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EXHIBIT 10.38
[LOGO]
METRO FACTORS, INC.
FACTORING AGREEMENT AND SECURITY AGREEMENT
UNITED MEDICORP, INC.
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FACTORING AGREEMENT AND SECURITY AGREEMENT
(GENERAL - FLEX FEE)
This Agreement is made as of the last date signed below between the
CLIENT identified on the last page of this Agreement (herein called CLIENT) and
METRO FACTORS, INC., a Texas corporation with its principal place of business
located in Dallas, Texas (herein called METRO). For good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
CLIENT agrees to sell to METRO and METRO agrees to purchase from CLIENT accounts
receivable for the sale of inventory or goods or the rendering of services or
labor (herein called BILLS) upon the following terms and conditions:
1. DEFINITIONS:
1.1 CUSTOMER. That person or business entity legally obligated
to pay a ▇▇▇▇ sold and/or assigned by CLIENT to METRO.
1.2 ▇▇▇▇. Any right to payment (account receivable, note,
contract, etc.) for the sale of inventory or goods or the
rendering of services or labor by CLIENT.
1.3 NON-RECOURSE BASIS. The purchase of BILLS from CLIENT by
METRO wherein METRO assumes the CREDIT RISK of a CUSTOMER.
1.4 CREDIT RISK. Non-payment by a CUSTOMER of a ▇▇▇▇ within one
hundred twenty (120) days after the date of such ▇▇▇▇ when
such non-payment is due solely to the insolvency and
financial inability of a CUSTOMER to pay as evidenced by
the filing of a petition under any Chapter of the Federal
Bankruptcy Act by or against such CUSTOMER within the one
hundred twenty (120) day period immediately following the
date of such ▇▇▇▇. At the end of such one hundred twenty
(120) day period, whether or not METRO has been paid by the
CUSTOMER, if such non-payment is due solely to the CREDIT
RISK of the CUSTOMER, CLIENT'S account with METRO shall be
credited as fully as if METRO had received payment from the
CUSTOMER.
1.5 RECOURSE BASIS. The purchase of BILLS from CLIENT by METRO
wherein CLIENT retains the risk of non-payment of a ▇▇▇▇ by
a CUSTOMER for any reason whatsoever.
1.6 DISPUTE. Any defense, dispute, offset, or claim asserted by
a CUSTOMER with respect to a ▇▇▇▇ whether valid or invalid.
1.7 NET CASH EMPLOYED. The total outstanding and unpaid face
amount of BILLS purchased by METRO from CLIENT minus
CLIENT'S RESERVE FUND on the day such figure must be
determined.
1.8 MAXIMUM NET CASH EMPLOYED. The NET CASH EMPLOYED shall not
exceed $500,000.
2. SALE OF ACCOUNTS. In CLIENT'S sole discretion, CLIENT shall
determine the BILLS to be offered for sale to METRO. All such
BILLS offered for sale to METRO shall be identified by separate
and subsequent written assignments in a form approved by METRO,
which form shall include, but not be limited to, all forms of
electronic transfers. CLIENT will immediately upon sale of BILLS
to METRO make proper entries on its books and records disclosing
the absolute sale of all such BILLS to METRO. All BILLS purchased
by METRO from CLIENT constitute a sale of accounts and legal and
equitable title to said BILLS shall pass to METRO regardless of
whether said BILLS were purchased on a RECOURSE BASIS or
NON-RECOURSE BASIS.
3. CREDIT APPROVAL. METRO reserves the right to approve the credit
of any CUSTOMER prior to the purchase of any ▇▇▇▇ due from such
CUSTOMER and if credit is approved, whether such credit is
approved on a NON-RECOURSE BASIS or on a RECOURSE BASIS. METRO
may, but shall not be obligated to, establish maximum credit
limits upon any CUSTOMER. METRO may withdraw any credit approval
at any time before
INITIALS:
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delivery or performance by CLIENT. All BILLS are purchased by METRO
on a RECOURSE BASIS unless METRO has issued a written approval of
the purchase of BILLS on a NON-RECOURSE BASIS on METRO'S form
entitled "Credit Approval Request" and then only for BILLS issued
during the time stated on such form unless such approval has been
withdrawn with notice to CLIENT.
