[Rapid RxEMIT (Register Mark) Letterhead]
March 10, 1997
Xx. Xxxxx Xxx
Senior Vice President
Xxxxx Xxxxx, Inc.
00-00 00xx Xxxxx
Xxxx Xxxxxx Xxxx, XX 00000
Rapid RxEMIT (Register Mark) RECEIVABLES PURCHASE AGREEMENT
AGREEMENT, by and between XXXXX XXXXX, INC., a corporation
with principal executive offices at 00-00 00xx XXXXX, XXXX XXXXXX XXXX, XX
00000 (the "Seller"), and PHARMACY FUND RECEIVABLES, INC., a New York
corporation with offices at 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 ("PFR").
The Seller, in the ordinary course of its pharmacy business, generates
third party prescription receivables resulting from the sale of pharmaceutical
products to customers covered by third party insurance or payment plans;
The Pharmacy Fund, Inc. ("PFI"), the parent company of PFR, has
developed and implemented its RAPID RxEMIT (Register Mark) Program (the "RR
PROGRAM") pursuant to which PFR purchases certain third party prescription
receivables and electronically remits payment for such receivables on the next
business day; and
The Seller desires to subscribe for the RR Program and sell to PFR
certain receivables, on the terms and conditions of this Agreement.
NOW THEREFORE, the parties agree as follows:
ARTICLE I
AGREEMENT TO PURCHASE AND SELL
1.1 Agreement to Purchase : Rights and Obligations.
(a) Purchase Obligation. The Seller shall sell to PFR, and PFR shall
purchase from the Seller, all third party prescription accounts receivable
including, without limitation, any contract rights, general intangibles,
accounts, chattel paper, amounts due and to become due thereunder and all
rights, powers and privileges arising thereunder or related thereto and all
proceeds and products of any of the foregoing ("Receivables") that (i) are
generated pursuant to agreements ("Provider Agreements"), in form and substance
satisfactory to PFR, between the Seller and an insurer, a plan sponsor, an
administrator, a governmental program such as Medicaid, or their agents, who
satisfies PFR's approval policies (an "Approved Payor"); (ii) have been
adjudicated and approved electronically as a claim payable in accordance with
all then currently applicable National Council for Prescription Drug Program
standards; and (iii) are free and clear of any liens, claims, offsets and
encumbrances of any kind and nature ("Liens"). Each receivable that meets the
foregoing requirements and is purchased by PFR is referred to herein as a
"Purchased Receivable".
(b) Assumption of Risk. With respect to the Purchased Receivables, PFR
shall assume the risk of nonpayment without recourse to the Seller; provided,
however, that in the event (i) any Purchased Receivable is subsequently
rejected by an Approved Payor pursuant to the terms of the applicable Provider
Agreement as a result of the Approved Payor's good faith allegation of the
Seller's error,
wrongful conduct or failure to perform under the terms of such Provider
Agreement, (ii) a Receivable is purchased after the termination of this
Agreement pursuant to Section 1.2 hereof, (iii) a Receivable is purchased in
respect of which there shall have occurred a breach of any obligation,
covenant, representation or warranty of Seller hereunder or (iv) any
governmental Approved Payor for any reason rejects or adjusts to a lesser
amount any of its Purchased Receivables and, accordingly, the representations
and warranties of Seller to PFR under the Agreement are breached, such
Purchased Receivable (an "Adjusted Receivable") shall be with full recourse to
the Seller.
(c) Collections by PFR. In the event that PFR receives payment from an
Approved Payor on account of any Receivables other than the Purchased
Receivables, PFR shall promptly remit such payment to the Seller. The Seller
hereby appoints PFR as its agent and attorney-in-fact for the purpose of
authorizing PFR to receive and remit such payments on the Seller's behalf.
