EXHIBIT 10.12
HOLD BILLING SERVICES, LTD.
SUPPLEMENTAL ADVANCE PURCHASE AGREEMENT
This Supplemental Advance Purchase Agreement ("Supplemental Agreement") is
entered into as of the ___day of ________________________ 199____ (the
"Effective Date"), between HOLD Billing Services, Ltd. ("HBS"), a Texas limited
partnership with its principal office at 4242 Medical Drive, Suite 2100, San
Antonio, TX 78229 (hereinafter "HBS"), and ___________________
__________________________________ ("CUSTOMER"), a _______________ corporation
with its principal office at.
WITNESSETH:
WHEREAS, CUSTOMER and HBS have previously entered into a Billing Services
Agreement dated________ ("Billing Services Agreement"); and
WHEREAS, CUSTOMER wishes to sell its interest in LEC Accounts (as hereinafter
defined) to HBS to accelerate payment;
NOW, THEREFORE, CUSTOMER and HBS hereby consent to the terms of this
Supplemental Agreement and acknowledge that it is an integral part of their
Billing Services Agreement. The parties acknowledge that the terms of the
Supplemental Agreement will control if there are inconsistencies between the two
documents.
Section 1
CERTAIN DEFINITIONS
The following definitions apply to the corresponding terms used in this
Supplemental Agreement:
1. "End-User Accounts" means accounts receivable generated
when CUSTOMER provides telecommunications services to End-
Users.
2. "LEC Accounts" means CUSTOMER's receivables from Billing
Entities generated by the sale of CUSTOMER's End-User Accounts
to a Billing Entity through HBS.
3. "Affiliate" or "Affiliates" of a party to this Agreement
means any direct parent or subsidiary, or any other entity
under common control with the applicable party.
4. "Billing Entity" means any regional Bell operating
company, independent local exchange carrier or other provider
of local telephone services through which HBS has billing and
collection agreements.
5. "Business Day" means Monday through Friday excluding
nationally recognized holidays observed by the Billing
Entities.
6. "End-User" means a customer of CUSTOMER who has used
telecommunication services of CUSTOMER.
7. "Call Detail Record" means the documentation of an
individual telecommunications transaction between CUSTOMER and
an End-User evidencing an End-User Account.
8. "Shipment" means a batch of Call Detail Records submitted
to HBS for billing and collection.
9. "Amount Accepted" means the value of Call Detail Records
accepted by HBS for billing and collection.
10. "Initial Payment" means the down payment that HBS will pay
CUSTOMER for the Amount Accepted.
11. "Final Payment" means amounts that are payable by HBS to
CUSTOMER under terms of the Billing Services Agreement net of
Initial Payments repayable on Amounts Accepted that are
related thereto and net of any invoices outstanding.
12. "Advance Payable Schedule" means a schedule detailing the
amount of the funds that HBS will transfer to CUSTOMER.
13. "Factoring Fee" is the amount the CUSTOMER is charged for
Initial Payments. Such fees are invoiced to CUSTOMER
periodically.
14. "Chargebacks" mean Call Detail Records which are returned
as either uncollectible or unbillable, or are adjusted by
either the Billing Entity or by HBS.
15. "Maximum Advance Percentage" means the maximum percentage
of the Amount Accepted that is eligible for an Initial
Payment.
16. "Initial Payment Lag Time" means the number of Business
Days between the day on which the End-User Accounts are
processed by HBS and the day on which the Initial Payment is
made.
17. "Maximum Amount of Initial Payments" means the cumulative
outstanding Initial Payments set forth on Exhibit "A" attached
hereto.
18. "Collateral" shall have the meaning ascribed thereto in
Section 6 hereof.
19. "Agreements" means the Billing Services Agreement and this
Supplemental Agreement, collectively.
20. "Prime Rate" means the prime rate of NationsBank.