4. ADVANCES (NET CASH EMPLOYED). CLIENT shall have the right at any
time to be advanced funds from METRO in an amount up to 80.0% of
the total face amount of outstanding and unpaid BILLS purchased
from CLIENT by METRO, subject to the adequacy of the RESERVE FUND
as provided herein.
5. INTEREST, FEES, AND EXPENSES.
5.1 INTEREST ON NET CASH EMPLOYED. CLIENT agrees to pay
interest to METRO upon the NET CASH EMPLOYED at an annual
rate equal to the lesser of the BASE LENDING RATE plus 2.5%
or the maximum rate allowed by applicable state or federal
law. Such interest shall be calculated on a daily basis
upon a year consisting of 360 days and shall be due and
payable daily as it accrues. BASE LENDING RATE as used
herein shall be the BASE LENDING RATE from time to time
announced by KeyBank National Association, Cleveland, Ohio
on the date such BASE LENDING RATE must be determined. Each
change in the BASE LENDING RATE shall be effective without
notice to CLIENT on the date on which a change in the BASE
LENDING RATE shall have been made by the bank. The bank
charges its customers interest at rates at, above, or below
its BASE LENDING RATE. The BASE LENDING RATE of KeyBank
National Association is currently 8.5%. For purposes of
calculating interest, CLIENT'S account shall be credited
with payments received from CUSTOMERS after allowance of
three (3) banking days (Collection Days) to allow
sufficient time for check clearance through the Federal
Reserve system. In no event shall the rate charged by METRO
exceed the maximum rate of interest permitted by applicable
state or federal law. All sums of money which shall not be
paid to METRO by CLIENT when due, including deficiencies in
the RESERVE FUND, shall bear interest at the highest rate
allowed by law from such due date until paid in full. For
those days only when CLIENT'S RESERVE FUND balance exceeds
the balance of outstanding BILLS METRO agrees to pay
interest to CLIENT at the BASE LENDING RATE minus 2.0%
computed and paid consistent with the aforementioned
method.
5.2 FACTOR'S COMMISSION. CLIENT agrees to pay METRO a
commission equal to 1.0% of the face amount of BILLS
purchased by METRO from CLIENT as consideration for METRO'S
services in, among other things, making credit
investigations, supervising the ledgering and collection of
BILLS purchased hereunder, generation of management
accounting reports, and assuming the CREDIT RISK when
applicable. Such commission shall be due and payable at the
time such BILLS are purchased and shall be deducted from
any sums otherwise due CLIENT.
5.3 PROCESSING FEES. CLIENT agrees to pay METRO processing fees
as follows:
A. $1.10 per ▇▇▇▇ purchased by METRO hereunder. CLIENT
agrees to an adjustment of such processing fee
equivalent to an adjustment of postage rates, if any,
established by the United States Postal Service.
B. Expedited delivery fees (Federal Express, Express
Mail, wire transfers @ $15 each, etc.) incurred by
METRO on behalf of CLIENT.
C. Reimbursement to METRO for out-of-pocket fees and
expenses incurred by METRO for tax lien searches on
CLIENT in jurisdictions relevant to CLIENT limited to
once every six (6) months.
D. Reimbursement to METRO for out-of-pocket fees and
expenses incurred by METRO for public records search
and filing fees (UCC-3 Amendment(s), Continuation(s),
etc.)
INITIALS:
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5.4 INITIAL SETUP FEE. CLIENT agrees to pay to METRO an
origination fee of $1,000 and to reimburse METRO for
out-of-pocket fees and expenses incurred by METRO in the
preparation of this Agreement such as public records search
fees and filing fees (UCC-1 Financing Statement(s), UCC-3
Termination(s), etc.) [Note: This fee may be charged to
CLIENT'S RESERVE FUND.]
5.5 AUDIT FEES AND EXPENSES. METRO shall perform one (1)
scheduled audit at CLIENT'S place of business each six (6)
months. CLIENT shall pay METRO $500 per audit plus
reasonable expenses of the auditor's travel, lodging, and
meals incurred in connection therewith.