(d) Records and Data. To the extent permitted under all applicable
laws, the Seller hereby agrees to transfer and assign to PFR all of its right,
title and interest in and to the records and data relating to the transaction
which gives rise to a Purchased Receivable. All such records and data will be
segregated from those relating to other receivables of the Seller, and the
computer files and physical documentation relating to the Receivables shall
bear an indication reflecting that the Receivables have been sold to PFR, or
such third party as PFR shall direct, and Seller agrees to so indicate. Xxxxxx
further agrees to deliver to Envoy and PDX a notice authorizing Envoy and PDX
to make available to PFR, simultaneously with the electronic processing of
claims by Envoy as the switch, copies of all such claims submitted by Seller
and all responses from processors and others to such claims. PFR acknowledges
that this may bring it into possession of sensitive patient data which Seller
maintains in confidence as part of its patient/pharmacist relationship. PFR
agrees to take particular care in maintaining the confidentiality of this
sensitive patient data and not to disclose it to any third party or use it for
any purpose that is detrimental to Seller or to its patient/pharmacist
relationship. It is acknowledged and agreed that PFR may use or sell
statistical data derived from the Seller's use of the PR Program hereunder
without directly or indirectly identifying the Seller or its customers. Prior
to any sale by PFR of statistical data derived from the Seller's use of the RR
program, PFR, as courtesy, shall notify the Seller that PFR intends to make
such a sale. PFR shall not permit any of its affiliates to, enter into the
pharmacy business in competition with Seller.
1.2 Term. This Agreement shall commence on the date of the first
purchase by PFR of Receivables hereunder (the "Effective Date") and continue
for a period of three (3) years, unless sooner terminated in accordance with
the terms hereof. This Agreement shall automatically renew for successive one
(1) year terms unless either the Seller or PFR notifies the other of its
intention not to renew this Agreement not less than sixty (60) days prior to
the expiration of the initial term or any renewal term. Notwithstanding the
foregoing, this Agreement may be terminated immediately by either party in the
event of (i) a material breach hereof by either party, (ii) a failure of any
material covenant, representation or warranty of the other party set forth
herein, (iii) the insolvency of, or the institution of proceedings by or
against, the other party under any federal or state bankruptcy or insolvency
law, (iv) an assignment by the other party for the benefit of all or
substantially all of its creditors or (v) the cessation of business operations
by the other party. Upon termination of this Agreement, both parties shall be
relieved of further obligations hereunder, except those set forth in Sections
1.1(d), 3.5, 6.3, 6.4, and 6.15 which shall survive termination hereof.
1.3 Purchase Price. PFR shall pay to the Seller for any Purchased
Receivables an amount (the "Purchase Price") equal to the approved claim
payable amount of such Receivables discounted by 1.35% (the "Discount Rate").
The Discount Rate represents the only charge for your participation in the RR
Program.
1.4 Service Agreement. The Seller agrees that it shall process all of
its PFR-bound third party payor prescription claims though Envoy as the switch.
PFR acknowledges that the Seller uses PDX pharmacy software for the electronic
processing of claims, and PFR shall bear the responsibility for, and expense of
any modifications to the RR Program or to the Seller's systems which are
necessary to enable Seller to transmit,and PFR or Envoy and PDX to receive, any
claims or other information required to be transmitted by Seller hereunder.
Seller shall continue to process its claim using PDX software through
Envoy as the switch unless and until PFR at its expense causes a modification
in the Seller's system and switching contract to enable National Data
Corporation ("NDC") to serve as the switch. At that time, Xxxxxx agrees it
shall process all of its PFR-bound third party payor prescription claims
through NDC as the switch and shall enter into a Service Agreement with NDC or
such other entity designated by PFR (the "Service Agreement"), provided that
the terms and conditions of the Service Agreement are no less favorable to the
Seller than the terms and conditions of the Seller's agreement with Envoy.
During the term of this Agreement, the Seller agrees that it shall not modify
or terminate the Service Agreement without prior written notice to PFR.
1.5 Notice to Approved Payors. The Seller agrees that, promptly upon
execution of this Agreement, it shall deliver to all Approved Payors a Notice
or Notices of the sale of its Purchased Receivables to PFR in the forms
provided to Seller PFR.
1.6 Conditions to Purchase. PFR shall have no obligation to purchase
any Receivables unless all representations and warranties made by the Seller
herein shall be true and correct on the date of purchase as if made on such
date and all covenants and agreements of the Seller hereunder shall have been
performed and complied with.
