Exhibit 10.1 AMENDMENT NO. 1TO THE AARP HEARING CARE PROGRAM SERVICE AGREEMENT This Amendment
No. 1 to the AARP Hearing Care Program Service Agreement
(“Amendment No. 1”) is entered into by and between
AARP, Inc. (“AARP”), HearUSA, Inc.
(“HUSA”) and AARP Services, Inc. (“ASI”)
as of the 11th day
of August, 2009. (AARP, HUSA and ASI are referred to herein as each a
“Party”and collectively, the “Parties.”) WHEREAS, the Parties
entered into the Hearing Care Program Services Agreement, effective
August 8, 2008, pursuant to which HUSA is to provide or arrange to provide
through HUSA’s network of hearing care providers an AARP-branded discount
hearing program (the “Program”) for the benefit of AARP
Members (the “Services Agreement”); and WHEREAS, in connection
with the Services Agreement, HUSA and AARP entered into the AARP License
Agreement, effective August 8, 2008 (the “License
Agreement”), pursuant to which AARP granted to HUSA a license to use
certain of AARP’s intellectual property in connection with the Program
and HUSA agreed to make certain payments to AARP in consideration of that
license; and WHEREAS, on
December 22, 2008, AARP and HUSA amended the License Agreement pursuant to
Amendment No. 1 to the AARP License Agreement in order to delete the
royalty provision therein and to undertake to negotiate a revised royalty
compensation structure mutually agreeable to the parties; and WHEREAS,
contemporaneously with the execution of this Amendment No 1, AARP and HUSA are
executing Amendment No. 2 to the AARP License Agreement to set forth the
parties mutually agreeable changes to the License Agreement (as amended
pursuant to such Amendment and Amendment No. 1 to the License Agreement,
the “Amended License Agreement”); and WHEREAS, in connection
with the further amendment of the License Agreement, the Parties desire to
amend certain terms of the Services Agreement in order to reflect changes in
the Program (as amended hereby, the “Amended Services
Agreement”). NOW THEREFORE, in
consideration of the mutual covenants and agreements of the Parties herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties hereby agree to amend
the Services Agreement as follows:  1.
  
  Section 3.3 shall be deleted and replaced with the following:  3.3
  
  Program Roll Out. Subject to subparagraph (f) below, HUSA shall make the Program
available to Members as follows:  1




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(a)
  
  By the end of 2009, the Program shall be available to Members through all the HUSA Centers and
those participating audiologists that are members of the HUSA Network in Florida and New Jersey.  (b)
  
  By the end of 2010, the Program shall be available to Members through
those participating audiologists that are members of the HUSA Network in
Illinois, Michigan, Pennsylvania, Indiana, Massachusetts, Arizona, Wisconsin,
Washington, California, Georgia, Maryland, North Carolina, Virginia, Missouri, New York, Texas and Ohio.  (c)
  
  By the end of 2011, the Program shall be available to Members through a
combination of HUSA Centers and participating HUSA Network Providers in all
fifty (50) U.S. States, the District of Columbia, and the five U.S. Territories.  (d)
  
  HUSA will use commercially reasonable efforts to achieve the level of
availability set forth in Sections 3.3(a), 3.3(b) and 3.3(c) above in less
time but will not be deemed in breach of this Section 3.3 so long as the
availability set forth in Sections 3.3(a) through (c) is achieved by
the dates set forth in Sections 3.3(a), 3.3(b) and 3.3(c).  (e)
  
  The Parties will cooperate with one another and will confer with one
another on a quarterly basis to determine ways in which the roll out can be accelerated.  (f)
  
  Notwithstanding the foregoing, the Parties acknowledge that certain state
laws and regulations may preclude HUSA from making the Program available in
such state in compliance with such laws and regulations. The Parties agree that
in the event such laws preclude the Program, HUSA will be relieved from its
obligation to make the Program available to Members in that state unless and
until provision of the Program in such state is permitted under then applicable law.  2.
  
  Section 3.6 shall be amended as follows: The
reference in Section 3.6(a) to Section 3.3(b) shall be replaced with “Section 3.3”. The following shall be added to Section 3.6:  (d)
  
  HUSA shall use commercially reasonable efforts to expand the number of
HUSA Network Providers to 5,000 over the term of this Agreement. Once the
Program provides Members access to HUSA Network Providers as contemplated in
Section 3.3, HUSA shall use commercially reasonable efforts
to sustain that number of HUSA Network Providers.  3.
  