Section 2
AGREEMENT
CUSTOMER'S End-User Accounts are purchased by a Billing Entity at the time they
are accepted for billing and collection by the Billing Entity. Such purchase
gives rise to LEC Accounts owing to CUSTOMER. The proceeds of CUSTOMER's LEC
Accounts are typically collected 45 to 60 days after Billing Entity acceptance
of the End-User Accounts sold to the Billing Entity which give rise to such LEC
Accounts. During the term of this Agreement, HBS will purchase CUSTOMER's LEC
Accounts to accelerate CUSTOMER's cash flow. Title to CUSTOMER's LEC Accounts
shall pass to HBS upon payment of the Initial Payment for such LEC Accounts.
While such sale will be without recourse, CUSTOMER shall be liable to repurchase
LEC Accounts which are subsequently subject to Chargebacks and LEC Accounts
which remain unpaid by the applicable LEC for more than ninety (90) days after
the End-User Accounts related thereto were submitted to the LEC. CUSTOMER shall
also be liable to HBS in cases of breached representations and warranties in the
Agreements, including without limitation, representations and warranties
pertaining to the LEC Accounts and the other Collateral.
Section 3
PURCHASE PROCEDURES
The parties hereby agree that HBS' purchase of CUSTOMER's LEC Accounts shall
take place in accordance with the following provisions:
1. At least weekly, the following events will occur:
a. HBS will determine which Amounts
Accepted, if any, are eligible for Initial Payments
by reference to the parameters specified in Exhibit A
hereof.
b. HBS will calculate the amount of the
Initial Payment due by multiplying the eligible
Amounts Accepted by the Maximum Advance Percentage
specified in Exhibit A. The Maximum Advance
Percentage will be reevaluated periodically and may
be changed if HBS, at its sole discretion, determines
that it is at risk because of unexpectedly high
levels of Chargebacks or End-User complaints.
c. HBS will provide an Advance Payable
Schedule to CUSTOMER in a format that clearly sets
forth the calculation of the Initial Payment. The
calculated Initial Payment, when added to the
cumulative Initial Payments outstanding, may not
exceed the Maximum Amount of Initial Payments.
Cumulative Initial Payments outstanding is calculated
as
cumulative Initial Payments advanced minus cumulative
Initial Payments repaid.
2. Subject to the Maximum Amount of Initial
Payments, the Maximum Advance Percentage, and all
other conditions set forth herein, HBS will transfer
funds to the CUSTOMER'S bank account that is
specified in the Billing Services Agreement. The
transfer of funds will include the Initial Payment as
determined from the Amount Accepted during the
payment period as well as any Final Payments due to
Customer
3. If HBS has reason to suspect that a
Billing Entity may experience Chargebacks or other
pass through charges of a magnitude that might impair
HBS's ability to recoup its Initial Payments and
Factoring Fees, HBS shall have the right, at its sole
discretion, to suspend Initial Payments until it is
assured of collecting all monies due it hereunder.
4. The Factoring Fee will be calculated
monthly and invoiced to Customer. The daily fee is
calculated by multiplying the Factoring Fee Rate set
forth on Exhibit A by 1/365 and then by each day's
outstanding Initial Payments. The monthly fee is
calculated by summing all daily fees not previously
paid to HBS.
5. HBS has the right to set-off sums owed
by CUSTOMER against sums HBS owes to CUSTOMER and
sums HBS receives on CUSTOMER's behalf from Billing
Entities.
Section 4
PROCESSING OF ACCOUNTS
CUSTOMER will be responsible for all operational
matters regarding the End-User Accounts including,
but not limited to, customer inquiries, customer
adjustments, interaction with regulators, and all tax
matters. HBS's sole function under this Supplemental
Agreement shall be to purchase CUSTOMER's LEC
Accounts and any related obligations specifically
enumerated herein.
Section 5
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
In connection with the factoring of LEC Accounts
hereunder, CUSTOMER and HBS represent, warrant and
covenant to and with one another, as of the date
hereof and as of the date of each subsequent
Shipment, as follows:
1. Both parties will promptly and
efficiently discharge their obligations under this
Supplemental Agreement.
