EXHIBIT 10.18
COMMERCIAL RECEIVABLES AGREEMENT
1. INTRODUCTION
COMMERCIAL RECEIVABLE AGREEMENT (this "Agreement") is entered into this
8th day of November, 2001 by and between ALAMO CAPITAL CORPORATION ("ACC")
and PSR NURSES, LTD (the "Seller"). Subject to the terms and conditions of
this Agreement, ACC wishes to purchase from the Seller and the Seller
wishes to sell, assign and transfer to ACC certain of its Commercial
Receivables, as defined herein, during the term of this Agreement.
Capitalized terms used herein, unless otherwise defined, shall have the
meanings set forth in Appendix I to this Agreement.
Commercial Receivables, as used in this Agreement, means only those
Commercial Receivables accepted by ACC for purchase from the Seller and
which constitute the amounts due the Seller from Obligors. Commercial
Receivables includes accounts receivable billed to both Governmental
Obligors and Non-Governmental Obligors.
THIS IS NOT A FINANCING ARRANGEMENT OR AGREEMENT. SELLER IS AGREEING TO
A SALE OF THE COMMERCIAL RECEIVABLES AS SPECIFICALLY PROVIDED HEREIN.
2. SALE TRANSFER AND ASSIGNMENT TO ACC
(a) The Seller hereby sells, transfers, conveys and assigns to ACC all
of the Seller's right, title and interest in and to all Commercial
Receivables as are accepted by ACC for purchase hereunder, together with
all replacements and proceeds thereof, and all right, title and interest of
the Seller to the proceeds represented by such Commercial Receivables and
all rights available to the Seller under all applicable agreements, laws,
rules, regulations, orders and/or ordinances with respect to such
Commercial Receivables.
(b) ACC's rights with respect to the Commercial Receivables purchased
hereunder include, but are not limited to, the right to: (i) sell, assign,
transfer, pledge, encumber, settle, and/or compromise any or all of such
Commercial Receivables; (ii) do all acts necessary or advisable in
furtherance of any rights of ACC hereunder; (iii) demand, receive and xxx,
in the Seller's name at ACC's option, for any monies due or which may
become due under such Commercial Receivables or for enforcement of any
rights afforded the Seller with respect thereto; (iv) substitute one or
more Persons with like powers; and (v) sign and endorse on behalf of the
Seller all checks and instruments received in connection with Collections
on the Commercial Receivables and the Seller hereby irrevocably appoints
ACC the attorney-in-fact of the Seller for such purpose; and the Seller
hereby specifically authorizes, ratifies and confirms all that ACC or its
substitutes shall do by virtue hereof. The Seller specifically agrees to
execute and/or prepare, and file or publish, all at the request and
direction of ACC, any and all documentation and/or notice of ACC's rights
herein as may be necessary or advisable, in ACC's discretion, to effect the
terms hereof or protect ACC's interest herein described. In no event shall
ACC be responsible, in whole or in part, for any duties, performance or
obligations of the Seller nor shall the Seller be relieved thereof by
reason of this Agreement.
(c) This Agreement is intended to, and does, evidence a seller and
purchase relationship between ACC, as purchaser, and the Seller, as seller,
and shall be interpreted to accomplish such in all events. Both parties
hereto agree to modification and reformation of their rights and/or duties
hereunder to the extent necessary, but only to such extent, to avoid
classification of the Agreement, and the relationship between ACC and the
Seller created hereby, as a mere financing arrangement.
(d) As a condition precedent to the first purchase of Commercial
Receivables by ACC from the Seller, the following actions shall have been
taken to the satisfaction of ACC:
(1) acknowledgment copies of proper financing statements (Form
UCC-1) naming the Seller as the debtor/seller and naming ACC as the secured
party/purchaser or other similar documents or instruments as may be
necessary, or in the opinion of ACC, desirable under the UCC of all
appropriate jurisdictions or any comparable law to perfect ACC's interest
in all Commercial Receivables which may be sold to ACC hereunder;
(2) certified copies (or copies otherwise satisfactory to ACC) of
Requests for Information or Copies (Form UCC-11) (or a similar search
report certified by a Person acceptable to ACC) listing all effective
financing statements (including those referred to in (1) above) which name
the Seller (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 (1) 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 Seller
or its Commercial Receivables, none of which (except those filed pursuant
to (1) above) shall cover any Commercial Receivables to be purchased by ACC
or any related Contracts unless the documents referred to in (3) below
cover such financing statements;
(3) releases of and acknowledgment copies of proper termination
statements (Form UCC-3), if any, necessary to evidence the release of all
security interests, ownership and other rights of any Person in Commercial
Receivables previously granted by the Seller;
(4) notices to each Obligor substantially in the form of Exhibit
H-1, and
(5) such other documents, opinions or certificates as ACC may
reasonably request including but not limited to, legal opinions from
counsel to the Seller.
(e) As a condition precedent to the continuing obligation of ACC to
purchase Commercial Receivables after the first purchase of Commercial
Receivables by ACC from the Seller, the following conditions (in addition
to those enumerated under Section 2(d) herein above) shall be satisfied by
the Seller:
(1) All representations and warranties of the Seller contained
herein and in each other Seller 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;
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(2) The Seller 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 Seller Agreement
to which it is a party to be performed or complied with by it at all tunes
(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 ACC
shall have received evidence, in form and substance reasonably satisfactory
to it, of such performance and compliance; and
(3) All corporate actions necessary to authorize (i) the execution,
delivery and continuing performance by the Seller of this Agreement and of
each other Seller Agreement to which it is a party and (ii) the
consummation of the transactions contemplated hereby and thereby shall have
been and shall continue to be duly and validly taken by the Seller 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
easonably satisfactory to and approved by counsel for ACC 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.
(4) The Seller covenants and agrees that, on and after the date
hereof, all invoices to be sent to Obligors (and return envelopes, if
provided by the Seller) shall set forth-only the address of ACC as a return
address for payment of Commercial Receivables. The Seller hereby further
covenants and agrees to instruct and notify each of the members of the
Seller's accounting an collections staff and of ACC's accounting and
collection staff to provide identical information in communications with
Obligors with respect to collections. The Seller shall not change such
return address or the instructions in any Obligor Notice without the
express prior written consent of ACC.
(5) All deliveries and notifications referred to in this Section shall
be made promptly upon the Seller's receipt of any such amount or
information and delivery to ACC no later than 10:00 a.m. Central Time on
the first Business Day after the day any such amount is received or
collected by the Seller.
3. SECURITY INTEREST
The Seller and ACC intend that the transfers of Commercial Receivables
effected pursuant to this Agreement and the applicable Assignments
constitute true sales of such Commercial Receivables by the Seller to ACC,
providing ACC with the full benefits of ownership thereof, and neither the
Seller nor ACC intends the transactions contemplated hereby to be, or for
any purpose to be characterized as, a mere financing arrangement or as a
loan from ACC to the Seller. However, as a precautionary matter, (i) to
secure the prompt payment and performance of all of the Seller's
obligations (whether monetary or otherwise) under or in connection with
this Agreement including, but not limited to, the Seller's liability to
ACC for Damages and the Seller's obligation to pay amounts which may
become due and owing under Section 12 hereof, the Seller hereby assigns,
pledges and grants to ACC a first priority security
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interest in, and to and under all of the following, whether now or
hereafter existing or acquired: the Commercial Receivables purchased by ACC,
all related Contracts and all Collections with regard thereto, any and all
amounts now or hereafter due to the Seller from the Reserve Account and
replacements and proceeds thereof, any and all amounts which may become due
to the Seller from ACC with respect to the balance of the Purchase Price
due with respect to any Commercial Receivable purchased by ACC hereunder,
all funds on deposit in any lockbox, each of the foregoing and all
certificates and instruments, if any, from time to time evidencing the
Reserve Account and the Lockbox Accounts, if any, and funds on deposit
therein, all claims thereunder or in connection therewith all 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 and (ii) this
Agreement shall constitute a security agreement under the UCC as amended
from time to time.
