ORIGINATOR PURCHASE AND CONTRIBUTION AGREEMENT
Dated as of January 15, 1999
By and Among
AMERICAN ENTERPRISE SOLUTIONS, INC.,
as Primary Servicer and an Originator
Each of the Parties Named Herein as Originators
and
AES FUNDING CORP., as Company
ALL THE RIGHT, TITLE AND INTEREST OF THE COMPANY IN AND TO, ALL BENEFITS OF THE
COMPANY UNDER AND ALL MONIES DUE OR TO BECOME DUE TO THE COMPANY UNDER OR IN
CONNECTION WITH, THIS AGREEMENT HAVE BEEN ASSIGNED TO HCR POOL III FUNDING
CORPORATION (THE "LENDER"), AS COLLATERAL SECURITY FOR ANY AND ALL OBLIGATIONS
OF THE COMPANY PURSUANT TO A LOAN AND SECURITY AGREEMENT DATED AS OF JANUARY 15,
1999 BETWEEN THE COMPANY, THE LENDER, HEALTHCARE CAPITAL RESOURCES, INC. AND
ACCELERATED RECEIVABLES MANAGEMENT, LTD.
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS; CONSTRUCTION.................................................... 1
ss. 1.01. CERTAIN DEFINED TERMS...................................... 1
ss. 1.02. OTHER TERMS................................................ 13
ss. 1.03. INTERPRETIVE PROVISIONS.................................... 14
ARTICLE II
TERMS OF THE PURCHASES AND CONTRIBUTIONS..................................... 15
ss. 2.01. SALE, CONTRIBUTION AND PURCHASE OF ACCOUNTS................ 15
ss. 2.02. ACCOUNT INFORMATION AND TRANSFERRED BATCH DETERMINATION.... 15
ss. 2.03. THE TRANSFERS.............................................. 15
ss. 2.04. COLLECTION AND PAYMENT PROCEDURES.......................... 16
ss. 2.05. ALLOCATION OF SERVICER RESPONSIBILITIES.................... 16
ARTICLE III
INSURER PAYMENT MECHANICS;
GOVERNMENTAL ENTITIES PAYMENT MECHANICS;
EOB'S; MISDIRECTED PAYMENTS.................................................. 17
ss. 3.01. INSURER PAYMENT MECHANICS.................................. 17
ss. 3.02. GOVERNMENTAL ENTITIES PAYMENT MECHANICS.................... 18
ss. 3.03. MISDIRECTED PAYMENTS: EOB'S................................ 19
ss. 3.04. UNIDENTIFIED PAYMENTS: COMPANY'S RIGHT OF PRESUMPTION...... 19
ss. 3.05. NO RIGHTS OF WITHDRAWAL.................................... 20
ARTICLE IV
CONDITIONS OF PURCHASES...................................................... 20
ss. 4.01. CONDITIONS PRECEDENT ON THE INITIAL TRANSFER DATE.......... 20
ss. 4.02. CONDITIONS PRECEDENT ON ALL TRANSFER DATES................. 22
ARTICLE V
REPRESENTATIONS AND WARRANTIES; COVENANTS;
EVENTS OF TERMINATION; SERVICER TERMINATION EVENTS........................... 23
ss. 5.01. REPRESENTATIONS AND WARRANTIES............................. 23
ss. 5.02. COVENANTS.................................................. 28
ss. 5.03. EVENTS OF TERMINATION...................................... 35
-i-
Page
----
ss. 5.04. SERVICER TERMINATION EVENTS................................ 40
ss. 5.05. REMEDIES................................................... 41
ARTICLE VI
INDEMNIFICATION;
GRANT OF SECURITY INTEREST................................................... 42
ss. 6.01. INDEMNIFICATION AND SET-OFF RIGHTS FOR
DENIED ACCOUNTS......................................... 42
ss. 6.02. INDEMNITIES BY THE ORIGINATOR.............................. 43
ss. 6.03. RIGHT OF SET-OFF........................................... 44
ss. 6.04. GRANT OF SECURITY INTEREST................................. 44
ARTICLE VII
MISCELLANEOUS................................................................ 45
ss. 7.01. AMENDMENTS. ETC. .......................................... 45
ss. 7.02. NOTICES. ETC. ............................................. 45
ss. 7.03. ASSIGNABILITY.............................................. 46
ss. 7.04. FURTHER ASSURANCES......................................... 46
ss. 7.05. COSTS AND EXPENSES......................................... 46
ss. 7.06. CONFIDENTIALITY............................................ 47
ss. 7.07. TERM AND TERMINATION....................................... 48
ss. 7.08. SALE TREATMENT............................................. 48
ss. 7.09. GRANT OF SECURITY INTEREST................................. 48
ss. 7.10. NO LIABILITY OF THE COMPANY................................ 49
ss. 7.11. ATTORNEY-IN-FACT........................................... 49
ss. 7.12. ENTIRE AGREEMENT: SEVERABILITY............................. 49
ss. 7.13. GOVERNING LAW.............................................. 49
ss. 7.14. WAIVER OF JURY TRIAL OF JURY TRIAL AND VENUE............... 49
ss. 7.15. EXECUTION IN COUNTERPARTS.................................. 50
ss. 7.16. NO PROCEEDINGS............................................. 50
ss. 7.17. SURVIVAL OF TERMINATION.................................... 50
ss. 7.18. ADDITION. REMOVAL AND SUSPENSION OF ORIGINATORS............ 50
ss. 7.19. JOINT AND SEVERAL LIABILITY: ORIGINATORS................... 52
ss. 7.20. ACCOUNTING INFORMATION..................................... 53
-ii-
EXHIBITS
Exhibit I Receivable Information
Exhibit II-A Form of Notice to Governmental Entities
Exhibit II-B Form of Notice to Insurers
Exhibit 111 Interface Between Master Servicer and the Originators
Exhibit IV Primary Servicer Responsibilities
Exhibit V-A Form of Opinion of Originators' Counsels
with Respect to the Patient Consent Form
Exhibit V-B Form of Opinion of Originators' and Company's Counsel
with Respect to Certain Corporate Matters
Exhibit V-C Form of Opinion of Originators' Counsel
with Respect to Certain Bankruptcy Matters
Exhibit VI Form of Depositary Agreement
SCHEDULES
Schedule I Credit Policy
Schedule 11 Disclosures
Schedule 111 Lockbox Information
Schedule IV Designated Obligors
-iii-
THIS ORIGINATOR PURCHASE AND CONTRIBUTION AGREEMENT (as amended, restated,
modified or supplemented from time to time in accordance with its terms, this
"AGREEMENT") is made as of this 15th day of January, 1999 by and among AMERICAN
ENTERPRISE SOLUTIONS, INC., a Florida corporation (together with its corporate
successors and assigns, the "PRIMARY SERVICE"), each of the parties executing a
signature page hereto as an Originator from time to time (each, including the
Primary Servicer, together with each one's corporate successors and assigns, an
"ORIGINATOR" and, collectively, the "ORIGINATORS") and AES FUNDING CORP., a
Delaware corporation (together with its successors and assigns, the "COMPANY").
WHEREAS, each Originator wishes to sell or contribute to the Company on a
continuing basis all of its healthcare receivables; and
WHEREAS, the Company is prepared to purchase or to accept the contribution
of such healthcare receivables on the terms and subject to the conditions set
forth herein; and
WHEREAS, HCR Pool III Funding Corporation (together with its successors and
assigns, the "LENDER"') is prepared to fund purchases of such receivables on the
terms and subject to the conditions set forth in that certain Loan and Security
Agreement dated as of January 15, 1999 among the Lender, Healthcare Capital
Resources, Inc., Accelerated Receivables Management Ltd. and the Company (as
amended, modified or supplemented from time to time, the "LSA") and in reliance
by the Lender upon Originators' representations, warranties, covenants and other
agreements hereunder.
NOW, THEREFORE, in consideration of the mutual conditions and agreements
set forth herein, and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I DEFINITIONS; CONSTRUCTION
ss. 1.01. CERTAIN DEFINED TERMS. As used in this Agreement (including
its Exhibits and Schedules), the following terms shall have the following
meanings (such meanings to be equally applicable to the singular, plural,
masculine, feminine and neuter forms of the terms defined):
"ACCOUNT INFORMATION" has the meaning set forth in Section 2.02 hereto.
"ACCOUNTS" means any and all accounts, accounts receivable, contract
rights, instruments, documents, chattel paper, general intangibles and all other
obligations, including the third-party reimbursable or the third-party directly
payable portion of healthcare accounts receivable, owing or to be owing to an
Originator for the payment of money, arising out of any sale or lease of medical
products and supplies or rendition of
medical, surgical, diagnostic or other professional medical services in the
ordinary course of business by any Originator and under any trade names of any
Originator, whether now existing or hereafter arising, including all rights to
reimbursement under any agreements with and payments from Obligors, customers,
patients, residents or other Persons, all rights, remedies, guaranties,
insurance, security interests and Liens in respect of the foregoing, all books,
records (other than confidential medical records) and other Property evidencing
or related to the foregoing and all proceeds of any of the foregoing.
"ACCOUNTS RECEIVABLE TURNOVER" means, at any date, for the 12-month period
then most recently ended, the product obtained by multiplying (a) the quotient
obtained by dividing (i) aggregate Accounts of the Originators as of such date,
by (ii) aggregate gross revenue of the Originators for the 1 2-month period then
ended, by (b) 365 days.
"AFFILIATE" means, as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person or is a director or officer of such Person. For the purposes of this
definition, "control", when used with respect to any specified Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise.
"AGENT" means (i) Healthcare Capital Resources, Inc., or (ii) any other
Person then identified by the Company to the Originators as being authorized to
provide administrative services with respect to the Company and the Company's
purchase, funding and collection of healthcare receivables.
"AGREEMENT" has the meaning set forth in the preamble hereto.
"ANTICIPATED LIQUIDATION VALUE" means, with respect to each Designated
Class of Eligible Accounts on the date of purchase thereof, the amount of the
gross unpaid amount of such Accounts, which is anticipated to be actually
collected. Such Anticipated Liquidation Value is exclusive of any sales, use,
gross receipts or other similar taxes and any interest or penalties relating
thereto payable with respect to any such Account or the related goods or
services, and shall have deducted from it, without duplication, (x) the
historical average amount for the Originators of contractual allowances, as
calculated by an Independent Public Accountant, (y) an amount determined by an
Independent Public Accountant that reflects the actual collection experience of
the Originators (but which shall not reflect credit losses with respect to the
Designated Class to which such Account belongs) and (z) an amount determined by
an Independent Public Accountant that reflects set-offs, actual or potential,
against Accounts payable by Governmental Entities. The initial Anticipated
Liquidation Values have been set forth on SCHEDULE IV to this Agreement; the
Anticipated Liquidation Values may be modified from time to time by the Agent
upon not less than three (3) Business Days notice to the Originators, in its
sole and absolute discretion, which shall be binding absent bad faith or willful
misconduct.
2
"BATCH ACCOUNT", means an Account that is included in a Transferred Batch,
but excludes a Denied Account for which the Repurchase Price has been received
by the Company.
"BATCHING DEADLINE" means 11:00 a.m. New York City time, on Tuesday of each
week commencing the week prior to the Initial Purchase Date, or if such day is
not a Business Day, the immediately preceding Business Day.
"BILLING DATE" means, with respect to any Account, the date set forth on
the related invoice or statement.
"BUSINESS DAY" means any day on which banks are not authorized or required
to close in New York City, New York.
"CAPITAL EXPENDITURES" means, with respect to any Person for any period,
the aggregate of all expenditures (including, without limitation, obligations
created under Capital Leases in the year in which created but excluding payments
made thereon) of any Person in respect of the purchase or other acquisition of
fixed or capital assets.
"CAPITAL LEASE" means, as applied to any Person, any lease of any Property
(whether real, personal or mixed) by that Person as lessee, the obligations of
which are required, in conformity with GAAP, to be capitalized on the balance
sheet of that Person.
"CHAMPUS" means the Civilian Health and Medical Program of the Uniformed
Service, a program of medical benefits covering former and active members of the
uniformed services and certain of their dependents, financed and administered by
the United States Departments of Defense, Health and Human Services and
Transportation and established pursuant to 10 USC ss. 1071-1106, and all
regulations promulgated thereunder including without limitation (a) all federal
statutes (whether set forth in 10 USC 1071-1106 or elsewhere) affecting CHAMPUS;
and (b) all rules, regulations (including 32 CFR 199), manuals, orders and
administrative, reimbursement and other guidelines of all Governmental Entities
(including, without limitation, the Department of Health and Human Services, the
Department of Defense, the Department of Transportation, the Assistant Secretary
of Defense (Health Affairs), and the Office of CHAMPUS, or any Person or entity
succeeding to the functions of any of the foregoing) promulgated pursuant to or
in connection with any of the foregoing (whether or not having the force of law)
in each case as may be amended, supplemented or otherwise modified from time to
time.
"CHAMPVA" means the Civilian Health and Medical Program of Veterans
Affairs.
"CHANGE OF CONTROL" means (a) the sale, lease or transfer of all or
substantially all of the assets of an Originator to any Person or group (as such
term is defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended); (b) the
3
liquidation or dissolution of (or the adoption of a plan of liquidation by) an
Originator; (c) the acquisition by any Person or group (as such term is defined
in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) of a
direct or indirect majority interest (more than 51 %) of the voting stock of an
Originator by way of merger or consolidation or otherwise; or (d) any
transaction the result of which is that any Person or group (as such term is
defined in Section 1 3(d)(3) of the Securities Exchange Act of 1934, as amended)
beneficially owns, directly or indirectly, more of the voting stock of an
Originator than is owned on the date hereof.
"CLOSING DATE" means February 5, 1999.
"COLLECTION BANK" means First Union National Bank, as collecting bank under
the Depositary Agreement.
"COLLECTIONS" means all cash collections, checks, drafts, wire transfers,
electronic funds transfers, other instruments and other cash proceeds of
Accounts deposited in the Company Lockbox Account, including, without
limitation, all cash proceeds of any related security with respect thereto.
"COMPANY" has the meaning set forth in the preamble hereto.
"COMPANY LOCKBOX" means the lockbox set forth on SCHEDULE III hereto to
receive checks and EOB's with respect to Accounts payable by Insurers.
"COMPANY LOCKBOX ACCOUNT"' means the lockbox account set forth on SCHEDULE
III hereto associated with the Company Lockbox established by the Company to
deposit Collections from non-Governmental Entities, including Collections
received in the Company Lockbox and Collections received by wire transfer
directly from Insurers, all as more fully set forth in the Depositary Agreement.
"CREDIT POLICY" means those receivables credit and collection policies
and practices of the Originators in effect on the date of this Agreement and set
forth in SCHEDULE I hereto, as modified from time to time with the prior written
consent of the Company.
"DEBT" means as to any Person (without duplication): (i) all obligations of
such Person for borrowed money, (ii) all obligations of such Person evidenced by
bonds, notes, debentures, or other similar instruments, (iii) all obligations of
such Person to pay the deferred purchase or acquisition price of property or
services (other than trade accounts payables in the ordinary course of
business), (iv) all Capital Leases of such Person, (v) all Debt of others
directly or indirectly Guaranteed (which term shall not include endorsements in
the ordinary course of business) by such Person, (vi) all obligations secured by
a Lien existing on property owned by such Person, whether or not the obligations
secured thereby have been assumed by such party or are non-recourse to the
credit of such Person (but
4
only to the extent of the value of such property), and (vii) all reimbursement
obligations of such Person (whether contingent or otherwise) in respect of
letters of credit, bankers' acceptance and similar instruments.
