EXHIBIT 10.10
ADVANCED AESTHETICS INSTITUTE/XXXXX XXXXXXX MEDICINE
FIRST AMENDMENT TO CONSULTING SERVICES AGREEMENT
This First Amendment to Consulting Services Agreement (the "Amendment")
is being signed on this 23 day of March, 2005, but with the terms and conditions
of this Amendment to become effective as of June 1, 2005 (the "Effective Date"),
by and between Advanced Aesthetics, Inc., a Delaware corporation ("AAI"), and
Xxxxx Xxxxxxx Medicine ("JH"), acting through The Xxxxx Xxxxxxx Health System
Corporation, a Maryland corporation ("JHHS"), and The Xxxxx Xxxxxxx University,
a Maryland corporation ("JHU").
RECITALS
1. AAI and JH previously entered into a Consulting Services Agreement
dated December 17, 2003 (the "Agreement"). Among other things, Section 1 of the
Agreement provides for JH to perform certain Services (as defined in the
Agreement). Capitalized terms used herein and not otherwise defined shall have
the same meanings as set forth in the Agreement.
2. AAI and JH have agreed to modify the Services of JH, expand the use
of the Xxxx and increase the compensation to JH as provided in this Amendment.
Now, therefore, in consideration of the premises and of the mutual
covenants and conditions contained in this Amendment, JH and AAI agree as
follows:
1. SERVICES. The Services to be provided by 1W are described below in
this Section. AAI acknowledges that JH is performing the Services for its own
benefit in order to assure JH that the safety and medical quality aspects of
AAI's business are such as to allow continued use of the Xxxx as provided for in
the Agreement and this Amendment. Though the Services may have indirect benefits
for AAI, AAI agrees that JH has no duty to AAI with respect to the Services or
the care, skill or diligence with which they are performed. AAI irrevocably
waives any right, claim or cause of action against JH arising out of, or in
connection with, the Services or the care, skill or diligence with which they
are performed. All AAI information provided to patients or potential patients of
AAI shall include a disclaimer of liability acceptable to JH.
(a) XXXXX XXXXXXX COSMETIC PATIENT SAFETY PROGRAM. JH has
established at Xxxxx Xxxxxxx a Xxxxx Xxxxxxx Cosmetic Patient Safety Program
(the "Program") with Xx. Xxxxx Xxxxxx Xxxx and Xx. Xxxxxxx XxXxxxxx serving with
equal authority and responsibility as directors of the Program (the
"Directors"). The Program is more particularly described on EXHIBIT 1 to this
Amendment. In their capacities as Directors of the Program, Xx. Xxxxxx Xxxx and
Xx. XxXxxxxx shall provide guidance to the AAI Board of Medical Directors
("Medical Board") with respect to safety and medical quality aspects of AAI's
medical cosmetic business as necessary to allow continued usage of the Xxxx. The
Program will make its written recommendations to AAI's Medical Board through the
Directors, which will respond in writing within thirty (30) days, either
accepting the recommendations or detailing the reasons for its
rejection. Should Xx Xxxxxx Xxxx or Xx. XxXxxxxx cease for any reason to be
employed by JH, the Xxxx and CEO of Xxxxx Xxxxxxx Medicine will designate
another JH physician with a specialty in cosmetic surgery, dermatology or both
to serve as a replacement Director and consultant to AAI.
(b) PRACTITIONER PROTOCOLS AND OUTCOMES METRICS DESIGN. JH will
design protocols and outcomes metrics for each AAI medical procedure JH approves
for use in the AAI medical cosmetic centers. For those protocols designed by JH,
JH will retain ownership and copyrights to such protocols and documents
outlining such metrics. For those protocols and metrics that are co-designed by
JH and AAI, JH will retain co-ownership and co-copyrights with AAI. It is
understood that certain proprietary methods, metrics and services will be
exclusively designed by AAI. AAI shall in such cases maintain ownership of all
intellectual property pertaining to these designs and metrics.