6. RESERVE FUND. METRO may reserve and withhold from any payment or
credits otherwise to be made to CLIENT an amount in a RESERVE
FUND equal to 20.0% of the total outstanding and unpaid face
amount of BILLS purchased by METRO from CLIENT. Any under
payments on BILLS due to a DISPUTE shall be debited to the
RESERVE FUND and any over payments on BILLS to which CLIENT is
legally entitled shall be credited to the RESERVE FUND. METRO may
charge to such RESERVE FUND any indebtedness of CLIENT to METRO.
CLIENT shall be obligated to pay METRO deficiencies, if any, in
such RESERVE FUND. METRO may withhold such additional amounts in
the RESERVE FUND as it may reasonably deem necessary to cover and
provide for any DISPUTES, unpaid BILLS purchased on a RECOURSE
BASIS which are more than ninety (90) days old, and any other
present or potential indebtedness of CLIENT to METRO. RESERVE
FUNDS in excess of those necessary to satisfy the above
requirements shall be available to be advanced to CLIENT as
CLIENT so instructs METRO.
7. HOLD IN TRUST. If any payment of any BILLS purchased by METRO
shall be received by CLIENT from a CUSTOMER, such payment shall
be held by CLIENT in trust for METRO, separate and apart from
CLIENT'S own funds, and shall be immediately delivered to METRO
in the identical form in which it was received. Failure to so
deliver said payment shall give METRO, at its option, the right
to terminate this Agreement and/or resort to the collection of
said sums due from the RESERVE FUND and/or other balances or
credits otherwise due to or held for CLIENT by METRO without
demand or notice or to demand immediate payment from CLIENT by
cash or cashier's check. Should CLIENT come into possession of a
payment comprised of amounts owing to both METRO and CLIENT,
CLIENT shall remit such payment in the identical form in which it
was received to METRO and METRO shall refund CLIENT'S portion
directly to CLIENT or credit CLIENT'S RESERVE FUND with CLIENT'S
portion thereof when such check has cleared the bank upon which
it was drawn. Without waiving any other right of METRO hereunder,
METRO may charge CLIENT a service fee of up to 15.0% of the
amount of any payments due to METRO not remitted by CLIENT as
herein provided.
8. SETTLEMENT OF DISPUTE. CLIENT shall at its own expense settle all
DISPUTES, subject to METRO'S approval; but, METRO shall have the
right to settle or litigate any DISPUTE directly with the
CUSTOMER or other claimant and METRO may charge to CLIENT'S
RESERVE FUND any deficiencies, costs and expenses including
reasonable attorneys' fees incurred in connection with such
DISPUTE. In the event of a DISPUTE or other breach of warranty
hereunder as to any ▇▇▇▇, METRO may in its discretion immediately
or at such time as METRO may elect, charge the unpaid balance of
the related ▇▇▇▇ (or any DISPUTED portion thereof) to CLIENT'S
RESERVE FUND; however, such charge to CLIENT'S RESERVE FUND shall
not be deemed to be a reassignment of such ▇▇▇▇ to CLIENT.
9. REPURCHASE OF UNPAID BILLS PURCHASED ON A RECOURSE BASIS. IF any
▇▇▇▇ purchased by METRO on a RECOURSE BASIS remains unpaid for
any reason ninety (90) days after date of such ▇▇▇▇ or sooner if
in METRO'S sole discretion such ▇▇▇▇ is determined to be
uncollectible, CLIENT agrees to repurchase such BILLS from METRO
at the full face amount of such ▇▇▇▇. In any event, if more than
25.0% of a CUSTOMER'S account purchased on a RECOURSE BASIS is
unpaid after ninety (90) days from dates of the respective BILLS,
CLIENT agrees to repurchase the entirety of such account.
10. ACCOUNT STATED. All transactions between METRO and CLIENT shall
be recorded by METRO and statements of such transactions shall be
regularly supplied to CLIENT. Such statement shall be deemed an
ACCOUNT STATED unless METRO receives written notice from CLIENT
of any specific exception thereto within thirty (30) days after
date of receipt by CLIENT of such statement.