4. ACC PURCHASE PRICE
The Purchase Price payable by ACC upon the purchase of Commercial
Receivables under this Agreement shall be paid as follows:
(i) an amount equal to the aggregate Initial Payment with respect
to Commercial Receivables purchased on an Acquisition Date shall be paid by
ACC to the Seller upon notice by ACC to the Seller of the purchase by ACC
of those specific Commercial Receivables;
(ii) when the Asset Value of all Commercial Receivables having the
same Acquisition Date has been reduced to zero, as determined by ACC, an
amount equal to the balance of the Purchase Price for such Commercial
Receivables;
It is specifically agreed that Commercial Receivables will be purchased
hereunder in groups and identified by reference to the written Assignment
or Schedule on which such Commercial Receivables constituting a group are
listed. Each such group will be identified by a designated Assignment or
Schedule Number (Contract Number) and designated Acquisition Date.
5. ACC PERFORMANCE
(a) In consideration for the Seller's performance as described above
and elsewhere herein, which performance shall be a condition precedent to
any duties of ACC hereunder, ACC covenants and agrees to purchase all
Commercial Receivables specifically identified by ACC as acceptable to ACC,
in ACC's sole discretion, subject to the Maximum Purchase Ceiling
identified by ACC in Exhibit B attached hereto and incorporated herein.
ACC's Maximum Purchase Ceiling is identified as the maximum Net Value, as
of any date of determination, on Commercial Receivables purchased from the
Seller.
(b) The Seller shall offer, in writing, all Commercial Receivables
created by it to ACC for purchase from time to time throughout the term
hereof under the terms and conditions of this Agreement, with specific
identification of such Commercial Receivables and the terms
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thereof. ACC shall notify the Seller, within a reasonable time, of those
proffered Commercial Receivables which are acceptable to ACC for purchase.
6. RESERVE ACCOUNT
(a) ACC agrees to maintain the Reserve Account to which ACC shall
credit all Collections on the Commercial Receivables received by ACC less
all amounts payable to ACC hereunder or deductible from the Purchase Price,
including amounts due ACC with respect to the Asset Value of purchased
Commercial Receivable, and subject to application for amounts due ACC as
described herein. The Reserve Account shall be administered and controlled
solely by ACC.
(1) The Net Purchase Price, if any, owed the Seller under Section 4
with respect to a specific Schedule and amounts representing payments on or
proceeds of Commercial Receivables of the Seller not owned by ACC ("Non-
purchased Receivables Collections") shall be payable by ACC from the
Reserve Account. Such Net Purchase Price shall be paid only after: (i)
ACC shall have recovered the Asset Value of all Commercial Receivables in
the applicable Schedule, in full; (ii) ACC shall have been paid in full for
all Fees and Reimbursable Expenses associated with each Commercial
Receivable in the applicable Schedule purchased from the Seller on the
related Acquisition Date; and (iii) the Seller shall be in full compliance
hereunder with regard to all Commercial Receivables purchased from the
Seller at any Acquisition Date. Nonpurchased Receivables Collections from
time to time on deposit in the Reserve Account shall be applied by ACC (i)
to the payment of any amounts due ACC for Damages hereunder and (ii) to the
payment of any other amounts due ACC hereunder. If there is no then
continuing event of default hereunder and no amounts described in the
immediately preceding sentence are then due to ACC, amounts representing
Nonpurchased Receivables Collections on deposit in the Reserve Account, as
determined by ACC, shall be distributed to the Seller weekly.
(2) ACC shall be entitled, in its sole discretion and without
notice to the Seller, to apply any balance in the Reserve Account to: (i)
subject to the terms of this Agreement, to payment of any amounts due and
owing to ACC with respect to Damages, (ii) the payment of any sums which
shall have become owing to ACC by the Seller under the provisions of this
Agreement; and (iii) the liquidation of any Commercial Receivables or the
payment of any obligations which shall have become owing or which will
become owing to ACC under this Agreement or any guaranty given in
connection with this Agreement in the event of and at the time of filing
or institution of a proceeding in receivership or insolvency by or against
the Seller or any guarantor of the Seller's obligations under this
Agreement.
(b) If ACC determines that a Commercial Receivable purchased by or
assigned to ACC is a Rejected Receivable, the Seller shall have five (5)
calendar days after receipt of notice of such determination from ACC in
which to take such action as may be necessary to cause that Commercial
Receivable not to be a Rejected Receivable. If such corrective action is
not completed by the Seller to the satisfaction of ACC by the end of such
five (5) day period, (i) the Seller shall be required, if directed to do so
by ACC, to substitute for that Rejected Receivable one or more Commercial
Receivables representing amounts billed to an Obligor within forty (40)
days of the Seller's rendering the related services and which Commercial
Receivables have an aggregate Asset Value equal to or greater than the
Asset Value of the Rejected Receivable or (ii),
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if substitution is directed by ACC but not completed within five (5) days
of such direction or if substitution is not directed by ACC, there shall be
immediately due and owing to ACC from the Seller, as the mutually agreed to
damages for the breach of the representation and warranty causing such
Commercial Receivable to be a Rejected Receivable, an amount equal to the
then Asset Value of that Rejected Receivable (such amount, the "Damages"
for that Rejected Receivable).
Damages, if any, shall be an obligation of the Seller to ACC until paid
or provided for in accordance with this Agreement. The Seller hereby
authorizes and directs ACC to deduct, for the account of the Seller, the
amount of any unpaid Damages from (i) the Initial Payments due the Seller
on any Acquisition Date, (ii) any other amounts due to the Seller under
this Agreement or (iii) any amounts from time to time and at any time,
without regard to the source thereof, in the Reserve Account and any Net
Purchase Price due the Seller. Any such deductions shall be made at the
direction of ACC and on such dates as determined by ACC. ACC shall provide
notice of any unpaid Damages to the Seller, which notice shall be deemed
demand by the Seller for immediate payment of the unpaid Damages listed
therein.
(c) In addition to all other rights and remedies available to ACC at
law or in equity with respect to a Rejected Receivable, ACC shall have the
immediate right without notice to the Seller except as required by statute,
at law, in equity or otherwise, to set off and otherwise apply any Damages
owing to it with respect to a Rejected Receivable against any amounts
payable or distributable to the Seller pursuant to this Agreement or
otherwise.
(d) Any direct payments by the Seller of Damages shall be effective
only if paid to ACC.
(e) All Receivables purchased by ACC hereunder that are not paid by an
Obligor within 90 days of date of purchase by ACC shall be paid to ACC from
Seller's reserve account.