2. Both parties have the financial
capability to perform their obligations hereunder and
shall maintain such ability at all times during the
term of this Supplemental Agreement.
3. Neither HBS nor CUSTOMER has entered
into any agreement or commitments which would
prohibit either party from performing their
obligations imposed hereunder or prevent either party
from enjoying the rights granted hereunder.
4. HBS will have the right of access to
CUSTOMER's facilities if necessary to facilitate
liquidation of the Collateral and collection of the
LEC Accounts and the End-User Accounts and, at
reasonable times, to audit and copy CUSTOMER's books
and records with respect to the Collateral. A
representative of HBS's lender may accompany HBS
during such inspections.
5. CUSTOMER represents that all information
about CUSTOMER's financial condition provided to HBS
was accurate when submitted, as will be any
information subsequently provided.
6. CUSTOMER represents to HBS that its
chief executive office is the location set forth on
page 1 hereof and that none of its books and records
with respect to the Collateral shall be moved without
at least 20 days prior written notice to HBS.
Section 6
COLLATERAL
1. As collateral security for any and all
of CUSTOMER's obligations and liabilities to HBS
under the Agreements, CUSTOMER hereby grants to HBS a
continuing first lien and security interest in all of
the following property of CUSTOMER, whether now owned
or hereafter acquired or arising (collectively
"Collateral"):
a. LEC Accounts and general
intangibles due or to become due from any
Billing Entity which HBS has purchased or
hereafter purchases from CUSTOMER;
b. All accounts, general
intangibles and other amounts due or to
become due from HBS to CUSTOMER in
connection with the LEC Accounts described
above;
c. All End-User accounts, due or to
become due, which heretofore have and may
now or hereafter give rise to a LEC Account
purchased by HBS, whether as a result of a
sale, pledge or granting of a lien in an End
User Account to a Billing Entity;
d. All reserves and other amounts
due or to become due from HBS to CUSTOMER
under the terms of any agreement, document
or instrument between CUSTOMER and HBS;
e. All general intangibles relating
to any of the foregoing, including without
limitation all books and records and
customer lists relating to the customers
obligated on the foregoing LEC Accounts and
End-User Accounts; and
f. All cash and noncash proceeds of
any of the foregoing.
2. LEC Accounts are presently paid by the
applicable Billing Entity directly to HBS. HBS has
authorized its lender to collect directly from the
Billing Entity as its assignee.
3. HBS consents to CUSTOMER's sale of End-
User Accounts to the Billing Entities. Such consent
is conditioned upon the sale being subject to HBS'
lien and security interest continuing in the End-User
Accounts. Such continuing lien will be subordinate
and subject in all respects to the rights of the
Billing Entities in such End-User Accounts.
4. While it is intended that the sale of
LEC Accounts to HBS constitute a true sale of such
LEC Accounts, in the event that any such sale is
found to be a financing transaction or a loan, it is
the intention of the parties that such financing or
loan be secured by a perfected security interest in
the LEC Accounts as well as the other Collateral.
5. With respect to the Collateral, CUSTOMER
represents and warrants to HBS as follows:
a. Except for financing statements
in favor of HBS, no financing statement
covering the Collateral is filed in any
public office;
b. None of the Collateral is
affixed to real estate, is an accession to
any goods, is commingled with other goods,
or will become a fixture, accession, or part
of a product or mass with other goods; and
c. No End-User or Billing Entity or
other obligors whose debts or obligations
are part of the Collateral have any right to
setoffs, counterclaims, or adjustment or any
defenses in connection with their debts or
obligations; and
d. CUSTOMER owns all of its End-
User Accounts, LEC Accounts and other
Collateral free and clear of all liens,
claims and encumbrances of any nature.
6. With respect to the Collateral, CUSTOMER
covenants with HBS as follows:
a. CUSTOMER will defend the
Collateral against all claims and demands
adverse to HBS' interest in such property
and will keep the Collateral free from all
liens, claims and other encumbrances except
those for taxes not yet due and the security
interests created hereunder. The Collateral
will remain in CUSTOMER's possession or
control at all times, except as otherwise
provided in this Supplemental Agreement.