INITIAL:
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11. WARRANTIES, REPRESENTATIONS, AND COVENANTS OF CLIENT. As an
inducement for METRO to enter into this Agreement, and with full
knowledge that the truth and accuracy of the WARRANTIES,
REPRESENTATIONS, AND COVENANTS in this Agreement are being relied
upon by METRO, CLIENT warrants, represents and/or covenants that
(a) CLIENT is properly licensed and authorized to operate its
business under all applicable state and federal laws in the name
and/or trade name designated for CLIENT at the end of this
Agreement; (b) CLIENT'S business is solvent; (c) each of CLIENT'S
CUSTOMER'S business is solvent to the best of CLIENT'S knowledge
and belief; (d) CLIENT has good and clear title to the BILLS sold
and/or assigned to METRO and to all property in which a security
interest is granted to METRO herein except for the first position
security interest in all equipment granted to Texas Central Bank,
N.A. under a commercial security agreement dated December 31,
1998; (e) Assignment to METRO of each ▇▇▇▇ purchased by METRO
hereunder will thereby vest absolute ownership of such ▇▇▇▇ in
METRO free from any liens, claims, security interests, or
equities of third parties; (f) Each ▇▇▇▇ shall, on the date of
assignment, be based upon a bona fide rendering of services or
sale of goods or products by CLIENT and shall be a valid and
enforceable obligation of the CUSTOMER who is designated to be
billed upon the face of the ▇▇▇▇; (g) Such ▇▇▇▇ shall be
accepted and retained by the CUSTOMER without assertion of any
DISPUTE and CLIENT agrees to immediately notify METRO in writing
of any DISPUTE which may adversely affect payment of any ▇▇▇▇
assigned or sold to METRO; (h) Neither CLIENT nor any employee,
officer, director, agent, shareholder, or owner of CLIENT, owns,
controls, or in any way whatsoever exercises dominion over the
business of any CUSTOMER, the BILLS of which are sold hereunder
to METRO; (i) That no ▇▇▇▇ (or the goods or services related
thereto) sold to METRO hereunder is subject to or affected by any
of the following types of agreement: consignment, sale on
approval, conditional sale, guaranteed sale, sell or return,
buy-back, ▇▇▇▇ and hold, or any similar type of agreement however
named nor is there any debt owing by CLIENT to any CUSTOMER
related to any ▇▇▇▇ sold to METRO hereunder; (j) All financial
records, statements, books, or other documents relating to the
business of CLIENT which are supplied to METRO by CLIENT or any
of its authorized representatives, either before or after the
signing of this Agreement are true and accurate; (k) CLIENT will
not transfer, pledge, or give a security interest in any of its
BILLS to any other party during the life of this Agreement; (l)
CLIENT will not change or modify the terms of the original ▇▇▇▇
unless METRO first consents in writing to such change except for
the first position security interest in all equipment granted to
Texas Central Bank, N.A. under a commercial security agreement
dated December 31, 1998; (m) CLIENT will not permit a lien or
encumbrance to be created upon any of the BILLS sold and/or
COLLATERAL pledged herein to METRO; (n) CLIENT will maintain such
insurance covering CLIENT'S business and/or the property of
CLIENT'S CUSTOMERS as is customary or required by law for
businesses similar to the business of CLIENT and if reasonably
deemed necessary for the protection of METRO'S interest in any
BILLS or other COLLATERAL CLIENT shall name METRO as a loss payee
of any such insurance; (o) CLIENT will promptly notify METRO in
writing of any proposed or actual change in its owners, officers,
and/or directors, location of its principal offices, location of
the office in which books and records concerning BILLS and
COLLATERAL are kept, change of CLIENT'S name, death of any
co-owner, any sale or purchase of assets of CLIENT out of the
regular course of CLIENT'S business, and any other material
change in the business or financial affairs of CLIENT; (p) CLIENT
will promptly pay all sums due METRO when due or declared due;
(q) each ▇▇▇▇ sold and/or assigned to METRO is genuine and in all