In addition, all protocols will, to the best of JH's ability, be
refined to include hospitality and aesthetic concept components that enhance
client experience and satisfaction while not disrupting clinical outcomes. JH
shall have the right, at its option and for its benefit, to review as it deems
necessary protocols and metrics the Program already has approved and reserves
the right to require changes to these protocols and metrics based on changing
medical information. AAI shall require its medical directors and practitioners
to comply with such changes as promptly as possible alter receipt of written
notice of the change from JH.
(c) MEDICAL DIRECTOR HIRING AND REVIEW. JH will continue to assess
compliance by AAI with the rigorous standards established by AAI with JH's input
for the hiring of medical directors by AAI for the AAI medical cosmetic centers.
Upon submission by AAI, JH will review the CVs and AAI Evaluation reports for
each medical director that AAI anticipates hiring and will either acknowledge
compliance with such standards or submit to the Medical Board a report detailing
its withholding of verification of credentials of any medical director. These
reports will provide JH's assessment of the candidates' credentials and capacity
for delivering against both medical and hospitality components of care. JH will
rely solely on the CVs and AAI Evaluation reports as provided by AAI to JH and
shall have no duty to independently investigate the credentials of any medical
directors (though JH may, at its option and for its benefit, elect to do so).
AAI shall have the right to accept or reject these assessments and will advise
AAI in writing within thirty (30) days after receipt of written notice of JH's
findings as to whether it accepts or rejects those findings. If JH confirms a
medical director's credentials, AAI will be allowed to use JH-approved language
on that medical director's biographical information piece and refer in
JH-approved marketing and public relations materials to that medical director as
having met the credentials established by AAI with input from JH. If JH
assessment of a potential medical director is unfavorable, and AAI elects to
hire that clinician, AAI will not be allowed to use JH-approved language on
medical director biographical information pieces or imply any such confirmation
in marketing and public relations materials.
(d) PRACTITIONER HIRING AND REVIEW. AAI medical directors will hire
or otherwise contract with practitioners, including MDs, NPs, PAs and RNs, who
will deliver care in the AAI medical cosmetic centers. Based on the Program's
assessment of reports submitted by AAI's local medical directors (which will be
provided by AAI to JH), JH will advise AAI of the
2
failure of practitioners to follow protocols to the extent indicated by such
reports. JH will rely solely on the reports of the medical directors in making
such assessments and shall have no duty to independently investigate the
credentials of any practitioner or any aspect of the care provided by AAI
practitioners (though JH, at its option and for its benefit) may elect to do
so). Local medical directors will report at regular intervals (but no less
frequently than once each calendar quarter) to the Program through the Medical
Board. AAI shall indemnify and hold JH harmless (including payment of court
costs and reasonable attorney fees) from all liability for the actions of any
practitioner hired or otherwise contracted for by AAI.
JH shall have the right, at its option and for its benefit, to visit
and inspect each AAI medical cosmetic center at least once during each Contract
Year (hereinafter defined). During such visits, AAI will make available to the
individuals representing JH all documents and records pertaining to clinical
care at the center in question and will also cause the center's medical director
arid physicians, NPs, PAs and RNs to meet with such individuals upon request.
Expenses of JH incurred in connection with such visits shall be paid by AAI as
provided in Section 7(c) of this Amendment. In addition, at such time as AAI is
operating more than a specified number of medical cosmetic centers to be agreed
upon, AAI shall pay for time of JH faculty or other personnel incurred in
inspecting each center. Faculty time shall be paid for at an hourly rate to be
agreed upon (including travel time). Although AAI is free to not follow
recommendations of JH as provided above (with the exception of changes to
protocols and metrics required pursuant to Section 1(b)), JH retains the right
to terminate usage of the Xxxx under the circumstances set forth in Section 12
of the Agreement.
