MANNER.
BASELINE/MEASUREMENT:
AFTER THE EXECUTION OF THE IT OUTSOURCING
SERVICES AGREEMENT (THE "AGREEMENT") BETWEEN FCG AND HEALTHSTAR NETWORK, INC.
DBA STELLARIS HEALTH NETWORK ("STELLARIS") DATED AS OF THE DATE HEREOF, FCG WILL
CONDUCT AN ANALYSIS OF WP'S A/R DAYS OUTSTANDING AND ACTUAL A/R.
FCG WILL
MEASURE WP'S A/R DAYS OUTSTANDING AND ACTUAL A/R DURING THE FOUR (4) MONTH
PERIOD IMMEDIATELY PRECEDING THE 1ST DAY OF THE MONTH IN WHICH THE EXECUTION OF
THE AGREEMENT OCCURS (THE "BASELINE MEASUREMENT PERIOD").
DURING THE BASELINE
MEASUREMENT PERIOD, WP'S MAXIMUM MONTHLY A/R DAYS OUTSTANDING WILL BE THE
"BASELINE DO THRESHOLD" AND WP'S MAXIMUM MONTHLY ACTUAL A/R WILL BE THE
"BASELINE A/R THRESHOLD."
DURING THE PERIOD THAT ANY AMOUNTS UNDER THE NOTES
ARE OUTSTANDING, WP WILL CONTINUE TO OPERATE IN ACCORDANCE WITH ITS BAD DEBT
RESERVE AND "WRITE OFF" POLICIES FOR THE CALCULATION OF A/R DAYS OUTSTANDING AND
ACTUAL A/R IN ACCORDANCE WITH ITS PAST CUSTOMS AND PRACTICES.
SUCH CUSTOMS AND
PRACTICES ARE DESCRIBED IN EXHIBIT B ATTACHED HERETO, BUT IN ANY EVENT, WP'S
ACTUAL A/R AND A/R DAYS OUTSTANDING WILL BE CALCULATED "NET" OF ITS BAD DEBT
RESERVES AND ITS CONTRACTUAL ALLOWANCES.
HOSPITALS' OBLIGATIONS:
WP AGREES TO PERFORM THE FOLLOWING
TASKS, AND IMPLEMENT AND MAINTAIN THE FOLLOWING PROCESSES AND PRACTICES
COMMENCING UPON THE EXECUTION OF THE AGREEMENT AND EXTENDING THROUGH THE
TERMINATION DATE OF THIS FCG LOAN AGREEMENT (EACH, A "HOSPITAL OBLIGATION"):
1.
The allowance schedule, A/R Days
Outstanding calculation, write-off policies (including bad debt, charity,
courtesy, and others ) and discount policies of WP that are described in Exhibit
B attached ereto shall remain constant.
2.
WP SHALL TIMELY TAKE ALL REASONABLE
ACTIONS RECOMMENDED BY FCG TO REDUCE ITS ACTUAL A/R AND A/R DAYS OUTSTANDING
BETWEEN THE DATE OF THE AGREEMENT AND THE TERMINATION DATE OF THIS FCG LOAN
AGREEMENT.
SUCH REASONABLE ACTIONS SHALL INCLUDE, WITHOUT LIMITATION, ALLOWING
FCG TO USE ADDITIONAL RESOURCES TO WORK WITH WP'S PERSONNEL TO REDUCE THE ACTUAL
A/R AND THE A/R DAYS OUTSTANDING.
SPECIFICALLY, FCG WILL BE ALLOWED TO INSERT
RESOURCES, AT FCG'S EXPENSE, TO CO-MANAGE CURRENT ACCOUNTS RECEIVABLE WITHIN 120
DAYS AFTER THE DATE OF THE AGREEMENT TO ESTABLISH A DETAILED "WORKPLAN" WITH
GOALS AND PROCEDURES TO LOWER WP'S ACCOUNTS RECEIVABLE.
SUCH FCG RESOURCES WILL
PROVIDE VALUE TO WP AS THEY ARE SKILLED PROFESSIONALS THAT GENERALLY PROVIDE
CONSULTING AND OPERATIONAL SERVICES FOR OTHER FCG CLIENTS.
THE "WORKPLAN" WILL
BE CREATED AND MUTUALLY AGREED UPON BY FCG AND WP.
WP WILL WORK WITH FCG TO
DEDICATE SUFFICIENT STAFF (NO LESS THAN THE CURRENT STAFFING LEVELS USED TO
MANAGE THE ACCOUNTS RECEIVABLE) TO ENSURE THE "WORKPLAN" IS ACCOMPLISHED.
THE
FCG RESOURCE WILL HAVE FULL ACCESS TO ALL PATIENT ACCOUNTING DEPARTMENTS AND
ACCOUNTS RECEIVABLE INFORMATION.
3.
THE FTE LEVEL DEDICATED BY WP DURING
THE PERIOD BETWEEN THE DATE OF THE AGREEMENT AND THE "GO LIVE" DATE OF THE
MEDITECH SOFTWARE SYSTEM WILL AVERAGE AT LEAST NINETY PERCENT (90%) OF THE
AMOUNT OF FTES DEDICATED TO THE COLLECTION OF WP'S ACCOUNTS RECEIVABLE DURING
THE BASELINE MEASUREMENT PERIOD.
SUCH
2
FTE