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Exhibit 10(n)
RESPONSE ONCOLOGY, INC.
SERVICE AGREEMENT
SCHEDULE A
Base Service Fee
The Base Service Fee shall be equal to the sum of amounts recorded
(subject to the limitation hereinbelow described) as Clinic Expenses ("Clinic
Expense Portion") plus, for a period of *** months after the date hereof, $***
per month, in advance ("Fixed Portion"), prorated on a daily basis for any
partial month. Oncology's obligation to pay the additional $*** monthly portion
of the Base Service Fee shall terminate on the *** anniversary of the Service
Agreement. Notwithstanding the foregoing, the Clinic Expense Portion of the
Base Service Fee shall be limited to an amount which, when added to Physician
Employee Compensation, does not result in the sum of the Clinic Expense Portion
and Physician Employee Compensation exceeding ***% of Practice Revenue.
Performance Fee
During the entire term of the Service Agreement, including any extended
term, Performance Fee in an amount computed pursuant to the following formula
shall be paid to Response:
***% of the first $*** of Annual Surplus; plus
***% of any excess Annual Surplus over $***.
Performance Fees shall be computed on the basis of Annual Surplus computed for
each calendar year. For any period during the term of the Service Agreement
that does not encompass an entire calendar year, the Performance Fees for such
partial period shall be computed as follows:
a) For any partial period that commences with the execution and
delivery of the Service Agreement, Practice Revenue, Clinic
Expenses and Physician Employee Compensation from such commencement
date until the end of the calendar year of commencement shall be
determined. The sum of Clinic Expenses and Physician Employee
Compensation will be subtracted from Practice Revenue, with the
difference then being divided by the number of days in such period,
and the quotient multiplied by 365. From the product of such
computation shall be subtracted the amount of $***, representing
the monthly portion of the Base Service Fee for an entire year to
yield annualized Annual Surplus. The computation formula set forth
above will be applied to the annualized Annual Surplus to compute
an annualized Performance Fee, which shall then be divided by 365
and multiplied by the number of days in the partial period to yield
the Performance Fee payable with respect to such short period.
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b) For any partial period that commences on the first day of a
calendar year and ends prior to the last day thereof,
Non-Compensatory Revenue, Clinic Expenses and Physician Employee
Compensation for the entire calendar year shall be determined, and
the monthly portion of the Base Service Fee (if any) for an entire
year will be subtracted therefrom to yield annualized Annual
Surplus. The computation formula set forth above will be applied to
annualized Annual Surplus to yield an annualized Performance Fee,
which shall then be divided by 365 and multiplied by the number of
days during the partial period to yield the Performance Fees
payable with respect to such short period.
Practice Retainage
For purposes of this Agreement, the Practice Retainage percentage shall
equal *** percent.
*** Redacted material under claim of confidential treatment pursuant to Rule
24b-2 under the Securities Exchange Act of 1934.