CUSTOMER will maintain the Collateral in
good condition and protect it against
misuse, abuse, waste, and deterioration;
b. CUSTOMER will pay all expenses
incurred by HBS in obtaining, preserving,
perfecting, defending, and enforcing the
security interests granted herein and in
preserving and protecting the Collateral and
in collecting or enforcing the obligations
of CUSTOMER to HBS under the Agreements.
Expenses for which CUSTOMER is liable
include, but are not limited to, taxes,
assessments, reasonable attorneys' fees and
other legal expenses. These expenses will
bear interest from the date of demand by HBS
for their payment to the date of payment at
the rate of Prime plus 4% per annum, and
CUSTOMER will pay HBS this interest on
demand at a time and place reasonably
specified by HBS. These expenses and
interest will be part of the obligations
secured hereby and will be recoverable as
such in all respects;
c. CUSTOMER will immediately notify
HBS of: (i) any material change in the
Collateral; (ii) change in CUSTOMER's name,
address, or location; (iii) change in any
matter warranted or represented in this
Supplemental Agreement; (iv) change that may
affect the security interest granted herein;
and (v) any Event of Default;
d. CUSTOMER will not sell,
transfer, or encumber any of the Collateral
(except sales of End-User Accounts to
Billing Entities) without the prior written
consent of HBS;
e. At the time and in the form
specified by HBS, CUSTOMER will furnish HBS
any requested information related to the
Collateral, which may include all
information necessary to identify any of the
Collateral;
f. CUSTOMER will preserve the
liability of all obligors on the Collateral
and preserve HBS's first priority lien
position in all Collateral;
g. Without the written consent of
HBS, CUSTOMER will not agree to any
modification of terms in any writing related
to the Collateral;
h. Upon written notice of default
to CUSTOMER regarding any obligation under
this Supplemental Agreement, HBS may demand
that CUSTOMER will immediately deposit all
payments received as proceeds of Collateral
in a special bank account designated by HBS,
who alone will have power of withdrawal.
CUSTOMER will deposit the payments on
receipt, in the form received, and with any
necessary endorsements. HBS may make any
endorsements in CUSTOMER's name and behalf.
Between receiving and depositing these
payments, CUSTOMER will not commingle them
with any of CUSTOMER's other funds or
property but will hold them separate and in
an express trust for HBS. HBS shall apply
all or part of these funds against
CUSTOMER's obligations;
i. Unless notified otherwise in
writing by HBS, CUSTOMER will:
(i) inform HBS immediately of
the rejection of goods, delay in delivery or
performance, or claim made in regard to any
Collateral; and
(ii) pay HBS the unpaid
amount of any LEC Account under any of these
conditions: if the LEC Account is
Chargedback or not paid within 90 days of
submission of the associated End-User
Accounts to the applicable Billing Entity;
if the Billing Entity rejects the goods or
services covered by the LEC Account; or if
HBS rejects the LEC Account as
unsatisfactory. HBS may retain the LEC
Account in Collateral and may charge any
deposit account of CUSTOMER, or set-off
against any amount payable by HBS to
CUSTOMER, with the unpaid amount;
j. CUSTOMER will maintain accurate
books and records covering the Collateral
and showing the assignment of accounts in
Collateral to HBS. Only undisputed and
unpaid amounts will be shown as owed to
CUSTOMER on the books;
k. Each LEC Account and End-User
Account will represent the valid, legally
enforceable obligation of third parties and
will not be evidenced by any instrument or
chattel paper; and
l. If any Collateral or proceeds
include obligations of third parties to
CUSTOMER, the transactions creating those
obligations will conform in all respects to
applicable state and federal law.
