The first sentence ofSection 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 anew third sentence to Section 2.1:  “Atthe request of CLIENT made on or before November 30, 2004, OUTSOURCER agrees toengage in good faith renegotiation of such of the terms of the Agreement as areindicated in the request of CLIENT.”

 

**3****                                         *Section2.2***

 

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

 

**4.****                                      *Section3.4b***

 

Paragraph (b) ofSection 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 shallthereafter employ, the CLIENT Service Location staff

 

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performing OfficeCareservices. OUTSOURCER shall maintain operations at the CLIENT Service Locationuntil the transfer of employees is completed.”

 

**5.****                                      *Section3.12***

 

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

 

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

 

2)              The monthly profit and loss statementshall include detailed headcount and cost breakdown information for thepreceding month.

 

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

 

4)              OUTSOURCER shall also provide CLIENTquarterly with a forecast of anticipated revenues and expenses covering theimmediate next three-month period

 

5)              The above shall be presented to CLIENT nolater than the 15th day  ofthe month immediately preceding the respective quarter.

 

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

 

**6.****                                      *Section4.3***

 

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

 

“(d) Rehired Employees.

 

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

####  

#### (ii) CLIENT shall offer employment on the above dates to the RehiredEmployees.  Such offers of employmentshall provide for compensation and benefits consistent with the compensationand benefits in effect for such employees immediately preceding the Insuranceand OfficeCare Transfer Dates, giving effect to the level of seniority withOUTSOURCER of such Rehired Employees immediately preceding their respectiveTransfer Dates.

####  

#### (iii) Nothing contained herein shall be deemed to create an employmentcontract between CLIENT and any Rehired Employee or to cause any RehiredEmployee to be treated as other than an at will employee of CLIENT after theTransfer Date.  CLIENT shall not beobligated or deemed to employ any Rehired Employee who does not executeCLIENT’s standard offer letter for similarly situated employees.

####  

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#### (iv) OUTSOURCER shall be responsible, and CLIENT shall have noliability, for any accrued wages, severance pay, sick leave or any otherbenefits, or benefits under any of OUTSOURCER’s benefits plans, or any otherliability or claim of any type or nature arising from or on account ofOUTSOURCER’s employment of, or termination of employment of, the RehiredEmployees 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 theTransfer Dates.”

### ** **

### **7.****                                     *****Section 6.1***

 

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

 

**8.****                                      *Section 6.2 (b)***

 

Section6.2(b) is hereby deleted in its entirety and replaced by the following section:

 

“(b) Dedicated Staff.  OUTSOURCER will provide CLIENT the servicesof the following individuals (or their functional equivalents in the event anyof 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, EdDwyer and Lisa Graham (or their functional equivalents) shall be equal to thatof one full time equivalent person working 100% on the Services during 2004.

 

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

 

CLIENT and OUTSOURCERshall, from time to time, evaluate the need to maintain or to change the levelof dedication of the above staff

 

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

 

**9.****                                     *****Section 6.5***

 

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

 

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

 

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**10.****                              *****Section 12.1***

 

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

 

**11.****                              *****Section17.1***

###  

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

###  

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

 

**12.****                              *****Section17.2***

###  

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

###  

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

###  

### “(b) If this Agreement is terminated for convenience by OUTSOURCER asset forth in 17.1(a)(ii) prior to December 31, 2006, OUTSOURCER shall  pay to CLIENT in immediately available fundsthe 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 OUTSOURCERhereunder during the period that is the shorter of (i) the 12 monthsimmediately preceding the date of OUTSOURCER’s notice of termination (the“Notice Date”) or (ii) the period between the Effective Date and the NoticeDate.”

 

### **13.****                              *****Exhibit A, SectionA***

 

Section A ofExhibit A to the Agreement is hereby amended as follows:

 

The first sentencefollowing the title of Section A is hereby amended to read in its entirety asfollows:  “The following are RequiredServices to be performed after the Effective Date:”

 

**14.****                              *****Exhibit A, Section B, Part III***

 

Item1 and all subparts thereof are hereby deleted.

 

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Items2-5 are hereby amended to read in their entirety as follows:

 

“2)        Order Entry:

 

a)                                      Thefollowing are CLIENT’s responsibilities regarding entry of Orders onOutsourcer’s Systems:

i)                 Reviewing the PPA prior to enteringthe data and, to the extent possible, identifying missing, incomplete orincorrect information.

ii)              Implementing a process to communicatewith Physician Practices and/or CLIENT’s Agents to obtain missing and/orcorrect the information necessary to bill for the services provided toPatients.