7. REASSIGNMENT OF REJECTED RECEIVABLES
If the Seller has taken the corrective actions specified under Section
6(b) with respect to a Rejected Receivable, the full amount of the Damages
with respect to a Rejected Receivable has been recovered by ACC from the
deductions and transfers specified in accordance with Section 6(b) or the
Seller has otherwise paid the full amount of the Damages with )respect to a
Rejected Receivable, then such Rejected Receivable shall be reassigned by
ACC to the Seller without recourse or warranty and ACC shall, upon such
reassignment to the Seller, have no further ownership interest or rights
in such Rejected Receivable or Collections thereon, and such Rejected
Receivable shall no longer be deemed to be purchased hereunder.
8. REPRESENTATIONS AND WARRANTIES OF THE Seller
The Seller represents and warrants to ACC that, as of the date hereof,
and shall be deemed to represent and warrant to ACC as of each Acquisition
Date, as follows:
(a) if a corporation, limited liability company, or partnership, the
Seller has been duly organized and is validly existing and in good standing
as a corporation, limited liability
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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 Seller 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 Seller Agreements to which it is a party
and to consummate the transactions contemplated hereby and thereby;
(c) the execution, delivery and performance by the Seller of the Seller
Agreements and all other instruments and documents to be delivered
hereunder and the consummation of the transactions contemplated hereby are
within the Seller'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, nor will such
action result in any violation of the provisions of its organizational
documents (including its articles of incorporation and bylaws 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 Seller in connection with the execution,
delivery and performance by the Seller of the Seller Agreements, all other
instruments and documents to be delivered hereunder and the consummation of
the transactions contemplated hereby, and no transaction contemplated
hereby 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
Seller of the Seller Agreements except for the filing of the UCC financing
statements and the giving of notices referred to in Section 2(d), all of
which, at the time required in Section 2(d), shall have been duly made and
shall be in full force and effect;
(e) each of the Seller Agreements has been duly and validly authorized,
executed and delivered by the Seller and constitutes a valid and legally
binding obligation of the Seller, enforceable against the Seller 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 Seller, threatened, before any court,
administrative agency, arbitrator, governmental body or other tribunal, (i)
which, if determined adversely to the Seller, could have a material adverse
effect on the business, operations, properties, assets or financial
condition of the Seller, (ii) asserting the invalidity of any of the Seller
Agreements, (iii) questioning the consummation by the Seller of any of the
transactions contemplated by any of the Seller
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Agreements or (iv) which, if determined adversely, could materially and
adversely affect the ability of the Seller to perform its obligations under,
or the validity or enforceability of, any of the Seller Agreements or the
Commercial Receivables;
(g) the Seller 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 Commercial 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 sell or grant a security interest in any Commercial
Receivables;
(h) Exhibit C lists (i) the address of the chief executive office of
the Seller and (ii) the location(s) of the office(s) where the Seller keeps
all of its Commercial Receivables files. The Seller does not have an office
in the States of Colorado, Kansas, New Mexico, Oklahoma, Utah or Wyoming:
(i) 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, an 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
Seller with any governmental authority. All taxes, fees, assessments and
charges of whatsoever nature due or payable by the Seller 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 Seller) 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
Seller, nor any basis therefor known to the Seller. No governmental audits
or investigations with respect to taxes are, to the Seller's knowledge, in
progress with respect to the Seller, 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 Seller 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 Seller's failure to comply with any of the foregoing;
(j) the information furnished by or on behalf of the Seller to ACC and
to agents and employees of ACC prior to the date of this Agreement and
during the term of this Agreement or in connection with any transaction
contemplated by the Seller 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;
(k) the Seller is solvent and will not become insolvent after giving
effect to the transactions contemplated by the Seller Agreements; the
Seller has not incurred debts or
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liabilities beyond its ability to pay; the Seller will, after giving effect
to the transactions contemplated by the Seller Agreements, have an adequate
amount of capital to conduct its business in the foreseeable future; the
sales of Commercial Receivables hereunder are made in good faith and
without intent to hinder, delay or defraud present or future creditors of
the Seller; and the Seller has valid business reasons for selling its
interest in the Commercial Receivables rather than using the Commercial
Receivables as collateral for a loan;
(l) the legal name of the Seller is as set forth in Section 1 to this
Agreement. Except as set forth in the Exhibit C, the Seller has not changed
its name in the last six years and, during such period, the Seller did not
use, and the Seller does not now use, any trade names, fictitious names,
assumed names or "doing business as" names;
(m) each pension plan or profit sharing plan to which the Seller is a
party has been fully funded in accordance with the obligations of the
Seller set forth in such plan;
(n) the Seller is not a party to any unresolved disputes with any
Obligor on a Commercial Receivable, without regard to whether the dispute
with an Obligor involves a Commercial Receivable of the Seller which is
offered for sale, or sold, to ACC under this Agreement, except as disclosed
in writing to ACC;
(o) there are no pending civil or criminal investigations involving the
Seller or its officers and directors and neither the Seller nor any of its
officers or directors has been involved in, or the subject of, any civil or
criminal investigation within the past five (5) years;
(p) the Seller has executed and delivered the applicable Obligor Notice
to each Obligor, with executed copies thereof also delivered to ACC, of a
Commercial Receivable sold to ACC hereunder;
(q) neither the federal government nor any other Person has asserted
any claim or right to offset any liability or debt against any Governmental
Receivable. The Seller has no overdue or delinquent liabilities or debt
which could give rise to a right of the federal government or any other
Person to offset such liabilities or debt against Governmental Receivables;
(r) the Seller has heretofore delivered to ACC true and complete copies
of the financial statements each of which fairly presents the financial
position of the Seller as of the date thereof and the results of operations
and changes in financial condition of the Seller 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
Seller are true and complete in all material respects and fairly reflect
all the material properties, assets, liabilities and transactions of the
Seller 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 Seller and
in the Seller'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
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or for any other reason, understate in any material respect the true costs
and expenses of conducting the Seller's business; and
(s) all documents which have been or shall be delivered to ACC or filed
with any governmental authority by or on behalf of the Seller pursuant to
this Agreement or any other Seller Agreement or in connection with the
transactions contemplated hereby are, of when so delivered or filed shall
be, correct and complete in all material respects and, if applicable, in
full force and effect.