7. Each of the following conditions is an
"Event of Default":
a. If CUSTOMER defaults in timely
payment or performance of any obligation,
covenant, or liability in any written
agreement between CUSTOMER and HBS or in any
other transaction described in any of the
Agreements;
b. If any warranty, covenant, or
representation made to HBS by or on behalf
of CUSTOMER proves to have been false in any
material respect when made;
c. If a receiver is appointed for
CUSTOMER or any of the Collateral;
d. If the Collateral is assigned
for the benefit of creditors or, to the
extent permitted by law, if bankruptcy or
insolvency proceedings are commenced against
or by any of the following parties:
CUSTOMER; any partnership of which CUSTOMER
is a general partner; and any maker, drawer,
acceptor, endorser, guarantor, surety,
accommodation party, or other person liable
on or for any part of the obligations and
liabilities of CUSTOMER to HBS;
e. If any financing statement
regarding the Collateral and not favoring
HBS is filed;
f. If any lien attaches to any of
the Collateral; and
g. If any of the Collateral is
lost, stolen, damaged, or destroyed, unless
it is promptly replaced with Collateral of
like quality or restored to its former
condition.
8. In addition to all other rights and
remedies available to HBS at law or in equity or
under the terms of any of the Agreements, HBS may
exercise the following rights and remedies after the
occurrence of an Event of Default (as defined below):
a. Notify account debtors to make all
payments on Collateral directly to HBS (it being
understood that Billing Entities shall always make
payments to HBS directly regardless of the occurrence
of an Event of Default);
b. Take control of any funds generated by
the Collateral, such as refunds from any proceeds of
insurance, and reduce any part of the obligations
secured hereby in such order as HBS shall determine
or, in HBS's sole discretion, permit CUSTOMER to use
such funds to repair or replace damaged or destroyed
Collateral covered by insurance;
c. Demand, collect, convert, redeem, settle,
compromise, receipt for, realize on, adjust, sue for,
and foreclose on the Collateral, either in HBS's or
CUSTOMER's name, as HBS desires;
d. Declare all obligations and liabilities
of CUSTOMER hereunder immediately due and payable and
enforce such obligations;
e. Require CUSTOMER to deliver to HBS all
books and records relating to the Collateral;
f. Require CUSTOMER to assemble the
Collateral and make it available to HBS at a place
reasonably convenient to both parties;
g. Take possession of any of the Collateral
and for this purpose enter any premises where it is
located if this can be done without breach of the
peace;
h. Sell, lease, or otherwise dispose of any
of the Collateral in accordance with the rights,
remedies, and duties of a secured party under
chapters 2 and 9 of the Texas Uniform Commercial Code
after giving notice as required by those chapters;
unless the Collateral threatens to decline speedily
in value, is perishable, or would typically be sold
on a recognized market, HBS will give CUSTOMER
reasonable notice of any public sale of the
Collateral or of a time after which it may be
otherwise disposed of without further notice to
CUSTOMER; in this event, notice will be deemed
reasonable if it is mailed, postage prepaid, to
CUSTOMER at the address specified in this
Supplemental Agreement at least ten (10) days before
any public sale or ten (10) days before the time when
the Collateral may be otherwise disposed of without
further notice to CUSTOMER;
i. Apply any proceeds from disposition of
the Collateral after default in the manner specified
in chapter 9 of the Texas Uniform Commercial Code,
including payment of HBS's reasonable attorneys' fees
and court expenses; and
j. If disposition of the Collateral leaves
the obligations and liabilities of CUSTOMER under the
Agreements unsatisfied, collect the deficiency from
CUSTOMER.
9. A carbon, photographic, or other
reproduction of this Supplemental Agreement or any
financing statement covering the Collateral is
sufficient as a financing statement.
10. If the Collateral is sold after default,
recitals in the bill of sale or transfer will be
prima facie evidence of their truth, and all
prerequisites to the sale specified by this
Supplemental Agreement and by the Texas Uniform
Commercial Code will be presumed satisfied.