2. AMENDED USE OF XXXX.
AAI may make the additional uses of the Xxxx specified on Exhibit 2
to this Amendment subject to compliance with the review and approval processes
set forth in the Agreement. However, JH will in no event be associated with or
related to, either explicitly or by inference: (a) the non-medical cosmetic
aspects of AAI's business, or (b) unless otherwise agreed to in writing by JH
any products manufactured, distributed or sold by AAI. Any use of the Xxxx shall
be in such a manner as to minimize to the maximum extent possible any
association by inference with such non-medical cosmetic aspects of AAI's
business or any products. All provisions of the Agreement with respect to use of
the Xxxx shall continue in effect and be applicable to the additional uses of
the Xxxx set forth on EXHIBIT 2.
3. MEDICAL COSMETIC EDUCATION PROGRAM.
JH will develop with AAI during the Term two (2) types of medical
education programs as follows:
(a) AAI Training Seminars: internal programs to better train AAI
clinicians on the range of medical cosmetic procedures offered by AAI. AAI and
JH will establish the training agenda and goals; and
(b) Medical Cosmetic Seminars: open to health professionals. These
are JH-CME directed programs for which participants register, pay tuition, and
receive CME credits.
3
AAI and JH will be recognized as co-sponsors of these programs and will
establish the agenda and agree upon the participating seminar leaders. There
seminars must comply with all JHU requirements for programs awarding CME
credits.
In both cases, training and seminars will focus on patient safety,
standardized cosmetic dermatological and surgical care procedures, delivery,
outcomes and other topics to be mutually agreed upon. Program locations and
budgets will be mutually agreed upon, and JH reserves the right to not
participate or allow its brand to be associated with any program if JH
determines, in its sole discretion, that the topic, location, or program
structure, either together or individually, would diminish the reputation of JH.
Unless otherwise agreed by JH and AAI, AAI agrees to support at least one AAI
training seminar and at least one CME Seminar during each Contract Year,
beginning with Contract Year 1. Such support shall include payment of expenses
as set forth in Section 7(b).
4. AAI BOARD OF DIRECTORS.
JH will hold one voting seat on AAI's Board of Directors. The JH
representative shall be appointed by the Xxxx and CEO of Xxxxx Xxxxxxx Medicine
who shall also have the right to remove such director and appoint a successor at
any time by written notice to AAI.
5. PROPRIETARY PRODUCTS.
AAI will permit JH to use in JH's Cosmetic Center AAI's proprietary
service techniques and customer service informational material that have not
previously been developed with JH. If JH develops -- in whole or in part --
service techniques or customer service information material used in connection
with JH's Cosmetic Center, then such techniques and content will be considered
the intellectual property of JH and, as such, can be used by JH without
restrictions or limitations or compensation to AAI.
6. USE OF TECHNOLOGY.
As technology is developed in the field of cosmetic medicine, and
AAI considers adopting such technology in its facilities, AAI will grant the
Xxxxx Xxxxxxx Cosmetic Center the opportunity, at its option, to test, first
hand, the safety and efficacy of such technology, with review times and outcomes
to be mutually agreed upon. In recognition of JH's functioning as a test site,
JH shall have the right, at its option, to continue use of such technology on
tents at least as favorable as these granted by AAI to any other party, provided
that, the cost to JH shall in no event exceed the actual acquisition cost
incurred by AAI for such technology and shall be reduced to reflect that cost if
less than the most favorable rate charged by AAI to a third party. Upon request
by JH. AAI will provide JH with reasonable verification of its acquisition costs
and of the terms offered by it to third parties.
4
7. CONSIDERATION TO JH.
Section 4 (a) and 4(b)(i) of the Agreement are deleted in their
entirety. In addition to the Preferred Shares, JH shall receive the compensation
described in this Section as follows:
(a) ANNUAL FEES.