"DEFAULTED ACCOUNT" means a Batch Account (a) as to which the Obligor
thereof or any other Person obligated thereon has taken any action, or suffered
any event to occur, of the type described in Section 5.03(i) or (b) which,
consistent with the Credit Policy, would be, but for the sale thereof hereunder,
written off the applicable Originator's books as uncollectible.
"DELINQUENCY RATIO" means, as of the last Business Day of each month, a
percentage equal to:
DR
---
OPP
where:
DR= The Anticipated Liquidation Value of all Purchased Accounts which
became Delinquent Accounts in the four week period immediately prior to
the date of calculation.
0PP= The average Outstanding Purchase Price (calculated as the arithmetic
average of all daily balances) of all Purchased Accounts in the four
week period immediately prior to the date of calculation.
"DELINQUENT ACCOUNT" means a Batch Account (a) that has not been paid in
fully on or following the 180th day following the date of original invoicing
thereof, or (b) that is a Denied Account.
"DENIED ACCOUNT" has the meaning set forth in Section 6.01 hereto.
"DEPOSITARY AGREEMENT' means that certain Depositary Agreement, dated the
date hereof, among each of the Originators, the Company, the Lender, the Agent
and the Collecting Bank, in substantially the form attached hereto as EXHIBIT
VI, as such agreement may be amended, modified or supplemented from time to time
in accordance with its terms.
"DESIGNATED CLASS" means each class of Accounts listed on SCHEDULE IV to
this Agreement, as such schedule may be updated from time to time by the Agent.
"DESIGNATED OBLIGOR" means each Obligor listed on SCHEDULE IV to this
Agreement, as such schedule may be updated from time to time by the Agent.
5
"DOCUMENTS" means this Agreement, the LSA, the Depositary Agreement, and
each other document or instrument now or hereafter executed and delivered to the
Company by or on behalf of any Originator pursuant to or in connection herewith
or therewith.
"DOLLAR" and the sign "$' means lawful money of the United States of
America.
"EBITDA" means, for any period, the sum (determined without duplication on
a consolidated basis) for the Originators and Subsidiaries of (a) net income (or
net loss) of the Originators and Subsidiaries (calculated before extraordinary
items), PLUS (b) Group Interest Expense for such period deducted in the
determination of such net income (or net loss) PLUS (c) depreciation,
amortization and other noncash items for such period to the extent included in
the determination of net income (or net loss) PLUS OR MINUS (d) all taxes
accrued for such period on or measured by income to the extent deducted or
credited in determining such net income (or net loss) MINUS OR PLUS (e) gains
(or losses) from asset dispositions outside of the normal course of business to
the extent included in determining such net income (or net loss).
"ELIGIBILITY CRITERIA" has the meaning specified in the LSA as such
Eligibility Criteria may be modified from time to time by the Lender upon
Written Notice to the Primary Servicer.
"ELIGIBLE ACCOUNTS" has the meaning specified in the LSA.
"EMPLOYEE BENEFIT PLAN" means any employee benefit plan within the meaning
of 3(3) of ERISA maintained by any Originator or any ERISA Affiliate, or with
respect to which any of them have any liability.
"EOB" means the explanation of benefit from an Obligor that identifies the
services rendered on account of the Batch Account specified therein.
"EQUITY" means the amount, in conformity with GAAP, set forth on the
balance sheet of an Originator as equity.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" means any entity which is under common control with any
Originator within the meaning of ERISA or which is treated as a single employer
with any Originator under the Internal Revenue Code of 1986, as amended.
"EVENT OF TERMINATION" means any of the events specified in Section 5.03
hereto.
6
"FACILITY TERMINATION DATE" means the earlier of (a) the "Maturity Date"
under the LSA and (b) the date of delivery of notice of the occurrence of a
Group-Wide Event of Termination, if required pursuant to Section 5.05 hereof, or
the date of occurrence of an Event of Termination if no notice is required,
unless such event is waived by the Company in writing.
"FINAL PAYMENT DATE" means the first Settlement Date following the
Settlement Period in which final collection has been received for all Purchased
Accounts or such Purchased Accounts have become Repurchased Accounts or
Defaulted Accounts.
"GAAP" means generally accepted accounting principles in the United States
of America, applied on a consistent basis, as set forth in Opinions of the
Accounting Principles Board of the American Institute of Certified Public
Accountants or in statements of the Financial Accounting Standards Board or the
rules and regulations of the Securities and Exchange Commission or their
respective successors and which are applicable in the circumstances as of the
date in question.
"GOVERNMENTAL ENTITY" means the United States of America, any state, any
political subdivision of a state and any agency or instrumentality of the United
States of America or any state or political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government. Payments from Governmental Entities
shall be deemed to include payments governed under the Social Security Act (42
U.S.C. 1395 et seq.), including payments under Medicare, Medicaid, and
CHAMPUS/Champva, and payments administered or regulated by HCFA.
"GROUP CAPITAL EXPENDITURE" means, for any period, the Capital Expenditures
of the Originators and Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.
"GROUP DEBT SERVICE COVERAGE RATIO" means, for any period, the quotient
obtained by dividing (i) Group EBITDA BY (ii) Group Interest Expense.
"GROUP EBITDA" means, for any period, the EBITDA of the Originators and
Subsidiaries for such period, determined on a consolidated basis in accordance
with GMP.
"GROUP INTEREST EXPENSE" means, for any period, the Interest Expense of the
Originators and Subsidiaries for such period, determined on a consolidated basis
in accordance with GAAP.
"GROUP NET WORTH" shall mean at any date of determination, an amount equal
to (a) the total assets of the Originators and Subsidiaries on a consolidated
basis MINUS (b) the total liabilities of the Originators and Subsidiaries on a
consolidated basis.
7
"GROUP TOTAL NET INCOME" means, for any period, the total Net lncome of the
Originators and Subsidiaries for such period, determined on a consolidated
basis.
"GROUP-WIDE EVENT OF TERMINATION" has the meaning set forth in Section
5.03.
"GROUP-WIDE ORIGINATORS" means as of any date of determination, the
Originators responsible in the aggregate for the sale or contribution to the
Company of more than 25% of the Batch Accounts (whether or not purchased) in the
prior 90 days (or the number of days from the date of this Agreement to such
date of determination, if less than 90 days)
"GROUP-WIDE SEVICER TERMINATION EVENT" has the meaning set forth in Section
2.05(b).
"HCFA" means the Health Care Financing Administration of the United States
Department of Health and Human Services.
"INDEMNIFED AMOUNTS" has the meaning set forth in Section 6.02 hereto.
"INDEMNIFED PARTY" has the meaning set forth in Section 6.02 hereto.
"INDEPENDENT PUBLIC ACCOUNTANT" means any of (i) Arthur Andersen & Co.,
(ii) Deloitte & Touche LLP, (ii) Ernst & Young, (iv) KPMG Peat Marwick, (v)
PricewaterhouseCoopers LLP, (vi) Grant Thorton and (vii) any other firm of
independent accountants of national or regional reputation which is a member of
American Institute of Certified Public Accountants reasonably acceptable to the
Company; provided that such firm is independent of the Company, the Agent and
the Master Servicer within the meaning of the Securities Act of 1933, as
amended.
"INITIAL TRANSFER DATE" means the date of the initial purchase or
contribution of Accounts hereunder.
"INSURER" means any Person which in the ordinary course of its business or
activities agrees to pay for healthcare goods and services received by
individuals, including commercial insurance companies, nonprofit insurance
companies (such as Blue Cross, Blue Shield entities), employers or unions which
self-insure for employee or member health insurance, prepaid health care
organizations, preferred provider organizations and health maintenance
organizations. "Insurer" includes insurance companies issuing health or other
types of insurance but does not include any individual guarantors.
"LENDER" has the meaning specified in the LSA.
8
"LENDER GROUP" means (i) the Lender, the Agent and the Master Servicer and
(ii) the Lender's agents, delegates, designees and assigns identified from time
to time to effectuate this Agreement.
"LIEN" means any lien, mortgage, security interest, tax lien, pledge,
hypothecation, assignment, preference, priority, other charge or encumbrance, or
any other type of preferential arrangement of any kind or nature whatsoever by
or with any Person (including, without limitation, any conditional sale or title
retention agreement), whether arising by contract, operation of law, judicial
process or otherwise.
"LOCKBOX" means either the Originator Lockbox or the Company Lockbox, as
the context requires.
"LOSS-TO-LIQUIDATION RATIO" means, as of the last Business Day of each
month, a percentage equal to:
DR
--
C
where:
DR= The Anticipated Liquidation Value of all Purchased Accounts which
became Defaulted Accounts in the four week period immediately prior to
the date of calculation.
C= Collections in the four week period immediately prior to the date of
calculation.
"LSA" means the Loan and Security Agreement dated as of the date hereof
among the Company as borrower, the Lender, the Agent and the Master Servicer as
Administrative Agent for the Lender, as such agreement may be modified,
supplemented or amended from time to time in accordance with its terms.
"MASTER SERVICER" means Accelerated Receivables Management Ltd., and any
other Person then identified by the Agent to the Originators, or the Primary
Servicer on behalf of the Originators, as being authorized to administer and
service Accounts.
"MATERIAL ADVERSE EFFECT" means any event, condition, change or effect that
(a) has a materially adverse effect on the business, Properties, capitalization,
liabilities, operations, prospects or financial condition of (i) the Originators
on a consolidated basis, (ii) the Primary Servicer, or (iii) the Company, (b)
materially impairs the ability of the Primary Servicer, the Originators or the
Company to perform its obligations under this Agreement, (c) materially impairs
the validity or enforceability of, or materially impairs the rights, remedies or
benefits available to the Company (or the Lender as assignee of the
9
Company) under this Agreement, or (d) changes, or could reasonably be expected
to change, the characterization and treatment of the sales of Accounts under
this Agreement as something other than a true sale or transfer of ownership.
"MISDIRECTED PAYMENT" means a payment made by an Obligor with respect to a
Batch Account in a manner other than as provided in the Notice sent to such
Obligor.
"MULTIEMPLOYER PLAN" means a plan, within the meaning of ss. 3(37) of
ERISA, as to which the Primary Servicer, any Originator or any ERISA Affiliate
contributed or was required to contribute within the preceding five (5) years.
"NET WORTH" means, with respect to an Originator at any date of
determination, an amount in conformity with GMP equal to (a) the total assets of
the Originator MINUS (b) the total liabilities of the Originator.
"NOTICE" means a Notice to Governmental Entities or Notice to Insurers, as
applicable.
"NOTICE TO GOVERNMENTAL ENTITIES" means a notice letter on an Originator's
corporate letterhead in substantially the form attached hereto as EXHIBIT II-A.
"NOTICE TO INSURERS" means a notice letter on an Originator's corporate
letterhead in substantially the form attached hereto as EXHIBIT II-B.
"OBLIGOR" means the Insurer or Governmental Entity, as applicable, who is
responsible for the payment of all or any portion of an Account.
"ORIGINATOR" or "ORIGINATORS" has the meaning set forth in the preamble
hereto.
"ORIGINATOR LOCKBOX" means the lockbox set forth on SCHEDULE III hereto to
receive checks and EOB's with respect to Accounts payable by Governmental
Entities.
"ORIGINATOR LOCKBOX ACCOUNT" means the account set forth on SCHEDULE III
hereto in the name of the Originators and associated with the Originator Lockbox
established and controlled by the Originators to deposit Collections with
respect to Accounts payable by Governmental Entities, including Collections
received in the Originator Lockbox and Collections received by wire transfer
directly from Governmental Entities, all as more fully set forth in the
Depositary Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
10
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a govenment or any
political subdivision, instrumentality or agency thereof.
"PRIMARY SERVICE" has the meaning set forth in the preamble hereto, if
such Person is then authorized to perform the Primary Servicer Responsibilities
pursuant to Section 2.05(b), or the Master Servicer, or any other Person then
authorized to perform the Primary Servicer Responsibilities and any Originator
that is acceptable to the Agent to provide Primary Servicer Responsibilities.
"PRIMARY SERVICER ACCOUNT" means account #2090002593646 of the Primary
Servicer at First Union National Bank, ABA # ,__________________ [address], or
such other bank account designated by the Primary Servicer by Written Notice to
the Master Servicer, the Company and the Agent from time to time, as the account
for receipt of proceeds on behalf of the Originators.
"PRIMARY SERVICER RESPONSIBILITIES" has the meaning set forth in Section
2.05(b) hereto.
"PROPERTY" means property of all kinds, movable, immovable, corporeal,
incorporeal, real, personal or mixed, tangible or intangible (including, without
limitation, all rights relating thereto), whether owned or acquired on or after
the date of this Agreement.
"PROPOSED ELIGIBLE ACCOUNTS" has the meaning set forth in Section 2.02
hereto.
"PURCHASE PRICE" means, with respect to Accounts in each Purchased Batch,
the aggregate Anticipated Liquidation Value of the Accounts.
"PURCHASED BATCH" has the meaning set forth in Section 2.02(b) hereto.
"PURCHASED ACCOUNT" means an Account that has been purchased by the
Company.
"REAL ESTATE SALE" means the completed sale of the Parkside Hospital to
Simon Sinnreich and Stephen R. Bracciale.
"REPURCHASE PRICE" means an amount equal to (x) the Purchase Price of such
Denied Account, MINUS (y) any cash received from the Obligor in the Company
Lockbox Account with respect to such Denied Account, PLUS (z) interest on such
amount calculated at the interest rate then in effect under the LSA (or the
maximum rate legally permitted if less than such rate) on the average
outstanding difference between clauses
11
(x) and (y) from and including the Business Day following the Transfer Date of
such Denied Account to the date the Repurchase Price is received by the Company.
"SEVICER TERMINATION EVENT" means any of the events specified in Section
5.04.
"SETTLEMENT DATE" means Thursday of each week; or if such day is not a
Business Day, the next succeeding Business Day; PROVIDED, THAT, if, following
the occurrence of an Event of Termination, the Company shall have selected a
period shorter than one week as the Settlement Period, the Settlement Date shall
mean the fifth (5th) Business Day following the end of each such Settlement
Period.
"SETTLEMENT PERIOD" means the period beginning on Saturday of each week and
ending on the Friday of the following week; PROVIDED, THAT notwithstanding the
foregoing, the first Settlement Period shall be the period beginning on the
Initial Transfer Date and ending on the Friday of the following week; and
PROVIDED, FURTHER, that following the occurrence of an Event of Termination, the
Company may from time to time, by notice to the Primary Servicer on behalf of
the Originators, select a shorter period as the Settlement Period.
"SUBSIDIARY" means, with respect to any Originator, any corporation or
entity of which at least a majority of the outstanding shares of stock or other
ownership interests having by the terms thereof ordinary voting power to elect a
majority of the board of directors (or Persons performing similar functions) of
such corporation or entity (irrespective of whether or not at the time, in the
case of a corporation, stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or controlled by such
Originator.
"TOTAL COLLECTIONS" means, as to each Transferred Batch, the sum of all
Collections, Repurchase Prices and Indemnified Amounts (representing the amount
of the Repurchase Price) distributed to and received by the Company with respect
thereto.
"TRANSFER DATE" means any Business Day on which Accounts are sold or
contributed to the Company by an Originator.
"TRANSFERRED BATCH" has the meaning set forth in Section 2.02 hereto.
"TRANSMISSION" means, upon establishment of computer interface between the
Originators and the Master Servicer in accordance with the specifications
established by the Master Servicer, the transmission of Account Information
through computer interface to the Master Servicer, and prior to such time (not
to exceed 60 days from the Initial Transfer Date) by facsimile or overnight
courier, all in a manner satisfactory to the Master Servicer.
12
"UCC' means the Uniform Commercial Code as in effect from time to time in
the specified jurisdiction.
"WRITTEN NOTICE" and "IN WRITING" shall mean any form of written
communication or a communication by means of telex, telecopier device, telegraph
or cable.
ss.1.02. OTHER TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. All references herein to
"consolidated" financial data or to financial data of the Originators on a
"consolidated basis" shall be deemed to be the applicable financial data of each
Originators and its Subsidiaries consolidated in conformity with GAAP. In the
event that changes in GAAP shall be mandated by the Financial Accounting
Standards Board and/or the American Institute of Certified Public Accountants or
any similar accounting body of comparable standing, or shall be recommended by
an Originator's certified public accountants, to the extent that such changes
would modify such accounting terms or the interpretation or computation thereof
as contemplated by this Agreement at the time of execution hereof, then in such
event such changes shall be followed in defining such accounting terms only
after the Originators and the Company shall have agreed to amend this Agreement
to reflect the original intent of such terms in light of such changes, and such
terms shall continue to be applied and interpreted without such change until
such agreement. All terms used in Article 9 of the UCC in the State of New York,
and not specifically defined herein, are used herein as defined in such Article
9.
ss. 1.03. INTERPRETIVE PROVISIONS. (a) Any pronoun used shall be deemed
to cover all genders and the meanings of defined terms are equally applicable to
the singular and plural forms of the defined terms.
(b) The terms "herein", "hereof' and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular provisions,
section, paragraph or subdivision. Subsection, Section, Schedule and Exhibit,
references are to this Agreement unless otherwise specified.
(c) The term "including" is not limiting and means "including but without
limitation."
(d) In the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including," the words "to" and
"until" each mean "to but excluding" and the word "through" means "to and
including."
(e) The headings, section titles, table of contents and list of exhibits
and schedules appear as a matter of convenience only and shall not affect the
interpretation of this Agreement.
13
(f) Unless otherwise provided herein, (i) all references to any instruments
or agreements, including, without limitation, references to this Agreement any
of the other Documents shall include any and all modifications or amendments
thereto and any and all extensions or renewals thereof, but only to the extent
such amendments and other modifications or extensions and renewals are not
prohibited by the terms of any Document and (ii) all references to any statute
or regulation shall be construed as including all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or interpreting the
statute or regulation.
(g) This Agreement and the other Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.
(h) This Agreement and the other Documents are the result of negotiations
among and have been reviewed by counsel to the Borrower, the Agent, the Lender
and the Master Servicer, and are the product of all parties. Accordingly, they
shall not be construed against the Lender or the Agent merely because of the
Lender's or the Agent's involvement in their preparation.
ARTICLE II
TERMS OF THE PURCHASES AND CONTRIBUTIONS
ss. 2.01. SALE, CONTRIBUTION AND PURCHASE OF ACCOUNTS. On each Transfer
Date until the Facility Termination Date and on the terms and conditions set
forth herein, each Originator agrees to sell, without recourse except to the
extent expressly provided herein, or contribute all of such Originator's
Accounts to the Company, and the Company agrees to purchase or accept such
contribution of all of such Originator's Accounts.
ss. 2.02. ACCOUNT INFORMATION AND TRANSFERRED BATCH DETERMINATION. (a)
On each Business Day after the Initial Transfer Date, the Primary Servicer, on
behalf of the Originators, shall provide the Master Servicer by Transmission the
information listed on EXHIBIT I hereto (as such Exhibit may be modified by the
Company from time to time, the "ACCOUNT INFORMATION") with respect to all new
Accounts. The Primary Servicer shall also designate those new Accounts that it
has determined constitute Eligible Accounts (the "PROPOSED ELIGIBLE ACCOUNTS")
and those new Accounts that it has determined do not constitute Eligible
Accounts.
(b) All Proposed Eligible Accounts for which Account Information has been
received by the Master Servicer between the prior Batching Deadline and the
current Batching Deadline shall be reviewed by the Lender Group. On or prior to
each Transfer Date, the Company or the Agent shall prepare a list of all
Proposed Eligible Accounts
14
delineating those Proposed Eligible Accounts that the Company will purchase on
the Transfer Date (a "PURCHASED BATCH", and together with the remaining Proposed
Eligible Accounts and all other Accounts that are not Eligible Accounts that
will not be purchased and instead will be contributed to the Company, the
"TRANSFERRED BATCH").
ss. 2.03. THE TRANSFERS. (a) On each Transfer Date, (i) subject to
satisfaction of the applicable conditions set forth in Article IV the Company
shall pay to the Primary Servicer for the benefit of the Originators in same day
funds, at the Primary Servicer Account, an amount equal to the Purchase Price of
the Purchased Batch, and (ii) each Originator will contribute to the capital of
the Company all other Accounts in the Transferred Batch. The Primary Servicer
shall remit the proceeds of the Purchase Price of the Purchased Batch to the
applicable Originators in accordance with their respective interests.
(b) Effective on each Transfer Date, in consideration of the Purchase Price
and other good and valuable consideration, each Originator hereby sells,
contributes, assigns and conveys to the Company and the Company hereby purchases
and accepts, as absolute owner, all right, title and interest in and to the
Batch Accounts purchased or contributed on such Transfer Date.
ss. 2.04. COLLECTION AND PAYMENT PROCEDURES. (a) COLLECTIONS ON THE
TRANSFERRED BATCH. The Company, as absolute owner of the Batch Accounts, shall
be entitled with respect to each Transferred Batch, (i) to receive all
Collections on such Transferred Batch, and (ii) to have and to exercise any and
all rights (x) to collect, record, track and take all actions to obtain
Collections with respect to each Batch Account payable by Persons other than
Governmental Entities, and (y) to the extent permitted law and in a manner
consistent with all applicable laws and regulations, to record, track and take
all actions to obtain Collections with respect to each Batch Account payable by
Governmental Entities.
(b) COLLECTIONS NOT PART OF A PURCHASED BATCH. On each Settlement Date, and
provided that (i) the Originators shall have paid all amounts then due and owing
to the Company under this Agreement, (ii) the Originators, or the Primary
Servicer on behalf of the Originators, shall have successfully sent by
Transmission to the Master Servicer all information required with respect to the
Batch Accounts for the immediately preceding Settlement Period, and (iii) no
Event of Termination shall have occurred and be continuing, the Company shall
pay or turn over, as the case may be, to the Primary Servicer for the benefit of
the Originators any and all cash collections or other cash or non-cash proceeds
received by the Company during the immediately preceding Settlement Period with
respect to Accounts that are not part of any Purchased Batch. The Primary
Servicer shall remit such cash and proceeds to the applicable Originators in
accordance with their respective interests therein.
15
(c) DISTRIBUTIONS ON EACH SETTLEMENT DATE. On each Settlement Date and with
respect to each Transferred Batch, Total Collections shall be distributed to the
Company.
ss. 2.05. ALLOCATION OF SERVICER RESPONSIBILITIES. (a) Administration of
purchases, Collections and other transactions pertaining to each Transferred
Batch shall be performed by the Master Servicer in a manner consistent with the
terms of this Agreement. The responsibilities of each Originator to the Master
Servicer have been set forth in EXHIBIT III attached hereto. Each Originator
shall cooperate fully with the Primary Servicer and the Master Servicer in
establishing and maintaining the Transmission of the Account Information,
including, without limitation, the matters described in EXHIBIT III, and shall
provide promptly to the Master Servicer such other information, to the extent
available and otherwise permitted to be provided under applicable law and
regulation, that may be necessary or desirable for the administration of
Collections on the Batch Accounts as may be requested from time to time.
(b) The Company hereby appoints each Originator as its agent for the
administration and servicing obligations set forth in EXHIBIT IV hereto with
respect to the Accounts sold or transferred by such Originator to the Company
hereunder (the "PRIMARY SERVICER RESPONSIBILITIES"), and each Originator hereby
accepts such appointment and agrees to perform the Primary Servicer
Responsibilities. Each of the Originators hereby contracts its Primary Servicer
Responsibilities to the Primary Servicer and appoints the Primary Servicer to
act as its agent hereunder, PROVIDED, HOWEVER, that such contracting and
appointment shall not relieve any Originator from any of its duties,
responsibilities, liabilities and obligations resulting or arising hereunder.
The Primary Servicer hereby accepts such appointment and agrees to perform the
Primary Servicer Responsibilities on behalf of the Originators. Each of the
Originators, the Primary Servicer and the Company hereby acknowledge that the
Primary Servicer's appointment is subject to and limited by the Lender's
appointment of the Company as its agent for performance of the Primary Servicer
Responsibilities under the LSA and the Lender's rights thereunder to replace the
Company. The Company may, at any time following the occurrence of a Servicer
Termination Event (and shall, without requirement of notice to any party, upon a
Servicer Termination Event resulting from the events described in Section
5.03(9) or 0)) appoint another Person to succeed the Primary Servicer as its
agent for performance of the Primary Servicer Responsibilities. The Company may,
at any time following the occurrence of one or more Servicer Termination Events
(and may, without requirement of notice to any party, upon one or more Servicer
Termination Events resulting from the events described in Section 5.03(9) or
(j)) affecting the Group-Wide Originators (in each case, a "GROUPWIDE SERVICER
TERMINATION EVENT"), designate the Master Servicer or any other Person to
succeed the Primary Servicer as its agent for performance of the Primary
Servicer Responsibilities.
16
ARTICLE III
INSURER PAYMENT MECHANICS;
GOVERNMENTAL ENTITIES PAYMENT MECHANICS;
EOB'S; MISDIRECTED PAYMENTS
ss. 3.01. INSURER PAYMENT MECHANICS. (a) On or prior to the Initial
Transfer Date, each of the Primary Servicer, the Originators, the Company, the
Lender, and the Collecting Bank shall have entered into the Depositary Agreement
and shall have caused the Collecting Bank to establish the Company Lockbox and
the Company Lockbox Account.
(b) On or prior to the Initial Transfer Date, each Originator shall
prepare, execute and deliver to each Designated Obligor who is an Insurer, with
copies to the Company and the Agent, a Notice to Insurers addressed to each such
Insurer, which Notice to Insurers shall state that all present and future
Accounts owing to such Originator have been and will be transferred to the
Company and that all checks and EOB's from such Insurer on account of Accounts
shall be sent to the Company Lockbox and all wire transfers from such Insurer on
account of Accounts shall be wired directly into the Company Lockbox Account.
(c) Each Originator covenants and agrees that, on and after the Initial
Transfer Date, all invoices (and return envelopes, if provided by such
Originator) that are sent to Designated Obligors who are Insurers shall set
forth only the address of the Company Lockbox as a return address for payment of
Accounts and delivery of EOB's, and only the Company Lockbox Account with
respect to wire transfers for payment of Accounts. Each Originator hereby
further covenants and agrees to instruct and notify each of the members of its
accounting and collections staff to provide identical information in
communications with Insurers with respect to Collections, wire transfers and
EOB's.
ss. 3.02. GOVERNMENTAL ENTITIES PAYMENT MECHANICS. (a) On or prior to
the Initial Transfer Date, each of the Primary Servicer, the Originators, the
Company, the Lender, and the Collecting Bank shall have entered into the
Depositary Agreement, and the Originators shall have caused the Collecting Bank
to establish the Originator Lockbox and the Originator Lockbox Account.
(b) On or prior to the Initial Transfer Date, each Originator shall
prepare, execute and deliver to each Designated Obligor who is a Governmental
Entity, or its fiscal intermediary, with copies to the Company and the Agent, a
Notice to Governmental Entities addressed to each such Governmental Entity,
which Notice to Governmental Entities shall provide that all checks and EOB's
from Governmental Entities on account of Accounts shall be sent to the
Originator Lockbox and all wire transfers on account of Accounts shall be wired
directly into the Originator Lockbox Account.
17
(c) Each Originator covenants and agrees that, on and after the Initial
Transfer Date, all invoices that are sent to Designated Obligors who are
Governmental Entities (and return envelopes, if provided by such Originator)
shall set forth only the address of the Originator Lockbox as a return address
for payment of Accounts and delivery of EOB's, and only the Originator Lockbox
Account with respect to wire transfers for payment of Accounts. Each Originator
hereby further covenants and agrees to instruct and notify each of the members
of its accounting and collections staff to provide identical information in
communications with Governmental Entities with respect to Collections, wire
transfers and EOB's.
(d) The Originators shall maintain the Originator Lockbox and the
Originator Lockbox Account solely and exclusively for the receipt of payments on
account of Accounts (and delivery of EOB's) from Governmental Entities. The
Originators and the Primary Servicer shall take all actions necessary to ensure
that no payments from any Person other than a Governmental Entity shall be
deposited in the Originator Lockbox Account.
ss. 3.03. MISDIRECTED PAYMENTS: EOB'S. (a) In the event that an
Originator receives an EOB or a Misdirected Payment in the form of a check, such
Originator shall immediately send such Misdirected Payment by overnight delivery
service to the appropriate Company Lockbox or Originator Lockbox, as the case
may be, together with the EOB and the envelope in which such payment was
received. In the event an Originator receives a Misdirected Payment in the form
of cash or a wire transfer to an account oth than the Originator Lockbox
Account, such Originator shall immediately wire transfer the amount of such
Misdirected Payment directly into the Company Lockbox Account. all Misdirected
Payments and EOB's shall be sent promptly upon receipt thereof, and in no event
later than the close of business, on the first Business Day after receipt
thereof.
(b) If a Misdirected Payment in the form of a check is received by the
Company more than five days after the postmark date on the envelope enclosing a
check from the Obligor (or, if no such envelope is sent to the Company Lockbox
Account by an Originator, more than six days after the date of such check or
wire transfer with respect thereto), then the Originators shall pay interest on
such Misdirected Payment to the Company from such fifth subsequent day to and
including the date such check is received in the Company Lockbox Account, at an
interest rate equal to the rate then in effect under the LSA (or the maximum
rate legally permitted if less than such rate).
(c) Each Originator hereby agrees and consents to the Company taking such
actions as are reasonably necessary to ensure that future payments from the
Obligor of a Misdirected Payment shall be made in accordance with the Notice
previously delivered to such Obligor, including, without limitation, to the
maximum extent permitted by law, (i) the Company or any member of the Lender
Group executing on an Originator's behalf and delivering to such Obligor a new
Notice, and (ii) the Company or any member of the Lender Group contacting such
Obligor by telephone to confirm the instructions previously
18
set forth in the Notice to such Obligor. Upon the Company's request, an
Originator shall promptly (and in any event, within two (2) Business Days from
such request) take such similar actions as the Company may request.
ss. 3.04. UNIDENTIFIED PAYMENTS; COMPANY'S RIGHT OF PRESUMPTION. Each
of the Originators and the Company agrees and consents that the Company may
apply any payment it receives from an Obligor or any other payor against a
Transferred Batch if the Lender Group is unable in good faith (after making
reasonable attempts to contact the applicable Originator) to determine from the
information in the EOB whether such payment relates to a Transferred Batch.
3.05. NO RIGHTS OF WITHDRAWAL. None of the Originators nor the Company
shall have any rights of direction or withdrawal with respect to amounts held in
the Company Lockbox Account.
ARTICLE IV
CONDITIONS OF PURCHASES
ss. 4.01. CONDITIONS PRECEDENT ON THE INITIAL TRANSFER DATE. The
initial purchase of Accounts under this Agreement on the Initial Transfer Date
is subject to the conditions precedent that the Company shall have received on
or before the Initial Transfer Date the following, each (unless otherwise
indicated) dated such date, in form and substance satisfactory to the Company:
(a) For each Originator and the Primary Servicer, a certificate issued by
the Secretary of State of the state of such entity's (i) organization as to the
legal existence and good standing of such entity and (ii) locale of operation,
if different from its state of organization, as to the foreign qualification,
authorization and good standing of such entity in such locale (all of which
certificates shall be dated not more than 20 days prior to the Initial Transfer
Date) or an opinion of counsel for such entity to such effect.
(b) For each Originator and the Primary Servicer, certified copies of the
charter and by-laws of such entity, certified copies of resolutions of the Board
of Directors of such entity approving this Agreement, certified copies of all
documents filed to register any and all assumed names of such entity, and
certified copies of all documents evidencing other necessary corporate action
and governmental approvals, if any, with respect to this Agreement.
(c) For each Originator and the Primary Servicer, a certificate of the
Secretary or Assistant Secretary of such entity certifying the names and true
signatures of the incumbent officers of such entity authorized to sign this
Agreement and the other documents to be delivered by it hereunder.
19
(d) [Intentionally omitted].
(e) Acknowledgment or time stamped receipt copies of proper financing
statements (showing each Originator as debtor/seller, the Company as secured
party/purchaser and the Lender as assignee, and stating that the financing
statements are being filed because UCC Section 9-102 does not distinguish
between a sale and a secured loan for filing purposes) duly filed on or before
the Initial Transfer Date under the UCC of all jurisdictions that the Company
may deem necessary or desirable in order to perfect the ownership interests
contemplated by this Agreement.
(f) Acknowledgment or time-stamped receipt copies of proper financing
statements (showing each Originator as debtor and the Company as secured party
and the Lender as assignee with respect to the grant by the Originators of a
first priority security interest to the Company in the Originators' Accounts, as
contemplated by Section 6.04 of this Agreement) duly filed on or before the
Initial Transfer Date under the UCC of all jurisdictions that the Company may
deem necessary or desirable in order to perfect such security interest.
(g) UCC search reports dated within twenty days of the Initial Transfer
Date, and a detailed schedule thereof listing all effective financing statements
filed in the jurisdictions referred to in subsections (e) and (f) above that
name each Originator as debtor, together with copies of all other financing
statements filed against the Originators (none of which shall cover any
Accounts).
(h) Releases of, and acknowledgment copies of proper UCC termination
statements and UCC amendments, if any, necessary to evidence the release of all
security interests, ownership and other rights of any Person previously granted
by any Originator in any of its Accounts.
(i) Omitted.
(j) A favorable opinion of Foley & Lardner, counsel for the Primary
Servicer and the Originators, substantially in the form attached hereto as
EXHIBIT V-B, and as to such other matters as the Lender Group requests.
(k) A duly executed Depositary Agreement, together with evidence
satisfactory to the Company that the Company Lockbox, the Originator Lockbox,
the Company Lockbox Account and the Originator Lockbox Account have been
established.
(l) Copies of all Notices required pursuant to Article III of this
Agreement, together with evidence satisfactory to the Company that such Notices
have been or will be delivered to the addressees thereof.
20
(m) A copy of each form of invoice from each Orginator showing the proper
Originator Lockbox or Company Lockbox as the remittance address.
(n) A copy of all of the Originators' blank forms of patient consents to be
signed by each patient for which an Account is created, certified by an officer
of each Originator on behalf of the Originator, as being true, complete, correct
and the only consent forms presently in effect.
(o) A duly executed guaranty by American Enterprise Solutions, Inc. for the
benefit of the Company and the Lender.
ss. 4.02. CONDITIONS PRECEDENT ON ALL TRANSFER DATES. Each purchase of
a Purchased Batch on a Transfer Date (including the Initial Transfer Date) shall
be subject to the further conditions precedent that the Primary Servicer and
each Originator and the Company shall have agreed upon the terms of such
purchase and also that:
(a) Each Originator shall have delivered to the Company or the Master
Servicer, as the case may be, on or prior to such Transfer Date, in form and
substance satisfactory to the Company:
(i) completed Account Information with respect to each Proposed
Eligible Account (such Account Information having been delivered on or
prior to the most recent Batching Deadline preceding such Transfer
Date), together with such additional information as may reasonably be
requested by the Company or the Master Servicer; and
(ii) to the extent not previously provided, executed Notices to
each Obligor responsible for the payment of any of the Batch Accounts
to be purchased on such Transfer Date, directing such Obligors to make
payment to the addresses and accounts designated in the Notices, as set
forth in Article 111 hereof, together with evidence that such Notices
have been delivered to such Obligors.
(b) On each such Transfer Date the following statements shall be true
(and acceptance of the proceeds of such purchase by the Primary Servicer on
behalf of the Originators shall be deemed a representation and warranty by each
Originator that such statements are then true):
(i) the representations and warranties contained in Article V are
correct on and as of the date of such purchase as though made on and as
of such date except to the extent made with respect to an earlier date,
and
(ii) no event has occurred and is continuing, or would result from
such purchase, that constitutes a Group-Wide Event of Termination or
that would
21
constitute a Group-Wide Event of Termination but for the requirement
that notice be given or time elapse or both.
(c) The Company shall have received such other approvals, opinions or
documents as it may reasonably request.
(d) No acquisitions by the Originators of more than $1,000,000 shall
occur without the prior consent of the Agent.
(e) On or prior to April 30, 1999 the Originators shall deliver audited
copies of the consolidated balance sheets of each Originator and its
Subsidiaries as at December 31, 1998, and the related statements of income and
expense and retained earnings of each Originator and its Subsidiaries for the
fiscal year then ended, certified in a manner acceptable to the Company by an
Independent Public Accountant and demonstrating that there has been no Material
Adverse Effect.
(f) As soon as possible, and in any event, within 45 days after the
Closing Date, favorable opinions of such local counsels for the Originators as
the Lender Group requests, substantially in the form attached hereto as EXHIBIT
V-A, regarding compliance with patient confidentiality laws, and as to such
other matters as the Lender Group requests.
(g) As soon as possible, and in any event, within 45 days after the
Closing Date, a copy of all of the Originators' blank forms of patient consents
to be signed by each patient for which an Account is created, which consents
authorize certain demographic and medical information with respect to such
patient to be disclosed by each Originator to any assignee of the related
Account and to its servicing agents and by such servicing agents to any third
party obligors thereon, certified by an officer of each Originator on behalf of
the Originator, as being true, complete, correct and the only consent forms
presently in effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES; COVENANTS;
EVENTS OF TERMINATION; SERVICER TERMINATION EVENTS
ss. 5.01. REPRESENTATIONS AND WARRANTIES. Each Originator represents
and warrants as follows:
(a) EXISTENCE. It is a corporation duly incorporated, validly existing and
in good standing under the laws of the state of its incorporation as set forth
on SCHEDULE II hereto, and is duly qualified to do business, and is in good
standing, in every jurisdiction where the nature of its business requires it to
be so qualified, except in any jurisdiction other than that of its chief
executive offices where the failure to be so qualified would not have a Material
Adverse Effect.
22
(b) NO BREACH. The execution, delivery and performance by it of this
Agreement and the other documents to be delivered by it thereunder, (i) are
within its corporate powers, (ii) have been duly authorized by all necessary
corporate action, (iii) do not contravene (1) its charter or by-laws, (2) any
law, rule or regulation applicable to it, (3) any contractual restriction
binding on or affecting it or its Property, or (4) any order, writ, judgment,
award, injunction or decree binding on or affecting it or its Property, and (iv)
do not result in or require the creation of any Lien upon or with respect to any
of its Properties, other than the interests created by this Agreement. The
Agreement has been duly executed and delivered by it. It has furnished to the
Company a correct and complete copy of its certificate of incorporation and
by-laws, including all amendments thereto.
(c) NO CONSENT. No authorization or approval or other action by, and no
notice to or filing with, any Governmental Entity is required for the due
execution, delivery and performance by it of this Agreement or any other
document to be delivered thereunder.
(d) VALIDITY. The Agreement constitutes the legal, valid and binding
obligation of it, enforceable against it in accordance with its terms, except as
limited by bankruptcy, insolvency, moratorium, fraudulent conveyance or other
laws relating to the enforcement of creditors' rights generally and general
principles of equity (regardless of whether enforcement is sought at equity or
law).
(e) AUTHORITY. It has all power and authority, and has all permits,
licenses (including, without limitation, facility licenses), accreditations,
certifications, authorizations, approvals, consents and agreements of all
Insurers, Governmental Entities, accreditation agencies and any other Person
(including without limitation, accreditation by the appropriate Governmental
Entities and industry accreditation agencies and accreditation and
certifications as a provider of healthcare services eligible to receive payment
and compensation and to participate under Medicare, Medicaid, CHAMPUS/Champva,
Blue Cross/Blue Shield and other equivalent programs), necessary or required for
it (i) to own the assets (including Accounts) that it now owns, and (ii) to
carry on its business as now conducted, except where failure to have such
permits, licenses, agreements with third party payors, accreditation and
certifications (including, without limitation, accreditation by the appropriate
Governmental Entities and industry accreditation agencies and accreditation and
certifications as a provider of healthcare services eligible to receive payment
and compensation and to participate under Medicare, Medicaid, CHAMPUS/Champva,
Blue Cross/Blue Shield and other equivalent programs) would not have a Material
Adverse Effect.
(f) HEALTHCARE ISSUES. It has not been notified by any Insurer,
Governmental Entity or instrumentality, accreditation agency or any other
Person, during the immediately preceding 24 month period, that such party has
rescinded or not renewed, or is reasonably likely to rescind or not renew, any
such permit, license, accreditation,
23
certification, authorization, approval, consent or agreement granted to it or to
which it is a party.
(g) CONDITIONS PRECEDENT. As of the Initial Transfer Date, all conditions
precedent set forth in Section 4.01 have been fulfilled or waived in writing by
the Company and the Lender, and as of each Transfer Date, the conditions
precedent set forth in Section 4.02 shall have been fulfilled or waived in
writing by the Company and the Lender.
(h) FINANCIAL CONDITION. The balance sheets of each Originator and its
Subsidiaries as at September 30, 1998, and the related statements of income and
expense, cash flows and retained earnings of each Originator and its
Subsidiaries for the fiscal periods then ended, copies of which have been
furnished to the Company and the Lender, fairly present the financial condition
of each Originator and its Subsidiaries as at such date and the results of the
operations of each Originator and its Subsidiaries for the period ended on such
date, all in accordance with GMP, and since September 30, 1998 there has been no
change resulting in a Material Adverse Effect.
(i) LITIGATION. There is no pending or, to any Originator's knowledge,
threatened action or proceeding or injunction, writ or restraining order
affecting the Primary Servicer or any of its Subsidiaries before any court,
Governmental Entity or arbitrator which could reasonably be expected to result
in a Material Adverse Effect, and no Originator or any Subsidiary is currently
the subject of, or has a present intention of commencing, an insolvency
proceeding or petition in bankruptcy.
(j) NO LIENS. Each Originator is the legal and beneficial owner of the
Accounts in each Transferred Batch free and clear of any Lien (other than any
Lien on Accounts that is expressly subordinated in writing to the Lien created
hereunder in a manner acceptable to the Company, in its sole discretion); upon
each purchase or contribution of a Transferred Batch, the Company shall acquire
valid ownership of each Account in such Transferred Batch and in the Collections
with respect thereto prior to all other Liens thereon. No effective financing
statement or other instrument similar in effect covering any Accounts or the
Collections with respect thereto is on file in any recording office, except
those filed in favor of the Company, the Lender or any permitted assignee of the
Lender relating to this Agreement, and no competing notice or notice
inconsistent with the transactions contemplated in this Agreement remains in
effect with respect to any Obligor.
(k) RECEIVABLES INFORMATION. All Account Information, information provided
in the application for the program effectuated by this Agreement, all financial
information with respect to any Originator, and each other document, report and
Transmission provided by the Primary Servicer or any Originator to the Lender
Group is or shall be accurate in all material respects as of its date and as of
the date so furnished, and no such document contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary in order to make the statements
24
contained therein, in the light of the circumstances under which they were made,
not misleading.
(l) OFFICE. The principal place of business and chief executive office of
each Originator and the office where such Originator keeps its records
concerning the Accounts are located at the respective address referred to on the
signature pages of this Agreement and there have been no other such locations
for the four immediately prior months.
(m) INVESTMENT COMPANY ACT. Each purchase of a Purchased Batch will
constitute a purchase or other acquisition of notes, drafts, acceptances, open
accounts receivable or other obligations representing part or all of the sales
price of merchandise, insurance or services within the meaning of Section
3(c)(5) of the Investment Company Act of 1940, as amended.
(n) ELIGIBLE ACCOUNTS. Each Account included in a Purchased Batch is, as of
the Transfer Date of such Purchased Batch, an Eligible Account.
(o) FIRST PRIORITY LIENS. The provisions of this Agreement create, on the
Initial Transfer Date, legal and valid liens in all of the Accounts owned or
held by the Originators (other than the Batch Accounts that have been sold to
the Company pursuant to the provisions of this Agreement) in the Company's
favor, and when all proper filings and other actions necessary to perfect such
liens have been completed, will constitute a perfected and continuing Lien on
all of the Accounts owned or held by the Originators (other than the Batch
Accounts that have been sold to the Company pursuant to the provisions of this
Agreement), having priority over all other liens on such Accounts of the
Originators, enforceable against each Originator and all third parties.
(p) NOTICES. All required Notices have been prepared and delivered to each
applicable Governmental Entity and Insurer, and all invoices now bear only the
appropriate remittance instructions for payment direction to the Company
Lockbox, the Company Lockbox Account, the Originator Lockbox or the Originator
Lockbox Account, as the case may be.
(q) LOCATION CHANGE. Except as disclosed on SCHEDULE II hereto, no
Originator has changed its principal place of business or chief executive office
in the last five years.
(r) NAMES. The exact name of each Originator is as set forth on the
signature pages of this Agreement and, except as set forth on such signature
page, such Originator has not changed its name in the last five years and,
except as set forth opposite such Originator's name on SCHEDULE II, during such
period such Originator has not used, nor does such Originator now use, any other
fictitious, assumed or trade name.
25
(s) MATERIAL ADVERSE EFFECT. with respect to itself or any of its
Subsidiaries there exists no event which has or is reasonably likely to have a
Material Adverse Effect.
(t) COMPLIANCE WITH LAWS. It is not in violation under any applicable
statute, rule, order, decree or regulation of any court, arbitrator or
governmental body or agency having jurisdiction over any Originator which could
have a Material Adverse Effect.
(u) TAX OBLIGATIONS. It has filed on a timely basis all tax returns
(federal, state and local) required to be filed and has paid, or made adequate
provision for payment of, all taxes, assessments and other governmental charges
due from it, unless contested in good faith by appropriate proceedings. No tax
Lien has been filed and is now effective against it or any of its Properties,
except any Lien in respect of taxes and other charges not yet due or contested
in good faith by appropriate proceedings. To its knowledge, there are no pending
investigations of it by any taxing authority or any pending but unassessed tax
liability of it. It does not have any obligation under any tax sharing
agreement.
(v) SOLVENCY. It is solvent and will not become insolvent after giving
effect to the transactions contemplated by this Agreement; it has not incurred
debts or liabilities beyond its ability to pay; it will, after giving effect to
the transaction contemplated by this Agreement, have an adequate amount of
capital to conduct its business in the foreseeable future; the sales and
contributions of Accounts hereunder are made in good faith and without intent to
hinder, delay or defraud its present or future creditors.
(w) LOCKBOXES AND LOCKBOX ACCOUNTS. The Originator Lockbox is the only post
office box and the Originator Lockbox Account is the only lockbox account
maintained by the Originators for Accounts, the Obligors of which are
Governmental Entities; and no direction of any Originator is in effect directing
Obligors to remit payments on Batch Accounts other than to the applicable
Company Lockbox, Company Lockbox Account, Originator Lockbox, or Originator
Lockbox Account.
(x) PLANS. Each pension plan or profit sharing plan to which it is a party
has been fully funded in accordance with its obligations as set forth in such
plan.
(y) INVESTIGATIONS. To its knowledge, there are no pending civil or
criminal investigations by any Governmental Entity involving it or its officers
or directors and neither it nor any of its officers or directors has been
involved in, or the subject of, any civil or criminal investigation by any
Governmental Entity.
(z) BUSINESS. The primary business of each Originator is the provision of
healthcare services, products, merchandise or equipment.
(aa) GOVERNMENT LIENS. The assets of each Originator are free and clear of
any liens in favor of the Internal Revenue Service, any Employee Benefit Plan or
the PBGC other than inchoate tax liens resulting from an assessment of such
Originator.
26
(bb) ERISA. With respect to each Employee Benefit Plan of it, including to
its knowledge as to any Multiemployer Plan, such Employee Benefit Plan has
complied and been administered in accordance with its terms and in substantial
compliance with all applicable provisions of ERISA and the Internal Revenue Code
of 1986, as amended; neither it nor any ERISA Affiliate has been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of ERISA;
and it has no material unpaid liability for any Employee Benefit Plan.
(cc) AFFILIATE ACCOUNTS. None of the Proposed Eligible Accounts or
Purchased Accounts constitutes or has constituted an obligation of any
Subsidiary, parent or other Person which is its Affiliate.
(dd) DEFAULTED ACCOUNTS. The Obligor of each Proposed Eligible Account and
each Purchased Account has not been the Obligor of any Defaulted Accounts in the
past 12 months (other than, for the purpose of this clause, as a result of good
faith disputes).
(ee) BULK SALES. No transaction contemplated under this Agreement requires
compliance with any bulk sales act or similar law.
(ff) PROVIDER NUMBERS. It has, or has the right to use, valid provider
identification numbers and licenses to generate the Accounts and such numbers
are set forth under its name on the signature pages hereof.
(gg) TRUE SALE. It shall treat each sale of Accounts hereunder as a sale
for federal and state income tax, reporting and accounting purposes and shall
treat each contribution of Accounts hereunder as a contribution for federal and
state income tax, reporting and accounting purposes.
(hh) MARGIN STOCK. It is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation T, U, or X
of the Board of Governors of the Federal Reserve System), and no part of the
proceeds of any extension of credit under this Agreement will be used to
purchase or carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying margin stock.
(ii) CAPITAL ACCOUNTS. With respect to each Transferred Batch, each
Originator shall receive, for its own capital account, its proportional share
(based on such Originator's portion of the Accounts contributed to the Company)
of the aggregate Anticipated Liquidation Value of the Transferred Batch.
27
(jj) ACCOUNTS BILLING. Each Proposed Eligible Account and each Purchased
Account has been billed to the Obligor of such Account within 45 days of the
Billing Date.
ss. 5.02. COVENANTS. Until the later of the Facility Termination Date
and the Final Payment Date, each Originator agrees as follows:
(a) COMPLIANCE WITH LAWS, ETC. It will comply in all material respects with
all applicable laws, rules, regulations and orders and preserve and maintain its
corporate existence, rights, franchises, qualifications, and privileges except
to the extent that the failure so to comply with such laws, rules and
regulations or the failure so to preserve and maintain such existence, rights,
franchises, qualifications, and privileges would not result in a Material
Adverse Effect.
(b) OFFICES, RECORDS AND BOOKS OF ACCOUNT. It will keep its principal place
of business and chief executive office and the office where it keeps its records
concerning the Accounts at the address set forth under its name on the signature
pages to this Agreement or, upon 30 days' prior Written Notice to the Company
and the Lender, at any other locations in jurisdictions where all actions
reasonably requested by the Company and the Lender or otherwise necessary to
protect, perfect and maintain the Company's security interest in the Accounts
have been taken and completed. It shall keep its books and accounts in
accordance with generally accepted accounting principles and shall make a
notation on its books and records, including any computer files, to indicate
which Accounts have been sold or contributed to the Company and the security
interest of the Company in its Accounts not sold or contributed to the Company.
It shall maintain and implement administrative and operating procedures
(including, without limitation, an ability to recreate records evidencing
Accounts 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 Batch Accounts
(including, without limitation, records adequate to permit the daily
identification of each Batch Account and all Collections of and adjustments to
each existing Batch Account) and for providing the Account Information.
(c) PERFORMANCE AND COMPLIANCE WITH CONTRACTS AND CREDIT POLICY. It will,
at its expense, timely and fully perform and comply with all material
provisions, covenants and other promises required to be observed by it under the
contracts related to the Batch Accounts, and timely and fully comply in all
material respects with the Credit Policy in regard to each Batch Account and the
related contract, and it shall maintain, at its expense, in full operation each
of the bank accounts and lockboxes required to be maintained under this
Agreement. It shall not do anything to impede or interfere, or suffer or permit
any other Person to impede or interfere in any material respect, with the
collection by the Company, or the Master Servicer on behalf of the Company, of
the Batch Accounts.
28
(d) NOTICE OF BREACH OF REPRESENTATIONS AND WARRANTIES. It shall promptly
(and in no event later than one Business Day following actual knowledge thereof)
inform the Company and the Master Servicer of any breach of covenants or
representations and warranties hereunder, including, without limitation, upon
discovery of a breach of the Eligibility Criteria set forth in the LSA.
(e) SALES, LIENS, ETC. It will not sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any Liens upon
or with respect to, its Accounts, or upon or with respect to any account to
which any Collections of any Batch Account are sent, or assign any right to
receive income in respect thereof except those Liens in favor of the Company,
the Lender or any assignee of the Lender relating to this Agreement.
(f) EXTENSION OR AMENDMENT OF BATCH ACCOUNTS. It will not impede or
interfere with the Collection of the Accounts. It shall not amend, waive or
otherwise permit or agree to any deviation from the terms or conditions of any
Batch Account except in accordance with the Credit Policy.
(g) CHANGE IN BUSINESS OR CREDIT POLICY. It will not make any change in the
Credit Policy or make any change in the character of its business that, in
either event, could result in a Material Adverse Effect. It will not make any
other material changes in the Credit Policy without the prior written consent of
the Company and the Lender.
(h) AUDITS AND VISITS. It will, at its cost and expense not to exceed
$3,800 unless there is a material Event of Default or an incipient material
Event of Default, once annually unless there is a material Event of Default or
an incipient material Event of Default, during regular business hours as
requested by the Company and/or the Agent, permit the Company and/or the Agent,
or its agents or representatives (including the Master Servicer), (i) to examine
and make copies of and abstracts from all books, records and documents
(including, without limitation, computer tapes and disks) in its possession or
under its control relating to Batch Accounts including, without limitation, the
related contracts, and (ii) to visit its offices and properties for the purpose
of examining and auditing such materials described in clause (i) above, and to
discuss matters relating to Batch Accounts or its performance hereunder or under
its contracts with any of its officers or employees having knowledge of such
matters. It shall permit the Master Sevicer to have at least one agent or
representative physically present in its administrative office during normal
business hours to assist it in performing its obligations under this Agreement,
including its obligations with respect to the collection of Batch Accounts
pursuant to Article III of this Agreement.
(i) CHANGE IN PAYMENT INSTRUCTIONS. It will not terminate the Originator
Lockbox or the Originator Lockbox Account, or make any change or replacement
in the instructions contained in any invoice, Notice or otherwise, or regarding
payments with respect to Accounts to be made to the Lockboxes, the Originator
Lockbox Account, the
29
Company Lockbox Account, the Company or the Master Servicer, except upon the
prior and express written consent of the Agent.
(j) REPORTING REQUIREMENTS. It will provide to the Company and the Lender
(in multiple copies, if requested by the Lender) the following:
(i) as soon as available and in any event within 50 days after the
end of each of the first three quarters of each fiscal year of each
Originator, consolidated and consolidating balance sheets of each
Originator and its Subsidiaries as of the end of such quarter and
consolidated statements of income, cash flows and retained earnings of
each Originator and its Subsidiaries for the period commencing at the
beginning of the current fiscal year and ending with the end of such
quarter, certified by the chief financial officer of each Originator,
and accompanied by a certificate of an authorized officer of each
Originator detailing such Originator's compliance for such fiscal
period with all terms, including the financial covenants, contained in
this Agreement, and to the extent any noncompliance exists, a
description of the steps being taken by the Originator to address such
non-compliance;
(ii) as soon as available and in any event within 95 days after
the end of each fiscal year of each Originator, a copy of the audited
consolidated and consolidating financial statements (together with
explanatory notes thereon) and the auditor's report letter for such
year for each Originator and its Subsidiaries, containing financial
statements for such year audited by an Independent Public Accountant,
and accompanied by a certificate of an authorized officer of each
Originator detailing such Originator's compliance for such fiscal
period with all terms, including the financial covenants, contained in
this Agreement, and to the extent any non-compliance exists, a
description of the steps being taken by the Originator to address such
non-compliance;
(iii) on or before the 30th of each month, monthly and
year-to-date statistical and financial reports for each Originator,
including volume and time business reports (to be requested by the
Company) and unaudited consolidated profit and loss reports, from the
chief financial officer of the Primary Servicer in form and substance
satisfactory to the Agent;
(iv) promptly and in any event within five (5) days after
institutional knowledge of each Event of Termination or event which,
with the giving of notice or lapse of time, or both, would constitute
an Event of Termination, a statement of the chief financial officer of
the Primary Servicer setting forth details of such Event of Termination
or event, and the action that it or such applicable Originator has
taken and proposes to take with respect thereto;
30
(v) promptly after the sending filing thereof, if any, copies of
all reports and registration statements that any Originator or any
Subsidiary files with the Securities and Exchange Commission or any
national securities exchange and official statements that any
Originator or any Subsidiary files with respect to the issuance of
tax-exempt indebtedness and after an Event of Termination or Servicer
Termination Event, copies of all reports (if any) that any Originator
or any Subsidiary sends to any of its security holders;
(vi) promptly after the filing or receiving thereof, copies of all
reports and notices that any Originator or any of its Affiliates files
under ERISA with the Internal Revenue Service or the PBGC or the U.S.
Department of Labor or that any Originator or any of its Affiliates
receives from any of the foregoing or from any Multiemployer Plan to
which any Originator or any of its Affiliates is or was, within the
preceding five years, a contributing employer, in each case in respect
of the assessment of withdrawal liability or an event or condition
which could, in the aggregate, result in the imposition of liability on
any Originator or any such Affiliate in excess of $5,000;
(vii) at least ten (10) Business Days prior to any change in any
Originator's name or any implementation of a new trade/assumed name, a
Written Notice setting forth the new name or trade name and the
proposed effective date thereof and copies of all documents required to
be filed in connection therewith;
(viii) promptly (and in no event later than one (1) Business Day
following actual knowledge or receipt thereof), Written Notice in
reasonable detail, of (w) any Lien asserted or claim made against a
Batch Account, (x) the occurrence of a Servicer Termination Event, (y)
the occurrence of any other event which could have a Material Adverse
Effect on the value of a Batch Account or on the interest of the
Company in a Batch Account or (z) the results of any cost report or
similar audits being conducted by any federal, state or county
Governmental Entity or its agents or designees;
(ix) at least 30 days prior to the commencement of each fiscal
year, a consolidated and consolidating operating plan (together with a
complete statement of the assumptions on which such plan is based) of
each Originator and its Subsidiaries approved by its Board of
Directors, which shall include monthly budgets for the prospective year
in reasonable detail acceptable to the Company and the Agent and will
integrate operating profit and cash flow projections and personnel,
capital expenditures, and facilities plans;
(x) promptly upon receipt thereof, a copy of any management letter
or written report submitted to the Primary Servicer or any Originator
by independent certified public accountants with respect to the
Subsidiaries, business, condition (financial or otherwise), operations,
prospects, or Properties of the Originators;
31
(xi) no later than five (5) Business Days after the commencement
thereof, Written Notice of all actions, suits, and proceedings before
any Governmental Entity or arbitrator affecting any Originator which,
if determined adversely to such Originator, could have a Material
Adverse Effect;
(xii) promptly after the furnishing thereof, copies of any
statement or report furnished by an Originator to any other party
pursuant to the terms of any indenture, loan, or credit or similar
agreement and not otherwise required to be furnished to the Company
pursuant to this Agreement;
(xiii) as soon as possible and in any event within five (5) days
after becoming aware of the occurrence thereof, Written Notice of any
matter that could reasonably be expected to result in a Material
Adverse Effect;
(xiv) as soon as available, (A) one copy of each financial
statement, report, notice or proxy statement sent by any Originator or
any of its Subsidiaries to its stockholders generally, (B) and one copy
of each regular, periodic or special report, registration statement, or
prospectus filed by any Originator or any of its Subsidiaries with any
securities exchange or the Securities and Exchange Commission or any
successor agency or the Bankruptcy Court, and (C) all press releases
and other statements made available by any Originator to the public
concerning developments in the business of any Originator or any of its
Subsidiaries;
(xv) within the sixty (60) day period prior to the end of each
fiscal year of each Originator, a report satisfactory in form to the
Company and the Agent, listing all material insurance coverage
maintained as of the date of such report by such Originator and its
Subsidiaries and all material insurance planned to be maintained by
such Originator and its Subsidiaries in the subsequent fiscal year; and
(xvi) such other information respecting the Accounts or the
condition or operations, financial or otherwise, of any Originator or
any Subsidiary of an Originator as the Company or the Agent may from
time to time reasonably request.
(k) NOTICE OF PROCEEDINGS; OVERPAYMENTS. The Primary Servicer shall
promptly notify the Master Servicer in the event of any action, suit,
proceeding, dispute, set-off, deduction, defense or counterclaim that is or may
be asserted by an Obligor with respect to any Batch Account. The Primary
Servicer shall cause each Originator to make any and all payments to the
Obligors necessary to prevent the Obligors from offsetting any earlier
overpayment to any Originator against any amounts the Obligors owe on any Batch
Accounts.
32
(1) OFFICER'S CERTIFICATE. On the date the financial statements
referred to in paragraph (j) above are to be delivered in each fiscal year
after the Initial Transfer Date, the chief financial officer of each Originator
shall deliver a certificate to the Company and the Lender, stating that, as of
such date, (i) all representations and warranties set forth in this Agreement
are true and correct, (ii) the conditions precedent set forth in Section 4.02
have been fulfilled or waived in writing by the Company and the Lender, and
(iii) no Group-Wide Event of Termination exists and is continuing.
(m) FURTHER INSTRUMENTS. CONTINUATION STATEMENTS. Each Originator
shall, at its expense, promptly execute and deliver all further instruments and
documents, and take all further action that the Lender Group or the Company may
reasonably request, from time to time, in order to perfect, protect or more
fully evidence the full and complete transfer of ownership of the Batch
Accounts, or to enable the Company or the Lender Group to exercise or enforce
the rights of the Company hereunder or under the Batch Accounts. Without
limiting the generality of the foregoing, each Originator will upon the request
of the Agent execute and file such UCC financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or
notices, as may be, in the opinion of the Agent, necessary or appropriate. Each
Originator hereby authorizes the Lender, the Agent or its designees, upon two
(2) 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 Batch Accounts now existing or hereafter arising without the
signature of such Originator where permitted by law. If an Originator fails to
perform any of its agreements or obligations under this Agreement, the Agent or
the Lender may (but shall not be required to) itself perform, or cause
performance of, such agreement or obligation, and the expenses of the Agent or
the Lender incurred in connection therewith shall be payable by the Originators.
(n) TAXES. The Originators shall pay any and all taxes (excluding the
Company's income, gross receipts, franchise, doing business or similar taxes)
relating to the transactions contemplated under this Agreement, including but
not limited to the sale, transfer and assignment of each Batch Account.
(o) DEVIATION FROM TERMS OF BATCH ACCOUNT, ETC. No Originator shall,
without the prior written consent of the Company and the Lender:
(i) other than in connection with the repurchase of a Denied
Account, compromise, adjust, extend, satisfy, subordinate, rescind, set
off, waive, amend, or otherwise modify, or permit or agree to any
deviation from, the terms and conditions of any Batch Account, or
materially or adversely amend, modify or waive any term or condition of
any contract related thereto;
(ii) (x) amend, modify, supplement or delete in any way or to any
extent any provision for uncollectible accounts and free care
applicable to any Batch Account or (y) amend, modify or supplement in
any way or to any extent any
33
financial category or change in any way or to any extent the
manner in which any financial category is treated or reflected in an
Originator's records;
(iii) materially or adversely alter or modify (x) its claims
processing system, or (y) its third party billing system, as
applicable; or
(iv) change, modify or rescind any direction contained in any
invoice or previously delivered Notice.
(p) COMPANY'S OWNERSHIP OF BATCH ACCOUNTS. It shall not prepare or
permit to be prepared 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 the Company's ownership of the Batch Accounts.
(q) MERGER, CONSOLIDATION. It shall not merge with or into, consolidate
with or into, or enter into any agreement to merge or consolidate with or into,
another Person, or sell, assign, convey, transfer, lease or otherwise dispose of
all or substantially all of its assets (whether now owned or hereafter acquired)
for which the aggregate consideration exceeds $1,000,000 without the express
written consent of Lender and Agent.
(r) NO "INSTRUMENTS". It shall not take any action which would allow,
result in or cause any Transferred Batch or Batch Account to be evidenced by an
"instrument" within the meaning of the UCC of the applicable jurisdiction.
(s) MASTER SERVICER CERTIFICATE. On or before the thirtieth (30th)
calendar day after the Initial Transfer Date, the Company and the Lender shall
receive a certificate from the Master Servicer stating that all computer linkups
and interfaces necessary or desirable, in the judgment of the Master Servicer,
to effectuate the transactions and information transfers contemplated hereunder,
are fully operational to the satisfaction of the Master Servicer.
(t) DEVIATION FROM PATIENT CONSENT FORM. The Originator shall not,
without the prior written consent of the Company and the Agent, substitute,
alter, modify or change in any way the Patient Consent Form applicable to it.
(u) IMPLEMENTATION OF NEW INVOICES. Each Originator shall take all
reasonable steps to ensure that all invoices rendered or dispatched on or after
the Initial Transfer Date contain only the remittance instructions required
under Article III of this Agreement.
(v) ASSUMED/TRADE NAME CERTIFICATES. On or before January 15, 1999, the
Company shall receive copies of all certificates filed by the Originators in
each
34
applicable jurisdiction regarding the use of each of the trade or assumed names
set forth under each Originator's name on the signature pages hereof.
(w) NOTICE OF TERMINATION OR SUSPENSION OF CONTRACTS. It shall promptly
(and in no event later than one (1) Business Day following actual knowledge
thereof inform the Company and the Master Servicer of any termination or
suspension of any of its contracts.
(x) MILLENNIUM COMPLIANCE. No later than June 9, 1999, each of the
Originators and the Primary Servicer shall provide documentary evidence
satisfactory to the Agent that such Originator's or the Primary Servicer's, as
the case may be, computer software is date compliant.
ss.5.03. EVENTS OF TERMINATION. Each of the following shall be an "EVENT
OF TERMINATION" with respect to each individual Originator and, if any Event of
Termination relates either to the Primary Servicer or to the Group-Wide
Originators (in each case, a "GROUP-WIDE EVENT OF TERMINATION"), such Event of
Termination shall relate to each Originator:
(a) The Primary Servicer, in its capacity as agent for the Company
pursuant to Section 2.05(b), shall fail to perform or observe any term, covenant
or agreement included in the Primary Servicer Responsibilities (other than a
Servicer Termination Event resulting from the events described in Section
5.03(9)) and such failure shall remain unremedied for fifteen (15) days, or the
Primary Servicer or any Originator shall fail to make when due any payment or
deposit to be made by it under this Agreement.
(b) Any Originator or the Primary Servicer (i) fails to transfer in a
timely manner any servicing rights and obligations with respect to the Batch
Accounts to any successor designated pursuant to Section 2.05(b) of this
Agreement, (ii) fails to make any payment required under this Agreement (unless
such payment obligation has been fulfilled in full pursuant to the Company's
set-off rights under Section 6.03 of this Agreement) or (iii) sends a
"Revocation Order" (as defined in the Depositary Agreement) or makes any change
or replacement in the "Standing Revocable Instruction" (as defined in the
Depositary Agreement).
(c) Any representation or warranty (other than those representations
and warranties (i) with respect to the purchase of Accounts that are covered by
Section 5.03(f) and (ii) with respect to Batch Accounts, the Repurchase Price
with respect thereto is paid to the Company in the manner set forth in Article
VI of this Agreement within five (5) Business Days following demand therefor)
made or deemed made by an Originator under or in connection with this Agreement
or any information or report delivered by an Originator pursuant to this
Agreement shall prove to have been incorrect or untrue in any material respect
when made or deemed made or delivered.
35
(d) Any Originator fails to perform or observe any other term, covenant
or agreement contained in this Agreement on its part to be performed or observed
and any such failure shall remain unremedied for three (3) Business Days after
the earlier of (i) the discovery thereof by the Originator and (ii) written
notice thereof shall have been given to such Originator or the Primary Servicer
by the Company; unless such Originator is removed as an Originator in accordance
with Section 7.19(b) of this Agreement after the earlier of clauses (i) and
(ii).
(e) Any Originator or any of its Subsidiaries shall fail to pay any
principal of or premium or interest on any of its Debt when the same becomes due
and payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such Debt;
or any other event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect
of such event or condition is to accelerate, or to permit the acceleration of,
the maturity of such Debt; or any such Debt shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), redeemed, purchased or defeased, or an offer to repay, redeem,
purchase or defease such Debt shall be required to be made, in each case prior
to the stated maturity thereof.
(f) Any purchase of a Purchased Batch pursuant to this Agreement shall
for any reason (other than pursuant to the terms hereof fail or cease to create
or fail or cease to be a valid and perfected ownership interest in each Batch
Account in such Purchased Batch and the Collections with respect thereto free
and clear of all Liens unless, as to any such Batch Account, the Repurchase
Price with respect thereto is paid to the Company in the manner set forth in
Article VI of this Agreement within five (5) Business Days following demand
therefor.
(g) Any Originator or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against an Originator or
any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
Property and, in the case of any such proceeding instituted against it (but not
instituted by it), either such proceeding shall remain undismissed or unstayed
for a period of 30 days, or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official for, it
or for any substantial part of its Property) shall occur; or an Originator or
any of its Subsidiaries shall take any action to authorize any of the actions
set forth above in this paragraph (g).
36
(h) As of any date of determination, any Orginator is found to have
been overpaid by Governmental Entities by 10% or more during any period covered
by an audit conducted by the HCFA or any applicable State in which an Originator
conducts business and such overpayment is not repaid within 30 days of its due
date or reserved for in a manner reasonably acceptable to the Agent.
(i) There shall have occurred any Material Adverse Effect since
September 30, 1998.
(j) [Intentionally Omitted]
(k) Judgments or orders for payment of money (other than judgments or
orders in respect of which adequate insurance is maintained for the payment
thereof) against the Originators in excess of $500,000 in the aggregate remain
unpaid, unstayed on appeal, undischarged, unbonded or undismissed for a period
of 90 days or more.
(l) Any governmental authority (including, without limitation, the
Internal Revenue Service or the PBGC) files a notice of a Lien against the
assets of an Originator other than a Lien (i) that is limited by its terms to
assets other than Accounts and (ii) that does not result in a Material Adverse
Effect.
(m) Any Originator does not maintain, keep, and preserve all of its
Properties necessary or useful in the proper conduct of its business in good
repair, working order, and condition (ordinary wear and tear excepted) and make
all necessary repairs, renewals, replacements, betterments, and improvements
thereof.
(n) Any Originator does not pay or discharge at or before maturity or
before becoming delinquent (i) all taxes, levies, assessments, and governmental
charges imposed on it or its income or profits or any of its Property, and (ii)
all lawful claims for labor, material, and supplies, which, if unpaid, might
become a Lien upon any of its Property.
(o) Any Originator does not keep insured by financially sound and
reputable insurers all Property of a character usually insured by corporations
engaged in the same or similar business similarly situated against loss or
damage of the kinds and in the amounts customarily insured against by such
corporations and carry such other insurance as is usually carried by such
corporations. Each policy referred to in this paragraph (o) shall provide that
it will not be canceled, amended, or reduced except after not less than 30 days'
prior written notice to the Company and the Lender and shall also provide that
the interests of the Company shall not be invalidated by any act or negligence
of an Originator. Any Originator does not advise the Company promptly of any
policy cancellation, reduction, or amendment. Any insurance policy for property,
casualty, liability and business interruption coverage for an Originator does
not name the Lender as
37
assignee of the Company as loss payee (as the Company's interests may appear) or
an additional insured, as appropriate.
(p) Any Originator does not maintain proper books of record and account
in which full, true and correct entries in conformity with GAAP are made of all
dealings and transactions in relation to its business and activities.
(q) Any Originator does not comply in all material respects with (i)
any document directly relating to the responsibilities of such Originator under
this Agreement or (ii) any agreement, contract, or instrument that results in a
Material Adverse Effect.
(r) Any Originator does not comply with all minimum funding
requirements and all other material requirements of ERISA, if applicable, so as
not to give rise to any liability thereunder.
(s) Any Originator engages in any line or lines of business activity
other than the businesses in which it is engaged on the date hereof.
(t) An "Event of Default" (as defined in the LSA) shall occur under the
LSA.
(u) Any provision of this Agreement shall for any reason cease to be
valid and binding on the Primary Servicer or an Originator or the Primary
Servicer or an Originator shall so state in writing.
(v) The Loss-to-Liquidation Ratio in any four consecutive calendar
weeks exceeds 30%.
(w) The Delinquency Ratio in any four consecutive calendar weeks
exceeds 30%.
(x) [Intentionally Omitted]
(y) [Intentionally Omitted]
(z) [lntentionally Omitted]
(aa) [Intentionally Omitted]
(bb) [Intentionally Omitted]
(cc) THE ORIGINATOR'S DEBT TO EQUITY RATIO. The Originators permit the
ratio of Debt of the Originators to its Equity to exceed 20.0:1.0 at the end of
any fiscal quarter.
38
(dd) CHANGE OF CONTROL. A Change of Control shall occur without the
written consent of Agent and Lender.
(ee) Failure to add and maintain Parkside Hospital as an originator
upon the completion of the Real Estate Sale providing such addition is
acceptable to the Agent.
(ff) [Intentionally Omitted]
(gg) In no event shall the Borrower make any loans or financial
accommodations to any officer of Borrower.
(hh) Acquisition by the Originators for which the aggregate
consideration exceeds $1,000,000 without the prior consent of the Agent and
remaining unremedied for 1 80 days.
(ii) The merger or consolidation of any Originator with another Person
for which the aggregate consideration exceeds $1,000,000 without the express
written consent of Lender and Agent which shall remain unremedied for 180 days.
ss.5.04. SERVICER TERMINATION EVENTS. Each of the following shall be a
"SERVICER TERMINATION EVENT':
(a) An event has occurred and is continuing that constitutes an Event
of Termination or that would constitute an Event of Termination but for the
requirement that notice be given or time elapse or both.
(b) The Primary Servicer is not performing, or becomes unable (in the
commercially reasonable determination of the Company or the Lender) to perform,
fully the Primary Servicer Responsibilities set forth in EXHIBIT IV hereof.
(c) A Originator is unable to maintain the Transmission interface
described in EXHIBIT III to the complete satisfaction of the Master Servicer, or
the electronic information servicing capabilities of an Originator are not
functioning for a period of more than three consecutive Business Days.
(d) Any Originator has sent multiple Transmissions to the Master
Servicer in a manner that is not in compliance with the specifications set forth
in EXHIBIT III hereof.
(e) The Company or the Lender, in its sole judgement, which judgment
shall be commercially reasonable, is not satisfied with the performance by any
Originator, or the Primary Servicer on behalf of the Originators, of the Primary
Servicer Responsibilities with respect to the Batch Accounts.
39
(f) If, at any date, the aggregate Anticipated Liquidation Value of all
Delinquent Accounts that became Delinquent during the prior three (3) months is
in excess of 30% of the aggregate Anticipated Liquidation Value of all Accounts
sold by the Originators to the Company during the prior three (3) months
(regardless of whether the Denied Accounts are repurchased by the Originators
pursuant to Article VI of this Agreement).
(g) As of any date after the Initial Transfer Date, (i) the
dollar-weighted average days outstanding with respect to all outstanding Batch
Accounts on such date and on the same day of each of the two preceding calendar
months (or if there is no corresponding day in any such preceding month, the
last day of such month) is greater than 150 days, or (ii) the average over the
preceding 90-day period of the dollar-weighted average days outstanding with
respect to all outstanding Batch Accounts on each day during such period is
greater than 150 days.
(h) As of any date after the Initial Transfer Date, more than 30% of
all outstanding Batch Accounts (excluding Denied Accounts) are aged more than
120 days but less than 180 days from the respective Billing Dates of such Batch
Accounts.
(i) As of any date, Collections on all Batch Accounts that have been
liquidated or written off during the then most recent 13 week period, are less
than 30% of the aggregate gross value (billed amount) of such Batch Accounts.
(j) The Company, in its sole judgement, which judgement shall be
commercially reasonable, is not satisfied with the performance by the
Originators, or of the Primary Servicer on behalf of the Originators, of the
Primary Servicer Responsibilities with respect to the Batch Accounts.
ss.5.05. REMEDIES. (a) If any Group-Wide Event of Termination shall
occur and be continuing, the Company may, by notice to the Primary Servicer on
behalf of each of the Originators (which notice shall be deemed to have been
given to each Originator), take either or both of the following actions: (x)
declare the Facility Termination Date to have occurred (except with respect to
the Group-Wide Event of Termination in Section 5.03(g), in which case the
Facility Termination Date shall be deemed to have occurred automatically and
without notice), and (y) without limiting any rights hereunder, terminate the
appointment of the Originators and the Primary Servicer to perform any or all of
the Primary Servicer Responsibilities and replace the Primary Servicer in the
manner set forth in Section 2.05(b). Upon any such declaration or designation,
the Company shall have, in addition to the rights and remedies which it may have
under this Agreement, all other rights and remedies provided after default under
the UCC and under other applicable law, which rights and remedies shall be
cumulative.
(b) If an Event of Termination shall occur and be continuing, the
Company may terminate the appointment of the Originators and the Primary
Servicer, or any of their
40
agents, to perform any or all of the Primary Servicer Responsibilities in the
manner set forth in Section 2.05(b), and, with respect to an individual
Originator that does not constitute a Group-Wide Event of Termination, the
Company, in its sole discretion, may require the immediate removal of such
Originator from the program and, on or prior to the effective date of such
removal, (x) all Accounts sold by such Originator to the Company shall be
re-purchased by such Originator as if such Accounts were Denied Accounts and
payment in full shall have been received by the Company, or (y) all rights and
obligations in respect of Accounts sold by such Originator to the Company shall
be transferred to another Originator. Such Originator shall also withdraw as a
member of the Company; PROVIDED, HOWEVER, that such Originator's capital account
as a member of the Company shall not be paid out until the date of termination
of this Agreement as set forth in Section 7.07 herein.
ARTICLE Vl
INDEMNIFICATION;
GRANT OF SECURITY INTEREST
ss.6.01. INDEMNIFICATION AND SET-OFF RIGHTS FOR DENIED ACCOUNTS. (a) If
a breach of any of the representations or warranties contained herein relating
to a Purchased Account shall be discovered at any time (each, a "DENIED
ACCOUNT"), the Primary Servicer or the Originators shall, on the next Settlement
Date, repurchase such Denied Account from the Company at the Repurchase Price.
(b) For ease of administration, the Company shall be entitled to
presume that the failure of any Purchased Account (or portion thereof) to be
paid in full on or after the 180th day following the Billing Date thereof is
the result of a breach of a representation or warranty contained herein with
respect to such Purchased Account, unless the Company shall have actual
knowledge to the contrary (such as, by way of example, actual knowledge of the
financial inability of an Obligor to pay its obligations represented by an
Account). In the event the Company receives the Repurchase Price for any such
Purchased Account and it is thereafter determined that the failure of such
Purchased Account to be paid in full was not the result of a breach of
representation or warranty contained herein, the parties hereto shall make an
appropriate adjustment by increasing the Purchase Price of any Purchased Batch
to be purchased on or after such date.
(c) Upon receipt by (or on behalf of the Company of the Repurchase
Price with respect to any Denied Account, the Company shall be deemed to have
reassigned and resold to the applicable Originator such Denied Account without
any representation, warranty or recourse whatsoever, and, thereafter, neither
the Company nor any member of the Lender Group shall have any further servicing
or other obligation to such Originator with respect to such Denied Account.
41
(d) From time to time at the request of an Orginator, the Company shall
deliver to such Originator (at such Originator's sole cost and expense) such
documents, assignments, releases, notices and instruments of termination as such
Originator may reasonably request to evidence the reconveyance by the Company of
a Denied Account pursuant to the terms of Section 6.01(c).
ss. 6.02. INDEMNITIES BY THE ORIGINATOR. Without limiting any other
rights that the Company, the Agent, the Master Servicer or any of their
respective Affiliates (together with their respective officers, directors,
shareholders and lenders, each, an "INDEMNIFIED PARTY") may have hereunder or
under applicable law, each Originator hereby agrees jointly and severally to
indemnify each Indemnified Party from and against any and all claims, losses and
liabilities (including, without limitation, reasonable attorneys' fees) (all of
the foregoing being collectively referred to as "INDEMNIFIED AMOUNTS") arising
out of or resulting from any of the following:
(a) the sale of any Account which purports to be part of a Purchased
Batch but which is not, at the date of such sale, an Eligible Account described
in Section 5.01(j);
(b) any representation or warranty made or deemed made by any
Originator (or any of its officers) under or in connection with this Agreement
and not relating to a Purchased Account which shall have been incorrect in any
material respect when made;
(c) the failure by any Originator or any Batch Account to comply with
any applicable law, rule or regulation with respect to any Batch Account;
(d) the failure to vest in the Company a perfected ownership interest
in each Account included in a Transferred Batch and the Collections in respect
thereof, free and clear of any Liens;
(e) any dispute, claim, set-off or defense to the payment, in whole or
in part, of any Account (including, without limitation, a defense based on such
Account not being a legal, valid and binding obligation) or any other claim
resulting from the services or merchandise related to such Account or the
furnishing or failure to furnish such services or merchandise or relating to
collection activities with respect to such Account (if such collection
activities were performed by any Originator or any of its Affiliates acting as
Primary Servicer), PROVIDED, HOWEVER, this clause (e) shall not be deemed to
include any dispute, claim, set-off or defense to the payment of any Account (i)
arising out of the financial inability of an Obligor to pay its obligations
represented by such Account including, without limitation, a discharge in
bankruptcy, or (ii) arising after the sale of such Account to the Company
hereunder and arising solely as a result of actions taken by any member of the
Lender Group;
42
(f) a failure of any Orginator, including, without limitation, the
Primary Servicer's actions on behalf of the Originators under Section 2.05(b) of
this Agreement with respect to Primary Servicer Responsibilities, to perform its
duties or obligations in accordance with the provisions hereof or to perform its
duties or obligations hereunder; or
(g) the commingling by any Originator of Collections at any time with
other funds of such or any other Originator,
PROVIDED, HOWEVER, that in all events there shall be excluded from the foregoing
indemnification any claims, losses or liabilities resulting solely from the
gross negligence or willful misconduct of an Indemnified Party or which
constitutes recourse for an uncollectible Purchased Account.
Such Indemnified Party shall notify the Primary Servicer, on behalf of
the Originators, of such claim, provided that the failure to so notify shall not
affect or invalidate the indemnity granted pursuant to this Section 6.02.
ss.6.03. RIGHT OF SET-OFF. Unless an Originator notifies the Company in
writing that it desires to pay on the date when due the Repurchase Price under
Section 6.01 or any Indemnified Amounts under Section 6.02 and such Originator
makes such payment to the Company in immediately available funds on such date,
each such Originator hereby irrevocably instructs the Company to set-off the
full amount of the Repurchase Price or the Indemnified Amounts, as the case may
be, against the Purchase Price of any Purchased Batch to be purchased on or
after such date. No further notification, act or consent of any nature
whatsoever is required prior to the right of the Company to exercise such right
of set-off, PROVIDED, HOWEVER, the Company or a member of the Lender Group shall
notify the Primary Servicer on behalf of such Originator that a set-off pursuant
to this Section 6.03 occurred, the amount of such set-off and a description of
the Denied Account or Indemnified Amounts, as the case may be. The Company shall
exercise its right to set-off hereunder to the extent funds are available prior
to making a demand for indemnification under Section 6.02.
ss.6.04. GRANT OF SECURITY INTEREST. (a) As collateral security for the
Originators' existing and future (i) obligations to repurchase Denied Accounts
under Section 6.01 hereof, (ii) indemnification obligations to the Company under
Section 6.02 hereof, and (iii) obligations to pay costs, expenses and fees under
Section 6.05 hereof, each Originator hereby grants to the Company a first
priority lien on and security interest in, and right of set-off against, (x) all
of the Accounts now or hereafter owned or held by such Originator, (y) to the
maximum extent permitted by law, the Originator Lockbox and the Originator
Lockbox Account, and (z) all proceeds of any of the foregoing.
43
(b) In connection with the grant under (a) above, this Agreement shall
be deemed to be a security agreement as understood under the UCC. Each
Originator agrees to execute, and hereby authorizes the Company to file, one or
more financing statements or continuation statements or amendments thereto or
assignments thereof in respect of the lien created pursuant to this Section 6.04
which may at any time be required or, in the opinion of the Company, be
desirable, and to do so without the signature of such Originator where permitted
by law.
ARTICLE VII
MISCELLANEOUS
ss.7.01. AMENDMENTS. ETC. (a) No amendment or waiver of any provision
of this Agreement or consent to any departure therefrom by a party hereto shall
be effective unless in writing signed by the Primary Servicer, the Originators,
the Company, and the Lender as assignee of all of the Company's rights and
remedies hereunder, and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No failure on the part of the Company, the Primary Servicer or an
Originator to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right.
(b) The parties hereto agree to make any change, modification or
amendment to this Agreement as may be requested by any rating agency then rating
the healthcare financing program of the Lender, so long as any such change,
modification or amendment does not materially adversely affect the parties
hereto.
ss.7.02. NOTICES. ETC. All notices and other communications hereunder
shall, unless otherwise stated herein, be in writing (which may include
facsimile communication) and shall be faxed or delivered, (i) to each party
hereto, at its address set forth under its name on the signature pages hereof or
at such other address as shall be designated by such party in a written notice
to the other parties hereto (each Originator hereby acknowledges and agrees that
notices to or for the benefit of such Originator may be delivered to the Primary
Servicer and such delivery to the Primary Servicer shall be deemed to be
received by each such Originator), and (ii) to the Agent and the Master Servicer
as follows:
44
if to the Agent: HEALTHCARE CAPITAL RESOURCES, INC.
875 Avenue of the Americas
New York, New York 10001-3507
Attention: Suzanne Steinan
Telephone: (212) 331-6900
Facsimile: (212) 331-6909
if to the Master Servicer: ACCELERATED RECEIVABLES
MANAGEMENT LTD.
1400 Renaissance Drive, Suite 400
Park Ridge, Illinois 60068
Attention: James Swanson
Telephone: (847) 824-5510
Facsimile: (847) 824-7166
Notices and communications by telefacsimile shall be effective when sent (and
shall be followed by hard copy sent by regular mail), and notices and
communications sent by other means shall be effective when received.
ss.7.03. ASSIGNABILITY. (a) This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective permitted
successors and assigns.
(b) Subject to Section 7.03(b) of the LSA, this Agreement and the
Company's rights and obligations herein (including without limitation, ownership
of the Purchased Accounts in each Purchased Batch, the Company Lockbox and
Company Lockbox Account and rights in relation to the Originator Lockbox and the
Originator Lockbox Account) shall be assignable by the Company and its
successors and assigns. Each Originator hereby acknowledges that the Company is
granting to the Lender, which is further granting to its lenders, a security
interest in this Agreement and all of the Company's rights, title and interests
hereunder (including, without limitation, the Purchased Accounts, each
Originator's obligations hereunder, the Company Lockbox and Company Lockbox
Account, and rights in relation to the Originator Lockbox and the Originator
Lockbox Account).
(c) No Originator may assign its rights or obligations hereunder or any
interest herein without the prior written consent of the Company and the Lender.
ss.7.04. FURTHER ASSURANCES. The Originators shall, at their cost and
expense, upon the request of the Company, duly execute and deliver, or cause to
be duly executed and delivered, to the Company such further instruments and do
and cause to be done such further acts as may be necessary or proper in the
reasonable opinion of the Company to carry out more effectively the provisions
and purposes of this Agreement.
45
ss. 7.05. COSTS AND EXPENSES. In addition to the rights of
indemnification granted under Section 6.02 hereof, the Originators agree to pay
on demand (i) all reasonable non-legal costs and expenses in connection with the
preparation, execution and delivery of this Agreement, whether such expenses and
fees are incurred prior to, on or after the date hereof; (ii) the reasonable
fees and out-of-pocket expenses of counsels for the Company, its Affiliates and
members of the Lender Group in connection with this transaction; and (iii) all
reasonable costs and expenses, if any (including reasonable counsel fees and
expenses), of the Company, its Affiliates and members of the Lender Group in
connection with any waiver, modification, supplement or amendment hereto, or the
enforcement of this Agreement. The Originators further agree to pay on the
Initial Transfer Date (and with respect to costs and expenses incurred following
the Initial Transfer Date, within seven days of demand therefor) (i) all
reasonable costs and expenses incurred by the Company or its agent in connection
with periodic audits of the Accounts, which audits, other than after an Event of
Default, shall occur no more frequently than [annually]; (ii) any bank charges
in connection with opening and maintaining and transferring funds from any
Lockbox Account; (iii) costs arising out of the Agent's indemnification of the
Collecting Bank against damages incurred by the Collecting Bank in the operation
of the Lockbox Account or other account; (iv) photocopying and other mechanical
or electronic reproduction expenses in connection with Company's rights of
inspection under this Agreement or any other Document or in connection with any
service utilized by the Company to perform such functions; (v) all reasonable
costs and expenses incurred by the Company, the Master Servicer or any member of
the Lender Group to accommodate any significant coding or data system changes
made by the Originators that would affect the transmission or interpretation of
data received through the interface; and (vi) all reasonable costs and expenses
incurred by the Company for additional time and material expenses of the Master
Servicer resulting from a lack of either cooperation or responsiveness of the
Primary Servicer of any Originator to agreed upon protocol and schedules with
the Master Servicer; PROVIDED, that the Primary Servicer or such Originator has
been informed of the alleged lack of cooperation or responsiveness and has been
provided the opportunity to correct such problems.
ss.7.06. CONFIDENTIALITY. (a) Each Originator, the Primary Servicer and
the Company hereby acknowledge that this Agreement, the LSA and the documents
delivered hereunder, thereunder or in connection with, including, without
limitation, any information relating to any member of the Lender Group, contains
confidential and proprietary information. Unless otherwise required by
applicable law, each of the Originators, the Primary Servicer and the Company
hereby agrees to maintain the confidentiality of this Agreement (and all drafts,
memos and other documents delivered in connection therewith including, without
limitation, any information relating to any member of the Lender Group delivered
hereunder or under the LSA) in communications with third parties and otherwise
and to take all reasonable action to prevent the unauthorized use or disclosure
of and to protect the confidentiality of such confidential information;
PROVIDED, that such confidential information may be disclosed to (i) the
Originators' and Company's legal counsel, accountants and auditors, (ii) the
Agent, the Lender, the Primary Servicer, each member
46
of the Lender Group, investors in and creditors of the Lender, appropriate
rating agencies with respect to the Lender, and each of their respective legal
counsel, accountants and auditors, (iii) any Person, if such information
otherwise becomes available to such Person or publicly available through no
fault of any party governed by this Section 7.06, (iv) any Governmental Entity
requesting such information, and (v) to any other Person with the written
consent of the applicable party, which consent shall not be unreasonably
withheld, and PROVIDED FURTHER that the Originators shall not disclose such
confidential information to any financial adviser except with the consent of the
Agent.
(b) Each of the Originators, the Primary Servicer and the Company
understands and agrees that the other or the Lender Group may suffer irreparable
harm if the obligations under this Section 7.06 are breached and that monetary
damages shall be inadequate to compensate the injured party for such breach.
Accordingly, each of the Originators, the Primary Servicer and the Company
agrees that, in the event of their respective breach of Section 7.06(a), the
injured party, in addition and not in limitation of its rights and remedies
under law, shall be entitled to a temporary restraining order, preliminary
injunction and permanent injunction to prevent or restrain any such breach.
(c) All parties hereto agree to comply with all applicable state or
federal statutes or regulations relating to patient medical record
confidentiality.
ss.7.07. TERM AND TERMINATION. This Agreement shall continue in full
force and effect from the date hereof until the Final Payment Date; PROVIDED,
HOWEVER, that, with respect to any Transferred Batches transferred prior to the
Final Payment Date and not repurchased pursuant to Section 6.01, the occurrence
of the Final Payment Date shall not terminate any security interest of the
Company hereunder, nor shall it relieve or discharge any of the Originators, the
Primary Servicer or the Company of or from their respective duties, obligations
or covenants hereunder and all the terms, provisions and conditions of this
Agreement shall remain in effect for such purpose until such obligations have
been satisfied and performed in full. Upon the satisfaction in full of all the
obligations, the Company shall deliver all assignments, certificates, releases,
notices and other documents at the Originators' expense, as the Originators may
reasonably request to effect such termination.
ss.7.08. SALE TREATMENT. The Originators and the Company have
structured the transactions contemplated by this Agreement with respect to each
Purchased Batch as a sale and with respect to each Batch Account that is not a
Purchased Account as a contribution constituting a full and complete transfer of
ownership, and intend that such transactions constitute a sale or full and
complete transfer of ownership, and each of the Originators and the Company
agree to treat each such transaction as a sale or full and complete transfer of
ownership for all purposes, including, without limitation, in their respective
books, records, computer files, tax returns (federal, state and local),
regulatory and governmental filings (and shall reflect such sale in their
respective financial statements). Each Originator will advise all persons
inquiring about the ownership of the
47
Batch Accounts that all Batch Accounts have been sold or contributed to the
Company. The Originators will pay all taxes (excluding income or franchise taxes
of the Company), if any, relating to the transactions contemplated under this
Agreement, including, without limitation, the sale, transfer and contribution of
each Transferred Batch to the Company.
ss.7.09. GRANT OF SECURITY INTEREST. In the event that, contrary to the
mutual intent of the Originators and the Company, any purchase of a Purchased
Batch is not characterized as a sale, each Originator shall, effective as of the
date hereof, be deemed to have granted (and each Originator hereby does grant)
to the Company a first priority security interest in and to any and all present
and future Batch Accounts and the proceeds thereof to secure the repayment of
all amounts paid to the Originators hereunder with accrued interest thereon, and
this Agreement shall be deemed to be a security agreement. With respect to such
grant of a security interest, the Company may at its option exercise from time
to time any and all rights and remedies available to it under the UCC or
otherwise. Each Originator agrees that five Business Days shall be reasonable
prior notice to the applicable Originator or to the Primary Servicer on behalf
of such Originator of the date of any public or private sale or other
disposition of all or any of the Batch Accounts.
ss.7.10. NO LIABILITY OF THE COMPANY. Neither this Agreement nor any
document executed in connection herewith shall constitute an assumption by the
Company of any obligation to an Obligor or a patient/customer of any Originator.
ss. 7.11. ATTORNEY-IN-FACT. Each Originator hereby irrevocably
designates and appoints the Company, the Primary Servicer, the Master Servicer
and each member of the Lender Group, to the extent permitted by applicable law
and regulation, as such Originator's attorneys-in-fact, which irrevocable power
of attorney is coupled with an interest, with authority to (i) endorse or sign
such Originator's name to financing statements, remittances, invoices,
assignments, checks (other than payments from Governmental Entities), drafts or
other instruments or documents in respect of the Batch Accounts, (ii) notify
Insurers to make payments on the Batch Accounts directly to the Company, and
(iii) bring suit in such Originator's name and settle or compromise such Batch
Accounts as the Company, the Primary Servicer, the Master Servicer or any member
of the Lender Group may, in its discretion, deem appropriate.
ss.7.12. ENTIRE AGREEMENT: SEVERABILITY. (a) This Agreement, including
all exhibits hereto, embodies the entire agreement and understanding of the
parties concerning the subject matter contained herein. This Agreement
supersedes any and all prior agreements and understandings between the parties,
whether written or oral.
(b) If any provision of this Agreement shall be declared invalid or
unenforceable, the parties hereto agree that the remaining provisions of this
Agreement shall continue in full force and effect.
48
ss. 7.13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF); PROVIDED HOWEVER, THAT
PROVISIONS OF THE FLORIDA UCC OR, WITH RESPECT TO BUILDING BLOCKS HOME HEALTH
SERVICES, INC., CALIFORNIA UCC, GOVERN THE CREATION AND PERFECTION OF SECURITY
INTERESTS GRANTED PURSUANT TO SECTION 6.04 AND SECTION 7.09 HEREOF.
ss.7.14. WAIVER OF JURY TRIAL, JURISDICTION AND VENUE. EACH OF THE
PARTIES HERETO HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN THE EVENT OF ANY
LITIGATION WITH RESPECT TO ANY MATTER RELATED TO THIS AGREEMENT, AND HEREBY
IRREVOCABLY CONSENTS TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED
IN NEW YORK COUNTY, NEW YORK CITY, NEW YORK IN CONNECTION WITH ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. IN ANY SUCH LITIGATION,
EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR
OTHER PROCESS AND AGREES THAT SERVICE THEREOF MAY BE MADE BY CERTIFIED OR
REGISTERED MAIL DIRECTED TO SUCH PARTY AT ITS ADDRESS SET FORTH ON THE SIGNATURE
PAGE HEREOF. EACH OF THE PARTIES HERETO SHALL APPEAR IN ANSWER TO SUCH SUMMONS,
COMPLAINT OR OTHER PROCESS WITHIN THE TIME PRESCRIBED BY LAW, FAILING WHICH SUCH
PARTY FAILING TO SO APPEAR SHALL BE DEEMED IN DEFAULT AND JUDGMENT MAY BE
ENTERED BY THE OTHER PARTY FOR THE AMOUNT OF THE CLAIM AND OTHER RELIEF
REQUESTED THEREIN.
ss.7.15. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.
ss.7.16. NO PROCEEDINGS. Each of the Originators hereby agrees that it
will not institute against the Company or the Lender any proceeding of the type
referred to in Section 5.03(g) so long as any senior indebtedness issued by the
Company or the Lender shall be outstanding or there shall not have elapsed one
year plus one day since the last day on which any such senior indebtedness shall
have been outstanding.
ss.7.17. SURVIVAL OF TERMINATION. The provisions of Article VI (and the
representations and warranties with respect thereto) (other than Section 6.04)
and Sections 7.05, 7.06, 7.10 and 7.17 shall survive any termination of this
Agreement.
ss.7.18. ADDITION. REMOVAL AND SUSPENSION OF ORIGINATORS. (a) Subject
to the conditions set forth below, upon 30-days' prior written request from time
to time of the Primary Servicer, the Company hereby agrees to the adding of
other Persons designated by the Primary Servicer as additional Originators
hereunder (each such event, an
49
"ADDITION"); PROVIDED, THAT, in the reasonable commercial judgment of the
Company and its designees and assignees):
(i) no Group-Wide Event of Termination is existing and the proposed
Addition shall not cause, or not reasonably be expected to cause, a Group-Wide
Event of Termination;
(ii) as of the effective date of such Addition, such applicable
conditions precedent set forth in Sections 4.01 and 4.02 hereto shall have been
fulfilled with respect to such Person;
(iii) as of the effective date of such Addition, each applicable
representation and warranty set forth in Section 5.01 hereto shall be true and
correct in all material respects with respect to such Person;
(iv) if such Person is not an Affiliate of the Primary Servicer, the
Company shall have determined that such Person will be able to perform the
Primary Servicer Responsibilities, or have waived such requirement in writing;
(v) the Company shall have received a certificate from the Master
Servicer stating that all computer linkups and interfaces necessary or
desirable, in the sole discretion of the Master Servicer, to effectuate the
transactions and information transfers under this Agreement with respect to the
Addition are fully operational to the satisfaction of the Master Servicer and
the Master Servicer shall have received an interface fee for each additional
computer interface;
(vi) such Person shall execute such agreements, instruments and
documents as the Company may reasonably request, in form and substance
satisfactory to the Company to effectuate the Addition, including without
limitation (x) an amendment to this Agreement whereby such Person agrees to be
bound by the terms of this Agreement, and (y) financing statements covering
Accounts that such Person may sell or contribute to the Company; and
(vii) the Company and its assigns shall have been provided with such
information (whether financial or otherwise) and time necessary and desirable
(in the sole discretion of the Company and its assigns) to make the assessments
under clauses (i), (ii) and (iii).
(b) Subject to the conditions set forth below, upon 30-days' prior
written request from time to time of the Primary Servicer, the Company hereby
agrees to the removal of any Originator designated by the Primary Servicer from
time to time (each such event, a "REMOVAL"); PROVIDED, THAT, in the reasonable
commercial judgment of the Company (and the Lender as its assignee):
50
(i) no Group-Wide Event of Termination is existing and the proposed
Removal shall not cause, or not reasonably be expected to cause, a Group-Wide
Event of Termination;
(ii) on or prior to the effective date of such Removal (x) all Accounts
contributed or sold by such Originator to the Company shall be repurchased by
such Originator as if such Accounts were Denied Accounts and payment in full
shall have been received by the Company, or (y) all rights and obligations in
respect of Accounts contributed or sold by such Originator to the Company shall
be transferred to another Originator;
(iii) after giving effect to such Removal, the aggregate minimum Net
Worth of the remaining Originators hereunder shall (x) equal at least
$10,000,000, and (y) not have decreased as a result of the Removal (combined
with all other Removals) by greater than 10%;
(iv) such Person shall execute such agreements, instruments and
documents as the Company may reasonably request, in form and substance
satisfactory to the Company to effectuate the Removal, including without
limitation an amendment to this Agreement effectuating such Removal;
(v) the Company and the Lender, as its assignee, have been provided
with such information (whether financial or otherwise) and time necessary and
desirable (in the sole discretion of the Company and the Lender, as its
assignee) to make the assessments under clauses (i), (ii), (iii) and (iv) above;
and
(vi) such Person shall withdraw as a member of the Company; PROVIDED,
HOWEVER, that such Originator's capital account as a member of the Company shall
not be paid out until the date of termination of this Agreement as set forth in
Section 7.07 herein.
(c) Company hereby agrees to the suspension of any Originator
designated by the Primary Servicer from time to time (each such event a
"SUSPENSION"); PROVIDED, THAT in the reasonable commercial judgment of the
Company (and the Lender as its assignee), no Group-Wide Event of Termination is
existing and the proposed Suspension shall not cause, or not reasonably be
expected to cause, a Group-Wide Event of Termination. For the period of the
Suspension, such suspended Originator shall be deemed not to be an Originator
for the purpose hereof or for the purposes of the LSA. Such Suspension shall
cure any breach of a covenant, representation or warranty by such suspended
Originator, PROVIDED, THAT such cure shall not be deemed, in and of itself, to
cure a Group-Wide Event of Termination and not reasonably be expected to cure a
Group-Wide Event of Termination.
ss.7.19. JOINT AND SEVERAL LIABILITY: ORIGINATORS. Each Originator
agrees that each reference to "the Originators" in this Agreement shall be
deemed to refer to each such
51
Originator jointly and severally. Each Originator (i) shall be jointly and
severally liable for the obligations, duties and covenants under this Agreement
and the acts and omissions of each other such Originator including, without
limitation, under Article V hereof, and (ii) jointly and severally makes each
representation and warranty under this Agreement; PROVIDED, HOWEVER, that the
breach of an obligation, duty, covenant, representation or warranty by one
Originator shall not result in an Event of Termination with respect to any other
Originator unless such breach constitutes a Group-Wide Event of Termination.
ss.7.20. ACCOUNTING INFORMATION. Each Originator authorizes the Company
and the Lender Group to discuss the financial condition of such Originator with
its Independent Public Accountant and agrees that such discussion or
communication shall be without liability to the Company, any of the Lender Group
or the Independent Public Accountants. Each Originator shall deliver a letter
addressed to such accountants authorizing them to comply with the provisions of
this subsection, and authorizing the Company and the Lender Group to rely on
financial statements of the Originator issued by such accountants, which letter
shall be acknowledged and consented to in writing by such accountants.
52
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
ORIGINATORS: AMERICAN ENTERPRISE SOLUTIONS, INC.,
By:/s/ ANTHONY F.MANISCALCO
----------------------------------
Name: Anthony F. Maniscalco
Title: C.O.O.
Address: 6800 N. Dale Mabry Highway
Suite 100
Tampa, FL 33614
Facsimile Number:
---------------------
Provider Identification
Number:
-------------------------------
Assumed/Trade Names:
------------------
BUILDING BLOCKS HOME HEALTH
SERVICES, INC.
By:/s/ CATHERINE PROPHET
------------------------------------
Name: Catherine Prophet
Title: President/CEO
Address: 4100 Campres Ste. 230
------------------------------
Newport Beach, CA 92660
------------------------------
Facsimile Number 949-752-6933
----------------------
Provider Identification
Number: 33-0596438
-------------------------------
Assumed/Trade Names: Building Blocks
------------------
Pediatric Home Health Services
HEALTH CENTERS OF EXCELLENCE, INC.
By: /s/ BENEDICT S. MANICOLCO
-----------------------------------
Name:
Title:
Address: 2727 W. Dr. Martin Luther King, Jr.
Blvd., Suite 800
Tampa, FL 33607
Facsimile Number: (813) 870-0884
-----------------------
Provider Identification
Number: 59-3472530
---------------------------------
Assumed/Trade Names:
--------------------
NATIONAL DIAGNOSTICS, INC.
By: /s/ CURTIS L. ALLISTON PRESIDENT
-------------------------------------
Name: Curtis L. Alliston
Title: President
Address: 6800 N. Dale Mabry Highway
Suite 100
Tampa, FL 33614
Facsimile Number: (813) 882-8704
-----------------------
Provider Identification
Number: 59-3248917
---------------------------------
Assumed/Trade Names:
--------------------
BRANDON DIAGNOSTIC CENTER, LTD.
By: /s/ CURTIS L. ALLISTON
-------------------------------------
Name:
Title: President
Address:
--------------------------------
--------------------------------
Facsimile Number:
-----------------------
Provider Identification
Number:
---------------------------------
Assumed/Trade Names:
--------------------
SUNPOINT DIAGNOSTIC CENTER, INC.
By: /s/ CURTIS L. ALLISTON
-------------------------------------
Name:
Title: President
Address:
--------------------------------
--------------------------------
Facsimile Number:
-----------------------
Provider Identification
Number:
---------------------------------
Assumed/Trade Names:
--------------------
NATIONAL DIAGNOSTICS/ORANGE PARK, INC.
By: /s/ CURTIS L. ALLISTON
-------------------------------------
Name:
Title: President
Address:
--------------------------------
--------------------------------
Facsimile Number:
-----------------------
Provider Identification
Number:
---------------------------------
Assumed/Trade Names:
--------------------
NATIONAL DIAGNOSTICS/RIVERSIDE, INC.
By: /s/ CURTIS L. ALLISTON
-------------------------------------
Name:
Title: President
Address:
--------------------------------
--------------------------------
Facsimile Number:
-----------------------
Provider Identification
Number:
---------------------------------
Assumed/Trade Names:
--------------------
COMPANY: AES FUNDING CORP.
By: /s/ ANTHONY F. MANISCALCO
-------------------------------------
Name: Anthony F. Maniscalco
Title: President
Address: 6800 N. Dale Mabry Highway
Suite 100
Tampa, FL 33614
Facsimile Number: (813) 882-8704