9. REPRESENTATIONS AND WARRANTIES CONCERNING COMMERCIAL RECEIVABLES SOLD
TO ACC
The Seller represents and warrants to ACC that, as of the date hereof,
and shall be deemed to represent and warrant to ACC as of each Acquisition
Date, as follows with respect to each Commercial Receivable purchased by
ACC hereunder:
(a) the Net Value of such Commercial Receivable is payable in full by
an Eligible Obligor;
(b) all Commercial Receivable Information and all information regarding
such Commercial Receivable contained in the related Assignment is true and
correct;
(c) such Commercial Receivable has not been paid in whole or part;
(d) the Seller has submitted all necessary documentation and supplied
all necessary information for payment of such Commercial Receivable to the
Obligor thereof and has fulfilled all of its other obligations in respect
thereof, including verification of the eligibility of the Commercial
Receivable for payment by such Obligor;
(e) the Net Value of such Commercial Receivable is net of contractual
allowances or other modifications;
(f) neither such Commercial Receivable nor any related Contract has
been compromised, adjusted, extended, satisfied, subordinated, rescinded,
setoff or modified by the Seller 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, except as disclosed in writing to
ACC;
(g) true and correct copies of all invoices, agreements and other
documents relating to the creation of such Commercial Receivable have been
delivered to ACC or the ACC Servicer;
(h) such Commercial Receivable was owned, prior to its sale to ACC, by
the Seller 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;
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(i) no action, other than the execution and delivery of this Agreement
and the related Assignment, the filing of ACC financing statements in the
state in which the Seller's chief executive office is located, the
execution and delivery of the appropriate Obligor Notices and the payment
of the Initial Payment by ACC is required to perfect the interest of ACC,
as a purchaser, assignee and transferee of accounts receivable, in such
Commercial Receivable and all such actions have been or will be
accomplished no later than the Acquisition Date therefor;
(j) such Commercial Receivable complies with all laws and regulations
applicable thereto;
(k) such Commercial 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 UCC, as amended from time to
time;
(1) such Commercial Receivable does not constitute or has not
constituted an obligation of any subsidiary, parent or other Person which
is an affiliate of the Seller;
(m) such Commercial Receivable (i) is payable, in an amount equal to
not less than its Net Value, by the Eligible Obligor identified by the
Seller as being obligated to do so, and is recognized as such by the
applicable Eligible Obligor, (ii) is based on an actual and bona fide
rendition of services to, or the furnishing of goods by the Seller 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 instruments or chattel paper within the meaning of the UCC;
(n) such Commercial Receivable (i) is not subject to any setoff,
counterclaim, defense, abatement, suspension, deferment, deductible,
reduction or termination by its Obligor, or (ii) is past, or within 120
days of, the statutory limit for collection applicable to its Obligor;
(o) the goods and services provided and reflected in such Commercial
Receivable, were ordered by the Obligor and the Obligor has received such
goods or services.
(p) the fees charged for the services or goods constituting the basis
for such Commercial Receivable were reasonable fees charged in the Seller'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 Commercial Receivable for which the fees
are so restricted has been clearly identified to ACC as being subject to
such restriction;
(q) the only Obligor primarily liable on such Commercial Receivable is
the Obligor identified in the applicable Commercial Receivable Information;
(r) the Seller has the right to sell, assign and transfer such
Commercial Receivable pursuant to this Agreement, no consent from the
related Obligor or any other Person is required to effect the sale of such
Commercial Receivable to ACC and this Agreement and each applicable
Assignment vests and thereafter at all times will vest in ACC full right
and title in such Commercial Receivable purported to be conveyed hereby and
thereby, and such
conveyance of such Commercial Receivable will constitute a valid assignment
in such Commercial Receivable enforceable against the Seller and all
creditors of and purchasers from the Seller;
(s) the Seller has made all payments to any Obligor necessary to
prevent the Obligor from offsetting an earlier overpayment to the Seller
against any amount the Obligor owes on such Commercial Receivable;
(t) the Seller has treated the assignment of such Commercial Receivable
as a sale for all purposes, including without limitation tax and accounting,
it being understood that it is the intention of the parties hereto that
the assignment of any Commercial Receivable pursuant to this Agreement and
any Assignment be treated as a sale for all purposes.
(u) there are no procedures or investigations pending or threatened
before any Governmental authority (i) asserting the invalidity of such
Commercial Receivable or any Contract related thereto, (ii) relating to the
bankruptcy or insolvency of the related Obligor, (iii) seeking the payment
of such Commercial 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 Commercial
Receivable or any Contract related thereto;
(v) neither such Commercial Receivable nor Contract related thereto
contravenes in any material respect any federal, state or local laws, rules
or regulations applicable thereto (including, without limitation, 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;
and .
(w) such Commercial Receivable complies with such additional criteria
and requirements (other than those relating to the collectibility of such
Commercial Receivable). as ACC may from time to time specify to the Seller
following 30 days' written notice.
It is understood that the representations and warranties of the Seller set
forth herein do not constitute representations and warranties as to (i) the
ultimate collectibility of any Commercial Receivable from its Obligor or
for whom the services specified therein were rendered or (ii) the
continuing financial solvency of any Obligor. Although some of the
foregoing representations and warranties may have been made to the best of
the Seller's knowledge, the Seller's lack of knowledge with respect to an
inaccuracy in a particular representation or warranty shall still
constitute a breach of the inaccurate representation or warranty. The
performance or compliance by Seller as to all representations and
warranties shall be determined for this purpose as if all qualifications to
such warranties and representations based on knowledge or materiality were
omitted.
The Seller and ACC agree that, in the event that a breach of any of the
foregoing representations or warranties with respect to a Commercial
Receivable purchased by and/or assigned to ACC under this Agreement occurs,
the obligations and liabilities of the Seller with respect to such breach
shall be as set forth in Section 10(b) and the actions of ACC or its
assigns against the Seller with respect to such breach shall be limited to
recovery of Damages.
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10. COVENANTS OF THE SELLER
The Seller hereby agrees with and covenants to ACC and its successors
and assigns, as follows:
(a) If the Seller is a corporation, limited liability company or
partnership, the Seller 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 ACC hereunder or in the Commercial Receivables, or the
ability of ACC, the ACC Servicer or the Seller Servicer to perform its
respective obligations hereunder;
(b) The Seller shall do nothing to impair ACC's right in any Commercial
Receivable, or impede or interfere with the collection by ACC or any of its
agents of any Commercial 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 Commercial
Receivable;
(c) The Seller shall comply, in all material respects, with all laws,
acts, rules, regulations, orders, decrees and directions of any federal,
state or local governmental authority Commercial Receivables or any part
thereof or any related Contracts and with respect to the Seller and its
business and properties; provided, however, that the Seller may contest any
act, law, rule, regulation, order, decree or direction in any reasonable
manner which shall not, in the judgment of the Purchaser, materially and
adversely affect the rights of ACC in the Commercial Receivables. The
Seller shall comply, in all material respects, with its obligations under
the Contracts relating to Commercial Receivables;
(d) The Seller shall not create, permit or suffer to exist, and shall
defend ACC's rights to and interest in the Commercial Receivables against,
"d take such other actions as are necessary to remove, any lien, claim or
right in, to or on the Commercial Receivables, shall defend the right,
title and interest of ACC in and to the Commercial Receivables against the
claims and demands of all Persons whomsoever;
(e) The Seller shall keep its books and accounts in accordance with
generally accepted accounting principles, shall not include a Commercial
Receivable on its books and records, and shall make a notation on its
computer files and other physical books and records to indicate which of
its Commercial Receivables have been sold to ACC. The Seller also shall
maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Commercial
Receivables and related Contracts 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
Commercial Receivables (including, without limitation, records adequate to
permit the daily identification of each Commercial Receivable and all
Collections of and adjustments to each existing Commercial Receivable) and
for providing the Commercial Receivables files;
13
(f) The Seller shall advise ACC immediately (and in no event later than
one Business Day following actual knowledge thereof), in reasonable detail,
(i) of any lien asserted or claim made against any of the Commercial
Receivables purchased by or assigned to ACC and (ii) of the occurrence of