  Section 3.10 is amended by deleting references to “calendar
year 2009” and substituting “calendar year 2010.”  4.
  
  Section 3.11 shall be deleted and in its place shall appear: “Intentionally deleted.”. 2  2




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5.
  
  Section 3.12 shall be deleted and replaced with the following:  3.12
  
  HUSA’s Annual Marketing Budget. Starting in calendar year
2010 and continuing annually for each calendar year during the Term, HUSA shall
commit a minimum of $4.4 million per calendar year as the marketing budget
for the Program. For calendar year 2009, HUSA’s minimum marketing budget
shall be as set forth in a marketing plan for 2009 as shall be reasonably
approved by ASI in performing its quality control function:.  6.
  
  Section 3.37 shall be deleted and replaced with the following: HUSA shall maintain a database of all products
and manufacturer warranty terms. Upon early termination of this Agreement, HUSA
shall provide ASI with a copy of such database in a format mutually agreed to by the Parties.
  7.
  
  Section 10.1 shall be deleted and replaced with the following:  10.1
  
  Term. The term of this Amended Services Agreement shall commence
on the Effective Date and shall expire at 12:00 midnight, Eastern Time on
August 31, 2012, unless this Agreement is terminated earlier in accordance
with its terms (the “Term”). This Agreement shall
automatically terminate upon termination or expiration of the Amended License Agreement.  7.
  
  Section 10.2 shall be deleted and in its place shall appear: “Intentionally deleted.”.  8.
  
  Section 10.3 shall be amended as follows: All references to “ninety
(90) days” shall be deleted and “sixty (60) days” shall be substituted therefor. The following language shall be added to Section 10.3: A material breach by
HUSA shall include, but not be limited to, (i) failure to make the Program
available as described in Section 3.3 of this Agreement, (ii) failure
to make the marketing budget expenditures as required under Section 3.12
of this Agreement, including allocation of 9.25% of those marketing expenses to
the AARP General Program, and (iii) failure to pay the royalties required
under Section 4 of the Amended License Agreement.  9.
  
  Exhibit E is amended as set forth in the attached Exhibit E.  10.
  
  Exhibit G is amended as set forth in the attached Exhibit G.  10.
  
  Except for the above modifications, all other terms and conditions of the
Hearing Care Program Services Agreement shall remain in full force and effect. [signatures appear on the following page] 3  3




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IN WITNESS WHEREOF,
AARP, HUSA and ASI have caused this Amendment to be executed by their duly
authorized representatives as Amendment No. 1 to the Services Agreement. AARP By:

Name:
Title: HearUSA, Inc. By:

Name:
Title: AARP Services, Inc. By:

Name:
Title: 4  4




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EXHIBIT E Program Products and Services The Program is to include the following products and services:  1.
  
  The evaluation/consultation fee is to be ninety dollars ($90.00) and
shall include the following tests: (i) otoscopy, (ii) air conduction,
(iii) bone conduction, (iv) speech audiometry, (v) comfortable
listening level, and (vi) uncomfortable listening level.  2.
  
  The hearing aid discount is to include hearing aid, fitting and service:  (a)
  
  Hearing aids (directional microphones included in all products)  (i)
  
  Basic: $1,280.00  (ii)
  
  Economy: $1,600.00  (iii)
  
  Mid-Level: $1,760.00  (iv)
  
  Premium: $2,240.00  (v)
  
  Ultimate: $2,600  (b)
  
  Fitting protocol  (i)
  
  REM/Sound Field  (ii)
  
  Post-Fitting Assessment  (c)
  
  Pricing for existing products shall be reviewed and adjusted annually to
ensure the competitiveness of the Program.  (d)
  
  Any new products and the pricing thereof shall be added to the Program
quarterly.  3.
  
  The Program shall offer products from a variety of manufacturers and a
variety of brands within manufacturers’ lines.  4.
  
  HUSA shall ensure that Providers and suppliers of hearing aids provide
recipients of hearing aids with a limited warranty of three (3) years from
date of order of the product. The warranty shall cover defects in materials and
workmanship for thirty-six (36) months from date of order and shall
include loss and damage replacement; provided, however, that the warranty only
includes one loss or damage replacement per hearing aid in the three-year
period. HUSA shall ensure that the termination or expiration of this Agreement
will not affect the warranties for hearing aids ordered prior to the date of
termination or expiration of this Agreement. 5  5




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5.
  