11. This security interest shall neither
affect nor be affected by any other security for any
of the obligations and liabilities of CUSTOMER to
HBS. Neither extensions of any of the obligations nor
releases of any of the Collateral will affect the
priority or validity of the security interests
granted herein with reference to any third person.
12. Foreclosure of the security interests
granted herein by suit does not limit HBS's remedies,
including the right to sell the Collateral under the
terms of this Supplemental Agreement. All remedies of
HBS may be exercised at the same or different time,
and no remedy shall be a defense to any other. HBS's
rights and remedies include all those granted by law
or otherwise, in addition to those specified in this
Supplemental Agreement.
Section 7
TERM AND TERMINATION
The term of this Supplemental Agreement shall
commence on the Effective Date and will run
concurrent with the Billing Services Agreement which
this contract supplements. This Supplemental
Agreement may be terminated in accordance with the
following provisions upon the occurrence of any of
the following events:
1. In the event that either party
materially or repeatedly defaults in the performance
of any of its duties or obligations set forth herein
and such default is not substantially cured within
thirty (30) days after written notice is given to the
defaulting party specifying the default, then the
party not in default may, by giving written notice
thereof to the defaulting party, terminate this
Supplemental Agreement as of a date specified in such
notice of termination;
2. Failure to reimburse HBS for a
deficiency in a Final Payment or to pay Factoring
Fee(s) when due;
3. Termination of the underlying Billing
Services Agreement; or
4. Upon the occurrence of an Event of
Default.
Termination of this Supplemental Agreement shall not
relieve either party of any obligations which have
accrued prior to the date of such termination,
including without limitation, the respective
obligations of the parties to make payments
hereunder.
Section 8
DOLLAR AMOUNT OF COMMITMENT
HBS agrees to purchase CUSTOMER's LEC Accounts up to
the Maximum Amount of Initial Payments at any one
time outstanding. At HBS' sole discretion, the
cumulative dollar amount of Initial Payments may be
increased or decreased from time to time, but in no
event will HBS be obligated to make Initial Payments
in excess of the Maximum Amount of Initial Payments
unless this Section is amended in writing.
Section 9
DOCUMENTS REQUIRED
CUSTOMER agrees to furnish the following documents to
HBS as conditions of funding:
1. Financial Statements within 90 days of
the end of CUSTOMER'S fiscal year and within 45 days
of the end of each of the CUSTOMER'S first three
fiscal quarters. Such statements will be prepared in
accordance with generally accepted accounting
principles and will be certified by the CUSTOMER's
chief financial officer or its independent Certified
Public Accountants;
2. Revenue projections within 30 days of
the close of the CUSTOMER's fiscal year;
3. Copy of Federal Form 941 and proof of
payment of tax deposits within 30 days after the
close of each calendar quarter;
4. UCC-1 Financing Statements in form,
number and substance acceptable to HBS; and
5. UCC-1 financing statement, judgment and
state and federal tax lien searches verifying that
HBS will possess a first priority perfected lien
position with respect to the Collateral.
If HBS has reason to question the accuracy of the
above documents or the collectibility of the LEC
Accounts, HBS will have the right to audit (and
HBS' lendor shall have the right to accompany HBS on
such audits) the documents, LEC Accounts, and/or the
systems by which LEC Accounts and End-User Accounts
are generated. The cost of such audit will be borne
50% by each of the parties to this Supplemental
Agreement.
CUSTOMER shall, from time to time, furnish to HBS all
documents, instruments and agreements reasonably
requested by HBS to facilitate the terms hereof
including without limitation, additional UCC-1
financing, continuation and amendment statements.
Section 10
LIMITATION OF LIABILITY
The parties agree that in the event of any failure,
defect in the services provided hereunder by HBS, or
in the event of any negligence on the part of HBS or
otherwise in performing this Supplemental Agreement
that neither HBS, nor its general partner, nor any
employee or agent thereof shall be liable to CUSTOMER
for injury or loss to CUSTOMER or CUSTOMER's business
or property arising out of or occasioned by, directly
or indirectly, such failure, defect or negligence,
and CUSTOMER agrees to save HBS harmless from all
claims for any such damages, except as follows in
this Section 10.
The amount of damages recoverable against HBS for any
and all acts or omissions related to this
Supplemental Agreement shall not exceed the amount of
Factoring Fees collected by HBS for the six-month
period immediately preceding the first occurrence of
such event, act or omission. In no event will the
measure of damage recoverable by CUSTOMER against HBS
include any amounts for indirect, consequential or
punitive damages or for the loss of anticipated
profits or other alleged economic loss. CUSTOMER may
not assert a cause of action that occurred more than
two (2) years prior to filing of suit.
Section 11
OTHER PROVISIONS
1. Provisions contained in the Billing
Services Agreement that are applicable but are not
addressed in this Supplemental Agreement will be
considered to be an integral part hereof. Such
provisions include, but are not limited to, Notices,
Assignment, Counterparts, Headings, Relationships
between Parties, Media Releases, Disputes Resolution,
Severability, Waivers, Remedies, Governing Law,
Confidentiality and Entire Agreement.
2. HBS' lendor will be deemed a third-party
beneficiary of this Supplemental Agreement. Neither
the Supplemental Agreement nor any of the Agreements
or documents related to the Collateral may be
modified or amended in any manner which would
materially and adversely affect any of lendor's
rights without lendor's prior written consent.
3. HBS's rights under this Supplemental
Agreement shall inure to the benefit of its
successors and assigns. Assignment of any part of the
obligations and liabilities of CUSTOMER to HBS and
delivery by HBS of any part of the Collateral will
fully discharge HBS from responsibility for that part
of Collateral. If CUSTOMER is more than one person or
entity, all representations, warranties and
agreements contained herein are joint and several.
CUSTOMER's obligations under this Supplemental
Agreement shall bind CUSTOMER's personal
representatives, successors and assigns.
4. Neither delay in exercise nor partial
exercise of any of HBS's remedies or rights shall
waive further exercise of those remedies or rights.
HBS's failure to exercise remedies or rights does not
waive subsequent exercise of those remedies or
rights. HBS's waiver of any default does not waive
further defaults. HBS's waiver of any rights in this
Supplemental Agreement or any of the other Agreements
or of any default or Event of Default is binding only
if it is in writing.
HBS may remedy any default without waiving it.
5. If CUSTOMER fails to perform any of
CUSTOMER's obligations and liabilities, HBS may
(without obligation to do so) perform such
obligations on CUSTOMER's behalf and be reimbursed by
CUSTOMER on demand for any sum so paid, including
without limitation, attorney's fees and other legal
expenses, plus interest on those sums from the date
of demand for payment therefor to the date of payment
at the rate of Prime plus 4% per annum. Sums to be
reimbursed shall be secured by the Collateral.
6. Although no interest is contemplated as
part of the obligations and liabilities except as
expressly set forth herein, to the extent that
interest is imputed or deemed by a court of competent
jurisdiction to have been charged, interest shall not
exceed the maximum amount of non-usurious interest
that may be contracted for, taken, reserved, charged,
or received under law; any interest in excess of that
maximum amount shall be credited to the non-interest
obligations and liabilities of CUSTOMER to HBS under
the Agreements, and if they have all been paid in
full, refunded.
7. No provision of this Supplemental
Agreement shall be modified or limited except by
written agreement of the parties hereto.
8. The unenforceability of any provision of
this Supplemental Agreement will not affect the
enforceability or validity of any other provision.
9. This Supplemental Agreement will be
construed according to the internal laws of the State
of Texas without regard to those laws relating to
choice of law or choice of forum.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Agreement
to be executed and delivered by their duly authorized officers as of the
Effective Date.
CUSTOMER: HOLD BILLING SERVICES, LTD.
a Texas Limited Partnership
By: HBS, Inc.
- -----------------------------------
By: By:
-------------------------------- --------------------------------
David W. Mechler, Jr.
Vice President - Finance