AAI will pay JH annual fees (the "Annual Fees") of: (i)
$1,000,000 in Contract Year 1, (ii) $1,500,000 in Contract Year 2, and (iii)
$1,000,000 in each Contract Year thereafter. "Contract Year 1" refers to the
twelve (12) month period commencing on the Effective Date with "Contract Year 2"
and other references to "Contract Year" being to the succeeding twelve (12)
month period as designated. Quarterly payments of the Annual Fees shall continue
as currently scheduled (due on the first business day of September, December,
March and June), with the first quarterly installment of $250,000 due on June 1,
2005 and continuing quarterly thereafter. In Contract Year 2, the quarterly
payments, on the same schedule, will each be $375,000. In Contract Years 3-5,
all quarterly payments on the same schedule will be $250,000. For Services above
and beyond those described in Section 1 of this Amendment, AAI will pay JH on an
a la carte basis for all work as mutually agreed upon by both parties.
(b) COSMETIC EDUCATION PROGRAMS.
AAI will fully underwrite all costs and expenses associated
with educational programs described in Section 3 above as mutually agreed upon
by the parties. These costs and expenses will be separate and apart from the
Annual Fees. Any revenues resulting from educational programs shall be applied
first to actual out-of-pocket costs and expenses incurred by AAI in connection
the program (but excluding time of AAI. personnel and general overhead). Any
remaining revenues shall be divided equally between JH and AAI.
(c) EXPENSES.
Travel, lodging, meals and other business related expenses
incurred by JH staff in conjunction with this transaction will be reimbursed by
AAI in addition to Annual Fees and other consideration. All air travel of more
than three (3) hours shall be business class with lodging to be of a quality
acceptable to JH. Such reimbursement shall be made within thirty (30) days after
invoicing by JH. All such expenses will be subject to pre-approval by AAI.
(d) ESCALATOR CLAUSE.
Commencing upon the Effective Date, and continuing thereafter during
the Term (hereinafter defined) of the Agreement, AAI shall pay JH 1.5% of the
amount by which AAI's Total Services Revenue in each such calendar year exceeds
$80 million. For example, if Total Services Revenue equals $100 million for the
calendar year beginning January 1, 2006, the payment due JH would be $300,000.
Such payments shall be due within one hundred twenty (120) days after the end of
each such calendar year. With respect to the stub period for the 2005 calendar
year, AAI's payment pursuant to this Section shall be prorated and thus equal to
1.5%
5
of the amount by which AAI's Total Services Revenue for such seven (7) month
period exceed $46,640,000. Examples of the computation of Total Services Revenue
and the payment due JH (including products and services encompassed within Total
Services Revenue) are included in Exhibit 3. In connection with such payments,
AAI shall provide JH with the following:
(i) As soon as available, and in any event within thirty (30) days after the end
of each fiscal quarter, copies of a balance sheet, operating statement
specifying Total Services Revenue and cash flow statement for AAI as of the
close of such period, in each case setting forth in comparative form the figures
for the corresponding period of the preceding year, all in reasonable detail and
certified as complete and correct, subject to changes resulting from year-end
adjustments, by the chief financial officer of AAI. This shall be accompanied by
a letter from such chief financial officer to JH certifying that AAI has paid
all sums due to JH pursuant to this Amendment; and
(ii) As soon as available, and in any event within one hundred twenty (120) days
after the close of each of its fiscal years, copies of: (i) an audited balance
sheet of AAI as of the close of such fiscal year, and (ii) for each such fiscal
year, audited operating and cash flow statements, in each case setting forth in
comparative form the figures for the preceding fiscal year, all in reasonable
detail. Audited financial statements shall be accompanied by an opinion thereon
of a firm of independent certified public accountants of recognized standing
reasonably acceptable to JH to the effect that such financial statements have
been prepared in accordance with generally accepted accounting principles
consistently maintained (except for changes in which such accountants concur)
and present fairly the financial condition of AAI. Such firm of independent
certified public accountants shall contemporaneously provide JH with a letter
stating that, based on the results of its audit, AAI has paid JH all sums due
pursuant to this Agreement; and
(iii) Such information regarding its business and financial affairs as JH may
reasonably request within fifteen (15) days after any such request and also make
its principal officers and independent accountants and attorneys available to
discuss such affairs with JH.