  HUSA will provide recipients of hearing aids with free batteries for
three (3) years after date of order of the hearing aids. HUSA shall ensure
that the termination or expiration of this Agreement will not affect a
recipient’s right to free batteries for three years after date of order
of the hearing aid if the aid is ordered prior to the date of termination or
expiration of the Agreement.  6.
  
  Subject to any differing requirements under applicable law, rules or
regulations, HUSA shall insure that Providers provide recipients of hearing
aids with a ninety (90) day return period. The return period will be
ninety (90) days from date of order of the hearing aid. During that
period, the recipient may return the product(s) at no charge. During the return
period, the recipient may make unlimited visits to the dispensing office or, if
recipient is out of the area of the dispensing office, to another HUSA center
or network provider as arranged by HUSA. During the return period, HUSA will
ensure that each hearing aid recipient has access to Aural Rehabilitation
services in an approved format (book, DVD, Internet). HUSA shall ensure that
the termination or expiration of this Agreement will not affect a
recipient’s return period if the recipient ordered the hearing aid prior
to the date of termination or expiration of the Agreement.  7.
  
  HUSA shall offer, through its online store (ehearingshop.com), a variety
of hearing aid accessories and assistive listening devices; including:
(i) hearing aid batteries, (ii) carrying cases, and
(iii) amplified telephones. Members will receive a 15% discount off the
price of these accessories and devices sold through ehearingshop.com.  8.
  
  Examination Reports. All Members requesting and receiving a hearing
examination under the Program may receive a hearing care examination report
from the Provider. HUSA shall specify to the Providers the information to be
included in such examination reports. A sample of the format of such
examination reports is attached hereto as Attachment 1.  9.
  
  Medical Evaluation by Physician. The Program shall include in the test
and evaluation protocol specific practice guidelines for determining the need
to refer or recommend the Member for medical evaluation by a physician
(otolarngologist/Ear Nose & Throat specialist or primary car physician) as
appropriate.  10.
  
  HUSA shall ensure that the assessment and rehabilitative protocols among
the Provider locations, including HUSA Centers and the HUSA Network, are
standardized.  11.
  
  HUSA shall not offer mail order hearing aids.  12.
  
  HUSA and ASI shall cooperate in developing enhancements to the HUSA
quality standards and measures for the Program using industry-recognized and
best practices criteria and processes.  13.
  
  Provider Contract. HUSA shall submit to ASI’s for its written
approval the form of contract to be used with HUSA Network Providers. If,
during the Term of this Agreement, HUSA wants to modify the form provider
contract, HUSA shall submit the modified form to ASI for its written approval
before the modified form is used. Any such approval by ASI shall not be
unreasonably withheld or delayed.  6  6




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EXHIBIT G
HUSA Reporting
Requirements  (a)
  
  Royalty payment.  (b)
  
  Customer service report ­  (i)
  
  AARP Member utilization of the Program and the imputed savings
attributable thereto; and  (ii)
  
  Aggregate hearing products purchased and the imputed savings attributed
thereto.  (c)
  
  Marketing report — HUSA shall report response data associated with
direct response activities. Data shall include campaign cost, number of AARP
Members participating in the campaign, and, where available, number of Members
that were directly contacted. The response data associated with direct
response activities shall be provided to the MOW through the established MOW
process.  (d)
  
  Member access and satisfaction report as defined by ASI – HUSA
shall also provide an electronic report in a format acceptable to ASI,
which will identify the Providers and the  (i)
  
  Utilization of the Program by Members; and  (ii)
  
  Customer service issues and resolutions, including escalated customer
service issues regarding the Program.  (e)
  
  MSQS – HUSA shall provide a representative sample list of Program
participants for the annual MSQS as requested by ASI. ASI will manage the
MSQS.  (f)
  
  Network utilization.  (g)
  
  Geographic utilization.  (h)
  
  Buyer profile report, with product trends and demographics.  (i)
  
  Performance Standards and Measurements – HUSA shall provide a
report as to whether it has satisfied the performance standards and
measurements set forth in Exhibit F.  (j)
  
  Compliance with reporting schedule and review.  (k)
  
  Financial Reports Reports will be
provided by the 25th business day following the end of the month or quarter, as
appropriate. HUSA shall provide ASI with a monthly report containing the
information described in sections (b) through (d) and (f) through
(k). HUSA shall provide ASI with a quarterly report containing the information
described in section (a). HUSA and ASI will determine the appropriate frequency
of the reporting of the information described in section (e). 7  7