respects what it purports to be and is not a duplicate of another
▇▇▇▇ covering the same charges nor has it been billed directly by
CLIENT to the CUSTOMER unless a special written agreement is
entered into by CLIENT with METRO concerning the terms of
purchase of such BILLS; (r) CLIENT will fully cooperate with
METRO in any litigation between METRO and a CUSTOMER relating to
any BILLS purchased and/or assigned to METRO hereunder, including
but not limited to furnishing at CLIENT'S expense any witnesses
(other than METRO'S employees) and documentation which is or
should be under CLIENT'S control (NOTE: If the related BILLS were
purchased on a NON-RECOURSE BASIS, failure of CLIENT to so
cooperate shall cancel the CREDIT RISK assumed by METRO on such
BILLS and CLIENT shall be liable to METRO for all expenses
incurred by METRO in such litigation if an adverse decision is
rendered against METRO therein.); (s) CLIENT will promptly pay
when due all federal, state and local taxes and will immediately
notify METRO in writing if any such taxes are not paid when due;
(t) CLIENT will immediately notify METRO of the filing of any
Federal Tax Lien or Levy or if any agreement is made with any
taxing authority to pay out any due and unpaid taxes; (u) CLIENT
will immediately notify METRO of the filing of any petition of
bankruptcy by or against CLIENT, the composition of CLIENT'S
creditors, or the appointment of a
INITIALS:
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trustee or receiver for CLIENT'S business; (v) CLIENT will
immediately notify METRO of any change, or intent to change, the
nature of its business as it relates to the products or services
presently sold to CUSTOMERS.
12. BILLING REQUIREMENTS. CLIENT further warrants, represents, and/or
covenants that all BILLS submitted for sale to METRO shall be
presented to METRO within thirty (30) days after the sale of
inventory or goods or the rendering of services or labor related
to such ▇▇▇▇ and shall conform to the following requirements:
12.1 Be the original ▇▇▇▇ (unless special written arrangements
are made for METRO TO purchase BILLS, the originals of
which have already been delivered to the CUSTOMER).
12.2 Be accompanied by as many additional copies as are required
by CUSTOMER plus one (1) file copy to be retained by METRO.
12.3 Be legible.
12.4 Clearly state the full legal name and address of CUSTOMER
and the party to whom such ▇▇▇▇ is to be mailed.
12.5 If requested by METRO, BE accompanied by the original
purchase order and/or contract and any amendments or
modifications thereof, signed bills of lading (if any), or
proof of delivery or acceptance signed by CUSTOMER.
12.6 Be attached to any supporting information or documentation
required by CUSTOMER as a precondition to payment. (NOTE:
Copies of any and all such documentation shall also be
attached to METRO'S file copy of the related ▇▇▇▇).
12.7 Be stamped or imprinted with a notice of sale of such ▇▇▇▇
to METRO with instructions to remit payment directly to
METRO IN LANGUAGE APPROVED by METRO.
12.8 Except as METRO may otherwise consent, the terms of
CUSTOMER'S payment of BILLS shall be "Net 30 days" or less.
12.9 CLIENT shall timely issue credit memos when appropriate and
immediately deliver two (2) copies of such credit memos to
METRO, ONE (1) of which will be mailed by METRO TO THE
related CUSTOMER
12.10 Be verifiable by the CUSTOMER TO METRO'S SATISFACTION.
13. EVENT OF DEFAULT. CLIENT shall be in default of this Agreement
upon the happening of any of the following events (herein called
EVENT OF DEFAULT):
13.1 The breach of any warranty, covenant, or representation
made herein or in connection herewith. whether written or
oral, the filing of an involuntary petition of bankruptcy
against CLIENT, or the filing of a voluntary petition in
bankruptcy by CLIENT. CLIENT will give METRO at least
forty-eight (48) hours advance notice of the filing of any
voluntary petition of bankruptcy by CLIENT.
13.2 If METRO reasonably deems itself insecure as to the intent
or ability of CLIENT TO pay any indebtedness of CLIENT to
METRO when due or declared due or to perform any obligation
of CLIENT herein or attendant hereto.