JH shall have the right to audit (including making copies of) the books
and records of AAI at any time to confirm the accuracy of the payments described
in this Section. AAI agrees to cooperate in such audit and make available to JH
or the person designated by JH to conduct the audit, all such books and records
and all personnel of AAI (including its internal and independent accountants) to
respond to questions. Any appropriate reconciliation in payment based on the
results of such audit shall be made within thirty (30) days after the completion
of the audit. Should an audit disclose an underpayment of more than five percent
(5%), AAI shall pay to JH: (i) all costs of the audit, and (ii) interest on the
amount underpaid from the date it should have been paid. until the date received
by JH at the rate of fifteen percent (15%) per annum.
8. AMENDED TERM RENEGOTIATION RIGHT.
(a) The Term of the Agreement shall be five (5) years from the
Effective Date. Thereafter, the Term shall renew for additional three (3) year
periods unless either party
6
shall provide written notice of termination to the other party no later than 120
days prior to the then current expiration date. The right of termination set
forth in Section 5 of the Agreement based on failure to proceed with the "Phase
2 Relationship" is terminated and shall be of no force or effect. JH's right to
renegotiate its compensation pursuant to Section 8(b) below includes negotiation
of a formula to appropriately compensate JH for the value created by it pursuant
to this Agreement in the event the Term is not extended beyond its initial five
(5) year period. This may include, for example, an ending cash payment to JH or
issuance of additional stock.
(b) Notwithstanding the stated Term of this Agreement, AAI and JH
shall each have the right to require a renegotiation of JH's compensation
pursuant to the escalator clause in Section 7(d) of this Amendment at any time
on or before September 1, 2005 (as such date may be extended by mutual agreement
of the parties). If such right of renegotiation is exercised, and JH and AAI
cannot agree upon revised compensation acceptable to each party, in its sole
discretion, either party may elect to terminate this Agreement on the date that
is ninety (90) days from the date the terminating party gives written notice of
termination to the other party. In order for JH to assess the adequacy of its
compensation, AAI agrees to provide JH with such documents and information
pertaining to its business and financial affairs and the transactions described
in this Agreement as JH may request within fifteen (15) days after any such
request.
9. EFFECTIVE DATE. As noted in the preamble to this Amendment, JH and
AAI intend that its terms and conditions will not be applicable to them until
the Effective Date of June 1, 2005. Prior to the Effective Date, the parties
shall continue to be bound by the terms and conditions of the Agreement without
giving effect to this Amendment.
10. BINDING EFFECT.
This Amendment shall be binding upon, and inure to the benefit of,
the parties and their respective successors and assigns.
11. EFFECT OF AMENDMENT.
Except as expressly provided in this Amendment, the rights and
obligations of JH and AAI as set forth in the Agreement shall remain in full
force, effect, and unamended.
(Remainder of page intentionally left blank.
Signatures begin on the following page)
7
IN WITNESS WHEREOF, the parties have executed and delivered this
Amendment as of the date first listed above.
WITNESS:
XXXXX XXXXXXX MEDICINE
ACTING THROUGH
THE XXXXX XXXXXXX HEALTH
SYSTEM CORPORATION
/s/ Xxxxxxx X. Xxxxxx
__________________________ By:_____________________________
Xxxxxxx X. Xxxxxx
THE XXXXX XXXXXXX UNIVERSITY
/s/ Xxxxxxx X. Xxxxxx
__________________________ By:______________________________
Xxxxxxx X. Xxxxxx
ADVANCED AESTHETICS, INC.
/s/ Xxxxxxx Xxxxxxxx
__________________________ By:______________________________
Xxxxxxx Xxxxxxxx
Chairman
8
EXHIBIT 1
The Xxxxx Xxxxxxx Cosmetic Patient Safety Program
The Xxxxx Xxxxxxx Cosmetic Patient Safety Program (CPSP) was established in May
2004 to ensure the safety of patients receiving medical cosmetic treatment (for
both dermatological and surgical procedures).