1.7 Changes of Approved Payors. Seller reserves the right, in its
discretion, from time to time upon notice to PFR, to withdraw Approved Payors
from this Agreement. Seller may also, in its sole discretion, add Approved
Payors to this Agreement upon notice to PFR. PFR reserves the right, in its
sole discretion, from time to time upon notice to the Seller, to withdraw
Approved Payors from this Agreement which fail to continue to meet the criteria
set forth in Section 1.1(a)(i) hereof.
ARTICLE II
PURCHASE PROCEDURES
2.1 General. Until 12:00 Midnight Eastern time, on each day, PFR shall
purchase Receivables as such Receivables have been adjudicated and approved for
payment as a claim payable during the preceding twenty-four (24) hours. Each
sale of a Receivable hereunder shall transfer ownership of such Receivable to
PFR effective as of the close of business on such day, and PFR shall have all
rights against the Approved Payor of an unpaid seller with respect to such
Purchased Receivable. With respect to Purchased Receivables from a governmental
Approved Payor, to the extent that such governmental Approved Payor does not
recognize the transfer of ownership of its Purchased Receivables to PFR, PFR
shall have no rights against such governmental Approved Payor, and the Seller
shall, as PFR's agent and on PFR's behalf, exercise its best efforts to
vigorously and diligently pursue all rights of an unpaid seller against
governmental Approved Payor.
2.2 Purchase Documents. On the date of the first purchase by PFR of
Receivables hereunder and thereafter, the Seller shall deliver to PFR such
documents confirming transfer of title to the Purchased Receivables as PFR may
request.
2.3 Payment. PFR shall pay the Purchase Price for the Purchased
Receivables, less the amount of any Adjusted Receivables (adjusted to reflect
the applicable Discount Rate) and any third party deductions, via ACH transfer
to the account designated by the Seller on the next banking day after the date
of purchase of the Purchased Receivables.
2.4 Reconciliation by Seller. After 6:00 A.M. Eastern time of each
day, the Seller shall have the right electronically to review all transactions
between PFR and the Seller that occurred during the preceding day in accordance
with the data file transmission agreed to between PFR and Seller and to dispute
any amounts with which it does not in good faith agree.
ARTICLE III
PROTECTION OF PFR
3.1 True Sale; Security Interest. The purchases of Receivables
contemplated by this Agreement are intended by the parties to be "true sales"
of such Receivables. If for any reason, notwithstanding the parties' intent,
the purchases of Receivables hereunder shall be construed as anything other
than a true
sale, Seller shall have been deemed to grant to PFR, as of the date of this
Agreement, a first priority security interest in the Purchased Receivables now
existing or hereafter arising.
3.2 Further Assurances. The Seller from time to time do and perform
any and all acts and execute any and all documents necessary to perfect and
protect PFR's interest in the Purchased Receivables and all collections with
respect thereto against all persons or entities whomsoever, including, without
limitation, a financing statement or statements with respect to the Purchased
Receivables meeting the requirements of applicable state law in such manner and
in such jurisdictions as are necessary to perfect and protect the interests of
PFR created hereby under the applicable Uniform Commercial Code against all
creditors of, and purchasers from, the Seller.
3.3 Power to Act; Power of Attorney. PFR shall have the right to do
all acts and things as it deems necessary to protect its interest in the
Purchased Receivables and perform its duties hereunder. In furtherance of this
power, during the term of this Agreement, the Seller hereby grants to PFR an
irrevocable power of attorney, with full power of substitution, coupled with an
interest, to execute and file any and all documents in the name of the Seller
or in PFR's own name necessary to perfect and protect PFR's interest in the
Purchased Receivables.
