**Exhibit10.1**

 

October 1, 2003

 

JoelSeligman

President& CEO

NorthernWestchester Hospital Center

400Main Street

Mt.Kisco, New York

10549

 

Re:  Reimbursement of Interest Expense

 

DearMr. Seligman,

 

## In connection with First Consulting Group, Inc.’s (“FCG”) implementationof the Meditech software system at Northern Westchester Hospital Center (the“Hospital”), FCG will agree to reimburse the Hospital for actual interestamounts owed if the Hospital draws working capital from a third partycommercial line of credit or other loan agreement due to an increase in thenumber of days that its patient accounts receivable are outstanding (the “A/RDays Outstanding”).  FCG’s offer toreimburse such interest amounts is subject to the terms and conditionscontained in this letter agreement.

 

## FCG will measurethe A/R Days Outstanding for the Hospital during the four (4) month periodimmediately preceding the 1st day of the month in which the firstservices under the IT Outsourcing Agreement (the “Agreement”) between FCG andHealthstar Network, Inc. (dba Stellaris Health Network) (“Stellaris”)occur.  During such four month period,the maximum monthly A/R Days Outstanding for the Hospital will be the “BaselineDO Threshold.”  During the Interest Payment Period (defined below), theHospital will continue to operate in accordance with its bad debt reserve and“write off” policies for the calculation of A/R Days Outstanding in accordancewith its past customs and practices, but in any event the Hospital’s A/R DaysOutstanding will be calculated “net” of its bad debt reserves and itscontractual allowances.

##  

## FCG will only reimburse the Hospital’s actual interest charges (not toexceed the prime rate, as reported in the Western Edition of the Wall StreetJournal on the Hospital’s borrowing date, plus 2.0%) incurred on incrementalborrowings under its credit facility up to the Maximum Principal Amount(defined below) for a period of 120 days after the Commencement Date (definedbelow) (the “Interest Payment Period”). The Hospital shall designate its Commencement Date, and such date mustbe within 90 days after the “go live” date of the “Billing AccountsReceivables” software systems in connection with the Meditech softwareimplementation by FCG (the “Commencement Date”).  FCG will only reimburse the Hospital’s interest charges onprincipal amounts of indebtedness that have actually been drawn by the Hospitalduring the Interest Payment Period, and then only based on a principal amountdetermined by the difference between the A/R Days Outstanding for the previousmonth-end less the Baseline DO Threshold (and only if such difference is apositive number), multiplied by the Hospital’s average revenue per day (ascomputed in the calculation of A/R Days Outstanding) during the 120 day periodprior to the Commencement Date.

##  

The calculation in the preceding paragraph shall be conducted on theCommencement Date and every 30 days thereafter during the Interest PaymentPeriod.  The principal amount againstwhich FCG will reimburse interest expenses will be adjusted as a result of themonthly calculation; however, FCG will not reimburse any interest expense onprincipal amounts that exceed the lesser of (i) $2,970,000 or (ii) theHospital’s average revenue per day (as computed in the calculation of A/R DaysOutstanding) during the 120 day period prior to the Commencement Date,multiplied by 10.  Such maximum amountis the “Maximum Principal Amount.”  .  For example, (assuming the Hospital makes adraw on its credit facility, the Hospital does not repay any such amounts andits average revenue per day is $250,000) if the Hospital’s Baseline DO is 72days, its A/R Days Outstanding on the Commencement Date is 74 days, its A/RDays Outstanding on the 30th day after the Commencement Date is 75 days, thenthe maximum principal amount for which FCG would be obligated to pay theHospital’s actual interest charges for the first 30 days after the CommencementDate is $500,000 and the maximum principal amount FCG for which FCG would beobligated to pay the Hospital’s actual interest charges for the 30th-60thdays after the Commencement Date is $750,000.

##  

## Further, if the Hospital has repaid any draws under its credit facilityduring the Interest Payment Period, then the principal amount against which FCGis obligated to reimburse interest charges will be reduced by the amount thatthe Hospital repaid to its lender. The Hospital will also be required to submitevidence to FCG that it has drawn on its credit facility (including theprincipal amount and applicable interest rate) and present FCG with an invoicefor the interest expense reimbursable under the terms of this letteragreement.  Such invoices will be paidwith five business days of receipt.  TheHospital also agrees to promptly inform FCG of any repayments to its lenderduring the Interest Payment Period.

##  

Except for FCG’s obligations that have accrued prior to the terminationdate of this letter agreement, FCG’s obligations under this letter agreementshall immediately cease upon the earlier to occur of the following: (i) thetermination of the Agreement by Stellaris or FCG for any reason, (ii) the 121stday following the Commencement Date, (iii) Stellaris’ failure to timely pay allundisputed fees associated with the Agreement that results in a material breachof the Agreement, (iv) the dissolution or termination of Stellaris or theHospital as an operating business, (v) the insolvency of Stellaris or theHospital (determined if the entity is unable to pay its debts before theybecome due or if the entity’s total liabilities exceed its total assets), (vi)the appointment of a receiver for Stellaris or the Hospital’s business orproperty or any assignment for the benefit of creditors, (vii) any type ofcreditor workout, or the commencement of any proceeding under any bankruptcy orinsolvency laws by or against Stellaris or a Hospital, (viii) the commencementof foreclosure or forfeiture proceedings by any creditor of Stellaris or theHospital, or by any governmental agency against any collateral securing anyloan or credit facility, (ix) Stellaris’ divestiture or sale of the Hospital.

##  

## 

##  

## IfStellaris and the Hospital do not receive a Certificate of Need (if required)for the Meditech software implementation by September 30, 2004, orStellaris terminates the Letter of Engagement with FCG to implement theMeditech software system, then FCG’s obligations under this letter agreementwill immediately terminate and this letter agreement will be of no furtherforce or effect.

##  

## FCG also agrees to provide resources, to the extent mutually agreed, tohelp reduce the Hospital’s A/R Days Outstanding prior to the Commencement Dateand during the Interest Payment Period. Such FCG assistance will provide value to the Hospital as they areskilled professionals that generally provide consulting and operationalservices for other FCG clients in the area of revenue cycle.

##  

Ifthis letter agreement is acceptable to the Hospital, please acknowledge andagree to these terms by countersigning below.

 
| Best  regards,           | Accept  and Agree:       |
|--------------------------|--------------------------|
|                     |                     |
|                     |                     |
|                     |                     |   |   |
| Luther  Nussbaum         | Name:                    |
| Chief  Executive Officer | Chief  Executive Officer |
|                          |                          |  |  |

 

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