While health care practitioners live by the oath to "Do No Harm," no clinical
environment or medical procedure is absolutely risk free. That is why safety and
positive outcomes must be the twin goals of quality patient care.
Positive outcomes result from not only a clinician's quality of care but also
from his or her attention to detail and the repeatability of that care and
detail. This detail is based. on proper protocols developed for each procedure,
which then can be followed by any clinician in any clinical setting.
The Xxxxx Xxxxxxx CPSP works with cosmetic medical service providers to:
1. establish and implement a rigorous clinician credentialing
process;
2. assess the safety and efficacy of medical cosmetic
dermatological, surgical and dental diagnostic tests, equipment,
and procedures;
3. develop the highest standards of protocols for each offered
procedure;
4. establish guidelines for facility safety and patient comfort;
5. develop a clinician monitoring capability; and
6. develop outcome metrics and a range of outcomes studies.
9
EXHIBIT 2
Use of Xxxx
X. FACILITY:
On the lower right quadrant of the right-side door leading directly into the
"lite medical" and/or ambulatory surgical wings of each AAI facility the
following will appear as a transparent peel stick logo of a size and design
mutually agreed to by the parties:
"AAI participates in the Xxxxx Xxxxxxx Cosmetic Patient Safety Program"
On the wall directly behind the reception desk in the "lite medical" and/or
ambulatory surgical wings of each AAI facility the following will appear as a
transparent peel stick logo of a size and design mutually agreed to by the
parties:
"AAI participates in the Xxxxx Xxxxxxx Cosmetic Patient Safety Program"
II. INFORMATIONAL MATERIALS: On all AAI client informational support materials
for dermatology, dentistry and cosmetic surgery procedures the following may
appear subject to JH's right to approve the specific manner and context in which
the Xxxx is used as provided in the Agreement:
1) DOCTOR BIOS
Dr. XXXX serves Advanced Aesthetics Institute after being
credentialed in accordance with a rigorous set of guidelines
for physician credentialing which guidelines were established
by Advanced Aesthetics Institute after consultation with the
Xxxxx Xxxxxxx Cosmetic Patient Safety Program.
2) AESTHETICS CHECKLIST
Although every medical cosmetic procedure has some risk, AAI
is committed to ensuring the highest standards of patient
safety. As recommended by the Xxxxx Xxxxxxx Cosmetic Patient
Safety Program, you and a physician will review the risks
associated with every medical cosmetic procedure you may
consider.
3) DERMATOL AND SURGICAL PROCEDURE BROCHURES
Although every medical cosmetic procedure has some risk, AAI
is committed to ensuring the highest standards of patient
safety. The Xxxxx Xxxxxxx Cosmetic Patient Safety Program has
reviewed the protocol for this procedure and the patient
information included in this brochure.
10
4) AESTHETICS CONCIERGE CONSULTATION BROCHURE
Advanced Aesthetics Institute ("AAI") is committed to ensuring
the highest standards of safety for clients receiving medical
cosmetic services. After consultation with the Xxxxx Xxxxxxx
Cosmetic Patient Safety Program, AAI has established a
rigorous set of guidelines for the credentialing of clinicians
working at AAI centers. The Program also reviews the design of
the medical cosmetic wing of each AAI facility, evaluates and
approves only those medical cosmetic procedures proven to be
clinically safe, and reviews protocols pursuant to which
clinicians should deliver each medical cosmetic procedure.
5) CLINICAL TRIAL BROCHURES
Although every medical cosmetic procedure has some risk, AAI
is committed to ensuring the highest standards of patient
safety. The Xxxxx Xxxxxxx Cosmetic Patient Safety Program has
reviewed the protocol for this clinical trial procedure and
the patient information included in this brochure.