3.4 Performance of Undertakings under the Purchased Receivables. The
Seller shall at all times observe and perform, or cause to be observed and
performed, all obligations and undertakings to the Approved Payors arising in
connection with each Purchased Receivable or the related Provider Agreement and
will not take any action or cause or permit any action to be taken to impair
the rights of PFR in its interest in the Purchased Receivables. With respect to
Purchased Receivables from a governmental Approved Payor, the Seller agrees to
receive all payments from such governmental Approved Payor in trust for PFR. To
the extent not prohibited by applicable law or by the applicable Provider
Agreement, the Seller agrees to direct such governmental Approved Payor to make
payment on all of its Purchased Receivables to the Seller to a lock box or a
limited purpose demand deposit account at a financial institution designated by
PFR, which may be the same lock box or limited purpose demand deposit account
used for other pharmacies. The Seller's interest in any payments received in
the lock box or limited purpose demand deposit account are limited solely to
those related to Seller's Purchased Receivables. The Seller further agrees to
direct such financial institution (a) to transfer the funds in the lock box or
limited purpose demand deposit account on a daily basis to an account
designated by PFR and (b) to notify PFR of any change in such direction. In the
event that the Seller wishes to revoke or modify such direction, it shall give
PFR and such financial institution forty eight (48) hours prior written notice
of such desire. To the extent that any governmental Approved Payor is unwilling
to make payment to the Seller as directed by the Seller, the Seller shall
promptly remit any payments, remittance advices and related documents received
on account of such governmental Approved Payor's Purchased Receivables to PFR.
If the Seller fails to remit payment promptly, such Purchased Receivables shall
become Adjusted Receivables, and PFR shall have the rights with respect to such
Adjusted Receivables as are specified in Sections 1.1(b) and the Seller
acknowledges that such payments, remittance advices and related documents are
being received by Seller in trust for PFR and as its agent. If Seller fails to
turn over all such payments to PFR promptly, PFR shall have the right to set
off the amount of such payments against any other payments PFR owes to Seller
or to any other pharmacy under common ownership or Management; to terminate
this Agreement, to bring a civil action against Seller or anyone who
participated in the wrongful withholding or misappropriation of PFR's funds
for, among other things, conversion, and to recover compensatory damages,
punitive damages, interest, costs (including attorneys' fees) and
disbursements; to file a complaint with the appropriate pharmacy and
pharmacists licensing authorities; to notify the appropriate credit agencies;
and to file a criminal complaint against Seller and anyone who participated in
the wrongful withholding or misappropriation of PFR's funds.
3.5 Collections by the Seller. In the event that the Seller receives
payment on account of any Purchased Receivable which is not an Adjusted
Receivable, the Seller shall promptly remit such payment, remittance advice and
related documents to PFR. The Seller acknowledges that such payments are being
received by Seller in trust for PFR and as its agent. If Seller fails to turn
over all such payments to PFR in the most expedient manner, PFR shall have the
right to set off the amount of such payments against any other payments PFR
owes to Seller or to any other pharmacy under common ownership or Management;
to terminate this Agreement, to bring a civil action against Seller or anyone
who
participated in the wrongful withholding or misappropriation of PFR's funds
for, among other things, conversion, and to recover compensatory damages,
punitive damages, interest, costs (including attorneys' fees) and
disbursements; to file a complaint with the appropriate pharmacy and
pharmacists licensing authorities; to notify the appropriate credit agencies;
and to file a criminal complaint against Seller and anyone who participated in
the wrongful withholding or misappropriation of PFR's funds.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of the Parties. Each party hereto
hereby represents and warrants to the other party that:
(a) Organization. It is an entity duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation or
formation and has all requisite power and authority to carry on its business as
now being conducted.
(b) Authority. It has full power and authority to execute and deliver
this Agreement and the agreements referred to herein and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and such other agreements and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by such party, have been duly and validly executed and delivered by
such party and constitute the valid and legally binding agreements of such
party, enforceable against it in accordance with their respective terms.
(c) No Conflict. The execution and delivery of this Agreement and the
agreements referred to herein do not, and the consummation of the transactions
contemplated hereby and thereby will not, as the case may be, conflict with or
violate, result in a breach or default under or result in the creation of a
Lien on, (i) any law, regulation, court order, judgment or decree applicable to
such party, (ii) such party's corporate or partnership governance documents,
(iii) any of the properties or assets of such party or (iv) any contract,
permit, license or franchise to which such party or any of its properties or
assets is bound or affected.