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

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

 

3)        Verification of insurance coverage:

 

a)                                      Asrequired by the Third Party Payer and based on the type of and charge for thesupply provided to Patients, CLIENT shall contact the Third Party Payer toascertain whether the Patient is covered for the OfficeCare and InsuranceBusiness DME products they have or shall receive, as well as the Patient’s andThird Party Payer’s financial responsibilities.

 

b)                                     Requiredverification of insurance coverage shall occur within 48 hours after an Orderis entered on the System.

 

4)                                                        Pre-Authorizationof insurance coverage:

 

a)                                      Asrequired by its managed care agreements, CLIENT will obtain insurancePre-Authorization for OfficeCare products that have already been dispensed toPatients by Physician Offices. In those instances where the Pre-Authorizationis denied by the Third Party Payer, OUTSOURCER will seek payment from Patient.

 

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

 

5)                                                        Billing:

 

a)                                      Forthe Insurance Business only, CLIENT shall be responsible for submitting theinitial hard copy (paper) bill to Third Party Payers that do not acceptelectronic billing. OUTSOURCER shall be responsible for submitting allelectronic bills for Insurance and OfficeCare business. OUTSOURCER  shall be responsible for rebilling all ThirdPart Payers and/or Patients, for all Accounts, whether these happenelectronically or on paper. OUTSOURCER shall submit all OfficeCare invoices tocarriers that do not accept electronic billing.

 

b)                                     Exceptas stated on Exhibit A, Section B, Part III, Item 5a, OUTSOURCER shall invoicethe appropriate Third Party Payers and/or Patients on CLIENT’s behalf inaccordance with payer specific requirements, including any additional requireddocumentation.”

 

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

 

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

 

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

 

“b). Certify/RegisterProgram.  CLIENT shall pay directlyto supplier all cost associated with the certifying and registering of paperclaims mailed to insurance companies by OUTSOURCER.

 

c). Patient Product Agreements(PPA’s).  CLIENT will pay directlyto 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 allcosts related to PNC Bank (or its replacement).”

 

**15.****                               *ExhibitB, Section A***

 

SectionA of Exhibit B is hereby amended by deleting Items 1(c)(vi) and 1(d) in theirentirety.

 

**16.****                               *ExhibitB, Section C***

 

Items 1a and1b of Section C of Exhibit B are hereby amended in their entirety to read asfollows:

 

“a)        Subjectto 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 beconducted in April, 2004 and every 6 months thereafter.  The survey may have a section relating tothe evaluation of CLIENT’s business practices and shall have a section relatedto the evaluation of OUTSOURCER’s Services. Such survey shall be scored from 1 (lowest) to 6 (highest) in tenth ofpoint increments.  Patient responsesshall be directed to:

 

VP ofOfficeCaredj Orthopedics, LLC2985 Scott StreetVista, CA  92083-8339

 

 

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

 

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5% of thePatient population for the preceding 12-month period.  Scores on the OUTSOURCER’s Services component of the baselinesurvey shall be used as a baseline Patient satisfaction score.  The survey size for any  follow-up semi-annual surveys shall beinitially set up at 3% of the annual Patient population.  OUTSOURCER shall monitor the number ofreturned surveys and increase (from 3% to up to 5%) or decrease the sample sizein order to receive approximately 1,000 responses; however, the maximum samplesize shall be limited to 5% of the total Patient population for the preceding12 months.

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

(1)          Investigate any decline in OUTSOURCERperformance.

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

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

ii)              In all cases OUTSOURCER and CLIENT shallwork together using commercially reasonable efforts after each sampling toincrease Patient response rate.”

 

**17.****                               *ExhibitB, Section C***

 

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

 

“b) OUTSOURCER shall conduct a baseline survey for theOfficeCare sales representatives (i) before the Effective Date and (ii) withinone month after the date which is twelve months after the Effective Date.  Scores for the OUTSOURCER’s Services sectionof such baseline surveys shall be used as the baseline OfficeCare salesrepresentative satisfaction score for the next OfficeCare sales representativesurvey, which shall be conducted 6 months after the second baseline survey andthereafter conducted semi-annually.  Eachsubsequent survey result shall become the baseline for the next semi-annualsurvey.

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

(1)          Investigate decline in performance.

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

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

(4)          For any OfficeCare sales representatives whoscore OUTSOURCER as less than three (3), on the OUTSOURCER’s Services sectionof the survey, OUTSOURCER will:

(a)          Contact OfficeCare sales representative byphone.

(b)         Understand the nature of the complaint.

(c)          Develop an action plan to resolve theproblem.”

 

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**18.****                               *ExhibitB, Section C***

 

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

 

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

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

(1)          Investigate decline in performance.