any other event which would have a material adverse effect on the aggregate
Net Value of such Commercial Receivables;
(g) ACC 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 Seller and ACC and its representatives may examine the same,
take extracts therefrom and make photocopies thereof, and the Seller agrees
to render to ACC or its representatives, at the Seller's cost and expense,
such clerical and other assistance as may be reasonably requested with
regard thereto; provided, however, that ACC acknowledges that, in
exercising the rights and privileges conferred in this Section 10(7), 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 Seller has a proprietary interest. ACC 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 Seller 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 Seller, unless such information is generally
available to the public or is required by law to be disclosed. The Seller
shall, from time to time during regular business hours as requested ACC,
permit ACC, or its agents or representatives, to discuss matters relating
to its Commercial Receivables or the Seller's performance hereunder or
under the Contracts with any of the officers or employees of the Seller
having knowledge of such matters;
(h) From time to time, at its expense, promptly execute and deliver all
further instruments and documents, and take all further action that ACC may
reasonably request in order to perfect, protect or more fully evidence the
sale and transfer of the Commercial Receivables. Without limiting the
generality of the foregoing, the Seller will upon the request of ACC
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 opinion of ACC, necessary or appropriate. The Seller hereby
authorizes ACC, upon two Business Days' notice, to file one or more
financing or continuation statements, and amendments thereto and
assignments thereof, relative to all or any of the Commercial Receivables
purchased by or assigned to ACC now existing or hereafter arising without
the signature of the Seller where permitted by law;
(i) The Seller shall not, without providing 60 days' notice to ACC and
without filing such amendments to any previously filed financing statements
as ACC may require, (i) change the location of its chief executive office
or the location of the offices where the records relating to the Commercial
Receivables are kept or (ii) change its name, identity or corporate
structure in any manner which would, could or might make any financing
statement or continuation
14
statement filed by the Seller in accordance with this Agreement seriously
misleading within the meaning of Section 9-402(7) of the UCC;
(j) The Seller shall make all payments to an Obligor necessary to
prevent such Obligor from offsetting an earlier overpayment to the Seller
against any amount which such Obligor owes with respect to a Commercial
Receivable, and the Seller shall immediately notify ACC 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 Commercial
Receivable;
(k) The Seller and its agents and representatives are hereby
irrevocably constituted and designated as the Sellers attorney-in-fact,
which irrevocable power of attorney is coupled with an interest (i) to
endorse or sign the Seller's name to financing statements, remittances,
invoices, assignments, checks, drafts or other instruments or documents in
respect of the Commercial Receivables, (ii) to notify Obligors to make
payments on the Commercial Receivables directly to ACC and (iii) to bring
suit in the Seller's name and to settle or compromise such Commercial
Receivables (other than Governmental Receivables) as ACC may, in its sole
discretion, deem appropriate;
(l) The Seller shall not take any action to cause any Commercial
Receivable to be evidenced by an "instrument" (as defined in the UCC),
except to the extent that (i) causing a Commercial Receivable to be
evidenced by such an instrument is required for the collection of such
Commercial Receivable or for the enforcement of any rights therein and (ii)
the original copy of such instrument has been delivered to ACC;
(m) The Seller shall pay any taxes relating to the transfer of
Commercial Receivables purchased by or assigned to ACC;
(n) The Seller shall treat the transactions contemplated by the Seller
Agreements, including the assignment of each Commercial Receivable
purchased by or assigned to ACC, as a sale for all purposes including,
without limitation, tax and accounting, and shall reflect such sale
treatment in all books, records, computer files, tax returns, financial
statements and regulatory and governmental filings;
(o) The Seller 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 Commercial
Receivables;
(p) Until the termination of this Agreement, the Seller shall not,
without the prior written consent of ACC:
(1) 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 Commercial Receivable or
related Contract 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 any other Person to set off any
amount against any Commercial Receivables;
15
(2) extend, amend or otherwise modify the terms of any Commercial
Receivable, or amend, modify or waive any term or condition of any Contract
related thereto;
(3) 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), which change would, in either case, (x)
impair the timing of collection or ultimate collectibility of any
Commercial Receivable or (y) affect the ability of ACC, as appropriate, to
perform its duties with respect to the Commercial Receivables;
(4) prepare any financial statements which shall account for the
transactions contemplated hereby in a manner which is, or in any other
respect account for the transactions contemplated hereby in a manner which
is, inconsistent with ACC's ownership of the Commercial Receivables; or
(5) (x) amend, modify, supplement or delete in any way or to any
extent any provision for uncollectible accounts and free care applicable
to any Eligible Commercial Receivable or (y) 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 Seller's records (including, but not limited to, the
Commercial Receivables files), without the express written consent of ACC;
(q) The Seller agrees to indemnify, hold harmless and forever defend
ACC from any and all liability and expenses arising out of the sale of
goods, wares, merchandise, or services evidenced by the Commercial
Receivables, whether asserted by the Seller, the Obligor on such Commercial
Receivables or by any other Person;
(r) In no event shall ACC be obligated to pursue, on the Seller's
behalf, collection of the Commercial Receivables through use of litigation
or otherwise; and
(s) No provision hereof shall obligate ACC in any manner or to any
degree, to the Seller or to any third party whether such third party is
with or without notice of this Agreement, to perform for the Seller in
regard to the underlying contract which gave rise to any Commercial
Receivable. The Seller covenants and agrees to indemnify and hold ACC
harmless for any and all performance, responsibility or duty owed by the
Seller to any obligor for a Commercial Receivable or third party. The
Seller also covenants and agrees to fully comply, in an acceptable manner,
with the terms of any and all agreements with obligors for the Commercial
Receivables to the extent such might affect the Commercial Receivables.
(t) Seller covenants to provide, on a periodic basis, that financial
information shown on Exhibit E attached hereto, and as described in Section
14(e) herein.
11. DEFAULT BY THE SELLER
(a) Any of the following acts, omissions and/or events, shall be and
are hereby defined as events of default by the Seller, in addition to any
further events defined elsewhere as events of default by the Seller:
16
(1) breach by the Seller of its agreements with any Obligor for a
Commercial Receivable;
(2) breach by the Seller of any obligation, covenant,
representation or warranty of the Seller in any Seller Agreement (including
this Agreement) or obligations with respect to substitution or payment of
Damages with respect to Rejected Receivables and/or the Seller's obligation
to make payments under Section 16; or
(3) the insolvency or business failure of the Seller or Seller's
Servicer or the Seller's assignment for the preference of certain creditors
of the Commercial Receivables or placing the same in the custody of any
court or the filing by or against the Seller or the Seller's Servicer of a
petition for bankruptcy protection.
(b) Upon the occurrence of an event of default, and at any time
thereafter, ACC may elect, the Seller hereby expressly waiving notice,
demand and presentment, to foreclose on the security interest granted by
the Seller in Section 3 to secure amounts due and owing from the Seller;
provided, however, that it is specifically agreed in all events, that upon
such foreclosure, ACC must first proceed against the Reserve Account
balance, and exhaust such, prior to any further action in regard to any
other claims, including but not limited to claims for Damages, it may have
against the Seller and, provided further, that nothing in this Section 11(b)
shall be construed as granting ACC general recourse against the Seller for
(0i) amounts not collected on a Commercial Receivable purchased by ACC
which is not a Rejected Receivable or (ii) amounts in excess of Damages
with respect to a Rejected Receivable.
(c) In the event of default and action by ACC pursuant to Section 11(b),
ACC shall have the right to retain the balance of the Net Purchase Price
held in the Reserve Account and to set off against amounts then held in the
Reserve Account any and all Damages and further set off against any funds
received by ACC, ACC Servicer or the Seller Servicer on behalf of the
Seller. ACC shall have and may exercise any and all rights provided by the
Uniform Commercial Code of the State of Texas and/or the State of Seller,
to the maximum extent provided by said Code. ACC shall be entitled to avail
itself of at 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 the resort to any
remedy provided hereunder or provided by the Uniform Commercial Code of
Texas and/or State of Seller or by any other law of the State of the Seller,
shall not prevent the concurrent or subsequent employment of any other
appropriate remedy or remedies.