4.2 Representations and Warranties of the Seller. The Seller hereby
represents and warrants to PFR that:
(a) It has, and will have, good and marketable title to the Purchased
Receivables, free and clear of any Liens.
(b) It has not transferred or subjected, and will not transfer or
subject, to a Lien any of the Purchased Receivables, other than the sale of
such receivables to PFR in accordance with the terms of this Agreement.
(c) The Provider Agreements have been, and will be, duly authorized,
executed and delivered by the parties thereto, are, and will be, the legal,
valid and binding obligations of the parties thereto, are, and will be, in full
force and effect and are, and will be, enforceable against the parties thereto
in accordance with their terms, and there are, and will be, no defaults
existing or threatened thereunder.
(d) The Purchased Receivables are, and will be, bona fide, have been
and will be, created in accordance with the terms and conditions of the
Provider Agreements and represent, and will represent, the legal, valid and
binding payment obligations of the Approved Payor.
(e) The right of PFR (or its designee) to receive all payments due and
payable and to become due and payable with respect to the Purchased Receivables
shall be absolute and unconditional and shall continue without deduction,
setoff, counterclaim or recoupment for any reason whatsoever.
The foregoing representations and warranties shall not (i) constitute
a representation or warranty by Seller as to the present or continuing
creditworthiness of any Approved Payor or as to whether any governmental
Approved Payor has appropriated or will appropriate funds sufficient to make
payment on any Purchased Receivable or (ii) be deemed to be breached as a
result of (x) the imposition of an automatic stay or the discharge of the
obligation to pay a Purchased Receivable in a bankruptcy
proceeding involving any Approved Payor or (y) any similar event in any
conservatorship, receivership, moratorium, or other type of insolvency
proceeding involving any Approved Payor.
ARTICLE V
COVENANTS OF THE SELLER
5.1 Affirmative Covenants. The Seller covenants that it will:
(a) Promptly notify PFR of the results of any audits or other action
taken or to be taken by an Approved Payor pursuant to the applicable Provider
Agreement.
(b) Preserve and maintain its corporate or partnership existence,
rights, franchises and privileges in the jurisdiction of its incorporation or
formation.
(c) Give PFR prior written notice of any relocation of its principal
executive offices and will at all times maintain its principal executive
offices within a jurisdiction in the United States in which Article Nine of the
Uniform Commercial Code (1972 or later revision) is in effect.
(d) Promptly notify PFR of the occurrence of any event which would
give rise to PFR's right to terminate this Agreement immediately or any
material adverse change in the business operations or condition (financial or
otherwise) of the Seller.
(e) Promptly send to PFR by certified mail, return receipt requested,
a copy of all notices it sends to, or receives from, an Approved Payor pursuant
to the Provider Agreements.
5.2 Negative Covenants of the Seller. The Seller covenants that it
will not, without the prior written consent of PFR:
(a) Rescind or cancel any Purchased Receivable or Provider Agreement
or modify any of the material terms or provisions of the Provider Agreement
relating to the Purchased Receivables;
(b) Change its name, identity or legal structure in any manner which
could make any financing statement or continuation statement filed in
connection with this Agreement or the transactions contemplated hereby
seriously misleading within the meaning of the applicable provisions of the
Uniform Commercial Code; or
(c) Sell, negotiate or place any Lien on any of the Purchased
Receivables except as contemplated by this Agreement.
(d) Modify or terminate the terms of any Purchased Receivable or,
without prior written notice to PFR, modify or terminate any Provider
Agreement. Any attempted modification or termination without such consent or
notice, as the case may be, shall be void and of no force and effect.
ARTICLE VI
MISCELLANEOUS
6.1 Intent. The parties hereto acknowledge that this Agreement is, and
is intended to be, a contract to extend financial accommodations to the Seller
within the meaning of Section 365(e)(2)(B) of the United States Bankruptcy Code
or any amended or successor provision thereof or any amended or successor code.
6.2 Interpretation and Construction. The section headings contained in
this Agreement are for reference purposes only. Terms not otherwise defined
herein which are defined in the Uniform Commercial Code as in effect in the
State of New York on the date hereof shall have the respective meanings
ascribed to such terms therein unless the context otherwise clearly requires.