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

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

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

(a)          Contact such Insurance Business salesrepresentative by phone.

(b)         Understand the nature of the complaint.

(c)          Develop an action plan to resolve theproblem.”

 

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.****                               *ExhibitB, Section E***

 

Item1(a)(i)(3) of Section E of Exhibit B is hereby amended to read in its entiretyas follows:

 

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

 

(a)          Callto 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 tosuch other numbers as designated in writing by OUTSOURCER Contract Executivefrom time to time.”

 

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**20.****                               *Exhibit C***

 

Exhibit C is herebyamended in its entirety to read as follows:

 

“1)        No later than December first of each year, the Partieswill agree on a projected monthly headcount and costs (the “Target Operationsand Costs”) for OUTSOURCER to carry out the requirements of the Agreementduring the next calendar year. Current Target Operations and Costs areincorporated 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 Servicesdescribed in the Agreement, as amended herewith. OUTSOURCER costs shall includethose at OUTSOURCER and at CLIENT Service Locations, as well as required travelbetween locations

 

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

 

4)              No later than the 5th day of each month,OUTSOURCER will submit an invoice to CLIENT detailing total estimated costs forthe prior month plus the 10% Service Fee (the Estimated Fees). On or about the30th day of each month, OUTSOURCER will provide CLIENT with theactual costs for the prior month, as well as a final invoice (based on actualcosts) for the prior month (the Final Fees). Any difference between Estimatedand Final Fees shall be added or netted out of OUTSOURCER’s next invoice toCLIENT.

 

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

 

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

 

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

 

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

 

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

 

10)        OUTSOURCER monthly invoices shall include thefollowing information:

 

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

 

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

•                  Dates of Entryprior to or equal to 12/1/02

•                  Dates of Entrybetween 12/1/02 and 6/30/03

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

 

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

 

•                  Detailedtimecards listing projects and hours spent for the individuals mentioned insection 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 toprint 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 staffwho perform the Services (Creditek’s actual quarterly costs to maintain itsnetwork, terminals and systems, divided by the average number of terminals inoperation for the quarter. These shall include such expenses as staff, hardwareand software)

 

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

 

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

 

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

 

k)              Wilkes-Barre overhead (includes prorated cost ofspace, 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 advertisingexpenses in connection with the Services

 

o)             Forms (for September 2003 only)

 

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

 

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

 

9)              OUTSOURCER agrees to use best efforts to eithercontinue to improve MaxPro or to replace it by a system that providesequivalent or better functionality

 

10)        OUTSOURCER shall follow the operational standardspresented on Exhibit 4”

 

**21.****                              *****Exhibit E***

 

Exhibit E is herebydeleted in its entirety.

 

 

IN WITNESS WHEREOF, theparties have hereunto executed this Amendment as of the first date abovementioned.

 

 
| Creditek MediFinancial, Inc. | dj Orthopedics, LLC |
|------------------------------|---------------------|
|                         |                |
|                         |                |
| By                           |                |   | By |   |   |
| Name:                        | Name:               |
| Title:                       | Title:              |
|                         |                |
|                         |                |
| By                           |                |   |   |
| Name:                        |                |
| Title:                       |                |

 

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**Exhibit 1**

 

**StaffingLevels 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**

 

**CollectionExpectations 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**

 

**CollectionExpectations 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 unappliedcash**

 

----

 

**Exhibit 4:  CREDITEK OPERATIONALSTANDARDS**

 

 

**Creditek Standard**

 

CashApplication

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

 

CollectionAgency

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

•                  No follow-up after Account sent to collections

 

PaperClaims

•                  Regular Mail

 

CSRPatient Response

•                  Immediate for: Pay Plan, Credit Card Pay, or generalinfo **or any sales consultant or distributorcall**

 

•                  <48 hour average response time for other outboundcalls

 

DenialAppeals

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

•                  Appealed if EOB = Non cov service, etc

 

REP/CarrierComplaint

•                  Mary G & Sherry P handle

 

AnalystFTE Assumptions

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

 

 

**Actions**

 

•                  *Standard OK*.  Lise audit Cash App group regularly toachieve <1.5% target error rate (eg no more than 1.5 errors/100 accountsposted)

 

•                  *Standard OK*.  Lise audit and djOrtho to approve alltransfers

 

•                  *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 CSRstandard

 

•                  *Standard OK.*  Controlled by Denial Instruction Procedures

 

•                  *Standard OK*

 

•                  *Standard OK*

 

•                  *Standard OK.*  Lisereport quarterly on 30% and 12 minute assumptions

 

----