III. MARKETING AND PROMOTIONAL ACTIVITIES: In conjunction with marketing,
promotional and publicity materials as they relate to Xxxxx Xxxxxxx' consulting
role in connection with AAI's medical services, the following may appear subject
to JH's right to approve the specific manner and context in which such
statements are made as provided in the Agreement:
1. "Xxxxx Xxxxxxx provides consulting services to AAI on safety
and medical quality aspects of its cosmetic medical services."
2. "The Xxxxx Xxxxxxx Cosmetic Patient Safety Program has
reviewed for safety the design of the AAI facility, located at
XXXX."
With respect to usage of the Xxxx as described in Sections II and III above, JH
may require that the materials in question include a disclaimer in the following
format or in such other format as may be required by JH in its reasonable
discretion:
"Xxxxx Xxxxxxx consults only on clinical aspects of the medical cosmetic
services offered by AAI. Xxxxx Xxxxxxx does not participate in, and is not
responsible for, the actual delivery of cosmetic medical procedures by AAI
clinicians, credentialing of AAI clinicians, or the operation of any AAI
facility."
11
EXHIBIT 3
AAI & JH ESCALATOR ANALYSIS
($ IN MILLIONS)
Current Estimated Annual
Run Rate 2005 2006 2007 2008 2009
-------- ---- ---- ---- ---- ----
AAI Services Revenue $ 28.0 $ 50.0 $ 100.0 $ 250.0 $ 400.0 $ 600.0
% Medical/Lite Medical 10% 20% 25% 30% 35% 40%
% Non-Medical 90% 80% 75% 70% 65% 60%
$ Medical Revenue $ 2.8 $ 10.0 $ 25.0 $ 75.0 $ 140.0 $ 240.0
$ Non-Medical Revenue $ 25.2 $ 40.0 $ 75.0 $ 175.0 $ 280.0 $ 360.0
EBITDA contribution of Service Business (Before JH) $ 2.2 $ 5.0 $ 12.0 $ 32.5 $ 56.0 $ 90.0
Total EBITDA % 8% 10% 12% 13% 14% 15%
- Medical EBITDA Contribution $ 0.2 $ 1.0 $ 3.0 $ 9.8 $ 19.6 $ 36.0
- Non-Medical EBITDA Contribution $ 2.0 $ 4.0 $ 9.0 $ 22.8 $ 36.4 $ 54.0
Xxxxx Xxxxxxx Annual Fee $ 1.0 $ 1.5 $ 1.0 $ 1.0 $ 1.0 $ 1.0
Xxxxx Xxxxxxx Escalator Fee $ - $ - $ 0.3 $ 2.6 $ 4.8 $ 7.8
- Threshold $ 80.0
- % of Revenue 1.8%
* Total Xxxxx Xxxxxxx Fee $ 1.0 $ 1.5 $ 1.3 $ 3.6 $ 5.8 $ 8.8
- Represented as a percentage of Total Revenue 3.6% 3.0% 1.3% 1.4% 1.5% 1.5%
- Represented as a percentage of a Medical Revenue 35.7% 15.0% 5.2% 4.7% 4.1% 3.7%
- Represented as a percentage of Total EBITDA 44.6% 30.0% 10.8% 10.9% 10.4% 9.8%
- Represented as a percentage of Medical EBITDA 445.4% 150.4% 43.3% 36.4% 29.6% 24.4%
* The term AAI Services Revenue as used in this Exhibit means Total Services
Revenue as defined in the amendment and is intended to include all revenues
of any nature attributable to sales of services by AAI. AAI will not attempt
to diminish Total Services Revenue by making sales through subsidiaries,
discounting pricing for services based on the purchase of products or
otherwise. If any of the foregoing occur, AAI and JH shall negotiate an
equitable adjustment to the amount of Total Services Revenue used for
purposes of computing the amount due JH pursuant to the escalator clause set
forth in Section 7(d).