6.3 INDEMNIFICATION.
(a) The Seller shall indemnify, defend and save harmless PFR, its
directors, officers, shareholders, employees, representatives and each person
or entity who controls PFR (collectively, the "Indemnities") from and against
any and all losses, claims, damages, liabilities, costs and expenses (including
attorneys' fees), excluding, however, any indirect, consequential, exemplary,
special, incidental or punitive damages, which the Indemnities may incur or
which may be asserted against the Indemnities by any person or entity arising
out of or relating to (i) any misrepresentation or breach of a warranty,
covenant or agreement of the Seller made hereunder or in any document executed
in connection herewith or the transactions contemplated hereby, (ii) any action
taken or failed to be taken by the Seller with respect to a Purchased
Receivable or any of the Seller's obligations hereunder, (iii) any obligation
or liability of the Seller to any Approved Payor under any Provider Agreement
other than relating to a Purchased Receivable or (iv) any action taken or
caused to be taken by the Seller which impairs PFR's interest in the Purchased
Receivables.
(b) PFR shall indemnify, defend and save harmless the Seller, its
directors, officers, shareholders, employees, representatives and each person
or entity who controls the Seller (collectively, the "Indemnities") from and
against any and all losses, claims, damages, liabilities, costs and expenses
(including attorneys' fees), subject to Section 6.4 below, which the
Indemnities may incur or which may be asserted against the Indemnities by any
person or entity arising out of or relating to (i) misrepresentation or breach
of warranty, covenant or agreement of PFR made hereunder or in any document
executed in connection herewith or the transactions contemplated hereby, or
(ii) any transaction executed pursuant to a lock box agreement the Seller has
entered into at PFR's request.
6.4 Limitation of Liability. PFR SHALL HAVE NO LIABILITY TO THE SELLER
FOR INDIRECT, CONSEQUENTIAL, EXEMPLARY, SPECIAL, INCIDENTAL OR PUNITIVE DAMAGES
EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES WITH RESPECT TO
ITS OBLIGATIONS UNDER THIS AGREEMENT, THE PURCHASE DOCUMENTS AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY. IN ANY EVENT, THE LIABILITY OF
PFR TO THE SELLER FOR ANY REASON AND UPON ANY CAUSE OF ACTION SHALL BE LIMITED
TO GENERAL MONEY DAMAGES IN AN AMOUNT NOT TO EXCEED THE GREATER OF $1,000,000
AND THE AMOUNT OF THE UNPAID PURCHASED RECEIVABLES. THIS LIMITATION APPLIES TO
ALL CAUSES OF ACTION IN THE AGGREGATE, INCLUDING, WITHOUT LIMITATION, BREACH OF
CONTRACT, BREACH OF WARRANTY, NEGLIGENCE, STRICT LIABILITY, MISREPRESENTATION
AND OTHER TORTS.
6.5 Disclaimer of Warranties. PFR MAKES NO REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE RR
PROGRAM.
6.6 Notices. All notices and other communications (collectively
"notices") under this Agreement shall be in writing and shall be sent by
prepaid first-class mail, telex or facsimile with confirmation in writing
mailed by first-class mail to applicable party at the address stated on the
first page of this Agreement or to such other address as either party advises
the other party. Notices shall be deemed given when sent.
6.7 Severability. The provisions of this Agreement are intended to be
severable. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
of such provision in any other jurisdiction or the remaining provisions hereof
in any jurisdiction.
6.8 Governing Law. This Agreement shall be governed by the laws of the
State of New York without giving effect to its conflict of laws rules. All
disputes arising hereunder shall be adjudicated in
the appropriate federal or state courts located in the City and County of New
York, and the parties hereby consent to the jurisdiction of such courts and
waive any objection to such jurisdiction or venue.
6.9 Entire Agreement; Amendments. This Agreement and accompanying
letter of even date herewith sets forth the entire understanding of the parties
relating to the subject matter hereof, supersedes all prior understandings and
agreements, whether written or oral, between the parties and may be amended
only by written agreement signed by both parties.
6.10 Survival. All representations, warranties, agreements and
covenants of the Seller and PFR contained herein or made in connection herewith
or in connection with any Purchased Receivables shall survive the making
thereof and the termination of the purchase obligation hereunder.
6.11 Counterparts. This Agreement may be executed in counterparts each
of which shall be deemed an original, but all of which shall constitute one and
the same instrument.
6.12 No Implied Covenants. This is an arms-length transaction and
relationship. Other than specific rights, duties and obligations expressly
stated in this Agreement, there shall exist no implied or otherwise unstated
covenants, rights or obligations by or against either party. The parties
expressly disclaim the existence of any implied covenant of good faith and/or
fair dealing.
6.13 Force Majeure. PFR shall not be liable for failure to provide the
RR Program if such failure is due to any cause or condition beyond its
reasonable control. Such cause or conditions shall include, but shall not be
limited to, acts of God or the public enemy, acts of the Government in either
its sovereign or contractual capacity, fires, floods, epidemics, quarantine
restrictions, strikes, shortages of labor or materials, freight embargoes,
unusually sever weather, electrical power failures or other similar causes
beyond PFR's control.
6.14 Waiver and Remedies. No provision of this Agreement shall be
deemed waived by either party unless such waiver is in writing and signed by
the party against whom enforcement is sought. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
6.15 Expenses. In the event that it becomes necessary for PFR to
enforce its rights under this Agreement in any legal action, Xxxxxx agrees to
reimburse PFR for all costs and expenses, including reasonable attorney's fees,
as a result of such legal action.
6.16 Assignment. PFR shall have the right to assign this Agreement and
its rights, obligations or duties hereunder to an affiliate of PFR or to a
trust or other vehicle established for the purpose of financing the purchase of
the Purchased Receivables.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
PHARMACY FUND RECEIVABLES, INC.
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Xxxx X. Xxxxxx
Chairman
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxx
Senior Vice President, CFO
Xxxxx Xxxxx, Inc.
00-00 00xx Xxxxx
Xxxx Xxxxxx Xxxx, XX 00000
[Rapid RxEmit(Register Mark) Letterhead]
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THIS AGREEMENT dated March 28th, 1997 shall supplement, amend and
modify the agreement dated March 10, 1997 (the "Purchase Agreement"), by and
between Xxxxx Xxxxx, Inc., a corporation with principal executive offices at
00-00 00xx Xxxxx, Xxxx Xxxxxx Xxxx, XX 00000 ("DR Inc.") and Pharmacy Fund
Receivables, Inc., a New York corporation with offices at 000 Xxxxx Xxxxxx, Xxx
Xxxx, XX ("PFR").
The parties desire to clarify that the "Seller" for purposes of this
Agreement and the Purchase Agreement shall be deemed to be Xxxxx Xxxxx, a New
York general partnership (the "Seller") comprised of two general partners, DR
Inc. and Daboco Inc.
The Seller desires to sell, and PFR desires to buy, certain of
Seller's third party prescription receivables (the "Additional Receivables")
not covered by the Purchase Agreement.
The parties desire to amend the termination provision in the Purchase
Agreement.
NOW THEREFORE, the parties agree as follows:
1. Substitution of Xxxxx Xxxxx for Xxxxx Xxxxx, Inc. Xxxxx Xxxxx, a New York
general partnership shall constitute the "Seller" for purposes of this
Agreement and the Purchase Agreement.
2. Agreement to Purchase Additional Receivables.
a. On March 31, 1997, the Seller shall send to PFR a data file in a
format subject to PFR's specifications for all of the Seller's outstanding
third party prescription accounts receivable with a date of fill from and
including March 2, 1997 through and including March 30, 1997. The Seller shall
sell to PFR, and PFR shall purchase from the Seller, all of the foregoing third
party prescription accounts receivable for which the Seller has not received
complete or partial payment, including, without limitation, any contract
rights, general intangibles, accounts, chattel paper, amounts due and to become
due thereunder and all rights, powers and privileges arising thereunder or
related thereto and all proceeds and products of any of the foregoing
("Receivables") which meet the requirements of Section 1.1(a)(i)(ii) and (iii)
of the Purchase Agreement. Each Receivable that meets these requirements and is
purchased by PFR is referred herein as an "Additional Purchased Receivable".
PFR shall pay the Purchase Price for the Additional Purchased Receivables via
wire transfer to the account designated by the Seller on the next banking day
after PFR processes the data file from the Seller.
b. Commencing on March 31, 1997 and continuing until the Seller's PDX
software is modified to route data files directly to PFR completely bypassing
the Seller, the Seller shall send to PFR in a format subject to PFR's
specifications, the Seller's daily
generated third party prescription accounts receivable. The Seller shall sell
to PFR, and PFR shall purchase from the Seller, all of the foregoing third
party prescription accounts receivable including, without limitation, any
contract rights, general intangibles, accounts, chattel paper, amounts due and
to become due thereunder and all rights, powers and privileges arising
thereunder or related thereto and all proceeds and products of any of the
foregoing ("Receivables") which meet the requirements of Section 1.1(a)(i)(ii)
and (iii) of the Purchase Agreement. Each Receivable that meets these
requirements and is purchased by PFR is referred to herein as an "Additional
Purchased Receivable". PFR shall pay the Purchase Price for the Additional
Purchased Receivables via ACH transfer to the account designated by the Seller
on the next banking day after PFR processes the data file from the Seller.
c. With respect to all Additional Purchased Receivables, PFR shall
assume the risk of nonpayment without recourse to the Seller; subject to the
exceptions contained in Section 1.1(b) of the Purchase Agreement. In addition
to the foregoing PFR, in the event that an Additional Receivable is purchased
in respect of which there shall have occurred a breach of any obligation,
covenant, representation or warranty of the Seller hereunder, such Additional
Purchased Receivable shall be with full recourse to the Seller. PFR shall have
the right to set off the amount of the Purchase Price for any such Additional
Purchased Receivable against any other payments PFR owes or will in the future
owe to the Seller.
d. All references in the Purchase Agreement to Purchased Receivables
shall be deemed to also refer to Additional Purchased Receivables, except where
doing so would be contrary to the terms contained herein.
e. In addition to the representations and warranties in the Purchase
Agreement, the Seller further represents and warrants as to Additional
Purchased Receivables that:
(i) The data files which the Seller provides to PFR to evidence an
adjudicated and approved Additional Receivable shall be bona fide and accurate.
(ii) The data files which the Seller provides to PFR shall include
all reversals.
(iii) The Seller shall not have received partial or full payment
from an Approved Payor for an Additional Purchased Receivable prior to selling
the Additional Receivable to PFR.
f. The Seller agrees that commencing on March 31, 1997 the Seller
shall immediately forward to PFR all payments and remittance advices unopened
the Seller receives from Approved Payors. If any payment is for a receivable
which was not purchased by PFR, PFR shall remit that payment to the Seller via
ACH transfer.
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3. Termination. In addition to the termination provisions contained in Section
1.2 of the Purchase Agreement, each party shall have the right to terminate the
Purchase Agreement as amended hereby without cause upon sixty (60) days notice
to the other party. However, as a condition precedent to termination, the
terminating party shall pay the other Party an amount equal to the difference
between $300,000.00 and the product of $273.9726 multiplied by the number of
days which have elapsed from the date of the first purchase of a receivable by
PFR and the date of termination. In the event of termination without cause,
neither party shall make or cause to be made any defamatory or disparaging
statement about the other party or take any action which materially damages the
business reputation of the other party. The parties shall in any statement
issued relating to the termination attribute the termination to a mutually
agreeable business decision. In the event of termination with or without cause
neither party shall disclose or cause to be disclosed the terms of the Purchase
Agreement or any information it has acquired about the business practices and
finances of the other party to any third party.
IN WITNESS WHEREOF, the parties have duly executed this Agreement
which shall supplement, amend and modify the Purchase as of the date first
above written.
PHARMACY FUND RECEIVABLES, INC.
By: /s/ Authorized Signatory
--------------------------
Title: President
--------------------------
XXXXX XXXXX
By: DABOCO INC.
Its: General Partner
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------
Title: Sr. V.P.
--------------------------
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