(d) ACC 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 ACC's rights and this
security interest and any releases may be executed or herein conveyed
without affecting the priority of this 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.
17
(f) Any requirement of reasonable notice to the Seller 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 Seller at the last known business address of the Seller, as required
by law.
(g) The Seller hereby expressly acknowledges that, except with respect
to a breach of a representation and warranty with respect to a purchased
Commercial Receivable which causes such purchased Commercial Receivable to
be a Rejected Receivable, the Seller's breach of any of the other covenants,
obligations, representations or warranties contained in any Seller
Agreement or any Contract would cause irreparable injury and damage to ACC
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 Seller of any Seller Agreement or any Contract could cause ACC to
suffer irreparable injury if injunctive relief is not granted and,
therefore, ACC 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 Seller from all
actions which such court deems necessary to adequately protect ACC from
further damage or injury. In any instance of a breach or threatened breach
for which injunctive relief is deemed necessary by ACC, the Seller hereby
waives demand or notice of default and waives the requirements, if any, for
posting bond in connection with the granting of injunctive relief.
Notwithstanding the foregoing, the remedy of ACC with respect to breach of
a representation and warranty by the Seller contained in Section 8 which
results in a purchased Commercial Receivable becoming a Rejected Receivable
shall be limited to the right to the immediate receipt of the Damages with
respect thereto and action, including equitable action and injunctive
relief determined necessary by ACC to secure and obtain payment of such
Damages.
12. INDEMNIFICATION
(a) Without limiting any other rights which ACC may have hereunder or
under applicable law, the Seller hereby agrees to indemnify ACC from and
against any and all amounts awarded against or incurred by it arising out
of or as a result of this Agreement or ACC's interest in any Commercial
Receivables, excluding, however, indemnified amounts resulting from gross
negligence or willful misconduct on the part of ACC to which such
indemnified amount would otherwise be due. Nothing in this Section 12(a)
shall be construed as the Seller's guarantee of the ultimate collectibility
of any Commercial Receivables. Without limiting the generality of the
foregoing, the Seller shall indemnify ACC, its officers, directors and
agents for indemnified amounts relating to or resulting from:
(1) reliance on any representation or warranty made by the Seller
(or any of its authorized officers) under or in connection with this
Agreement, any information or report delivered by the Seller pursuant
hereto which shall have been false or incorrect in any material respect
when made or deemed made;
(2) the failure by the Seller to comply with any applicable law,
rule or regulation with respect to any Commercial Receivable or the
nonconformity of any Commercial Receivable with any such applicable law,
rule or regulation;
18
(3) the failure to vest and maintain vested in ACC, as the
purchaser, assignee and transferee of Commercial Receivables, a valid,
perfected, exclusive ownership interest in the Commercial Receivables sold,
assigned and transferred to ACC, together with all Collections related to
such Commercial Receivables, free and clear of any lien, whether existing
at the date of purchase by ACC or at any time thereafter;
(4) the failure to file, in a timely manner, financing statements
or other similar instruments or documents under the UCC or other applicable
laws with respect to any Commercial Receivables sold, assigned and
transferred to ACC, whether at the time of any purchase, assignment or
transfer or at any subsequent time;
(5) any dispute, claim, offset or defense of the Obligor to the
payment of any Commercial Receivables sold, assigned and transferred to
ACC (including, without limitation, a defense based on such Commercial
Receivables not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms); or
(6) any failure of the Seller to perform its duties or obligations
in accordance with the provisions of this Agreement.
(b) Any Indemnified Amounts due hereunder shall be payable on demand.
13. TERMINATION
This Agreement shall continue in full force and effect until terminated
by any party. Any party to this Agreement may, after the expiration of 365
from the date of this Agreement, terminate this Agreement upon giving to
the other at least 30 days' prior written notice of termination by
registered or certified mail given as provided in Section 14(h). ACC shall
have the right to terminate this Agreement, by written notice to the
Seller, at any time during which an event of default hereunder has occurred
and is continuing. Termination, however, shall not relieve or discharge
the Seller of its duties, obligations or covenants hereunder until all of
the Seller's obligations to the Purchaser have been satisfied or paid in
full, and all of the terms, provisions and conditions of this Agreement
shall remain in effect. If, after receipt of any payment of all or any part
of the Seller's obligations hereunder, the Purchaser is for any reason
compelled to surrender such payment to any person or entity 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 Seller shall be liable to
the Purchaser for, and shall indemnify and hold the Purchaser harmless for,
the amount of such payment surrendered. The provisions of this Section 17
shall be and remain effective notwithstanding any contrary action which may
have been taken by the Purchaser in reliance upon such payment, and any
such contrary action so taken shall be without prejudice to the Purchaser'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 13 shall survive the termination of the Agreement.
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14. MISCELLANEOUS
(a) This Agreement has been made and is performable in San Antonio,
Texas, and the legal relations between the parties hereto shall be governed
by and construed in accordance with the laws of the State of Texas, without
regard to the conflict of laws rules thereof.
The jurisdiction and venue for any suit instituted by any party (except
for the enforcement of an equitable remedy by ACC under the provisions of
Section 11(g) hereof) arising in connection with the terms and conditions
of this Agreement, its enforcement, breach or construction shall be
instituted in the State of Texas, Bexar County, in a court of general
subject matter jurisdiction and in no other venue or jurisdiction.
THE SELLER AND ACC HEREBY CONSENT TO AND SUBMIT TO THE JURISDICTION AND
VENUE OF THE COURT OF GENERAL SUBJECT MATTER JURISDICTION LOCATED IN BEXAR
COUNTY, STATE OF TEXAS.
(b) The Seller shall be liable for the full amount of attorneys' fees
and other costs incurred by ACC in enforcing its rights hereunder and/or in
taking any legal action to settle, collect or defend the Commercial
Receivables or any part thereof or security interest therein, together with
interest on unpaid amounts at the maximum rate permitted by law.
(c) This Agreement, and the Exhibits and Appendices attached hereto
from time to time, set forth the complete and entire understanding between
the Seller and ACC as to the terms hereof. Such Agreement shall only be
modified by a written instrument signed by all parties to be bound thereby.
(d) Failure or delay by ACC in exercising any right hereunder shall not
waive the later assertion of that right nor waive the Seller's future
performance.
(e) ACC shall at all times have access to the Seller's financial
records and to those of any Seller's Servicer to the extent necessary to
protect ACC's position hereunder and/or its ownership interest in purchased
Commercial Receivables. The Seller shall furnish all financial data to ACC,
immediately upon request for such from ACC, 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, Seller
hereby agrees that he will provide to ACC that periodic financial
information as shown on Exhibit E attached hereto, at such intervals as
shown on Exhibit E.
(f) All rights of ACC against the Seller, in the event of the
nonperformance or breach by the Seller or the Seller's Servicer, shall
survive the termination of this Agreement.
(g) This Agreement shall be binding on and inure to the benefit of the
parties hereto and their legal representatives, heirs, executors,
administrators, successors and assigns.
(h) 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 (2) Business Days following
dispatch as set forth above.
20
(i) The representations and warranties made by the Seller shall be true
on the date of execution of this Agreement and the Seller 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 Seller 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 Seller or the assets of the Seller.