14. REMEDIES. Upon the occurrence OF AN EVENT OF DEFAULT, and at any
time thereafter, METRO may elect, CLIENT hereby expressly
waiving notice, demand, and presentment, to declare any and all
indebtedness hereby secured immediately due and payable. METRO
SHALL BE ENTITLED TO ALL RIGHTS AND remedies of a Secured Par-~
under the Uniform Commercial Code of Texas as presently existing
or hereafter amended, including the right :o enter upon the
premises where any COLLATERAL is located and take immediate
possession of such COLLATERAL
INITIALS:
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and remove same from such premises. To the extent deemed
reasonably necessary by METRO to aid in the collection of its
collateral, METRO shall have the right to the use of any computer
hardware or software used by CLIENT pertaining to its accounts
receivable. METRO shall be entitled to avail itself of all such
other rights and remedies as may now or hereafter exist at law or
in equity for collection of said indebtedness and the enforcement
of the covenants, warranties, and representations herein and the
resort to any one or combination of such remedies provided
hereunder shall not prevent the concurrent or subsequent
employment of any other appropriate remedy. CLIENT shall be
liable to METRO for any deficiencies after foreclosure of METRO'S
security interest herein. The waiver by METRO of the breach of
any term of this Agreement or the compliance therewith shall not
be construed as a waiver of any subsequent breach or compliance.
CLIENT agrees to reimburse METRO for any out-of-pocket expenses
incurred by METRO as a result of an EVENT OF DEFAULT or in
connection therewith.
15. JURISDICTION, VENUE, WAIVER OF JURY TRIAL, AGENT FOR SERVICE OF
PROCESS. CLIENT agrees that this Agreement is accepted and made
in the State of Texas and is subject to the laws of the State of
Texas and that all sums due hereunder are payable in the State of
Texas. CLIENT subjects itself to the jurisdiction of the courts
of the State of Texas and agrees that venue shall be in Dallas
County, Texas for the purpose of enforcement of this Agreement.
Recognizing the inherent delays of jury trials and desiring a
speedy resolution of any litigation between CLIENT and METRO,
CLIENT WAIVES ITS RIGHT TO TRIAL BY JURY and agrees to submit all
disputed issues to the judge of the court in which any such
litigation is pending. In the event CLIENT has no agent appointed
for the service of process in the State of Texas, CLIENT
authorizes service upon the Secretary of the State of Texas on
its behalf.
16. SECURITY INTEREST. METRO, in addition to the outright ownership
of those BILLS purchased from CLIENT hereunder, is hereby granted
a continuing security interest in all of CLIENT'S presently owned
and existing and hereafter acquired and arising accounts,
accounts receivable, all other forms of obligations owing to
CLIENT, all contract rights, inventory, goods, equipment,
furniture, fixtures, chattel paper, general intangibles, and all
instruments, documents, books, and records pertaining to any of
the foregoing together with all damage claims and insurance
proceeds of any of the foregoing and all merchandise returns not
otherwise owned by METRO and other goods represented thereby
including all of CLIENT'S rights to stoppage in transit and of
recovering possession by any proceedings including replevin and
reclamation and rights as an unpaid vendor and lienor, together
with all guaranties, securities, and liens for payment of any
BILLS and all products and proceeds of any of the foregoing
except for the first position security interest in all equipment
granted to Texas Central Bank, N.A. under a commercial security
agreement dated December 31, 1998. All of the foregoing is
sometimes collectively called herein COLLATERAL. Such security
interest in such COLLATERAL is to be security for any and all
obligations or indebtedness of any kind, direct or indirect,
absolute or contingent, owing by CLIENT to METRO however incurred
or evidenced and however and whenever same shall arise or have
arisen, and whether such COLLATERAL is now or hereafter existing.
17. FINANCIAL STATEMENTS, BOOKS AND RECORDS, AND RIGHT OF INSPECTION.
As often as such are prepared, but no less than within sixty (60)
days after the close of each quarter, CLIENT shall furnish METRO
with a copy of CLIENT'S most recent profit and loss statement and
balance sheet. Within ninety (90) days after the close of each
fiscal year, CLIENT shall furnish METRO with a profit and loss
statement and balance sheet as of the close of such fiscal year,
prepared and signed by an independent certified public
accountant. CLIENT agrees to timely furnish METRO such
additional financial information as METRO shall request. CLIENT
agrees to provide METRO by the 10th day of each month a detailed
accounts receivable ageing reflecting all open and unpaid BILLS
for all non-factored CUSTOMERS as of the last day of the
immediately preceding month. METRO and METRO'S agents shall have
the right at all times between the hours of 8:00 a.m. and 6:00
p.m. Monday through Friday to examine and make extracts from all
books and records of CLIENT. Failure to comply with this
paragraph may at METRO'S discretion be deemed an EVENT OF
DEFAULT.
