REVOLVING CREDIT AND SECURITY AGREEMENT
Exhibit
10.1
Section
1. Introduction.
THIS
REVOLVING CREDIT AND SECURITY AGREEMENT
(this
“Agreement”) is entered into this 17th
day of
April,
2007
by and
between PRESIDENTIAL
HEALTHCARE CREDIT CORPORATION
(“PHCC”)
and PARK INFUSION CARE, LP, a Texas limited partnership, formerly known as
PARK
INFUSION SERVICES, LP, d/b/a PARK INFUSION CARE, PARK INFUSIONCARE OF DALLAS,
LP, a Texas limited partnership, PARK INFUSIONCARE OF HOUSTON, LP, a Texas
limited partnership and PARK INFUSIONCARE OF SAN ANTONIO, LP, a Texas limited
partnership (together, jointly and severally, the “Provider”). Subject to the
terms and conditions of this Agreement, the Provider wishes to obtain a
revolving credit loan from PHCC and PHCC wishes to make a revolving credit
loan
to the Provider. Capitalized terms used herein, unless otherwise defined,
shall
have the meanings set forth in Appendix I to
this
Agreement.
NOW,
THEREFORE, in consideration of the premises and in order to induce PHCC to
make
the Loan, PHCC and the Provider agree as follows.
Section
2. Amount
and Payment of Loan.
(a) (i)PHCC
agrees, on the terms and subject to the conditions hereinafter set forth,
to
review Advance Requests from the Provider, and to make Advances to the Provider
during the period from the date hereof to, but not including, the earlier
of (A)
the date of termination in whole of this Agreement pursuant to Section 12;
and
(B) the Scheduled Maturity Date. Amounts borrowed hereunder may be repaid
and
borrowed again from time to time provided that no Event of Default shall
have
occurred. The principal amount of the Loan outstanding shall not exceed the
Maximum Aggregate Loan Amount at any time.
(ii) Any
determination as to whether there is availability for Advances shall be made
by
PHCC in its reasonable sole discretion and is final and binding upon the
Provider. Subject to the provisions of this Agreement, the Provider may request
Advances up to and including the value, in U.S. Dollars, of the “Availability
Amount” which shall equal (A) eighty-five
percent (85%)
of the
Net Value of Eligible Receivables minus, (B) if applicable, amounts reserved
pursuant to this Agreement. In addition, if at any time Provider is not entitled
to any advances by the terms of this Agreement, PHCC may, in its sole
discretion, make requested advances upon the payment of an overadvance fee
(an
“Overadvance Fee”) in the amount of one thousand dollars ($1,000.00); however,
it is expressly acknowledged and agreed that, in such event, Provider shall
have
the right, in its sole discretion, to decline to make any requested advance
and
to require any payment required under the terms of the Agreement without
prior
notice to Provider and the making of any such advances shall not be construed
as
a waiver of such right by PHCC.
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(iii) If
at any
time the outstanding balance of the Loan exceeds the lesser of (A) the
Availability Amount, or (B) the Maximum Aggregate Loan Amount, then Borrower
shall not be entitled to any additional Advances under the Loan while such
excess exists and shall immediately remit to PHCC immediately available funds
sufficient to eliminate such excess and, if PHCC requests, deliver to PHCC
additional collateral of a value and character satisfactory to
PHCC.
(iv) In
the
event that the availability of the Loan hereunder expires by the terms of
this
Agreement, or by the terms of any agreement extending the Scheduled Maturity
Date of the Loan, PHCC may, in its sole discretion, make requested Advances;
however, it is expressly acknowledged and agreed that, in such event, PHCC
shall
have the right, in its sole discretion, to decline to make any requested
Advance
and may require payment in full of the Loan at any time without prior notice
to
Provider and the making of any such Advances shall not be construed as a
waiver
of such right by PHCC.
(v) PHCC,
in
its reasonable sole credit judgment, may further adjust the Availability
Amount
based upon the Provider’s actual, recent collection history for each payor class
(i.e., Medicare, Medicaid, commercial insurance, etc.) in a manner consistent
with PHCC’s underwriting practices and procedures, including, without
limitation, PHCC’s review and analysis of, among other things, the Provider’s
historical returns, rebates, discounts, credits and allowances. Also, PHCC
shall
have the right to establish from time to time, in its reasonable sole credit
judgment, reserves against the Availability Amount, which reserves shall
have
the effect of reducing the amounts otherwise eligible to be disbursed to
the
Provider.
(vi) Advances
may be made by PHCC without an Advance Request as hereinafter provided for
the
payment of interest due and payable on the Loan and Fees and Reimbursable
Expenses and for the payment of fees due to the Servicer under the Servicing
Agreement when such interest and/or fees are due to the extent other moneys
have
not been made available by Provider to PHCC (or, in the case of fees due
Servicer, to Servicer) for such payments and there is sufficient Availability
Amount for such Advances.
(b) (i)Advances
made by PHCC shall be evidenced by, and repayable with interest in accordance
with, a single Revolving Variable Rate Note of the Provider payable to the
order
of PHCC, dated of even date herewith, in the form of Exhibit B hereto (the
“Note”). PHCC shall record the date and amount of each Advance made and the date
and amount of each payment of principal thereof, and any such recordation
shall
constitute prima facie evidence of the accuracy of the information so recorded.
PHCC shall, on behalf of the Provider, maintain a register (the “Register”) for
the recordation of (i) the names and addresses of PHCC and any assignees
of PHCC
and (ii) the Commitment of, and the principal amount and interest of the
Loans
owing to, PHCC or any assignee from time to time.
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The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Provider, PHCC, and each assignee of PHCC shall treat each Person
whose
name is recorded in the Register as the owner of the Loans for all purposes
of
this Agreement. The Note shall (A) be dated the date of issuance thereof,
or,
with respect to any amendment thereof, the date of such amendment, (B) mature
on
the Scheduled Maturity Date and (C) provide for the payment of interest in
accordance with Section 2(c)(ii). The aggregate principal amount outstanding
under the Note, together with accrued but unpaid interest thereon, Fees and
Reimbursable Expenses shall be due and payable on the Scheduled Maturity
Date.
(ii) The
Provider may, in its discretion, prepay the Loan in whole or in part at any
time
by paying all or any part of the outstanding principal balance of the Note
plus
accrued interest and all other Fees and Reimbursable Expenses then due (the
“Prepayment Amount”). The Provider shall prepay the Loan in full immediately
upon demand of PHCC after the occurrence of an Event of Default by paying
the
Prepayment Amount.
(c) (i)Advances
shall accrue interest at the rate and in the manner set forth in the Note.
The
Provider shall make payments of interest and principal as hereinafter described
(the “Loan Payments”).
(ii) Accrued
interest shall be due and payable on each Interest Payment Date.
(iii) Except
as
otherwise expressly provided by this Agreement, the obligations of the Provider
to make the Loan Payments, to make payments of any Fees and Reimbursable
Expenses, and to perform and observe the covenants and agreements contained
herein shall be absolute and unconditional under all circumstances, without
abatement, diminution, deduction, setoff or defense for any reason. Except
as
otherwise may be expressly provided by this Agreement, the Provider shall
make
all such payments when due and shall not withhold any Loan Payments or other
payments due under the Provider Agreements pending final resolution of any
dispute with PHCC, nor shall the Provider assert any right of setoff or
counterclaim against its obligation to make any such payments required under
the
Provider Agreements.
(iv) Regardless
of any provision contained in any of the Loan Documents, in no contingency
or
event whatsoever shall the aggregate of all amounts that are contracted for,
charged or received by PHCC pursuant to the terms of this Agreement or any
of
the other Loan Documents and that are deemed interest under applicable law
exceed the highest rate permissible under applicable law.
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No
agreements, conditions, provisions or stipulations contained in this Agreement
or any of the other Loan Documents or the exercise by PHCC of the right to
accelerate the payment or the maturity of all or any portion of the Obligations,
or the exercise of any option whatsoever contained in any of the Loan Documents,
or the prepayment by the Provider of any of the Obligations, or the occurrence
of any contingency whatsoever, shall entitle PHCC to charge or receive in
any
event, interest or any charges, amounts, premiums or fees deemed interest
by
applicable law (such interest, charges, amounts, premiums and fees referred
to
herein collectively as “Interest”) in excess of the Maximum Rate and in no event
shall the Provider be obligated to pay Interest exceeding such Maximum Rate,
and
all agreements, conditions or stipulations, if any, which may in any event
or
contingency whatsoever operate to bind, obligate or compel the Provider to
pay
Interest exceeding the Maximum Rate shall be without binding force or effect,
at
law or in equity, to the extent only of the excess of Interest over such
Maximum
Rate. If any Interest is charged or received in excess of the Maximum Rate
(“Excess”), the Provider acknowledges and stipulates that any such charge or
receipt shall be the result of an accident and bona fide error, and such
Excess,
to the extent received, shall be applied first to reduce the principal
Obligations and the balance, if any, returned to the Provider, it being the
intent of the parties hereto not to enter into a usurious or otherwise illegal
relationship. The right to accelerate the maturity of any of the Obligations
does not include the right to accelerate any Interest that has not otherwise
accrued on the date of such acceleration, and PHCC does not intend to collect
any unearned Interest in the event of any such acceleration. Provider recognizes
that, with fluctuations in the rates of interest set forth in the Note and
the
Maximum Rate, such an unintentional result could inadvertently occur. All
monies
paid to PHCC hereunder or under any of the other Loan Documents, whether
at
maturity or by prepayment, shall be subject to any rebate of unearned Interest
as and to the extent required by applicable law. By the execution of this
Agreement, the Provider covenants that (i) the credit or return of any Excess
shall constitute the acceptance by the Provider of such Excess, and (ii)
the
Provider shall not seek or pursue any other remedy, legal or equitable, against
PHCC, based in whole or in part upon contracting for, charging or receiving
any
Interest in excess of the Maximum Rate. For the purpose of determining whether
or not any Excess has been contracted for, charged or received by PHCC, all
Interest at any time contracted for, charged or received from the Provider
in
connection with any of the Loan Documents shall, to the extent permitted
by
applicable law, be amortized, prorated, allocated and spread in equal parts
throughout the full term of the Obligations. The Provider and PHCC shall,
to the
maximum extent permitted under applicable law, (i) characterize any
non-principal payment as an expense, fee or premium rather than as Interest
and
(ii) exclude voluntary prepayments and the effects thereof. The provisions
of
this Section 2(c)(iv) shall be deemed to be incorporated into every Loan
Document (whether or not any provision of this Section is referred to therein).
All such Loan Documents and communications relating to any Interest owed
by the
Provider and all figures set forth therein shall, for the sole purpose of
computing the extent of Obligations, be automatically recomputed by the
Provider, and by any court considering the same, to give effect to the
adjustments or credits required by this Section 2(c)(iv).
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(d) On
or
before the Closing Date, the Provider shall pay to PHCC a nonrefundable
commitment fee in an amount equal to one
percent (1%)
of the
Maximum Aggregate Loan Amount (“Initial Commitment Fee”).
(e) All
payments and reimbursements to PHCC made under any Provider Agreement shall
be
free and clear of, and without deduction for, all taxes, levies, imposts,
deductions, assessments, charges or withholdings and all liabilities with
respect thereto of any nature whatsoever, excluding taxes to the extent imposed
on PHCC’s net income. If PHCC shall be required by law to deduct any such
amounts from or in respect of any sum payable under any Provider Agreement
to
PHCC, then the sum payable to PHCC shall be increased as may be necessary
so
that, after making all required deductions, PHCC receives an amount equal
to the
sum it would have received had no such deductions been made. Notwithstanding
any
other provision of any Provider Agreement, if at any time after the Closing
Date
(i) any change in any existing law, regulation, treaty or directive or in
the
interpretation or application thereof, (ii) any new law, regulation, treaty
or
directive enacted or any interpretation or application thereof, or (iii)
compliance by PHCC with any request or directive (whether or not having the
force of law) from any governmental authority: (A) subjects PHCC to any tax,
levy, impost, deduction, assessment, charge or withholding of any kind
whatsoever with respect to any Provider Agreement, or changes the basis of
taxation of payments to PHCC of any amount payable thereunder (except for
net
income taxes, or franchise taxes imposed in lieu of net income taxes, imposed
generally by federal, state or local taxing authorities with respect to
interest, Reimbursable Expenses and Fees payable hereunder or changes in
the
rate of tax on the overall net income of PHCC, or (B) imposes on PHCC any
other
condition or increased cost in connection with the transactions contemplated
thereby or participations therein; and the result of any of the foregoing
is to
increase the cost to PHCC of making or continuing any Loan or Advance hereunder
or to reduce any amount receivable hereunder, then, in any such case, the
Provider shall promptly pay to PHCC any additional amounts necessary to
compensate PHCC, on an after-tax basis, for such additional cost or reduced
amount as determined by PHCC. If PHCC becomes entitled to claim any additional
amounts pursuant to this Section it shall promptly notify the Provider of
the
event by reason of which PHCC has become so entitled, and each such notice
of
additional amounts payable pursuant to this Section submitted by PHCC to
the
Provider shall, absent manifest error, be final, conclusive and binding for
all
purposes and shall be payable on each Interest Payment Date.
(f) (i)The
Servicer will prepare and deliver an Availability Certificate to the Provider
by
10:00 a.m. on the Business
Day prior to each Advance Day. The Availability Certificate shall identify
the
aggregate Net Value of all Eligible Receivables pledged to PHCC as Collateral
hereunder, the outstanding principal balance of the Loan, all Reimbursable
Expenses and Fees then due, the Availability Amount and such other information
regarding Eligible Receivables as is required by the Availability
Certificate.
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(ii) Each
Advance Request shall be made by the Provider prior to 12:00 p.m. (Central
Standard/Daylight Time) on the Advance Day by an Authorized Person by delivery
to PHCC with a copy to the Servicer.
(iii) Upon
receipt of the Advance Request and satisfaction of all applicable conditions
set
forth in this Section 2, PHCC shall disburse the amount of the Advance on
the
Advance Day by crediting the same to the account of the Provider identified
in
Exhibit C or such other account as may be designated in writing by an Authorized
Person of the Provider.
(iv) No
Advance shall cause the aggregate principal balance outstanding on the Loan
to
exceed the Maximum Aggregate Loan Amount.
(g) The
Provider shall use Advances for the purpose of supporting the Provider’s
business operations and for any other general business needs.
(h) (A)As
a
condition precedent to the obligation of PHCC to disburse the initial Advance
under this Agreement, the following shall have been received by PHCC and
the
following actions shall have been taken to the satisfaction of
PHCC:
(i) the
Provider Agreements, properly executed on behalf of the Provider;
(ii) a
certificate of an authorized officer, manager or managing member, as the
case
may be, of the Provider, certifying as to (i) the resolutions of the Provider’s
board of directors, general partner(s) or managing member(s), as the case
may
be, authorizing the execution, delivery and performance of the Provider
Agreements and any related documents and (ii) the signatures of each
Authorized Person authorized to execute and deliver the Provider Agreements
and
other instruments, agreements and certificates on behalf of the Provider
and to
request Advances;
(iii) if
applicable, a Certificate of Good Standing issued as to the Provider by the
Secretary of the State of the Provider’s state of organization not more than 30
days prior to the Closing Date;
(iv) payment
of Reimbursable Expenses due on the Closing Date, the Initial Commitment
Fee and
such other fees, commissions and expenses required to be paid by the Provider
pursuant to the Provider Agreements as of the Closing Date;
(v) acknowledgment
copies of proper financing statements (Form UCC-1) naming the Provider as
the
debtor and naming PHCC as the secured party or other similar documents or
instruments as may be necessary, or in the opinion of PHCC desirable, under
the
UCC, as amended from time to time, of all appropriate jurisdictions, or any
comparable law, to perfect PHCC’s security interest in all Collateral which may
be pledged by the Provider to PHCC hereunder;
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(vi) certified
copies (or copies otherwise satisfactory to PHCC) of Requests for Information
or
Copies (Form UCC-11) (or a similar search report certified by a Person
acceptable to PHCC) listing all effective financing statements (including
those
referred to in subsection (v) above) which name the Provider (under its present
name and any previous name) as debtor or seller and which are filed in the
jurisdictions in which filings were made pursuant to subsection (v) above,
together with copies of such financing statements and searches of applicable
federal and state court and agency dockets and lien records showing all
judgment, tax and ERISA liens affecting the Provider or the Collateral, none
of
which (except those filed pursuant to subsection (v) above) shall cover any
of
the Collateral to be pledged by the Provider to PHCC or any related Contracts
unless the documents referred to in subsection (vii) below cover such financing
statements;
(vii) releases
and acknowledgment copies of proper Termination Statements, if any, necessary
to
evidence the release of all security interests, ownership and other rights
of
any Person in the Collateral previously granted by the Provider;
(viii) a
copy of
the Servicing Agreement and any Addendums thereto requested by PHCC, duly
authorized, executed and delivered by the Provider and the Servicer, together
with evidence satisfactory to PHCC that the Provider has established an account
at an insured depositary institution into which all payments with respect
to the
Healthcare Receivables will be deposited;
(ix) as
requested by PHCC from time to time, a copy of all of the Provider’s forms of
patient consent to be signed by each patient for which a Healthcare Receivable
is or was created which authorizes the demographic and medical information
with
respect to such patient to be disclosed to, and by, the Servicer;
(x) PHCC
shall have completed examinations, the results of which shall be satisfactory
in
form and substance to PHCC, of the Collateral, the financial statements and
the
books, records, business, obligations, financial condition and operational
state
of the Provider, and the Provider shall have demonstrated to PHCC’s satisfaction
that (A) its operations comply, in all respects deemed material by PHCC, in
its sole reasonable judgment, with all applicable federal, state, foreign
and
local laws, statutes and regulations, (B) its operations are not the
subject of any governmental investigation, evaluation or any remedial action
which could result in any expenditure or liability deemed material by PHCC,
in
its sole judgment, and (C) it has no liability (whether contingent or
otherwise) that is deemed material by PHCC, in its reasonable sole
judgment;
(xi) the
various mechanisms for creating and perfecting the security interests in
the
Collateral are in effect and can be utilized with respect to the
Collateral;
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(xii) all
Collateral in which PHCC has been granted, or may demand, a security interest
are owned outright by the Provider, are not subject to claim, assignment
or
setoff, and are in the physical or constructive possession or control of
PHCC;
(xiii) the
Provider has the unrestricted right to pledge the Collateral as contemplated
herein;
(xiv) such
other documents, opinions or certificates as PHCC may reasonably request;
and
(xv) an
Availability Certificate and Advance Request in the form of Exhibit E duly
executed by an Authorized Person.
(B) As
a
condition precedent to the continuing obligation of PHCC to make each Advance,
the following conditions (in addition to those enumerated under Section 2(h)(A)
hereinabove) shall be satisfied by the Provider:
(i) all
representations and warranties of the Provider contained herein and in each
other Provider Agreement shall be true and complete in all material respects
(determined for this purpose as if all qualifications to such representations
and warranties based on knowledge or materiality were omitted) at all times
during the term of this Agreement;
(ii) the
Provider shall have performed and complied in all material respects with
all
obligations and agreements and all covenants and conditions contained in
this
Agreement and in each other Provider Agreement to which it is a party to
be
performed or complied with by it at all times (such performance or compliance
to
be determined for this purpose as if all qualifications to such obligations,
agreements, covenants and conditions based on the use of diligent efforts
or
best efforts were omitted) and PHCC shall have received evidence, in form
and
substance reasonably satisfactory to it, of such performance and
compliance;
(iii) all
corporate actions necessary to authorize (A) the execution, delivery and
continuing performance by the Provider of this Agreement and of each other
Provider Agreement to which it is a party and (B) the consummation of the
transactions contemplated hereby and thereby shall have been and shall continue
to be duly and validly taken by the Provider and shall be in full force and
effect. All such actions and all other actions, proceedings, instruments
and
documents required to carry out the transactions contemplated hereby or
incidental hereto and all other related legal matters shall be reasonably
satisfactory to and approved by counsel for PHCC and such counsel shall be
furnished with such certified copies of such corporate actions and proceedings
and such other instruments and documents as it shall have reasonably requested
from time to time;
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(iv) no
event
has occurred and is continuing, or would result from such Advance, which
constitutes an Event of Default; and
(v) the
Provider shall provide with each Advance Request an Availability Certificate
and
Advance Request in the form of Exhibit E duly executed by an Authorized
Person.
Each
Advance Request shall constitute a representation that the above is true
and
that the statements set forth in Sections 7 and 8 are correct.
(i) PHCC’s
Commitment shall terminate on the Scheduled Maturity Date unless this Agreement
is terminated prior thereto.
Section
3. Servicing
of Healthcare Receivables.
Healthcare Receivables will be serviced by the Servicer pursuant to the terms
and conditions of the Servicing Agreement. Under the terms of the Servicing
Agreement, the Servicer shall act as the agent of the Provider, shall service
the Healthcare Receivables in accordance with the directions of the Provider
and
shall, as agent of the Provider, disburse proceeds of the Healthcare Receivables
as directed by the Provider under the Servicing Agreement.
If
the
Provider determines, for any reason, to terminate or remove the Servicer,
the
Provider may do so only upon not less than thirty (30) days’ prior written
notice to the Servicer, with a copy of such notice sent to PHCC, along with
(i) a certified copy of the resolution unanimously adopted by the governing
body of the Provider authorizing and directing that the Servicer be terminated
as agent under the Servicing Agreement and (ii) a certificate signed by the
Provider, evidencing termination of the Servicing Agreement, subject to
appointment of a successor to the Servicer as provided below (provided, however,
that the foregoing shall not impede the Provider’s ability to change a return
address or instructions with respect to Governmental Obligors as contemplated
by
Section 4(b) or change an automatic transfer instruction as contemplated
by
Section 4(f)). In addition, if the Servicer is in default under the terms
of the
Servicing Agreement, PHCC shall have the right to obtain the removal or
termination of the Servicer for cause and the right to have the Provider
appoint
a successor Servicer, subject to the last sentence of this Section. No
termination or removal of a Servicer, whether by the Provider or at the
direction of PHCC for cause as provided herein, shall be effective unless,
prior
to the date such termination or removal is to be effective, the Provider
has
selected a successor Servicer acceptable to PHCC and such successor Servicer
has
accepted its appointment by the Provider in writing.
Section
4. Post
Office Box and Provider Lockbox Account For Healthcare
Receivables.
(a) On
or
prior to the date hereof, Provider, pursuant to the Servicing Agreement,
shall
have established in its own name (1) a post office box for the receipt of
all
items with respect to Healthcare Receivables (the “Lockbox”), and (2) an account
at an insured depository institution approved by PHCC for the deposit of
all
Collections and payments on the Healthcare Receivables (the “Lockbox Account”)
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The
Lockbox Account shall be subject at all times to a control agreement in form
satisfactory to PHCC in PHCC’s reasonable sole discretion (the “Control
Agreement”), said control agreement to be among PHCC, Provider and the financial
institution at which the Lockbox Account is established.
(b) The
Provider hereby covenants and agrees that, on and after the date hereof,
all
claims (including CMS 1500 or related insurance billing forms) to be sent
to
Obligors (and return envelopes, if provided by the Provider) shall set forth
only the address of the Lockbox as a return address for payment of Healthcare
Receivables and delivery of all EOB/ERAs and only the Lockbox Account as
the
account into which wire transfers for Collections and payment on Healthcare
Receivables shall be deposited. The Provider hereby further covenants and
agrees
to instruct and notify each of the members of the Provider’s accounting and
collections staff, and of the Servicer’s accounting and collection staff, to
provide identical information in communications with Obligors with respect
to
collections, wire transfers and EOB/ERAs on Healthcare Receivables. With
respect
to Non-Governmental Obligors, the Provider shall not change such return address
or the instructions in any Obligor Notice without the express prior written
consent of PHCC. With respect to Governmental Obligors, Provider remains
free to
change such return address and the instructions in any Obligor Notice; provided,
however, any such change undertaken by Provider without the express written
permission of PHCC shall constitute a breach of this Agreement.
(c) Unless
an
Event of Default exists or a court order to the contrary is received, the
Provider will retain the right to receipt of Collections and payment of the
Healthcare Receivables and all rights to demand or make claims under the
applicable Governmental program for any Governmental Receivable to the extent
provided under the Servicing Agreement. The Provider shall remit daily to
the
Servicer all amounts which the Provider receives with respect to the Healthcare
Receivables (whether received in the Lockbox, the Lockbox Account, or otherwise,
and whether accomplished through the mechanism described in subsection (f)
below
or otherwise), and shall notify PHCC and the Servicer of all such amounts,
including information as to the Healthcare Receivables to which such amounts
relate and copies of any related EOB/ERAs. Provider hereby instructs the
Servicer to pay all amounts so received on a daily basis to PHCC. PHCC will
immediately credit to interest owing hereunder and to any outstanding line
of
credit balance all such amounts that were received from account debtors which
are or were at one time account debtors on Eligible Receivables; provided,
however, that in no case shall PHCC be required to credit Provider with the
amount of any check or other instrument constituting provisional payment
until
PHCC has received final payment thereof at its office in the form of immediately
available funds accepted by PHCC. Unless an Event of Default exists, PHCC
(or
Servicer on PHCC’s behalf) shall pay to Provider daily (i) all such amounts that
were received from account debtors which are not and were never account debtors
on Eligible Receivables, and (ii) any such amounts received on a day when
the
outstanding principal and interest balance on Provider’s line of credit under
this Agreement is zero or less than zero.
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(d) If
an
Obligor makes a payment on a Healthcare Receivable other than to the Lockbox
or
the Lockbox Account, with respect to wire transfers the Provider shall promptly
give written notice thereof to PHCC and the Provider shall take all necessary
steps to effect the collection of such payment from any other Person claiming
an
interest therein or having possession thereof and deliver such to the Servicer
together with all necessary endorsements. If the Provider itself shall receive
any amounts with respect to a Healthcare Receivable (other than receipts
into
the Lockbox or the Lockbox Account, which receipts are addressed elsewhere
in
this Agreement), the Provider shall so notify PHCC and the Servicer immediately
and shall hold all checks and instruments received in trust for PHCC and
shall
deliver to Servicer such checks and other instruments duly endorsed to PHCC
(or,
at the direction of PHCC, the proceeds thereof) without delay or setoff,
including information as to the Healthcare Receivable to which such amounts
relate and copies of any related EOB/ERAs. The Provider shall cooperate with
PHCC and the Servicer in the identification of items deposited in the Lockbox
or
the Lockbox Account.
(e) All
deliveries and notifications referred to in this Section 4 shall be made
promptly upon the Provider’s receipt of any such amount or information and
delivery to PHCC and the Servicer thereof shall be no later than midnight
Central Time within three (3) days of receipt by the Provider (except with
respect to delivery of tangible items, which shall be no later than 5:00
pm CST
on the business day after receipt by the provider).
(f) Pursuant
to the Servicing Agreement, the Provider shall instruct the financial
institution holding the Lockbox and the Lockbox Account to transfer, or cause
to
be transferred, to the account described in the Servicing Agreement,
automatically, at the end of each Business Day, all amounts on deposit in
the
Lockbox Account. No Person, other than the Provider, shall have the right
to
change or cancel the foregoing automatic transfer instruction; provided,
however, that the Provider shall not make such change or cancellation other
than
pursuant to the Servicing Agreement and as provided in the Addendum to the
Servicing Agreement.
Section
5. Security
Interest.
(a) This
Agreement is intended to constitute a security agreement within the meaning
of
the UCC. As security for the Obligations, the Provider hereby assigns, pledges
and grants to PHCC a first priority continuing security interest in all right,
title and interest of the Provider in, to and under all of the following,
whether now or hereafter owned, existing, created, arising or acquired
(collectively, the “Collateral”):
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(i) Healthcare
Receivables, all related Contracts and all Collections with regard thereto,
any
and all amounts now or hereafter due to the Provider from the Lockbox, the
Lockbox Account, all funds on deposit in each of the foregoing with regard
thereto and all certificates and instruments, if any, from time to time
evidencing the Lockbox and the Lockbox Account and such funds of the Provider
on
deposit therein, all claims thereunder or in connection therewith, all software
and books and records relating to any of the foregoing, all general intangibles,
accounts, payment intangibles, interest, dividends, moneys, instruments,
securities and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the
foregoing, and all proceeds and amounts received or receivable under any
or all
of the foregoing;
(ii) substitutions,
accessions, additions, parts, accessories, attachments, replacements, Proceeds
and products of, for and to any and all of the foregoing, including, without
limitation, any and all insurance proceeds, and any and all such substitutions,
accessions, additions, parts, accessories, attachments, replacements, Proceeds
and products in the form of any of the property described or referenced in
(i)
above.
All
references in this Agreement to the UCC shall mean the Georgia Uniform
Commercial Code (the “UCC”), as amended from time to time. All references in
this Section 5 to general intangibles, accounts and payment intangibles shall
mean those terms as defined in the UCC.
Upon
an
Event of Default under this Agreement, to the fullest extent permitted by
applicable law, PHCC’s rights with respect to the Collateral pledged hereunder
include, but are not limited to, the right to: (i) settle and/or compromise
any
or all of such Collateral; (ii); and (iii)demand, receive and xxx, in the
Provider’s name at PHCC’s option, for any moneys due or which may become due
under such Collateral, or for enforcement of any rights afforded the Provider
with respect thereto.
Notwithstanding
the foregoing provision, to the fullest extent permitted by applicable law,
at
any time PHCC’s rights with respect to the Collateral pledged hereunder include,
but are not limited to, the right to: (i) do all acts necessary or advisable
in
furtherance of any rights of PHCC hereunder and
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(ii)
sign
and endorse on behalf of the Provider all checks and instruments received
in
connection with Collections on the Healthcare Receivables and the Provider
hereby irrevocably appoints PHCC the attorney-in-fact of the Provider for
such
purpose; and the Provider hereby specifically authorizes, ratifies and confirms
all that PHCC shall do by virtue hereof; provided, however, that notwithstanding
anything to the contrary in this Agreement, the Provider, and not PHCC, shall
retain, unless otherwise specified in a court order or an agreement of agency,
all rights of collection and endorsement with respect to Governmental
Receivables.
The
Provider specifically agrees to execute and/or prepare, and file or publish,
all
at the request and direction of PHCC, and at the Provider’s expense, any and all
documentation and/or notices of PHCC’s rights herein as may be necessary or
advisable, in PHCC’s discretion, to effect the terms hereof or protect PHCC’s
interest herein described. In no event shall PHCC be responsible, in whole
or in
part, for any duties, performance or obligations of the Provider with respect
to
the Collateral nor shall the Provider be relieved thereof by reason of this
Agreement.
(b) This
Agreement secures the payment and performance by the Provider of all
indebtedness, liabilities and obligations now existing or hereafter created
or
arising under the Note and all renewals, extensions, restructurings and
refinancings thereof and all other amounts owing under the Provider Agreements,
including, without limitation, any additional indebtedness which may be extended
to the Provider pursuant to any restructuring or refinancing of the Provider’s
indebtedness thereunder, and including any post-petition interest accruing
during any bankruptcy, reorganization or other similar proceeding (collectively,
the “Obligations”).
(c) It
is the
intent of the parties hereto that the pledge of Collateral and any action
taken
with respect thereto pursuant to this Agreement shall be in a form and manner
sufficient to create a first priority perfected security interest therein
for
the benefit of PHCC. If, at any time, PHCC’s counsel determines that the
procedures necessary to create or perfect such security interest should be
modified to enable PHCC’s counsel to deliver an opinion that PHCC’s security
interest in the Collateral is a first priority perfected security interest,
such
procedures shall be modified to enable such opinion to be
delivered.
(d) The
Provider hereby authorizes PHCC to file financing statements, continuation
statements, and amendments thereto, naming the Provider as debtor and
describing, as collateral therein, all Collateral pledged by the Provider
pursuant to this Agreement, including specific lists, sublists and types
of
collateral, and which contain any other information required or permitted
by the
Uniform Commercial Code, as in effect from time to time in any relevant
jurisdiction.
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Section
6. Representations
and Warranties of the Provider.
The
Provider represents and warrants to PHCC that, as of the date hereof, and
shall
be deemed to represent and warrant to PHCC as of each Advance Request, as
follows:
(a) if
a
corporation, limited liability company, or partnership, the Provider has
been
duly organized and is validly existing and in good standing as a corporation,
limited liability company or partnership, as the case may be, under the laws
of
the jurisdiction of its organization and is duly qualified to conduct business
in each State in which it conducts business;
(b) the
Provider has full power and authority to own or lease its properties and
to
conduct its business as presently conducted and to execute, deliver and perform
the Provider Agreements to which it is a party and to consummate the
transactions contemplated hereby and thereby;
(c) the
execution, delivery and performance by the Provider of the Provider Agreements
and all other instruments and documents to be delivered hereunder and the
consummation of the transactions contemplated hereby are within the Provider’s
powers, have been duly and validly authorized by all requisite action and
will
not conflict with or result in a breach of any of the terms or provisions
of, or
constitute a default under, or result in the creation or imposition of any
lien,
charge or encumbrances upon any of its property or assets pursuant to the
terms
of, any indenture, mortgage, deed or trust, loan agreement or other agreement
or
instrument by which it is bound or to which any of its property or assets
is
subject (except the Provider Agreements) nor will such action result in any
violation of the provisions of its organizational documents (including its
articles of incorporation and bylaws, operating agreement or partnership
agreement, as the case may be) or of any statute or any order, rule or
regulation of any court or governmental agency or body of the
United States, any state or any political subdivision of either having
jurisdiction over it or any of its properties or assets, and no consent,
approval, authorization, order, registration, filing, qualification, license
or
permit of or with any such court or any such regulatory authority or other
such
governmental agency or body is required to be obtained by or with respect
to the
Provider in connection with the execution, delivery and performance by the
Provider of the Provider Agreements, all other instruments and documents
to be
delivered thereunder and the consummation of the transactions contemplated
thereby, and no transaction contemplated thereby requires compliance with
any
bulk sales act or similar law;
(d) no
authorization or approval or other action by, and no notice to or filing
with,
any governmental authority or regulatory body or other Person is required
for
the due execution, delivery and performance by the Provider of the Provider
Agreements except for the filing of financing statements under the UCC or
the
Uniform Commercial Code in effect in any relevant jurisdiction and the giving
of
notices referred to in Section 2(h)(A), all of which, at the time required
in Section 2(h)(A) shall have been duly made and shall be in full force and
effect;
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(e) each
of
the Provider Agreements has been duly and validly authorized, executed and
delivered by the Provider and constitutes a valid and legally binding obligation
of the Provider, enforceable against the Provider in accordance with its
terms,
subject to applicable bankruptcy, reorganization, insolvency, moratorium
or
other similar laws affecting the enforcement of creditors’ rights generally and
subject as to enforceability to general principles of equity (regardless
of
whether enforcement is sought in a proceeding in equity or at law);
(f) there
are
no actions, suits, proceedings or investigations pending or, to the knowledge
of
the Provider, threatened, before any court, administrative agency, arbitrator,
governmental body or other tribunal, (i) which, if determined adversely to
the Provider, could have a material adverse effect on the business, operations,
properties, assets or financial condition of the Provider, (ii) asserting
the invalidity of any of the Provider Agreements, (iii) questioning the
consummation by the Provider of any of the transactions contemplated by any
of
the Provider Agreements or (iv) which, if determined adversely, could
materially and adversely affect the ability of the Provider to perform its
obligations under, or the validity or enforceability of any of the Provider
Agreements, Contracts or the Healthcare Receivables;
(g) the
Provider has all necessary permits, licenses, agreements, accreditation,
certifications and Governmental Consents to operate and conduct its business,
including the provision of all services reflected in and giving rise to each
Healthcare Receivable, as it is presently being conducted, subject to minor
exceptions and deficiencies which are not material and do not affect the
conduct
of its business and its ability to own, collect and grant a security interest
in
the Collateral;
(h) Exhibit
C
lists (i) the Provider’s exact legal name, (ii) the Provider’s address for
notices, (iii) the address of the chief executive office of the Provider,
(iv)
the Provider’s State of organization, (v) the location of the office where the
Provider keeps all of the tangible Collateral and Records related thereto
and to
all of the intangible Collateral and (vi) the location, account number and
account officer responsible for the Provider’s demand account;
(i) Except
as
occurs within the normal course of business, each Contract of the Provider
is in
full force and effect and has not been amended or otherwise modified, rescinded
or revoked or assigned, the Provider is in compliance with the material
requirements of the Contracts and no condition exists or event has occurred
which, in itself or with the giving of notice or lapse of time or both, would
result in the suspension, revocation, impairment, forfeiture or nonrenewal
of
any Governmental Consent applicable to the Provider or any other health care
facility owned or operated by the Provider or such facility’s participation in
the Governmental Programs and there is no claim that any such Contract or
Governmental Consent is not in full force and effect;
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(j) there
has
been filed in proper form, or a filing extension from the appropriate
governmental authority has been obtained with respect to, all federal, state,
and local income, franchise, sales, use, property, excise, payroll and other
tax
returns and all other reports (whether or not relating to taxes) required
by law
to be filed by or on behalf of the Provider with any governmental authority.
All
taxes, fees, assessments and charges of whatsoever nature due or payable
by the
Provider on or before the date hereof pursuant to said returns or reports
or
otherwise (including, without limitation, payments of estimated taxes and
deposits of taxes withheld by or on behalf of the Provider) have been paid.
There is no unpaid interest, penalty or addition to tax due or claimed to
be due
from, nor any unpaid tax deficiency determination or assessment outstanding
against the Provider, nor any basis therefore known to the Provider. No
governmental audits or investigations with respect to taxes are, to the
Provider’s knowledge, in progress with respect to the Provider, and no
governmental authority has given notice that it will begin any such audit
or
investigation. All returns and reports required to be filed, and all taxes,
fees, assessments and charges required to be paid, of whatsoever nature,
have
been so filed and paid. The Provider has complied in all material respects
with
all applicable laws relating to the employment of labor, including, without
limitation, ERISA and those relating to wages, hours, collective bargaining,
unemployment insurance, workers’ compensation, equal employment opportunity and
the payment and withholding of taxes, including income and social security
taxes, and has withheld (and duly segregated, deposited or paid over to the
appropriate authorities) all amounts required by law or agreement to be withheld
from the wages or salaries of its employees and is not liable for any arrears
of
wages or benefits or any taxes or penalties for the Provider’s failure to comply
with any of the foregoing;
(k) the
Medicare and Medicaid cost reports of each facility and of the home office
of
the Provider for all cost reporting periods ending on or before the date
hereof
have been filed with the appropriate governmental entity, if due, there are
no
pending or threatened Notice of Program Reimbursements outstanding, and
all
prior years’ cost reports have been examined and audited by (i) as to Medicaid,
the applicable state agency or other CMS-designated agents or agents of such
state agency charged with such responsibility or (ii) as to Medicare, the
Medicare intermediary or other CMS-designated agents charged with such
responsibility, and have been settled and there are no offsets pending,
threatened or now owed by the Provider;
(l) the
Provider has valid provider identification numbers and licenses to generate
valid Healthcare Receivables payable by Eligible Obligors;
(m) the
information furnished by or on behalf of the Provider to PHCC and to agents
and
employees of PHCC prior to the date of this Agreement and during the term
of
this Agreement or in connection with any transaction contemplated by the
Provider Agreements is and will be true and correct in all material respects
and
does not and will not omit to state a material fact necessary to make the
statements contained therein not misleading;
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(n) the
Provider is solvent and will not become insolvent after giving effect to
the
transactions contemplated by the Provider Agreements; the Provider has not
incurred debts or liabilities beyond its ability to pay; the Provider will,
after giving effect to the transactions contemplated by the Provider Agreements,
have an adequate amount of capital to conduct its business in the foreseeable
future; and the pledge of the Collateral hereunder is made in good faith
and
without intent to hinder, delay or defraud present or future creditors of
the
Provider;
(o) the
Lockbox Account established by the Provider is the only lockbox account into
which the Healthcare Receivables are or will be deposited;
(p) the
exact
legal name of the Provider is as set forth in Exhibit C to this Agreement.
Except as set forth in Exhibit C to this Agreement, the Provider has not
changed
its name in the last six years and, during such period, the Provider did
not use, and the Provider does not now use, any trade names, fictitious names,
assumed names or “doing business as” names;
(q) each
pension plan or profit sharing plan to which the Provider is a party has
been
fully funded in accordance with the obligations of the Provider set forth
in
such plan;
(r) the
Healthcare Receivables have been, and will continue to be, adjusted to reflect
reimbursement policies of the Obligors with respect thereto and the amount
thereof will not exceed amounts the Provider is entitled to receive under
any
capitation arrangement, fee schedule, discount formula, cost-based reimbursement
or other adjustment or limitation to the usual charges of the
Provider;
(s) Except
within the normal course of business, the Provider is not a party to any
unresolved disputes with any Obligor on a Healthcare Receivable, without
regard
to whether the dispute with an Obligor involves a Healthcare Receivable of
the
Provider which is pledged to PHCC under this Agreement, except as disclosed
in
writing to PHCC;
(t) there
are
no pending civil or criminal investigations involving the Provider or its
officers and directors and neither the Provider nor any of its officers or
directors has been involved in, or the subject of, any civil or criminal
investigation within the past five years;
(u) the
Provider has executed and delivered to each Obligor a notice showing the
Lockbox
and Lockbox Account as the only address to which Healthcare Receivable payments
and information are to be remitted and has provided a copy of each such notice
to PHCC;
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(v) other
than, with respect to Governmental Receivables, pursuant to the terms of
the CMS
in the rules and regulations governing the prospective payment system for
healthcare providers or similar governmental programs or regulations, neither
the federal government nor any other Person has asserted any claim or right
to
offset any liability or debt against any Governmental Receivable. Other than,
with respect to Governmental Receivables, pursuant to the terms of the CMS
in
the rules and regulations governing the prospective payment system for
healthcare providers or similar governmental programs or regulations, the
Provider has no overdue or delinquent liabilities or debt which could give
rise
to a right of the federal government, any state government or any other Person
to offset such liabilities or debt against Governmental
Receivables;
(w) the
Provider has heretofore delivered to PHCC true and complete copies of the
financial statements each of which fairly presents the financial position
of the
Provider as of the date thereof and the results of operations and changes
in
financial condition of the Provider for the period then ended and has been
prepared in accordance with generally accepted accounting principles
consistently applied. The
books
of account and records of the Provider are true and complete in all material
respects and fairly reflect all the material properties, assets, liabilities
and
transactions of the Provider in accordance with generally accepted accounting
principles consistently applied. All fees, charges, costs and expenses of
any
nature whatsoever associated with the ownership, operation and management
of the
business and the assets have been in all material respects fully and properly
charged and reflected in the books and records of the Provider and in the
Provider’s financial statements, and such books and records and financial
statements do not, because of the provision of services or the bearing of
costs
and expenses by any other person or for any other reason, understate in any
material respect the true costs and expenses of conducting the Provider’s
business; and
(x) all
documents which have been or shall be delivered to PHCC or filed with any
governmental authority by or on behalf of the Provider pursuant to this
Agreement or any other Provider Agreement or in connection with the transactions
contemplated hereby are, or when so delivered or filed shall be, correct
and
complete in all material respects and, if applicable, in full force and
effect.
Section
7. Representations
and Warranties Concerning Healthcare Receivables Pledged to
PHCC.
The
Provider represents and warrants to PHCC, as of the date hereof, and shall
be
deemed to represent and warrant to PHCC as of each Advance Request, as follows
with respect to each Healthcare Receivable pledged to PHCC
hereunder:
(a) the
Net
Value of such Healthcare Receivable is payable in full by an Eligible
Obligor;
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(b) the
Provider has submitted all necessary documentation and supplied all necessary
information for payment of such Healthcare Receivable to the Obligor thereof
(including, but not limited to, the COMN with respect to a DME Receivable)
and
has fulfilled all of its other obligations in respect thereof, including
verification of the eligibility of the Healthcare Receivable for payment
by such
Obligor;
(c) the
Net
Value of such Healthcare Receivable is net of contractual allowances or other
modifications;
(d) such
Healthcare Receivable has not been paid in whole or in part;
(e) neither
such Healthcare Receivable nor any related Contract has been compromised,
adjusted, extended, satisfied, subordinated, rescinded, set off or modified
by
the Provider and is not subject to compromise, adjustment, extension,
satisfaction, subordination, rescission, setoff, counterclaim, defense or
modification, whether arising out of transactions concerning the Contract
or
otherwise;
(f) true
and
correct copies of all claims, agreements and other documents relating to
the
creation of such Healthcare Receivable have been delivered to PHCC or the
Servicer;
(g) such
Healthcare Receivable is owned by the Provider free and clear of any claim
of
ownership of any other Person and is not subject to any sale, lien, security
interest, financing statement or other charge or encumbrance or other type
of
preferential arrangement having the effect of a lien or security interest,
in
favor of any Person other than as contemplated by this Agreement;
(h) no
action, other than the execution and delivery of this Agreement, the filing
of
financing statements in the state where the Provider is “located” pursuant to
the Uniform Commercial Code of the relevant jurisdiction, as amended from
time
to time, is required to perfect the interest of PHCC, as a secured party
of and
to such Healthcare Receivable, and all such actions have been or will be
accomplished no later than the date of execution of this Agreement;
(i) such
Healthcare Receivable complies with all material laws and regulations applicable
thereto;
(j) such
Healthcare Receivable is in full force and effect and represents and constitutes
a legal, valid and binding obligation of the related Obligor enforceable
against
such Obligor in accordance with its terms and constitutes an “Account” under the
Uniform Commercial Code in effect in any jurisdiction deemed to govern the
creation, perfection, and effect of perfection or non-perfection of a security
interest therein, as amended from time to time;
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(k) such
Healthcare Receivable does not constitute or has not constituted an obligation
of any subsidiary, parent or other Person which is an affiliate of the
Provider;
(l) such
Healthcare Receivable (i) is payable, in an amount equal to not less than
its
Net Value, by the Eligible Obligor identified by the Provider as being obligated
to do so, and is recognized as such by the applicable Eligible Obligor (except
to the extent limited for Governmental Receivables pursuant to the terms
of the
CMS in the rules and regulations governing the prospective payment system
for
healthcare providers or similar governmental programs or regulations), (ii)
is
based on an actual and bona fide rendition of services to, or the furnishing
of
goods or medical equipment provided to, a patient by the Provider in the
ordinary course of its business, (iii) is denominated and payable only in
lawful
currency of the United States and (iv) is an account and is not evidenced
by
“negotiable documents,” “instruments” or “tangible chattel paper” within the
meaning of the Uniform Commercial Code of any relevant
jurisdiction;
(m) other
than, with respect to Governmental Receivables, pursuant to the terms of
the CMS
in the rules and regulations governing the prospective payment system for
healthcare providers or similar governmental programs or regulations, such
Healthcare Receivable (i) is not subject to any setoff, counterclaim, defense,
abatement, suspension, deferment, deductible, reduction or termination by
its
Obligor and (ii) is not past, or less than 150 days prior to, the statutory
limit for collection applicable to its Obligor;
(n) the
goods
and services provided and reflected in such Healthcare Receivable, or the
medical equipment provided, were medically necessary, and the patient has
received such goods, services or medical equipment;
(o) the
fees
charged for the services or goods constituting the basis for such Healthcare
Receivable were the usual, customary and reasonable fees charged by other
medical service providers in the Provider’s community for the same or similar
services or goods or, if the fees for services or goods were subject to
limitations imposed by contracts for reimbursement from the related Obligor,
such fees did not exceed the limitations so imposed, and such Healthcare
Receivable for which the fees are so restricted has been clearly identified
to
PHCC as being subject to such restriction;
(p) the
Provider has identified and provided to the Servicer all Records, including
all
documents, contracts and other information necessary to identify each Obligor
liable on such Healthcare Receivable, whether primarily, secondarily or
otherwise, and the only Obligor(s) liable on such Healthcare Receivable is
(are)
the Obligor(s) identified in the applicable Records;
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(q) other
than as may be limited with respect to Governmental Receivables pursuant
to the
CMS in the rules and regulations governing the prospective payment system
for
healthcare providers or similar governmental programs or regulations, the
Provider has the right to pledge such Healthcare Receivable pursuant to this
Agreement, no consent from the related Obligor or any other Person is required
to effect the pledge of such Healthcare Receivable to PHCC and this Agreement,
and such pledge of such Healthcare Receivable will constitute a valid security
interest in such Healthcare Receivable in favor of PHCC enforceable against
the
Provider and all creditors of and purchasers from the Provider;
(r) other
than, for Governmental Receivables, pursuant to the CMS in the rules and
regulations governing the prospective payment system for healthcare providers
or
similar governmental programs or regulations, the Provider has made all payments
to any Obligor necessary to prevent the Obligor from offsetting an earlier
overpayment to the Provider against any amount the Obligor owes on such
Healthcare Receivable;
(s) there
are
no procedures or investigations pending or threatened before any Governmental
authority (i) asserting the invalidity of such Healthcare Receivable or any
Contract related thereto, (ii) relating to the bankruptcy or insolvency of
the
related Obligor, (iii) seeking the payment of such Healthcare Receivable
or
payment and performance of such Contract or (iv) seeking any determination
or
ruling that might materially and adversely affect the validity or enforceability
of such Healthcare Receivable or any Contract related thereto;
(t) neither
such Healthcare Receivable nor Contract related thereto contravenes in any
material respect any federal, state or local laws, rules or regulations
applicable thereto (including, without limitation, the rules and regulations
of
CMS and laws, rules and regulations relating to usury, consumer protection,
truth in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy), and no party to
such
related Contract is in violation of any such law, rule or regulation in any
material respect;
(u) the
insurance policy or Contract obligating an Obligor to make payment (i) does
not
prohibit the transfer of the right to receive payment from the patient to
the
Provider and (ii) was in full force and effect and applicable to the patient
at
the time the services constituting the basis for such Healthcare Receivable
were
performed; and
(v) such
Healthcare Receivable complies with such additional criteria and requirements
as
PHCC may from time to time specify to Provider other than as such criteria
and
requirements may be limited with respect to Governmental Receivables pursuant
to
the CMS in the rules and regulations governing the prospective payment system
for healthcare providers or similar governmental programs or
regulations.
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Section
8. Covenants
of the Provider.
The
Provider hereby agrees with and covenants to PHCC and its successors and
assigns
that during the term of this Agreement:
(a) if
the
Provider is a corporation, limited liability company or partnership, the
Provider shall preserve and maintain its existence in good standing under
the
laws of the state of its organization and qualify and remain qualified in
good
standing as a foreign entity in each jurisdiction where the failure to preserve
and maintain such existence, rights, franchises, privileges and qualification
would materially adversely affect the interests of PHCC hereunder or in the
Collateral, or the ability of PHCC or the Servicer to perform its respective
obligations hereunder;
(b) the
Provider shall do nothing to impair PHCC’s right in any Collateral or impede or
interfere with the collection by PHCC or any of its agents of any Healthcare
Receivable, or compromise, adjust, extend, satisfy, subordinate, rescind,
set
off or modify or otherwise permit or agree to any deviation from the terms
or
conditions of any Healthcare Receivable;
(c) the
Provider shall comply, in all material respects, with its obligations under
the
Contracts relating to Healthcare Receivables, and with all material laws,
acts,
rules, regulations, orders, decrees and directions of any federal, state
or
local governmental authority (including, without limitation, the Social Security
Act and the rules and regulations promulgated thereunder and the applicable
State and federal Medicaid laws and rules and regulations promulgated thereunder
and in accordance therewith) applicable to the Healthcare Receivables or
any
part thereof or any related Contracts and with respect to the Provider and
its
business and properties; provided, however, that the Provider may contest
any
act, law, rule, regulation, order, decree or direction in any reasonable
manner
which shall not, in the judgment of PHCC, materially and adversely affect
the
rights of PHCC in the Collateral;
(d) the
Provider shall not create, permit or suffer to exist, and shall defend PHCC’s
rights to and interest in the Collateral against, and take such other actions
as
are necessary to remove, any lien, claim or right in, to or on the Collateral,
not contemplated or permitted hereunder, and shall defend the right, title
and
interest of PHCC in and to the Collateral against the claims and demands
of all
Persons whomsoever;
(e) the
Provider shall keep its books and accounts in accordance with generally accepted
accounting principles and shall make a notation on its computer files and
other
physical books and records to indicate which of its Healthcare Receivables
have
been pledged to PHCC.
-25-
The
Provider also shall maintain and implement administrative and operating
procedures (including, without limitation, an ability to recreate Records
evidencing the Collateral in the event of the destruction of the originals
thereof), and keep and maintain all documents, books, records and other
information reasonably necessary or advisable for collecting all Healthcare
Receivables (including, without limitation, Records adequate to permit the
daily
identification of each Healthcare Receivable and all Collections of and
adjustments to each existing Healthcare Receivable) and for providing the
Healthcare Receivables files;
(f) the
Provider shall advise PHCC immediately (and in no event later than three
(3)
Business Days following actual knowledge thereof), in reasonable detail,
(i) of any lien asserted or claim made against any of the Collateral
pledged to PHCC and (ii) of the occurrence of any other event which is a
Material Adverse Event or reasonably could result in a Material Adverse
Change;
(g) PHCC
and
its representatives shall at all times have full and free access during normal
business hours to all the books, correspondence and records of the Provider
and
PHCC and its representatives may examine the same, take extracts therefrom
and
make photocopies thereof, and the Provider agrees to render to PHCC or its
representatives, at the Provider’s cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto; provided,
however, that PHCC acknowledges that, in exercising the rights and privileges
conferred in this Section 9, it or its representatives may, from time to
time, obtain knowledge of information, practices, books, correspondence and
records of a confidential nature and in which the Provider has a proprietary
interest. PHCC agrees (and shall obtain a similar agreement from each of
its
representatives) that all such information, practices, books, correspondence
and
records are to be regarded as confidential information and that such information
may be subject to laws, rules and regulations regarding patient confidentiality
and agrees that (i) it shall retain in strict confidence and shall use its
best
efforts to ensure that its representatives retain in strict confidence and
will
not disclose without the prior written consent of the Provider any or all
of
such information, practices, books, correspondence and records furnished
to them
and (ii) that it will not, and will use its best efforts to ensure that its
representatives will not, make any use whatsoever (other than for the purposes
contemplated by this Agreement) of any of such information, practices, books,
correspondence and records without the prior written consent of the Provider,
unless such information is generally available to the public or is required
by
law to be disclosed. The Provider shall, from time to time during regular
business hours, permit PHCC, or its agents or representatives, upon PHCC's
request, to discuss matters relating to the Collateral or the Provider’s
performance hereunder with any of the officers or employees of the Provider
having knowledge of such matters. Unless an Event of Default under this
Agreement has occurred , PHCC will provide three (3) days advance notice
to
Provider prior to exercising its right of access as set forth in this
paragraph.
-26-
(h) the
Provider shall from time to time, at the Provider's expense, promptly execute
and deliver all further instruments and documents, and take all further action
that PHCC may reasonably request in order to perfect, protect or more fully
evidence the pledge of the Collateral. Without limiting the generality of
the
foregoing, the Provider shall, at the Provider's expense, and upon the written
request of PHCC, execute and file such financing or continuation statements,
or
amendments thereto or assignments thereof, and such other instruments or
notices, as may be, in the reasonable opinion of PHCC, necessary or appropriate.
The Provider hereby authorizes PHCC, without notice to the Provider, and
at the
Provider’s expense, to file one or more financing or continuation statements,
and amendments thereto and assignments thereof, relative to all or any of
the
Collateral pledged to PHCC now existing or hereafter arising without the
signature of the Provider where permitted by law;
(i) the
Provider shall not: (i) without providing ten (10) days’ prior written notice to
PHCC and without filing such amendments to any previously filed financing
statements as PHCC may require, change the location of its chief executive
office or the location of the offices where the records relating to the
Healthcare Receivables are kept or (ii) without providing thirty (30) days’
prior written notice to PHCC and without filing such amendments to any
previously filed financing statements as PHCC may require, change its name,
identity or corporate structure in any manner which would, could or might
make
any financing statement or continuation statement filed by the Provider in
accordance with this Agreement seriously misleading within the meaning of
Section 9-506 of the UCC, as amended from time to time;
(j) except
as
otherwise mandated with respect to Governmental Receivables pursuant to the
terms of the CMS in the rules and regulations governing the prospective payment
system for healthcare providers or similar governmental programs or regulations,
the Provider shall make all payments to an Obligor necessary to prevent such
Obligor from offsetting an earlier overpayment to the Provider against any
amount which such Obligor owes with respect to a Healthcare Receivable, and
the
Provider shall immediately notify PHCC in the event of any action, proceeding,
dispute, offset, deduction, defense or counterclaim that is or may be asserted
by an Obligor relating to a Healthcare Receivable, and the Provider shall
take
such action as is reasonably requested by PHCC to defend against such action,
proceeding, dispute, offset, deduction, defense or counterclaim, and shall
do so
within the time period prescribed by applicable law or under an applicable
contract, or if a time period is not prescribed by law or under a Contract,
within a reasonable time, and if in PHCC’s judgment, the Provider is not or may
not initiate such defense in a timely manner, the Provider hereby appoints
PHCC
as its attorney-in-fact to initiate and proceed with such defense on the
Provider’s behalf, subject to, and to the extent permitted by, applicable law.
-27-
(k) the
Provider and its agents and representatives hereby irrevocably constitute
and
designate PHCC as the Provider’s attorney-in-fact, which irrevocable power of
attorney is coupled with an interest: (i) to endorse or sign the Provider’s name
to financing statements, remittances, invoices, assignments, checks (other
than
checks from Governmental Obligors), drafts or other instruments or documents
in
respect of the Healthcare Receivables, (ii) to notify Obligors to send payments
on the Healthcare Receivables directly to the Lockbox or Lockbox
Account, and
(iii)
upon an Event of Default under this Agreement, to bring suit in the Provider’s
name and to settle or compromise such Healthcare Receivables (other than
Governmental Receivables) as PHCC may, in its reasonable sole discretion,
deem
appropriate;
(l) the
Provider shall not take any action to cause any Healthcare Receivable to
be
evidenced by a/an “negotiable document,” “instrument” or “tangible chattel
paper” (each as defined in the UCC), except to the extent that (i) causing a
Healthcare Receivable to be evidenced by such negotiable document, instrument
or
tangible chattel paper is required for the collection of such Healthcare
Receivable or for the enforcement of any rights therein and (ii) the original
copy of such negotiable document, instrument or tangible chattel paper has
been
delivered to PHCC for purposes of effecting a first-priority, perfected security
interest therein;
(m) the
Provider shall pay any taxes relating to the pledge and creation of the security
interest in the Collateral in favor of PHCC;
(n) the
Provider shall, at its expense, timely and fully perform and comply with
all
material provisions, covenants and other promises required to be observed
by it
under any Contracts related to the Healthcare Receivables;
(o) the
Provider shall not, without the prior written consent of PHCC:
(i) except
as
otherwise provided herein, sell, assign (by operation of law or otherwise)
or
otherwise dispose of, or create or suffer to exist any adverse claim upon
or
with respect to, any Collateral (including a claim of CMS or any other Person
with respect to a claim or offset against Governmental Receivables or a claim
of
the State Medicaid agency with respect to a claim or offset against Governmental
Receivables), or upon or with respect to the Lockbox or Lockbox Account,
or
assign any right to receive income in respect thereof, or take any action
that
could give rise to, or omit to take any action that could preclude or limit,
a
right of CMS or any other Person to set off any amount against any Governmental
Receivables;
(ii) outside
the ordinary course of business, extend, amend or otherwise modify the terms
of
any Healthcare Receivable, or amend, modify or waive any term or condition
of
any Contract related thereto;
-28-
(iii) make
any
change in the character of its business or in its credit and collection policy
(except for changes required by state or federal statutes, rules or regulations
or for continued participation in third-party payment programs in which event
the Provider shall promptly provide PHCC notice thereof), which change would,
in
either case, (x) impair the timing of collection or ultimate collectibility
of
any Healthcare Receivable or (y) affect the ability of the Servicer to perform
its duties with respect to the Healthcare Receivables;
(iv) withdraw,
attempt to withdraw or cause the withdrawal of any amounts from the Lockbox
or
Lockbox Account or instruct any bank or any other Person to transfer any
amounts
in the Lockbox or Lockbox Account other than as set forth in this
Agreement;
(v) (A)
amend, modify, supplement or delete in any way or to any extent any provision
for uncollectible accounts and free care applicable to any Healthcare Receivable
or (B) amend, modify or supplement in any way or to any extent any financial
class or change in any way or to any extent the manner in which any financial
class is treated or reflected in the Provider’s records (including, but not
limited to, the Healthcare Receivables files);
(p) the
Provider shall not, without first providing written notice to PHCC and the
Servicer:
(i) outside
the ordinary course of business, extend, amend or otherwise modify the terms
of
any Healthcare Receivable or amend, modify or waive any term or condition
of any
Contract related thereto; or
(ii) withdraw,
attempt to withdraw or cause the withdrawal of any amounts from the Lockbox
or
the Lockbox Account or instruct any bank or any other Person to transfer
any
amounts in the Lockbox or the Lockbox Account other than as set forth in
the
Servicing Agreement;
(q) the
Provider agrees to indemnify, hold harmless and forever defend PHCC from
any and
all liability and expenses arising out of the sale of goods, wares, merchandise,
or services evidenced by the Healthcare Receivables, whether asserted by
the
Provider, the Obligor on such Healthcare Receivables or by any other
Person;
(r) in
no
event shall PHCC be obligated to pursue, on the Provider’s behalf, collection of
the Healthcare Receivables through use of litigation or otherwise;
-29-
(s) no
provision hereof shall obligate PHCC in any manner or to any degree, to the
Provider or to any third party whether such third party is with or without
notice of this Agreement, to perform for the Provider in regard to the
underlying Contract which gave rise to any Healthcare Receivable and the
Provider covenants and agrees to indemnify and hold PHCC harmless for any
and
all performance, responsibility or duty owed by the Provider to any Obligor
for
a Healthcare Receivable or any third party; and
(t)
the
Provider covenants and agrees to fully comply, in an acceptable manner, with
the
terms of any and all agreements with Obligors for the Healthcare Receivables
to
the extent such might affect the Healthcare Receivables; and
(u) If
an
Event of Default exists, or such distribution would give rise to an Event
of
Default as relates to any covenant or representation herein, the Provide
shall
not make any distribution of assets to its stockholders as such whether in
cash,
assets or obligations of such Borrower.
(v) the
Provider shall not fund or make distributions of any kind (including, but
not
limited to, advances, loans, payables, dividends, or investment in any form)
to
any non-Borrower Affiliate; provided however, in the normal course of business,
Provider shall be permitted to: (1) repay short terms loans received from
non-Borrower Affiliates and (2) pay existing management fees, in an amount
not
to exceed five percent (5%) of Provider’s annual revenue, to non-Borrower
Affiliates. For purposes hereof, “Affiliate” means, with respect any entity,
business or trade which is under common control or ownership with Borrower,
(where the term “control” means the possession, direct or indirect, of the power
to cause the direction of the management and policies of a person or entity,
whether through the ownership of voting) and includes, but not limited to,
a
parent company, sister company, or subsidiary.
(x) the
Provider agrees that as long as the Obligations hereunder remain outstanding
and
until the Commitment is terminated (unless the PHCC shall otherwise consent
in
writing), the Provider shall not incur, create, assume or permit to exist
any
indebtedness for borrowed money, howsoever evidenced, or its equivalent
(including but not limited to leases required to be capitalized under Generally
Accepted Accounting Principles, in excess of $100,000.00 in the aggregate.
(y)
the
Provider shall furnish to PHCC on or before the forty fifth (45th) day after
the
end of each month, internally prepared consolidating financial statements
in
form and substance satisfactory to PHCC and certified by an appropriate officer
or representative of Borrower, and furnish to PHCC annually on or before
one
hundred twenty (120) days after the end of Borrower's fiscal year, a
consolidating financial statement in form and substance satisfactory to PHCC
and
certified after audit by an independent certified public accountant acceptable
to PHCC, with all such reports to be prepared in accordance with Generally
Accepted Accounting Principles, consistently applied
-30-
Section
9. Default
by the Provider.
(a) Any
of
the following acts, omissions and/or events shall constitute an “Event of
Default” by the Provider, in addition to any further events defined elsewhere as
Events of Default by the Provider:
(i) breach
by
the Provider of its material agreements with any Obligor for a Healthcare
Receivable;
(ii) breach
by
the Provider of any material obligation, covenant, representation or warranty
of
the Provider in any Provider Agreement (including this Agreement) including,
but
not limited to, its obligation to direct payment of the Healthcare Receivables
to the Lockbox or Lockbox Account, to remit funds to PHCC or Servicer, pay
Servicer fees when due, make a payment under this Agreement when due and/or
to
make payments under any Provider Agreement;
(iii) any
of
the Provider Agreements ceases to be in full force and effect (including,
without limitation, the termination or expiration of the Servicing
Agreement);
(iv) any
of
the liens created under the Provider Agreements ceases to constitute a valid
perfected first priority lien in favor of PHCC on the Collateral in accordance
with the terms therefore;
(v) one
or
more judgments or decrees is rendered against the Provider in an amount in
excess of $50,000.00 which is not satisfied, stayed, vacated or discharged
of
record within thirty (30) calendar days of being rendered;
(vi) any
Material Adverse Effect, or Material Adverse Change;
(vii) PHCC
receives any indication or evidence that the Provider may have directly or
indirectly been engaged in any type of activity which, in PHCC’s sole reasonable
judgment, might result in the forfeiture of any property to any governmental
authority.
(viii) the
Provider or any of its respective directors, senior officers, general partners
or managing members, as applicable, is criminally indicted or convicted under
any law that could lead to a forfeiture of any Collateral;
(ix) the
issuance of any process for levy, attachment or garnishment or execution
upon or
prior to any judgment against the Provider or any of its property or assets;
or
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(x) the
insolvency or business failure of the Provider or Provider’s assignment for the
preference of certain creditors of the Collateral or placing the same in
the
custody of any court or the filing by or against the Provider of a petition
for
bankruptcy protection.
(xi) any
default of the Provider in the payment or performance of any other liabilities,
indebtedness or obligations of the Provider, to any other creditor, or any
occurrence which would allow or permit any other liabilities, indebtedness
or
obligations to any other creditor to be accelerated; provided however, this
provision shall not apply unless the aggregate amount of liabilities,
indebtedness or other obligation subject to default or acceleration exceed
$100,000.00.
(xii) Xxxxx
Xxxxxxxx shall cease to be active in the management of the
Provider;
(b) Upon
the
occurrence of an Event of Default, and at any time thereafter, PHCC may elect
(i) to terminate its obligations to make Advances under any Provider
Agreement, and such obligations shall immediately terminate, (ii) to
declare all outstanding principal and accrued interest under the Loan, together
with all outstanding Reimbursable Expenses, Fees, commissions and other expenses
under the Provider Agreements, immediately due and payable, and/or (iii) to
foreclose on the security interest granted by the Provider in Section 5 of
this Agreement to secure amounts due and owing from the Provider, and in
all
events, the Provider hereby expressly waives notice, demand and presentment
with
regard thereto.
Upon
the
occurrence of an Event of Default specified in Section 9(a)(xi) hereof, all
of
the Obligations shall become automatically due and payable without declaration,
notice or demand by PHCC to or upon the Provider and the Provider’s right to
request Advances shall automatically terminate as if terminated by PHCC pursuant
to Section 9(b) hereof and with the effects of such a termination by PHCC;
provided, however, that, if PHCC shall continue to make Advances or otherwise
extend credit to the Provider pursuant to this Agreement after an automatic
termination of the Provider’s right to request Advances by reason of the
occurrence of an Event of Default specified in Section 9(a)(xi) hereof, the
Provider acknowledges and agrees that such Advances and other credit shall
nevertheless be governed by this Agreement and enforceable against and
recoverable from the Provider as if such Event of Default had never
occurred.
(c) Upon
the
occurrence of an Event of Default and action by PHCC (or automatic acceleration
in the case of an occurrence of an Event of Default specified in Section
9(a)(xi) hereof) pursuant to Section 10(b), PHCC shall have and may exercise
all
rights provided by the Uniform Commercial Code in any relevant jurisdiction,
as
amended from time to time, or by any other law of the state where the Provider
is “located” as defined by the Uniform Commercial Code of the relevant
jurisdiction, as amended from time to time, to the maximum extent provided
thereby.
-32-
PHCC
shall be entitled to avail itself of any such rights and remedies as may
now or
hereafter exist at law or in equity for the enforcement of the covenants
herein
and the foreclosure of the security interest created hereby and to resort
to any
remedy provided hereunder or provided by the Uniform Commercial Code of any
relevant jurisdiction, or by any other law of any relevant State, shall not
prevent the concurrent or subsequent employment of any other appropriate
remedy
or remedies.
(d) PHCC
may
remedy any default, without waiving same, or may waive any default without
waiving any prior or subsequent default.
(e) The
security interest herein granted shall not be affected by nor affect any
other
security taken for the indebtedness hereby secured, or any part thereof;
and any
extensions may be made of PHCC’s rights and such security interest and any
releases may be executed or herein conveyed without affecting the priority
of
such security interest or the validity thereof with reference to any third
Person, and the holder of said rights shall not be limited by any election
of
remedies if he chooses to foreclose this security interest by suit.
(f) Any
requirement of reasonable notice to the Provider of the time and place of
any
sale of the Collateral, or any other intended disposition thereof to be made,
shall be met if such notice is mailed, postage prepaid, to the Provider at
the
last known business address of the Provider, as required by law.
(g) The
Provider hereby expressly acknowledges that, the Provider’s breach of any of the
other covenants, obligations, representations or warranties contained in
any
Provider Agreement or any Contract would cause irreparable injury and damage
to
PHCC in a manner that could not be adequately compensated by monetary damages
alone. The parties specifically agree that the breach or threatened breach
by
the Provider of any Provider Agreement or any Contract could cause PHCC to
suffer irreparable injury if injunctive relief is not granted and, therefore,
PHCC shall have the right, at its election and in addition to any and all
other
remedies available to it, upon any such breach or threatened breach, to seek
immediate injunctive relief from a court of competent jurisdiction, requesting
such orders and restraining the Provider from all actions which such court
deems
necessary to adequately protect PHCC from further damage or injury. In any
instance of a breach or threatened breach for which injunctive relief is
deemed
necessary by PHCC, the Provider hereby waives demand or notice of default
and
waives the requirements, if any, for posting bond in connection with the
granting of injunctive relief.
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Section
10. Indemnity;
Payment of Expenses. In
the
event (a) any of the Provider’s warranties or representations shall prove to be
false or misleading; (b) any Obligor in judicial proceedings shall assert
against PHCC or any of its officers, employees, directors, managers or agents
a
claim or defense arising out of any transaction between the Obligor and the
Provider; or (c) the Provider or any other person or entity shall assert
against
PHCC or any of its officers, employees, directors, managers or agents a claim
or
defense arising out of or relating to any of the Collateral, the Loan or
any of
the documents executed in connection with the Loan, the Provider agrees to
indemnify and hold PHCC harmless from and against any liability, judgment,
cost,
attorneys’ fees or other expense whatsoever arising therefrom.
The
Provider agrees, on demand, to (a) pay or reimburse PHCC for all Reimbursable
Expenses and (b) pay, indemnify, and hold PHCC harmless from and against
any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (except with respect to taxes and other amounts governed by Section
2(e) above), with respect to the execution, delivery, enforcement, performance
and administration of this Agreement, the Note and the other Provider Agreements
(all the foregoing, collectively, the “indemnified
liabilities”),
provided that the Provider has no obligation hereunder to PHCC with respect
to
indemnified liabilities arising from the gross negligence or willful misconduct
of PHCC.
Section
11. Term
and Termination.
Unless
earlier terminated pursuant to the terms hereof, this Agreement shall continue
in full force and effect until the Scheduled Maturity Date. Any party to
this
Agreement may, after the expiration of 180 days from the date of this Agreement,
terminate this Agreement upon giving to the other at least thirty (30) days’
prior written notice of termination by registered or certified mail given
as
provided in Section 13(h);
provided,
however, that as a condition precedent to Provider’s termination of this
Agreement prior to the expiration of the Term pursuant to the foregoing,
Provider shall have paid to PHCC a Prepayment Fee in the following amount:
(1)
if the effective date of such termination occurs prior to the first anniversary
of the effective date of this Agreement, two percent (2.0%) of the Maximum
Aggregate Loan Amount in effect on the effective date of the termination;
and
(2) if the effective date of such termination occurs after the first anniversary
of the effective date of this Agreement but prior to the Scheduled Maturity
Date, one percent 1.0% of the Maximum Aggregate Loan Amount in effect on
the
effective date of the termination. .PHCC shall have the right to terminate
this
Agreement, by written notice to the Provider, at any time during which an
Event
of Default hereunder has occurred and is continuing. Termination, however,
shall
not relieve or discharge the Provider of its duties, obligations or covenants
hereunder until all of the Provider’s obligations to PHCC have been satisfied or
paid in full, and all of the terms, provisions and conditions of this Agreement
and the Provider Agreements shall remain in effect. If, after receipt of
any
payment of all or any part of the Provider’s obligations hereunder, PHCC is for
any reason compelled to surrender such payment to any Person because such
payment is determined to be void or voidable as a preference, impermissible
setoff or a diversion of trust funds, or for any other reason, this Agreement
shall continue in full force and the Provider shall be liable to PHCC for,
and
shall indemnify and hold PHCC harmless for, the amount of such payment
surrendered.
-34-
The
provisions of this Section 11 shall be and remain effective notwithstanding
any
contrary action which may have been taken by PHCC in reliance upon such payment,
and any such contrary action so taken shall be without prejudice to PHCC’s
rights under this Agreement and shall be deemed to have been conditioned
upon
such payment having become final and irrevocable. The provisions of this
Section
11 shall survive the termination of the Agreement.
Section
12. Miscellaneous.
(a) THE
NOTE,
THIS AGREEMENT AND ALL OF THE OTHER LOAN DOCUMENTS, AND ALL RIGHTS AND
OBLIGATIONS HEREUNDER AND THEREUNDER, INCLUDING MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH
THE INTERNAL LAWS OF THE STATE OF GEORGIA, EXCEPT THAT ANY CONFLICT OF LAWS
RULE
OF SUCH JURISDICTION THAT WOULD REQUIRE REFERENCE TO THE LAWS OF SOME OTHER
JURISDICTION SHALL BE DISREGARDED. ANY SUITS, CLAIMS OR CAUSES OF ACTION
ARISING
DIRECTLY OR INDIRECTLY FROM THIS AGREEMENT, THE NOTE, THE OTHER LOAN DOCUMENTS
OR ANY OTHER AGREEMENTS OR INSTRUMENTS BETWEEN PHCC AND PROVIDER RELATING
TO
SUCH DOCUMENTS (except for the enforcement of an equitable remedy by PHCC
under
the provisions of Section 10(g)) MAY BE BROUGHT IN A COURT OF APPROPRIATE
JURISDICTION IN DEKALB COUNTY, GEORGIA, AND OBJECTIONS TO VENUE AND PERSONAL
JURISDICTION IN SUCH FORUM ARE HEREBY EXPRESSLY WAIVED. THIS AGREEMENT HAS
BEEN
NEGOTIATED AND IS BEING EXECUTED AND DELIVERED IN THE STATE OF GEORGIA, OR
IF
EXECUTED BY PROVIDER ELSEWHERE, SHALL BECOME EFFECTIVE UPON PHCC’S RECEIPT AND
EXECUTION OF THE ORIGINAL OF THIS AGREEMENT IN THE STATE OF GEORGIA; PROVIDED,
HOWEVER, THAT PHCC SHALL HAVE NO OBLIGATION TO GIVE, NOR SHALL PROVIDER BE
ENTITLED TO RECEIVE ANY NOTICE OF SUCH RECEIPT AND EXECUTION FOR THIS AGREEMENT
TO BECOME A BINDING OBLIGATION OF PROVIDER. IT IS INTENDED, AND PROVIDER
AND
PHCC SPECIFICALLY AGREE, THAT THE LAWS OF THE STATE OF GEORGIA GOVERNING
INTEREST SHALL APPLY TO THIS TRANSACTION. PROVIDER HEREBY ACKNOWLEDGES THAT
PROVIDER UNDERSTANDS, ANTICIPATES, AND FORESEES THAT ANY ACTION FOR ENFORCEMENT
OF PAYMENT OF THE LOAN OR THE LOAN DOCUMENTS MAY BE BROUGHT AGAINST IT IN
THE
STATE OF GEORGIA. TO THE EXTENT ALLOWED BY LAW, PROVIDER HEREBY SUBMITS TO
JURISDICTION IN THE STATE OF GEORGIA FOR ANY ACTION OR CAUSE OF ACTION ARISING
OUT OF OR IN CONNECTION WITH THE LOAN OR THE LOAN DOCUMENTS AND WAIVES ANY
AND
ALL RIGHTS UNDER THE LAWS OF ANY STATE OR JURISDICTION TO OBJECT TO JURISDICTION
OR VENUE WITHIN DEKALB COUNTY, GEORGIA;
-35-
NOTWITHSTANDING
THE FOREGOING, NOTHING CONTAINED IN THIS PARAGRAPH SHALL PREVENT PHCC FROM
BRINGING ANY ACTION OR EXERCISING ANY RIGHTS AGAINST PROVIDER, ANY GUARANTOR,
ANY SECURITY FOR THE LOAN, OR ANY OF PROVIDER’S OR ANY GUARANTOR’S PROPERTIES IN
ANY OTHER COUNTY, STATE, OR JURISDICTION. INITIATING SUCH ACTION OR PROCEEDING
OR TAKING ANY SUCH ACTION IN ANY OTHER STATE OR JURISDICTION SHALL IN NO
EVENT
CONSTITUTE A WAIVER BY PHCC OF ANY OF THE FOREGOING.
To
the
extent that any rule of procedure or rule of substantive law or statute of
any
state or regulations of any political subdivision would permit Provider to
assert a legal argument that insufficient contacts with the State of Georgia
exist to apply the law of the State of Georgia or that the law of another
State
should apply, the Provider hereby, to the fullest extent permitted by law,
waives such rights and agrees not to assert such claims. The failure of the
Provider to qualify to do business in the State of Georgia shall not be basis
for the Provider to assert that the law of another state, other than Georgia
should apply to any dispute. Notwithstanding the above provision for the
application of choice-of-law, the parties acknowledge that in regard to the
proper application of the Uniform Commercial Code as amended from time to
time
that the law of the Uniform Commercial Code statutes of another state may
be
applicable to determine the rights of the parties relative to creditors of
the
Provider.
(b) The
Provider shall be liable for attorneys’ fees and other costs incurred by PHCC in
enforcing its rights hereunder and/or in taking any legal action to settle,
collect or defend the Healthcare Receivables or any part thereof or security
interest therein, together with interest on unpaid amounts at the maximum
rate
permitted by law. Attorneys’ fees relating to enforcement and collection by PHCC
for which the Provider shall be responsible to reimburse PHCC shall be equal
to
the lesser of: (1) actual out-of-pocket attorneys’ fees or (2) fifteen percent
(15%) (or the maximum rate permitted by law) of the principal and interest
owed
hereunder at the time of commencement of collection activities. This Agreement,
and the Exhibits and Appendices attached hereto from time to time, set forth
the
complete and entire understanding between the Provider and PHCC as to the
terms
hereof. Such Agreement shall only be modified by a written instrument signed
by
all parties to be bound thereby.
(c) Failure
or delay by PHCC in exercising any right hereunder shall not waive the later
assertion of that right nor waive the Provider’s future
performance.
(d) PHCC
shall at all times have access to the Provider’s financial records to the extent
necessary to protect PHCC’s position hereunder and/or its interest in the
Collateral. The Provider shall furnish all financial data to PHCC, immediately
upon request for such from PHCC, and from time to time; such financial data
to
include, but not be limited to, receipts for all required tax payments, proof
of
payment of all insurance including workers’ compensation payments, proof of
payment of all current payables, Medicare cost reports, Medicare cost report
settlement statements and applicable state compliance information.
-36-
(e) All
rights of PHCC against the Provider, in the event of the nonperformance or
breach by the Provider shall survive the termination of this
Agreement.
(f) This
Agreement shall be binding on and inure to the benefit of the parties hereto
and
their legal representatives, heirs, executors, administrators, successors
and
permitted assigns.
(g) Any
notice to be given hereunder shall be sufficient if in writing and personally
delivered or mailed, postage prepaid, by U.S. registered or certified mail,
return receipt requested, to the parties’ addresses as set forth below. Notice
shall be deemed given two Business Days following dispatch as set forth
above.
(h) The
representations and warranties made by the Provider shall be true on the
date of
execution of this Agreement and the Provider shall reaffirm the truth of
the
representations and warranties on each day thereafter during the term of
this
Agreement. The representations and warranties made by the Provider shall
survive
the termination of this Agreement until the expiration of the statute of
limitations period applicable to the claims that may be asserted against
the
Provider or the assets of the Provider.
(i) In
no
event shall this Agreement be interpreted or enforced to contract for, charge
or
authorize receipt of any interest in excess of the maximum nonusurious rate
of
interest chargeable under applicable law in regard to which no claim or defense
of usury could successfully be asserted. Any amount determined by a court
of
proper jurisdiction as usurious interest shall be deemed a mistake and shall
be
refunded to the payor or credited to authorized amounts owed by such payor
to
PHCC. Provided that nothing hereinabove shall limit any fees or expenses
payable
to PHCC where such do not constitute “interest.”
(j) The
Provider Agreements and the interest of the Provider in the Collateral may
not
be sold, assumed, assigned or encumbered (except as provided in this Agreement)
by the Provider. Upon notice to Provider, this Agreement, the Note and any
and
all of the Loan Documents may be assigned in whole or in part by PHCC without
the consent of the Provider. The Provider understands that, upon notice to
Provider, PHCC may from time to time enter into a participation agreement
or
agreements with one or more participants pursuant to which each such participant
shall be given a participation in the Loan and that any such participant
may
from time to time similarly grant to one or more sub-participants
sub-participations in the Loan. The Provider agrees that, to the extent provided
under the participation agreements, any participant or sub-participant may
exercise any and all rights of banker's lien or set-off with respect to the
Provider, as fully as if such participant or sub-participant had made the
Loan
directly to the Provider in the amount of the participation or sub-participation
given to such participant or sub-participant in the Loan.
-37-
For
the
purposes of this Section 12(k) only, the Provider shall be deemed to be directly
obligated to each participant or sub-participant in the amount of its
participating interest in the amount of the Loan and any other indebtedness
arising under the Loan and the Loan Documents. PHCC may divulge to any
participant or sub-participant all information, reports, financial statements,
certificates and documents obtained by it from the Provider or any other
person
under any provision of this Agreement or otherwise.
-38-
Executed
to be effective this 17th day
of April, 2007.
PRESIDENTIAL
HEALTHCARE CREDIT CORPORATION
By
/s/ Xxxx Xxxxxx
Name
Xxxx Xxxxxx
Title
President
Address: 0000
Xxxxxxxx Xxxxxxx
Xxxxx
000
Xxxxxx,
XX
00000
PROVIDER
PARK
INFUSIONCARE, LP
By:
Xxxxxxxxx’x Operating GP, LLC
Its
General Partner
By:
/s/Xxxxx
X. Xxxx
Name:
Xxxxx X. Xxxx
Title:
Managing
Member, Chairman, President & CEO
Address:
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxx 00000
THE
STATE
OF OKLAHOMA
COUNTY
OF
XXXXX
BEFORE
ME, the undersigned authority, on this day personally appeared Xxxxx
X. Xxxx,
Managing
Member,
Chairman,
President and CEO of Xxxxxxxxx’x Operating GP, LLC,
a Texas
limited liability company, known to me to be the person whose name is subscribed
to the foregoing instrument, and acknowledged to me that he/she signed the
foregoing instrument and acknowledged to me that he/she executed the same
for
the purposes and consideration therein expressed, in the capacities therein
stated and as the act and deed of said limited liability company.
Given
under my hand and seal of office on this 17th
day of April,
2007.
/s/
Notary Public, State of Oklahoma
Notary Public, State of Oklahoma
-39-
PARK
INFUSIONCARE OF DALLAS, LP
BY:
Park
Infusioncare Of Dallas, GP, LLC
Its
General Partner
By:
/s/
Xxxxx X. Xxxx
Name:
Xxxxx X. Xxxx
Title:
Managing
Member, Chairman, President & CEO
Address:
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxx 00000
THE
STATE
OF OKLAHOMA
COUNTY
OF
XXXXX
BEFORE
ME, the undersigned authority, on this day personally appeared Xxxxx
X. Xxxx,
Managing
Member,
Chairman,
President and CEO of Park InfusionCare of Dallas GP, LLC,
a Texas
limited liability company, known to me to be the person whose name is subscribed
to the foregoing instrument, and acknowledged to me that he/she signed the
foregoing instrument and acknowledged to me that he/she executed the same
for
the purposes and consideration therein expressed, in the capacities therein
stated and as the act and deed of said limited liability company.
Given
under my hand and seal of office on this 17th
day of April,
2007.
/s/
Notary Public, State of Oklahoma
Notary Public, State of Oklahoma
-40-
PARK
INFUSIONCARE OF HOUSTON, LP
By:
Park
Infusioncare Of Houston, GP, LLC
Its
General Partner
By:
/s/
Xxxxx X. Xxxx
Name:
Xxxxx X. Xxxx
Title:
Managing
Member, Chairman, President & CEO
Address:
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxx 00000
THE
STATE
OF OKLAHOMA
COUNTY
OF
XXXXX
BEFORE
ME, the undersigned authority, on this day personally appeared Xxxxx
X. Xxxx,
Managing
Member, Chairman, President and CEO of Park InfusionCare of Houston, GP,
LLC,
a Texas
limited liability company, known to me to be the person whose name is subscribed
to the foregoing instrument, and acknowledged to me that he/she signed the
foregoing instrument and acknowledged to me that he/she executed the same
for
the purposes and consideration therein expressed, in the capacities therein
stated and as the act and deed of said limited liability company.
Given
under my hand and seal of office on this 17th
day of April,
2007.
/s/
Notary Public, State of Oklahoma
Notary Public, State of Oklahoma
-41-
PARK
INFUSIONCARE OF SAN ANTONIO LP
By:
Park
Infusioncare Of San Antonio, GP, LLC
Its
General Partner
By:
/s/
Xxxxx X. Xxxx
Name:
Xxxxx X.
Xxxx
Title:
Managing
Member, Chairman, President & CEO
Address:
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxx 00000\
THE
STATE
OF OKLAHOMA
COUNTY
OF
XXXXX
BEFORE
ME, the undersigned authority, on this day personally appeared Xxxxx
X. Xxxx,
Managing
Member, Chairman, President and CEO of Park InfusionCare of San Antonio,
GP,
LLC,
a Texas
limited liability company, known to me to be the person whose name is subscribed
to the foregoing instrument, and acknowledged to me that he/she signed the
foregoing instrument and acknowledged to me that he/she executed the same
for
the purposes and consideration therein expressed, in the capacities therein
stated and as the act and deed of said limited liability company.
Given
under my hand and seal of office on this 17th
day of
April,
2007.
/s/
Notary Public, State of Oklahoma
Notary Public, State of Oklahoma
-42-
APPENDIX
I
DEFINITIONS
Except
as
otherwise specified or as the context of this Agreement may otherwise require,
the following terms have the respective meanings set forth below for all
purposes of this Agreement and the definitions of such terms are applicable
to
the singular as well as the plural forms of such terms and to the masculine
as
well as to the feminine and neuter genders of such terms. Terms which are
defined in the UCC and used in this Agreement without definition shall have
the
meanings assigned thereto in the UCC.
“Accounts”
means all of the Provider’s (or other entities’, as applicable) accounts (as
defined in the UCC).
“Advance”
means
a
borrowing by the Provider pursuant to the Note and subject to the terms of
this
Agreement. Any amounts paid by PHCC on the Provider’s behalf under any Provider
Agreement shall be an Advance for purposes of this Agreement.
“Advance
Day”
means
the day of each week agreed upon by the Provider and PHCC on which Advances
are
to be made or if such day is not a Business Day the next succeeding Business
Day.
“Advance
Request”
means
the form of advance request set forth in Exhibit E.
“Agreement”
has
the
meaning set forth in Section 1 of this Agreement.
“Authorized
Person”
means
each officer, general partner or managing member, as the case may be, of
the
Provider specifically authorized by the Provider to make Advance Requests
on the
Note and whose name is included on a written list of names previously provided
to PHCC by the Provider, which list is certified by the Provider.
“Availability
Amount”
has
the
meaning set forth in Section 2(a)(ii) of this Agreement.
“Availability
Certificate”
means
the form of certificate set forth in Exhibit E.
“Blue
Cross/Blue Shield Contract”
means
any and all agreements between the Provider and any Blue Cross/Blue Shield
plan.
“Business
Day”
means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which
banking institutions in the State of Georgia generally and the City of Tucker,
Georgia, are authorized or obligated by law or executive order to
close.
“Closing
Date”
means
the date upon which all of the conditions precedent to the consummation of
the
transactions contemplated by this Agreement are satisfied or PHCC has given
to
the Provider a written waiver thereof.
-43-
“CMS”
means
the U.S. Center for Medicare and Medicaid Services.
“Collateral”
has
the
meaning set forth in Section 5(a) of this Agreement.
“Collections”
means
the amounts received or deemed received by the Servicer or PHCC with respect
to
a Healthcare Receivable.
“Commitment”
means
the obligation of PHCC to make Advances pursuant to the terms of this Agreement
up to the amount set forth on Exhibit A hereto.
“COMN”
means,
with respect to a DME Receivable, the certificate of medical necessity for
the
medical equipment sold, rented or leased by Provider.
“Contract”
means
an agreement pursuant to or under which an Obligor is obligated to pay for
services rendered or medical equipment or goods sold, leased or rented to
patients of the Provider from time to time.
“Control
Agreement”
has
the
meaning set forth in Section 4(a) of this Agreement.
“Eligible
Obligor”
means
an Insurer or a Governmental Entity.
“Eligible
Receivables”
means
each Healthcare Receivable existing on the Closing Date and arising during
the
term of this Agreement, unless (or to the extent):
(a) such
Healthcare Receivable is not payable by an Eligible Obligor;
(b) the
amount stated on the claim sent to the Obligor is not payable in full by
such
Obligor (in which case only the Net Value of such Healthcare Receivable shall
be
an Eligible Receivable);
(c) such
Healthcare Receivable or any related Contract has been compromised, adjusted,
extended, satisfied, subordinated, rescinded, set off or modified by the
Provider or is subject to compromise, adjustment, extension, satisfaction,
subordination, rescission, setoff, counterclaim, defense or modification,
whether arising out of transactions concerning the Contract or
otherwise;
(d) on
the
date of determining whether such Healthcare Receivable is an Eligible Receivable
the Provider has not delivered to PHCC or the Servicer true and correct copies
of all claims, agreements and other documents relating to the creation of
such
Healthcare Receivable, as required pursuant to this Agreement;
(e) such
Healthcare Receivable is not owned by the Provider free and clear of any
claim
of ownership of any other Person or is subject to any sale, lien, security
interest, financing statement or other charge or encumbrance or other type
of
preferential arrangement having the effect of a lien or security interest,
in
favor of any Person other than as contemplated by this Agreement;
-44-
(f) such
Healthcare Receivable is not subject to a valid, perfected, first-priority
security interest in favor of PHCC;
(g) such
Healthcare Receivable does not comply with all laws and regulations applicable
thereto;
(h) such
Healthcare Receivable does not constitute an “Account” under the Uniform
Commercial Code in effect in any jurisdiction deemed to govern the creation,
perfection, and effect of perfection or non-perfection of a security interest
therein;
(i) such
Healthcare Receivable is evidenced by “negotiable documents,” “instruments” or
“tangible chattel paper” within the meaning of the Uniform Commercial Code in
any jurisdiction deemed to govern the creation, perfection, and effect of
perfection or non-perfection of a security interest therein;
(j) such
Healthcare Receivable does not represent and constitute a legal, valid and
binding obligation of the related Obligor enforceable against such Obligor
in
accordance with its terms;
(k) such
Healthcare Receivable constitutes or has constituted an obligation of any
subsidiary, parent or other Person which is an affiliate of the
Provider;
(l) such
Healthcare Receivable is not based on a prospective (with respect to
Governmental Receivables, solely as contemplated by the CMS in the rules
and
regulations governing the prospective payment system for healthcare providers
or
similar governmental programs or regulations), or an actual and bona fide
rendition of services to, or the furnishing of goods or medical equipment
provided to, a patient by the Provider in the ordinary course of its
business;
(m) such
Healthcare Receivable is not denominated and payable only in lawful currency
of
the United States;
(n) the
goods
and services provided and reflected in such Healthcare Receivable, or the
medical equipment provided, were not medically necessary, or the patient
did not
receive such goods, services or medical equipment;
(o) the
fees
for services or goods constituting the basis for such Healthcare Receivable
are
subject to limitations imposed by contracts for reimbursement from the related
Obligor, and such fees exceed the limitations so imposed (in which case only
such portion of such Healthcare Receivable meeting the requirements of such
limitations, as determined by PHCC, shall be an Eligible
Receivable);
-45-
(p)
there
are procedures or investigations pending or threatened before a Governmental
authority (i) asserting the invalidity of such Healthcare Receivable or any
Contract related thereto, (ii) seeking the repayment of such Healthcare
Receivable or payment and performance of such Contract or (iii) seeking any
determination or ruling that might materially and adversely affect the validity
or enforceability of such Healthcare Receivable or any Contract related
thereto;
(q) such
Healthcare Receivable or Contract related thereto contravenes in any material
respect any federal, state or local laws, rules or regulations applicable
thereto (including, without limitation, the rules and regulations of CMS
and
laws, rules and regulations relating to usury, consumer protection, truth
in
lending, fair credit billing, fair credit reporting, equal credit opportunity,
fair debt collection practices and privacy), or a party to such related Contract
is in violation of any such law, rule or regulation in any material respect;
(r) the
related Obligor for such Healthcare Receivable has commenced a voluntary
case
under any bankruptcy or reorganization law, has made an assignment for the
benefit of creditors, has entered against it a decree or order for relief
in an
involuntary case under any bankruptcy or reorganization law by a court having
jurisdiction in respect of such Obligor, or has failed, suspended business,
ceased to be solvent, called a meeting of its creditors, or has consented
to or
suffered a receiver, trustee, liquidator or custodian to be appoint for it
or
for all or a significant portion of its assets or affairs, or the Provider,
in
the ordinary course of business, should have known of any of the foregoing;
(s) such
Healthcare Receivable fails to comply with such additional criteria and
requirements which may, from time to time, be established by PHCC pursuant
to
this Agreement or is not otherwise satisfactory to PHCC, as determined in
PHCC’s
reasonable sole discretion;
(t) such
Healthcare Receivable has been outstanding and unpaid for more than the lessor
of one hundred-twenty (120) days from the date
of billing or one hundred fifty (150) days from the ending date of service;
(u) such
Healthcare Receivable is otherwise unacceptable to PHCC in its sole reasonable
discretion.
“EOB/ERA”
means
the explanation of benefits that is provided by an Obligor explaining how
it
determined the amount it will or will not pay with respect to a Healthcare
Receivable of which it is the Obligor.
“Event
of Default”
means
any one of the events described in Section 10 of this Agreement.
“Excess”
has
the
meaning set forth in Section 2(c)(iv) of this Agreement.
-46-
“Fees”
means
all fees payable by the Provider pursuant to the Provider Agreements, including
without limitation, the Initial Commitment Fee, the Unused Line Fee, the
Prepayment Fee and the Overadvance Fee.
“Governmental
Agreement”
means
an agreement entered into between a state agency or other Person administering
a
Governmental Program, including the Medicaid program, and the Provider under
which the Provider agrees to provide services or merchandise for patients
participating in that Governmental Program in accordance with the terms of
that
agreement and regulations applicable to that Governmental Program.
“Governmental
Certification”
means
the certification of a facility by CMS or a state agency or entity under
contract with CMS that the facility fully complies with all the conditions
set
forth in Medicaid regulations, Medicare regulations or a combination thereof,
as
applicable to such facility.
“Governmental
Consents”
means
all licenses issued by a state health agency or similar agency or body
certifying that a facility of the Provider has been inspected and found to
comply with applicable law for operating such health facility, any applicable
accreditation certification by the Joint Commission for Accreditation of
Health
Care Organizations that such facility fully complies with the standards set
by
it for operation of such facility, and Governmental Certifications necessary
for
the activities and business of the Provider as currently conducted and proposed
to be conducted, the ownership, use, operation and maintenance of its
properties, facilities and assets and the performance by the Provider of
this
Agreement and the related transactions contemplated by this
Agreement.
“Governmental
Entity”
or
“Governmental
Obligor”
means
the United States, any State, any political subdivision of a State and any
agency or instrumentality of the United States or any State, political
subdivision or fiscal intermediary thereof which is obligated to make any
payments with respect to Medicare or Medicaid Receivables or with respect
to
Healthcare Receivables representing amounts owing under any other program
established by federal or state law which provides for payments for healthcare
services to be made to the Providers of such services (including, without
limitation, CMS and the program set forth in Title 38 U.S.C. Section
1713).
“Governmental
Programs”
means
Medicare or Medicaid.
“Governmental
Receivable”
means
a
Healthcare Receivable that is payable by a Governmental Obligor.
-47-
“Healthcare
Receivables”
means
all accounts receivable billed to Obligors representing amounts due and owing
to
the Provider arising from the prospective (with respect to Governmental
Receivables, solely as contemplated by the CMS in the rules and regulations
governing the prospective payment system for healthcare providers or similar
governmental programs or regulations), or actual (i) sale, rental or lease
of
durable health care goods (including, without limitation, medical equipment),
or
(ii) the provision of medical services (and services and sales ancillary
thereto), including all rights and remedies of the Provider relating thereto,
together with any and all proceeds in any way derived, directly or indirectly,
therefrom; provided, however, that “Healthcare Receivable” shall not include
claims arising under any workers’ compensation statutes.
“Initial
Commitment Fee”
means
the fee set forth in Section 2(d) of this Agreement in consideration for
PHCC’s
Commitment.
“Insurer”
means
any nonindividual Person, other than a Governmental Entity, located in the
United States which, in the ordinary course of its business or activities,
agrees to pay for healthcare goods and services received by individuals,
including, without limitation, a commercial insurance company, a nonprofit
insurance company (such as a Blue Cross/Blue Shield entity), an employer
or
union who self-insures for employee or member health insurance, an HMO and
a
PPO. “Insurer” shall include insurance companies issuing health, personal
injury, workmen’s compensation or other types of insurance.
“Interest”
has
the
meaning set forth in Section 2(c)(iv) of this Agreement.
“Interest
Payment Date”
means
(i) the first Business Day of each calendar month during the term of this
Agreement or during such time as amounts remain outstanding on the Note,
commencing on the first Business Day of the calendar month following the
month
in which the Note or any successor Note is executed and delivered to PHCC
and
amounts are outstanding thereon, (ii) any date the Loan is prepaid and, (iii)
the Scheduled Maturity Date.
“Inventory”
means all of the Provider’s (or other entities’, as applicable) inventory (as
defined in the UCC) and all finished goods, other goods, merchandise and
other
personal property now owned or hereafter acquired by the Provider which are
held
for sale, lease, or rental or are furnished or to be furnished under a contract
of service and all raw materials, work in process, component parts, materials
or
supplies used or to be used, or consumed or to be consumed, in the Provider’s
business, and related products and all goods represented thereby, wherever
located, and all such goods that may be reclaimed or repossessed from or
returned by the Provider’s customers, and all shipping and packaging materials
relating to any of the foregoing.
“Loan”
means
the Advances made by PHCC to Provider from time to time.
“Loan
Documents”
means
the Agreement, the Note, and all other documents and instruments executed
by the
Provider in favor of or with PHCC in connection therewith.
-48-
“Lockbox”
has
the
meaning set forth in Section 4(a) of this Agreement.
“Lockbox
Account”
has
the
meaning set forth in Section 4(a) of this Agreement.
“Material
Adverse Effect”
or
“Material
Adverse Change”
means
any event, condition or circumstance or set of events, conditions or
circumstances or any change(s) which (i) has, had or could reasonably be
expected to have any material adverse effect upon or change in the validity
or
enforceability of any Provider Agreement, (ii) has been or could reasonably
be
expected to be material and adverse to the value of any of the Collateral
or to
the business, operations, prospects, properties, assets, liabilities or
condition of the Provider, or (iii) has materially impaired the ability of
the
Provider to perform its obligations under the Provider Agreements or to
consummate the transactions thereunder.
“Maximum
Aggregate Loan Amount”
means
the maximum aggregate principal balance of the Loan outstanding at any time
during the term of this Agreement, which amount shall not exceed the lesser
of
(i) the Commitment or (ii) the Availability Amount as determined by
PHCC.
“Maximum
Rate”
means
the maximum non-usurious rate of interest permitted by applicable law that
at
any time, or from time to time, may be contracted for, taken, reserved, charged
or received on the debt in question or, to the extent that at any time
applicable law may thereafter permit a higher maximum non-usurious rate of
interest, then such higher rate. Notwithstanding any other provision hereof,
the
Maximum Rate shall be calculated on a daily basis (computed on the actual
number
of days elapsed over a year of 365 or 366 days, as the case may
be).
“Medicaid”
means
the medical assistance program established by Title XIX of the Social Security
Act, 42 U.S.C. Sections 1396 et seq., and any statutes succeeding
thereto.
“Medicare”
means
the health insurance program established by Title XVIII of the Social Security
Act, 42 U.S.C. Sections 1395 et seq., and any statutes succeeding
thereto.
“Medicare
or Medicaid Receivable”
means
a
Healthcare Receivable representing a claim against a Governmental Entity
pursuant to the Medicare program (as set forth in Title 42 U.S.C. Section
1395
et seq.) or the Medicaid program (as set forth in Title 42 U.S.C. Section 1396
et seq.).
“Monthly
Commitment Fee”
means
the Fee set forth in Section 2(d) of this Agreement.
“Note”
has
the
meaning set forth in Section 2(b)(i) of this Agreement.
“Net
Value”
means,
with respect to a Healthcare Receivable, the amount, determined by the Servicer
or PHCC as of the date of such determination, as collectible from the Obligor
on
such Healthcare Receivable after giving effect to contractual allowances
with
respect thereto and any amounts determined by the Servicer or PHCC to be
not
collectible from the Obligor on that Healthcare Receivable.
-49-
“Obligations”
has
the
meaning set forth in Section 5(b) of this Agreement.
“Obligor”
means
an Eligible Obligor which is identified by the Provider as being obligated
to
make payment of all or a portion of a Healthcare Receivable.
“Overadvance
Fee”
has
the
meaning set forth in Section 2 of this Agreement.
“Person”
means
any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or government or
any
agency or political subdivision thereof (including, without limitation, any
Governmental Entity) whether acting in an individual, fiduciary or other
capacity.
“PHCC”
has
the
meaning set forth in Section 1 of this Agreement.
“Prepayment
Amount”
has
the
meaning set forth in Section 2(b)(ii) of this Agreement.
“Prepayment
Fee”
has
the
meaning set forth in Section 11 of this Agreement
“Proceeds”
means all cash proceeds, non-cash proceeds and all forms of payment and other
property received or due from the sale, lease, rental, transfer, disposition,
licensing, collection, use or exchange of property constituting Collateral
hereunder and any and all claims against any third party for loss of or damage
to any Collateral, including insurance, contract and tort claims, and further,
without limiting the generality of the foregoing, Proceeds shall include
all
Accounts, checks, cash, money orders, drafts, chattel paper, general
intangibles, instruments, notes and other documents evidencing payment and
payment obligations to Provider for the sale, lease, rental, transfer,
disposition, licensing, collection, use or exchange of Collateral.
“Provider
Agreements”
means
this Agreement, the Note, the Servicing Agreement, and each certificate,
document or agreement executed or delivered by the Provider pursuant to any
of
the foregoing, each as amended or restated by the parties from time to
time.
“Records”
means
all Contracts and other documents, information, books and other records
maintained by the Provider or the Servicer with respect to Healthcare
Receivables, the related Obligors and any other Collateral. “Records” shall
include, but not be limited to, computer programs, tapes, disks, data processing
software and related property and rights.
“Reimbursable
Expenses”
means
the following expenses which are incurred in connection with this Agreement
and/or the Healthcare Receivables: (i) $20 for each wire transfer; (ii) $12
per
package for overnight mail delivery; (iii) $15 per check for check
certification; (iv) $3 per debtor for debtor notification; (v) any amounts
payable under Sections 2(e) and 11 hereof; (vi) the internal costs to PHCC
of
any collateral audit performed by PHCC personnel;
-50-
(vii)
PHCC’s reasonable out-of-pocket expenses incurred in connection with the
preparation, execution, delivery and administration of, and any amendment,
supplement or modification to, this Agreement, the Note, the Control Agreement
and the other Provider Agreements and any other documents prepared in connection
herewith or therewith, and the consummation of the transactions contemplated
hereby and thereby, including, without limitation, any and all lien search
fees,
collateral audit fees, credit inquiry and investigation fees and costs,
healthcare consultant fees, and the fees and charges of counsel to PHCC,
(viii)
PHCC’s costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the Note, the Control
Agreement, the other Provider Agreements and any such other documents,
including, without limitation, fees and charges of counsel to PHCC, and (ix)
any
and all recording and filing fees and any and all liabilities with respect
to,
or resulting from any delay in paying, any registration tax, stamp, duty
and
other similar taxes or duties, if any, which may be payable or determined
to be
payable in connection with the execution and delivery of, or consummation
of any
of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this
Agreement, the Note, the other Provider Agreements and any such other
documents.
“Scheduled
Maturity Date”
means
the date that is three (3) years after the date the Agreement is entered
into as
shown in the first paragraph of the first page of the Agreement.
“Servicer”
means
Healthcare Claims Management Corporation acting in such capacity under the
Servicing Agreement, and its successors and assigns.
“Servicing
Agreement”
means
the Medical Claims Servicing Agreement dated of even date herewith, by and
between the Provider and the Servicer and approved by PHCC, substantially
in the
form of Exhibit F of this Agreement, as amended and restated by the parties
from
time to time.
“Social
Security Act”
means
the federal Social Security Act of 1935, as amended, as set forth in Title
42,
U.S.C.A.
“State”
means
any state of the United States of America, the District of Columbia and the
Commonwealth of Puerto Rico.
“Termination
Fee”
means
the fee set forth in Section 2(d) of this Agreement.
“UCC”
has
the
meaning set forth in Section 5(a) of this Agreement.
“Unused
Line Fee”
had the
meaning set forth in Section 2(d) of this Agreement.
“United
States”
means
the United States of America, its territories and possessions.
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