(k) Notwithstanding any term or provision hereof which expressly or
impliedly indicates otherwise, no amount payable hereunder is payable as
interest, for the use, forbearance or detention of monies, and the Seller
covenants warrants and represents the truth thereof. All amounts payable
hereunder are fees for services rendered and discounts. In the event any
term or provision hereof is finally construed by any applicable governing
authority to constitute interest, then in such event, but only in such
event, such provision shall be modified without further notice or approval
so that it is in compliance with the applicable governing usury laws. All
amounts specifically designated as interest shall be forgiven to the extent
they cannot be restructured so as to constitute legally imposed charges.
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. Provided that
nothing hereinabove shall limit any fees or expenses payable to ACC where
such do not constitute "interest".
Executed to be effective this 8th day of November, 2001.
"ACC"
ALAMO CAPITAL CORPORATION
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx, President
Address: 00000 XX 00 Xxxx
Xxx Xxxxxxx, XX 00000
"Seller"
PSR NURSES, LTD
/s/ Xxxxxxx X. Xxxxxx, Xx.
Xxxxxxx X. Xxxxxx, Xx.
President of the General Partner
Address: 00000 Xxxxxx Xxxxxxx,
Xxx. 000
Xxxxxx, XX 00000
BEFORE ME, the undersigned authority, on this day personally appeared
Xxxxxxx X. Xxxxxx, Xx., President of the General Partner, of PSR NURSES,
LTD, a Texas corporation, known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me
21
that he signed the foregoing instrument and acknowledged to me that he
executed the same for the purposes and consideration therein expressed, in
the capacities therein stated and as the act and deed of said corporation.
Given under my hand and seal of
office on this 8th, day of
November, 2001.
/s/ Xxxxx X. Xxxxxx
Notary Public, State of Georgia
XXXXX X. XXXXXX
Notary Public, Chatham County, GA
My Commission Expires May 17, 2004
THE STATE OF GEORGIA
COUNTY OF CHATHAM
By signature below, and in exchange for sufficient, good and valuable
consideration, the receipt of which is hereby acknowledged, the undersigned
"Guarantor" does personally, jointly and severally, guaranty the Seller's
representations and warranties in Sections 8, 9 and I0, and the Seller's
payment of any amounts owed as Damages in the above Agreement by party
identified therein as Seller.
Guarantor
/s/ Xxxxxxx X. Xxxxxx, Xx.
Xxxxxxx X. Xxxxxx, Xx.
Date: 00/0/00
XXX XXXXX XX XXXXXXX
XXXXXX XX XXXXXXX
BEFORE ME, the undersigned authority, on this day personally appeared
Xxxxxxx X. Xxxxxx, Xx., Guarantor, known to me to be the person whose name
is subscribed to the foregoing instrument, and acknowledged to me that he
signed the foregoing instrument and acknowledged to me that he executed the
same for the purposes and consideration therein expressed.
Given under my hand and seal of office on this 8th day of November, 2001.
/s/ Xxxxx X. Xxxxxx
Notary Public, State of GEORGIA
XXXXX X. XXXXXX
Notary Public, Chatham County, GA
My Commission Expires May 17, 2004
22
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.
"ACC" has the meaning set forth in Section 1 of this Agreement.
"Acquisition Date" means, with respect to an individual Commercial
Receivable, the Business Day as of which such Commercial Receivable is
purchased by ACC under this Agreement, which date shall be the Business
Day on which the Initial Payment for such Commercial Receivable is deemed
paid to the Seller under this Agreement.
"Agreement" has the meaning set forth in Section 1 of this Agreement.
"Asset Value" means, as of any date with respect to a Commercial
Receivable purchased by ACC hereunder, an amount equal to (i) the Initial
Payment for that Commercial Receivable plus (ii) the Unpaid Fee, referred
to in Exhibit A, with respect thereto minus (iii) all Collections applied
against such Commercial Receivable; provided, however, that in no event
shall the Asset Value of any Commercial Receivable ever be deemed to be
less than zero nor more than its Net Value as of its Acquisition Date.
"Assignment" means an agreement substantially in the form of Exhibit D
hereto by which the Seller sells and assigns to ACC, as absolute owner, and
ACC purchases from the Seller, all of the Seller's right, title and
interest in and to Commercial Receivables accepted for purchase by ACC
under this Agreement and listed in the schedule to such agreement.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in the State of
Texas generally and the City of San Antonio, Texas, are authorized or
obligated by law or executive order to close.
"Collected Receivable" means a Commercial Receivable or Group of
Commercial Receivables on which the Collections received by ACC equaled not
less than that Commercial Receivables or Group of Commercial Receivables'
Asset Value. For purposes of determining whether a Commercial Receivable
is a Collected Receivable, amounts applied from the Reserve Account to that
Commercial Receivables' Asset Value shall not be deemed to be Collections
with respect to that Commercial Receivable.
"Collections" means the amounts received or deemed received by ACC with
respect to a Commercial Receivable.
"Contract" means an agreement pursuant to or under which an Obligor is
obligated to pay for services rendered or goods sold from time to time.
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"Commercial Receivable Information" means all documents, records, (and
Records), and information of any nature whatsoever maintained by or
available to Seller which is related to the Commercial Receivables.
"Commercial Receivables" means accounts receivable billed to Obligors
representing amounts due and owing to the Seller arising from the sale,
rental or lease of goods or the provision of services (and services and
sales ancillary thereto), including all rights and remedies of the Seller
relating thereto, together with any and all proceeds in any way derived,
directly or indirectly, therefrom. Commercial Receivables means both
governmental and non-governmental receivables.
"Damages" has the meaning set forth in Section 10(b).
"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 Commercial Receivables representing amounts owing under any
other program established by federal or state law which provides for
payments for Commercial goods or services to be made the Sellers of such
goods or services.
"Governmental Receivable" means a Commercial Receivable that is payable
by a Governmental Obligor.
"Initial Payment" means, with respect to a Commercial Receivable
purchased by ACC under this Agreement, an amount equal to (i) the then
applicable Purchase Factor times (ii) that Commercial Receivable's Net
Value.
"Net Purchase Price" means the difference, if any (but not less than
zero), between (i) the Purchase Price with respect to a Commercial
Receivable and (ii) the Initial Payment therefor.
"Net Value" means, with respect to a Commercial Receivable, the amount,
determined by ACC as of the date of ACC's purchase of such Commercial
Receivable, as collectible from the Obligor on such Commercial Receivable
after giving effect to contractual allowances with respect thereto and any
amounts determined by ACC to be not collectible from the Obligor on that
Commercial Receivable.
"Non-Governmental Obligor" means an Obligor that is not a Governmental
Entity.
"Non-Governmental Receivable" means any Commercial Receivable that is
payable by an Obligor other than a Governmental Entity.
"Nonpurchased Receivables Collection" has the meaning set forth in
Section 6(a) (1).
"Obligor" means an Eligible Obligor which is identified by the Seller
as being obligated to make payment of all or a portion of a Purchased
Receivable.
"Obligor Notice" means a notice to an Obligor of the assignment of
Commercial Receivables from the Seller to ACC pursuant to this Agreement in
the form of Exhibit H-1.
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"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.
"Seller Agreement" means this Agreement, each Assignment, the Servicing
Agreement, if any, each certificate, document or agreement executed or
delivered by the Seller pursuant to any of the foregoing.
"Purchase Contract" shall mean this Agreement.
"Purchaser" means ACC.