18. INDEMNITY. All taxes and governmental charges imposed upon CLIENT
with respect to the sale of inventory or goods or the rendering
of services or labor by CLIENT shall be the sole responsibility
of CLIENT and CLIENT shall indemnify and hold METRO harmless from
and against all liabilities for any acts or omissions of CLIENT.
INITIALS:
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19. NON-ASSIGNABILITY BY CLIENT. CLIENT may not assign any of its
rights or obligations hereunder without METRO'S prior written
consent; however, METRO may assign any of its rights and remedies
with respect to CLIENT.
20. AGREEMENT BINDING. This Agreement shall be binding upon CLIENT
and METRO, their heirs, successors, and assigns.
21. SEVERABILITY. The provisions of this Agreement are severable and
if any of these provisions shall be held by any court of
competent jurisdiction to be unenforceable such holdings shall
not affect or impair any other provisions hereof.
22. ENTIRE AGREEMENT. It is expressly acknowledged and agreed by
CLIENT that (a) No representations have been made, whether oral
or written, except as expressly set forth in this Agreement or in
a writing signed by a corporate officer of METRO, or (b) If any
such representations have been made and are not expressly set
forth herein, that any such representations have no binding
effect whatsoever. CLIENT has not relied on any inducement to
enter into this Agreement except as wholly set forth herein or as
communicated in writing by a duly constituted and authorized
corporate officer of METRO. This Agreement may only be changed,
modified, supplemented or amended by a written document signed by
all parties hereto. This Agreement may be signed in any number
of counterparts, each of which when so executed shall be deemed
to constitute one and the same agreement, whether signed and
delivered via facsimile or otherwise.
23. NOTICES. Notices from either party to the other shall be given in
writing and delivered via facsimile and/or mailed postage
prepaid registered or certified mail, or placed in the hands of
a national overnight delivery service addressed to the addresses
set forth at the end of this Agreement, or at such other address
as either party may advise the other in writing. If mailed,
notice shall be deemed to have been received three (3) days after
the date of postmark. Otherwise, notice shall be deemed to be
received upon actual receipt thereof, and if via facsimile, a
confirmation thereof shall constitute acknowledgment of receipt
thereof.
24. ACCEPTANCE AND TERMINATION. This Agreement will become effective
when accepted by METRO as evidenced by signature of any duly
authorized officer of METRO, shall continue for a term of thirty
(30) days hereafter (the "Initial Term"), and shall be
automatically renewed thereafter for successive periods of thirty
(30) days (the "Renewal Term") unless terminated as provided
herein. CLIENT and METRO shall have the right to terminate this
Agreement at the end of the Initial Term or at the end of any
Renewal Term by giving the other ten (10) days prior written
notice of such termination. Notwithstanding such notice, CLIENT
shall have no right to terminate this Agreement until all
obligations (direct or contingent) owing by CLIENT to METRO
hereunder or otherwise shall have been paid in full, whether or
not such obligations are due or are to become due in the future.
Upon the occurrence of an EVENT OF DEFAULT, METRO may at METRO'S
election consider such occurrence an anticipatory repudiation of
this Agreement and/or immediately terminate this Agreement as to
future transactions without notice. No termination of this
Agreement shall in any way affect or impair any right of METRO
arising prior thereto or by reason thereof, nor shall any such
termination relieve CLIENT or any of its guarantors of any
obligation to METRO under this Agreement or otherwise until all
of said obligations fully paid and performed, nor shall any
such termination affect any right or remedy of METRO arising from
any such obligation, and all agreements, warranties,
representations, and covenants of CLIENT OR its guarantors shall
survive termination. In the event that CLIENT shall have breached
any provision of this Agreement or if notice of termination is
given by either party, the RESERVE FUND and any other balances or
credits otherwise due by METRO to CLIENT may be retained and
applied by METRO from time to time upon any indebtedness then or
thereafter due from CLIENT and the RESERVE FUND may at METRO'S
discretion upon such breach or notice of termination, be
increased to an amount equal to the then total unpaid face amount
of all BILLS purchased by METRO hereunder and other present or
potential indebtedness of CLIENT to METRO, whether matured or
INITIALS:
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unmatured. In such event, as the RESERVE FUND exceeds all present
and potential indebtedness of CLIENT to METRO, METRO shall remit
such excess to CLIENT. In recognition of METRO'S right to have
its attorneys' fees and other expenses incurred in connection
with this Agreement secured by the COLLATERAL, notwithstanding
payment in full of all obligations by CLIENT, METRO shall not be
required to record any terminations or satisfactions of any of
METRO'S liens on the COLLATERAL unless and until CLIENT has
executed and delivered to METRO a general release in a form
reasonably satisfactory to METRO.