"Purchase Factor" means Eighty (80%) Percent unless ACC determines, in
its sole discretion, to increase or decrease such decimal, in which event
"Purchase Factor" means the decimal set forth by ACC by written notice to
the Seller, which revised Purchase Factor shall be used, unless thereafter
changed by ACC, for determining the Initial Payment due for Commercial
Receivables purchased by ACC hereunder on each Acquisition Date following
the effective date of such change in the Purchase Factor.
"Purchase Price" means, with respect to a Commercial Receivable
purchased by ACC under this Agreement, an amount equal to the Initial
Payment therefor plus Collections thereon from and after the Asset Value
thereof has been reduced to zero.
"Records" means all Contracts and other documents, information, books
and other records maintained by the Seller, the Seller Servicer or the ACC
Servicer with respect to Commercial Receivables, and the related Obligors.
"Records" shall include, but not be limited to, computer programs, tapes,
disks, punch cards, data processing software and related property and
rights.
"Reimbursable Expenses" means those expenses, and only those expenses,
which are incurred in connection with the following activities performed in
regard to the Commercial Receivables: (i) twenty dollars ($20.00) for each
wire transfer, (ii) twelve dollars ($12.00) per package for overnight mail
delivery; (iii) fifteen dollars ($15.00) per check for check certification;
(iv) three dollars ($3.00) per debtor for debtor notification; (v) ACC's
cost for any performed credit inquiries, UCC searches, filing fees, and
closing costs; (vi) any amount billed by any professional, including
attorneys and accountants, ACC hires to assist in protecting or asserting
ACC's rights hereunder or under any guaranties; and (vii) any amounts
payable under Section 16 hereof.
"Rejected Receivable" means a Commercial Receivable (i) with respect to
which a material breach of a representation and warranty or a covenant
contained in this Agreement has occurred and remains unremedied or (ii) on
which payment has been denied in whole or in part by the Obligor thereon.
"Rejected Receivable" shall include, without limitation, any Commercial
Receivable having a Governmental Obligor and the payment on which has been
diverted by the Seller away from the ACC Lockbox Account.
"Reserve Account" means the account established by ACC as provided in
Section 10.
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"State" means any state of the United States of America, the District
of Columbia and the Commonwealth of Puerto Rico.
"Uniform Commercial Code" or "UCC" means the Uniform Commercial Code as
in effect in the specified jurisdiction or, if no other jurisdiction is
specified, in the state in which the Seller is located. For purposes of
this Agreement, the Seller shall be deemed located at its place of business
if it has only one place of business and at its chief executive office if
it has more than one place of business.
"United States" means the United States of America, its territories and
possessions.
"Unpaid Fees" means the sum of all Fees due with respect to a
Commercial Receivable purchased by ACC under this Agreement, such Fees
calculated in accordance with Exhibit A hereto.
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EXHIBIT A
ACC FEE SCHEDULE
1. The fee earned by ACC for purchasing Commercial Receivables is based
upon the following percentage of the Net Value of the Commercial
Receivables purchased (Base Rate);
Two and nine point four seven one-hundredths (.0002947) of One Percent
per day
The Base Rate is based upon the current Prime rate plus Eight point two
five (8.25%) percent, as published in the Wall Street Journal. At such time
as the Prime rate in increased or decreased as evidenced by the Wall Street
Journal, the discount fee for the fast batch of invoices purchased
subsequent to the increase shall be adjusted accordingly.
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EXHIBIT B
ACC'S MAXIMUM PURCHASE CEILING - [ADJUSTABLE]
PROSPECTIVELY, BY ACC IN ITS SOLE DISCRETION
Two point Five Million ($2,500,000.00) Dollars
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EXHIBIT C
Seller INFORMATION
Seller Address for Notices:
00000 Xxxxxx Xxxxxxx, Xxx. 000
Xxxxxx, XX 00000
Address of Seller's Chief Executive Office:
00000 Xxxxxx Xxxxxxx, Xxx. 000
Xxxxxx, XX 00000
Location of Seller's Commercial Receivable File and Records:
00000 Xxxxxx Xxxxxxx, Xxx. 000
Xxxxxx, XX 00000
Name and Address of Seller Bank and the Account Officer:
Xxxxx Bank & Trust
000 Xxxx Xxxx.
Xxxxxxxx, XX 00000
Account Officer: Xxxx Xxxxxxxx / Xxxxxx Xxxx
29
AMENDMENT TO EXHIBIT A, ACC FEE SCHEDULE ATTACHED TO
HEALTHCARE RECEIVABLES SALE AGREEMENT ("SALE AGREEMENT")
DATED NOVEMBER 8, 2001 BY AND BETWEEN PSR NURSES, LTD AND ALAMO
CAPITAL CORPORATION
WHEREAS, PSR NURSES, LTD and Alamo Capital Corporation executed and
entered into a Health Care Receivables Sale Agreement ("Sale Agreement")
dated November 8, 2001 for the consideration and purposes therein stated;
WHEREAS, PSR NURSES, LTD and Medical Claims Services, Inc. executed and
entered into a Government Medical Claims Servicing Agency Agreement
("Servicing Agreement") dated November 8, 2001 for the consideration and
purposes therein stated;
WHEREAS, PSR NURSES, LTD and Alamo Capital Corporation desire to amend
the original Exhibit A, ACC Fee Schedule attached to Health Care
Receivables Sale Agreement ("Sale Agreement") dated November 8, 2001 by and
between PSR NURSES, LTD and Alamo Capital Corporation as set forth herein.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements hereinafter contained and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged and confessed,
the parties hereto agree and hereby enter this Amendment to Exhibit A, ACC
Fee Schedule Attached to Health Care Receivables Sale Agreement ("Sale
Agreement") dated November 8, 2001 by and between PSR NURSES, LTD and
Alamo Capital Corporation ("Amendment") and Exhibit A, ACC Fee Schedule
Attached to Health Care Receivables Sale Agreement ("Sale Agreement") shall
be amended as follows:
EXHIBIT A
ACC FEE SCHEDULE
The Fee earned by ACC for purchasing Healthcare Receivables effective
November 8, 2002 on any claims purchased with the dates of service after
November 8, 2002, shall be as follows:
Two and seven point seven eight one hundredths (.0002778%) Percent per
day
The fee is based upon the current Prime rate as published in the Wall
Street Journal. At such time as the Prime rate is increased as evidenced
by the Wall Street Journal, the fee for the first batch of claims purchased
subsequent to the Increase shall be as follows: For each One quarter of a
point of Prime rate increase, the fee shall be increased Two One-hundredths
of One percent per day.
Should any term, condition, or provision of the Sale Agreement or
Servicing Agreement be in conflict with any term, condition, or provision
contained in the Amendment, the terms, conditions, and provisions of this
Amendment shall govern and control. All other provisions contained in the
Sale Agreement and Servicing Agreement shall remain in full force and
effect,
unless modified or amended herein. This Amendment along with the
respective Sale Agreement and Servicing Agreement and any previous
amendments and/or addendum agreements to the same two agreements,
constitute the entire agreement between the parties hereto and supersedes
any prior agreements, written or oral, between the parties, other than as
specified herein.
"ACC"
ALAMO CAPITAL CORPORATION
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx, President
"MCS"
MEDICAL CLAIMS SERVICES, INC.
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx, President
"SELLER"
PSR NURSES, LTD
By: /s/ Xxxxxxx X. Xxxxxx
Xxxx Xxxxxx,
President of the General Partner