25. POWER OF ATTORNEY. In order to carry out this Agreement, CLIENT
irrevocably appoints METRO, or any authorized designee of METRO,
as CLIENT'S special attorney-in-fact with power:
25.1 To delete CLIENT'S address on all BILLS sold and/or
assigned to METRO by CLIENT and insert METRO'S address in
its place.
25.2 To receive, accept, open and forward to CLIENT all mail
addressed to CLIENT which may come into METRO'S possession.
25.3 To endorse the name of CLIENT on any checks or other
instruments or evidence of payment that may come into the
possession of METRO on bills purchased by METRO from CLIENT
OR in which CLIENT has granted METRO a security interest.
25.4 In CLIENT'S name, or otherwise, to demand, ▇▇▇ for, collect
and obtain releases for any and all monies due or to become
due on BILLS purchased by METRO from CLIENT or in which
CLIENT has granted METRO a security interest.
25.5 To compromise, prosecute or defend any action, claim or
proceeding as to BILLS purchased by 2%P. METRO from CLIENT
OR in WHICH CLIENT HAS GRANTED METRO a security interest.
25.6 To notify, direct or instruct CLIENT'S CUSTOMER in CLIENT'S
name of the proper remittance address and of procedures for
making payment on any BILLS that are sold to METRO by
CLIENT or in which CLIENT has granted METRO a security
interest.
25.7 To execute on CLIENT'S behalf and file such UCC financing
statements as METRO may deem necessary in order to perfect
and maintain the security interests granted by CLIENT in
accordance with this and any other agreement between CLIENT
and METRO, and CLIENT further agrees that METRO may file
this Agreement or a copy thereof as such UCC financing
statement.
25.8 To do any and all things in CLIENT'S name necessary and
proper to carry out the purposes intended by this
Agreement.
26. This Agreement includes all assumed names, tradestyles, and
divisions of CLIENT unless specifically agreed to in writing by
METRO. Further, notwithstanding anything herein to the contrary,
this Agreement is conditional upon there being no change in the
nature of CLIENT'S business which is presently processing and
collection -medical claims for clinics and hospitals.
27. This Agreement is contingent upon the delivery of the validity
guaranties of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, the corporate
guaranties of United Moneycorp, Inc. and United Medicorp
Financial Corporation. the subordination of its security interest
in accounts receivable by Bank United (successor-in-interest to
Texas Central Bank, N.A.), and ancillary documentation to METRO,
all in a form approved by METRO.
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28. CLIENT WARRANTS AND REPRESENTS TO METRO THAT CLIENT HAS READ THIS
AGREEMENT IN ITS ENTIRETY PRIOR TO SIGNING AND THAT PRIOR TO
SIGNING THIS AGREEMENT, ALL BLANKS WERE FILLED IN (EXCEPT FOR
DATES AND SIGNATURES) AND ALL ALTERNATIONS OF THIS AGREEMENT WERE
INITIALED BY CLIENT.
CLIENT: UNITED MEDICORP, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Date Signed: December 28, 1999
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Physical Address: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Mailing Address: Same
Attested By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Corporate Secretary
METRO FACTORS, INC.
By: [ILLEGIBLE]
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Its: President
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Date Signed:
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Physical Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Mailing Address: P. 0. Box 38604. Dallas, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attested By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇, Assistant Secretary
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INITIALS:
