exv10w5w2



 




Exhibit 10.5.2


PATIENT ACCOUNT PURCHASE AGREEMENT




     THIS AGREEMENT is entered into this 5th day of December 2003 by and
between Integrated Financial Systems, Inc., a Colorado corporation (“IFS”) and
Metroplex Health System, a Texas corporation (“Hospital”) and member
organization of Adventist Health System.



RECITALS:




     A. IFS has established a Patient Account Finance Program (the “Program”)
pursuant to which IFS purchases patient accounts from hospitals and other
providers of health care services.



     B. Hospital desires to sell, and IFS desires to purchase, subject to the
terms and conditions hereof, and in accordance with the Program, certain
Accounts.



     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:



I.

DEFINITIONS




     The defined terms herein shall have the meanings set forth below and in
the Financial Addendum attached as Exhibit A hereto.



     a. “Accounts” shall mean the amount a patient or other Responsible Party
owes the Hospital arising from the sale or provision of goods and services
provided by the Hospital, which is not covered by a third party payor, which is
freely assignable, which is evidenced by a Patient Financing Agreement and
which satisfies the Account Criteria. “Accounts” shall never include any
account wherein assignment thereof is specifically prohibited by applicable
law,



     b. “Additional Purchase Price” shall mean, with respect to any Account,
any principal payment received by IFS in excess of the Purchase Price.



     c. “Advance Rate”, shall be the amount set forth in Exhibit A hereto.



     d. “Account Criteria” shall mean the criteria set forth on Exhibit B
hereto.



     e. “Backlog Account” shall mean an Account which was created by the
Hospital prior to the date of this Agreement and may not be evidenced by a
Patient Financing Agreement.



     f. “Delinquent Account” shall mean any Account: where one or more
scheduled payments of principal and/or interest have not been received by the
tenth (10th) day after the due date thereof and such payments remain
outstanding.



     g. “Default Account” shall mean any Account where the equivalent of three
(3) or more scheduled payments of principal and/or interest are delinquent
(whether or not such scheduled payments are consecutive).



     h. “Disputed Account” shall mean:



 









 






     (i) an Account wherein any Responsible Party has sought protection
under the Bankruptcy Act;




     (ii) an Account wherein any Responsible Party is deceased;




     (iii) an Account that has been recalled by Hospital;




     (iv) an Account wherein any Responsible Party has retained legal
counsel, threatened or initiated legal action against IFS or the
Hospital;




     (v) Account wherein, after reasonable effort, any Responsible Party
cannot be located;




     (vi) an Account wherein fraud is reasonably suspected;




     (vii) any other Account that IFS determines to be uncollectible; and




     (viii) an Account that is determined to qualify for charity or
indigent care.



     i. “Financial Institution” shall mean one or more persons or entities that
provide financing to IFS to fund its obligations hereunder. IFS shall provide
notice to Hospital of any Financial Institution that has been assigned an
interest in this Agreement pursuant to Exhibit G hereto.



     j. “Patient Financing Agreement” shall mean the Consumer Credit Agreement,
Truth in Lending Statement and/or other documentation utilized by the Hospital
for use in the origination of Accounts. Unless waived by IFS, all such
documentation shall be in a form approved by IFS.



     k. “Net Proceeds” shall mean the Purchase Price minus the Service Fee,
which is the amount IFS is obligated to pay the Hospital in connection with the
initial Purchase of the Account by IFS.



     l. “Purchase” shall mean the purchase and sale of an Account, with
recourse as provided in this Agreement.



     m. “Purchase Date” shall mean each Friday while this Agreement is in
effect, unless such day is a holiday or day upon which banks are not open in
which event the Purchase Date shall be the next business day,



     n. “Purchase Price” shall mean, with respect to each Account, the face
amount of such Account multiplied by the Advance Rate.



     o. “Purchase Request” shall mean the form attached hereto as Exhibit C.



     p. “Repurchase Account” shall mean an Account that is subject to
repurchase by the Hospital pursuant to Section TV hereof.



     q. “Repurchase Event” shall occur with respect to an Account when such
Account becomes:



 









 






     (i) a Default Account; or




     (ii) a Disputed Account.



     r. “Repurchase Price” shall mean, with respect to any Account, the
Purchase Price, minus any principal payments received in respect of such
Account, plus the Repurchase Interest Amount, and minus the amount of any
Service Fee refund available under Section IV(d), which is the price payable by
the Hospital in connection with the repurchase of an Account under Section IV
hereof.



     s. “Repurchase Interest Amount” shall mean, with respect to a Repurchase
Account, an amount equal to interest on the unpaid principal amount of such
Account at the Repurchase Interest Rate from the time such Account becomes a
Delinquent Account to the repurchase of such Account by the Hospital.



     t. “Repurchase Interest Rate” shall mean the per annum rate of interest
set forth in Exhibit A hereto, which is the interest rate payable by the
Hospital with respect to any Repurchase Account.



     u. “Repurchase Notice” shall mean the form attached hereto as Exhibit D.



     v. “Responsible Party” shall mean, with respect to an Account, the person
or entity that is the obligor or account party with respect to such Account
(which may or may not be the patient) and (except in the case of a Backlog
Account) has executed a Patient Financing Agreement evidencing the amount owed
to the Hospital in respect of such Account.



     w. “Service Fee” shall mean the amount set forth in Exhibit A hereto,
which is the amount charged by IFS to the Hospital concurrently with the
initial Purchase of the Account by IFS.



     x. “Servicing Account Fee” shall mean the amount set forth in Exhibit A
hereto, which is the amount charged by IFS to the Hospital upon collection by
IFS of any amounts in payment of any Servicing Accounts.



     y. “Servicing Account(s)” shall mean accounts of the Hospital which IFS
has not purchased under Section II hereof and with respect to which IFS has
agreed to act as servicer in accordance with Section VII(f) hereof.



     z. “Servicing Procedures” shall mean the procedures identified on Exhibit
E hereto.



     aa. “Termination Event” shall mean:




     (i) termination by either party under Section IX
hereof;




     (ii) termination by IFS by reason of a default by Hospital under
Section X after expiration of the notice and grace periods provided
therein,



     bb. “Termination Notice” shall mean the form attached hereto as Exhibit F.



 









 





II.

PURCHASE OF ACCOUNTS




     a. Commitment. During the term of this Agreement and subject to the terms
hereof, IFS agrees to make the Program available to the Hospital to provide for
the purchase, with recourse, of Accounts originated by the Hospital and which
conform to the Account Criteria.



     b. Purchase. From time to time, the Hospital may request a Purchase
hereunder by submitting a Purchase Request to IFS in a manner to be agreed upon
by the parties. IFS will purchase Accounts from Hospital on a Purchase Date.
Hospital will submit a Purchase Request for an Account by the Friday prior to
the desired Purchase Date. Upon receiving a Purchase Request, IFS shall
confirm the propriety of the requested Purchase and if approved shall wire
transfer the Net Proceeds to the designated bank account of Hospital on the
Purchase Date.



     c. Purchase Price. As consideration for the sale of the Account to IFS,
IFS shall pay to the Hospital:




     (i) upon the sale of the Account, an amount equal to the Net
Proceeds; and




     (ii) on each Purchase Date, an amount equal to the Additional
Purchase Price, if any, with respect to amounts collected up to the
Friday immediately preceding such Purchase Date.



     IFS shall have the right to offset amounts payable to Hospital against
amounts owed by Hospital to IFS.



     d. Purchase Confirmation. Upon payment, to the Hospital of the Net
Proceeds, Hospital shall be deemed to have granted, transferred and assigned
the related Account to IFS and title to the Account and related servicing
rights and proceeds shall pass to IFS. Payment of the Net Proceeds shall be
deemed conclusive evidence of the Purchase of the related Account. Upon making
a Purchase and funding of the Purchase Price, IFS shall deliver to the Hospital
a Purchase Confirmation in its standard form. The Purchase Confirmation shall
be controlling absent manifest error. During the term of its ownership of an
Account, IFS shall have the right to demand and collect all amounts due under
such Account.



     e. Backlog Accounts. The parties agree that Hospital may also submit
Backlog Accounts for Purchase hereunder in accordance with the foregoing
procedures. IFS may accept or reject such Accounts for Purchase in its sole
discretion.



III.

RESPONSIBILITIES OF HOSPITAL




     a. Credit Approval, Documentation. Hospital shall have the sole right and
responsibility to approve all applications for credit under this Agreement. All
Accounts submitted to IFS for purchase shall satisfy the Account Criteria and
shall be subject to the terms of this Agreement. Except with respect to Backlog
Accounts or unless agreed to by IFS, Hospital shall only use Patient Financing
Agreements approved by IFS. Hospital shall provide to IFS complete, properly
executed Patient Financing Agreements for all Accounts submitted to IFS for
purchase as provided herein or as otherwise required by IFS.



 









 





     b. Billing and Collection. For all Accounts purchased by IFS, the Hospital
shall instruct the patients to make payments as directed by IFS. IFS shall have
the right to modify or extend the terms of any and all Accounts it purchases
under this Agreement. Except as provided in Section VII(c), Hospital shall not
negotiate with or collect any amounts in regard to the Accounts purchased
hereunder. In the event Hospital receives any payment due on an Account
purchased by IFS, Hospital shall immediately forward it to IFS.



     c. Compliance with Applicable Law. Hospital shall submit to IFS only
Accounts that arise from goods and services actually provided by Hospital to
the patient and for which Hospital may submit a bill under applicable laws and
regulations.



     d. No Surcharges or Fees. Hospital shall not assess to the patient or any
Responsible Party a surcharge or any other extra fee or charge on any Account
submitted to IFS for purchase,



     e. Access
to Information. Throughout the terms of this Agreement, Hospital
shall promptly furnish to IFS all non-clinical patient information reasonably
requested by IFS. Upon reasonable notice, IFS and its representatives shall
have the right to audit Hospital records during business hours with respect to
the Accounts.



IV.

UNCONDITIONAL OBLIGATION TO REPURCHASE




     a. Repurchase By Hospital. The Hospital hereby unconditionally and
irrevocably agrees to repurchase each Account wherein a Repurchase Event has
occurred (each, a “Repurchase Account”). In order to initiate the repurchase of
one or more Repurchase Accounts, IFS shall submit a Repurchase Notice to the
Hospital on or before the Friday immediately preceding the desired Purchase
Date for repurchase. The Hospital shall wire transfer the Repurchase Price for
such Repurchase Accounts on such Purchase Date to the designated account of
IFS. Upon payment of the Repurchase Price, title to the applicable Repurchase
Accounts shall pass to the Hospital free of any claim of IFS or a Financial
Institution.



     b. Unconditional Obligation. The Hospital’s obligation to repurchase an
Account and to repay IFS or any Financial Institution, is continuing, absolute
and unconditional and without right of setoff; is irrespective of the value,
validity or enforceability of a Patient Financing Agreement or the Account; and
is irrespective of action, inaction, bankruptcy, failure to perform, failure
to service, or other default on the part of IFS. Hospital hereby waives and
agrees not to assert any defenses it may have under suretyship law or otherwise
to its obligation to repurchase an Account including, without limitation, any
defense related to fraud, misrepresentation, amendment, modification or
supplement to a Patient Financing Agreement; any exercise, non-exercise or
delay in exercising any right, remedy, power or privilege under a Patient
Financing Agreement; any right to require presentment (except as set forth
herein) protest, demand or notice of any kind; any bankruptcy of an obligor or
Responsible Party under an Account; any extension of time for payment by an
Account; or death or incompetency of an obligor or Responsible Party under an
Account. Hospital waives and agrees never to assert any defenses of an obligor
or Responsible Party under an Account to avoid, reduce, limit or negate in any
way Hospital’s obligation to repurchase and repay.



     c. Repurchase of All Accounts. Upon a Termination Event, the Hospital
unconditionally and unequivocally agrees, in accordance with subsection (b)
above, to



 









 







repurchase all Accounts assigned to and purchased by IFS under this
Agreement. In such event IFS shall transmit a completed Termination Notice and
Hospital shall have thirty (30) days after receipt of the Termination Notice to
wire transfer the Repurchase Price for all of the Accounts as shown on the
Termination Notice to the designated bank account of IFS.



     d. Refund of Service Fee. Upon the repurchase of an Account by the
Hospital pursuant to this Section IV, the Hospital shall be entitled to a
refund in an amount equal to the unearned portion of the Service Fee that was
paid by the Hospital in connection with the purchase of the Account by IFS. For
purposes of this subsection (d), a Service Fee shall be treated as “unearned”
in the same proportion as the ratio of (i) the unpaid balance of the Account,
to (ii) the original principal balance of the Account when purchased by IFS.
Any Service Fee refund with respect to an Account shall be paid by deducting
the refund amount from the Repurchase Price of the Account. Notwithstanding the
foregoing, the Hospital shall not be entitled to any refund with respect to an
Account if the repurchase of the Account results from (A) a termination of this
Agreement by the Hospital pursuant to Section IX hereof, or (B) a termination
of this Agreement resulting from a Default by the Hospital pursuant to Section
X hereof. In the event hospital elects to terminate this agreement within six
months of signing, IFS agrees it will not charge Hospital the service fee on
any accounts repurchased by Hospital under the termination provisions.



V.

REPRESENTATIONS AND WARRANTIES OF HOSPITAL




     The following representation and warranties of the Hospital shall be true
and correct as of the date hereof and throughout the term of this Agreement:



     a. Corporate Organization; Authority. Hospital is a non-profit corporation
duly organized, solvent, validly existing and in good standing under the laws
of Texas. Hospital has all necessary corporate power and authority to enter
into and execute this Agreement and to perform and consummate the transactions
contemplated hereby. Upon execution, this Agreement shall be a legally
enforceable, valid and binding obligation of Hospital. The execution and
delivery of this Agreement does not and will not conflict with or violate the
articles of incorporation or corporate bylaws of Hospital nor will it result in
violation of any law, ordinance, regulation, court order or decree, or the
terms of any other contract, agreement or financing covenant applicable to
Hospital.



     b. Account Compliance. All Accounts submitted to IFS for purchase shall be
accounts that arise from goods and services actually provided by Hospital to
the patient and for which Hospital may submit a bill under applicable laws and
regulations. All Accounts submitted to IFS hereunder and their related
documentation were originated in compliance with all applicable laws and
regulations, were duly executed by the parties thereto and are valid and
enforceable in accordance with their terms and are free from all liens,
encumbrances or rights of offset or counterclaim. Each Account satisfies all of
the Account Criteria set forth on Exhibit B and is in an unpaid amount equal to
or in excess of the amount set forth on the related Purchase Request. Except
for Backlog Accounts, each Account shall, be evidenced by a complete and
accurate Patient Financing Agreement which has been executed by the Responsible
Party and the Hospital and which has been assigned and purchased by IFS upon
payment of the Net Proceeds. Immediately prior to purchase hereunder, Hospital
is the owner of the Accounts. The Hospital has possession of the Patient
Financing Agreements and if requested by IFS, the Hospital shall deliver to IFS
originals of any Patient Financing Agreements relating to Accounts purchased by
IFS under this Agreement.



 









 





     c. Consent and Approvals. No consent of any entity or person is required
in connection with the execution and delivery of this Agreement by Hospital or
for the performance consummation of the transactions contemplated herein. Each
Purchase hereunder shall be deemed a restatement of the Hospital’s
representations and warranties hereunder.



     d. Financial Statements. Hospital has delivered to IFS copies of
Hospital’s audited, consolidated financial statements for the most recent
fiscal year- and unaudited consolidated financial statements for the most
recent fiscal quarter, all of which are complete, correct and, accurate in all
material respects as of their respective dates. Within 45 days after the end of
each of its fiscal quarters, Hospital shall deliver to IFS a copy of its
unaudited financial statements for such quarter. Within 90 days after the end
of each of its fiscal years, Hospital shall deliver to IFS a copy of its
audited financial statements (consolidated, if applicable). All such financial
statements are or shall be correct and complete and present fairly the
financial position of Hospital and the results of operations for Hospital. All
such financial statements shall have been prepared in accordance with generally
accepted accounting principles consistently maintained and applied throughout
the periods indicated.



VI.

REPRESENTATIONS AND WARRANTIES OF IFS




     The following representation and warranties of IFS shall be true and
correct as of the date hereof and throughout the term of this Agreement:



     a. Corporate Organization; Authority. IFS is a corporation duly organized,
solvent, validly existing and in good standing under the laws of the State of
Colorado. IFS has all necessary corporate power and authority to enter into and
execute this Agreement and to consummate the transactions contemplated hereby.
Upon execution, this Agreement shall be a legally enforceable, valid and
binding obligation of IFS. The execution and delivery of this Agreement does
not and shall not conflict with or violate the articles of incorporation or
corporate bylaws of IFS.



     b. Consents and Approvals. No consent of any entity or person is required
in connection with the execution and delivery of this Agreement by IFS or for
the consummation of the transactions contemplated herein, including, without
limitation, consents from parties to loans, contracts, leases or other
agreements to which IFS is a party.



VII.

SERVICING




     a. Servicing. During the term of its ownership, IFS shall use commercially
reasonable efforts to maximize recovery under the Account subject to the terms
of this Agreement and the Servicing Procedures. In this regard, IFS shall
service the Accounts in accordance with industry standards and the Servicing
Procedures consistent with the degree of skill and care customarily required
with respect to servicing Accounts and in accordance with applicable standards.
IFS shall: (i) comply with all, applicable Federal, State and local laws and
regulations; and (ii) maintain all necessary state anal federal licenses,



     b. Application of Funds. IFS shall apply all payments received from the
Responsible Party in respect of an Account in the following order of priority:
(i) to any unpaid penalties or fees due and owing in respect of such Account,
(ii) to accrued and unpaid interest,



 









 







and (iii) to the outstanding principal balance of the Account. On each
Purchase Date, IFS shall provide an Account Status report to Hospital
summarizing the status of each Accounts as of the previous Friday. All
interest, fees, late charges, and other amounts paid under the Accounts during
the term of IFS’ ownership shall be the sole property of IFS and fully earned
upon receipt.



     c. Settlement. Hospital may settle, compromise or adjust any Account
during the term of IFS’ ownership upon (i) written notice to IFS; and (ii)
payment to IFS of the amount of such adjustment, compromise or reduction plus
interest on such amount at the Repurchase Interest Rate from and including the
date of purchase to the date of payment by the Hospital. IFS may not settle,
compromise or adjust any Account without the prior approval of Hospital.



     d. Access to Information. Throughout the term of this Agreement, IFS shall
provide to Hospital information regarding the Accounts as the Hospital may
reasonably request. Upon reasonable notice, Hospital and its representative
shall have the right to audit IFS records during business hours with respect to
the Accounts.



     e. Set-Up and Installation Fee. Prior to the initial Purchase hereunder,
the Hospital shall pay to IFS a Set-Up and Installation Fee in the amount set
forth in Exhibit A in consideration for IFS’ initial implementation. of the
Servicing Procedures. Such fee shall be fully-earned and non-refundable upon
payment.



     f. Servicing Accounts. IFS shall service the Servicing Accounts in
accordance with the standards and procedures set forth in subsection (a) of
this Section VII. IFS shall remit all amounts received by it in respect of any
Servicing Accounts to the Hospital for application against such Servicing
Accounts in the order of priority established pursuant to subsection (b) of
this Section VII. In consideration for IFS servicing the Servicing Accounts,
the Hospital shall pay IFS the Servicing Account Fee with respect to all
amounts collected by IFS relating to the Servicing Accounts, which amount shall
be paid by deducting it from the amount paid over to the Hospital pursuant to
the previous sentence.



VIII.

SALE, NOT A LOAN; SECURITY INTEREST




     Although the parties intend that all transactions hereunder be sales and
purchases and not loans, in the event any Purchase is deemed to be a loan,
Hospital shall be deemed to have granted to IFS a security interest in such
Accounts as of the date of Purchase. In this regard, Hospital hereby grants and
pledges to IFS a first priority security interest in the Accounts and all
payments and proceeds thereof as security for the performance by Hospital of
its obligations hereunder, and agrees not to create or suffer to exist any lien
or security interest of any party other than IFS in any such Accounts. In this
regard, IFS shall be authorized to take such action as it deems necessary to
perfect the foregoing security interest including, without limitation, the
filing of a financing statement with respect to the Accounts. In the event of a
default hereunder, IFS shall have all rights and remedies granted to a secured
party under the Colorado Uniform Commercial Code



IX.

TERMINATION




     Either party shall have the right to terminate this Agreement upon thirty
(30) days prior written notice to the other party. Upon such notice of
termination, IFS shall have no further



 









 







obligation to purchase and Hospital shall have no further obligation to
sell Accounts hereunder, In such event, the Hospital shall be obligated to
repurchase all of the Accounts following receipt of a Termination Notice as
provided in Section IV(c) above. Termination of this Agreement shall be deemed
effective upon full payment of all amounts owed by either party hereunder.



X.

DEFAULT




     a. Event of Default. The following events shall constitute a default (a
“Default”) under the terns of this Agreement: (1) Hospital fails to pay or
perform any obligation, covenant or liability in connection with this Agreement
within ten (10) days after the date that written notice thereof is given to
Hospital, (2) if it fails to repurchase or make repayment for any Accounts
presented for repurchase by IT’S as provided herein; (3) any warranty,
representation or statement whenever made by Hospital in connection with. this
Agreement proves to be false in any material respect when made or becomes
untrue in any material respect; (4) dissolution of Hospital; (5) insolvency of
Hospital; (6) the assignment for the general benefit of Hospital’s creditors,
the appointment of a receiver or trustee for its assets, the commencement of
any proceeding under any bankruptcy or insolvency laws by or against Hospital
or any proceeding for the dissolution or liquidation, settlement of claims
against or winding up of its affairs; (7) the termination or withdrawal of any
guarantee for Hospital’s obligations; (8) default by the Hospital on any bonds
or other material indebtedness of any kind; (9) the Hospital’s bond rating
falls below investment grade; (10) Hospital discontinues its business as a
going concern; (11) Hospital’s loss of Medicare or Medicaid provider number; or
(12) IFS, in good faith, deems the prospects of Hospital’s payment, or
performance of its obligations have been jeopardized.



     b. Effect of Default. Upon the occurrence of any Default, in addition to
any rights IFS has under this Agreement or applicable law, IFS may immediately
declare a Termination Event and terminate this Agreement by delivering a
Termination Notice, at which time, IFS shall have no further obligation to
purchase Accounts hereunder, all obligations of Hospital to IFS shall
immediately become due and payable without further notice, and the Hospital
shall be obligated to repurchase all of the Accounts in accordance with Section
IV(c) hereof.



     c. Late Interest. In addition to the payment of the Repurchase Price,
Hospital shall pay late interest to IFS at the rate of one and one-half
percent (1.5%) per month on any amounts Hospital owes to IFS which are not paid
when due.



XI

INDEMNIFICATION




     Hospital agrees to defend, indemnify and hold IFS, its agents and
employees harmless from and against any and all claims, counterclaims,
liabilities, losses, damages, court costs, attorneys’ fees and other expenses
arising from the origination of any Account purchased hereunder and the
collection activities performed by the Hospital, its agents or employees with
respect to any Accounts. IFS agrees to defend, indemnify and hold Hospital, and
its agents and employees harmless from and against any and all claims,
counterclaims, liabilities, losses, damages, court costs, attorneys’ fees and
other expenses arising solely out of IFS’ collection activities with respect
to the Accounts not being in conformity with applicable laws and regulations.



 









 





XII.

NON-SOLICITATION




     During the term of this Agreement and for one (1) year after the date of
termination of this Agreement (the “Restrictive Period”) Hospital shall not
solicit, hire, influence or attempt to influence any employee or contractor of
IFS to terminate his or her employment or other contractual relationship with
IFS for any reason. Additionally, during the Restrictive Period, Hospital shall
not directly or indirectly attempt to solicit or conduct business with any
person or entity that is a client, customer or active prospect of IFS at the
time of termination of this Agreement for the purpose of providing services
that are competitive with the services provided by IFS under this Agreement.
The terms “client,” “customer” and “active prospect” include, but are not
limited to, any person or entity solicited or contacted by IFS or any person
or entity to which services have been rendered by IFS directly or indirectly
during the two (2) years preceding Hospital’s termination. Hospital
acknowledges its duty, both by contract and common law, neither to interfere
with contractual relationships nor to use proprietary and confidential
information about customers or clients of IFS for the advantage of any person
or entity other than IFS.



     The covenants of Hospital contained in this Section XII shall be
independent of any other provision in this Agreement; and the existence of any
claim or cause of action by Hospital against IFS shall not constitute a defense
to the enforcement by IFS of said covenants. Hospital understands that the
covenants contained in Section XII are essential elements of this Agreement, in
the absence of which, IFS would not have agreed to disclose confidential
information and provide access to key employees and contractors as contemplated
herein. Hospital further agrees and acknowledges that this Agreement (i) is
reasonable as to length of time, scope and geographic area for purposes of
protecting the commercial advantages enjoyed by IFS, (ii) does not impose a
greater restraint than is necessary to protect the goodwill or business
interests of IFS and (iii) is adequately paid for by the consideration to
Hospital under this Agreement. Hospital and IFS also agree that the court,
under Section XII shall have authority to modify any provision of this covenant
in accordance with the court’s ruling as to reasonableness or scope of
application and, consistent with Section XII of this Agreement, this Agreement
shall remain enforceable as modified or amended in the jurisdiction where this
Agreement is so modified or amended.



XIII.

NONDISCLOSURE OF PROPRIETARY CONFIDENTIAL INFORMATION




     Each party acknowledges that, during the term of this Agreement, a party
may obtain special training and shall have access to and become familiar with
various trade secrets and confidential information of the other party
including, but not limited to the terms of this Agreement; methods of
operation; techniques; designs; processes; technologies; compilations of
information; past, present and prospective customer lists; records and
specifications that are owned. by and commercially beneficial to a party,
including any compilation of various trade secrets or data derived from such
information (collectively, the “Proprietary Information”). The Proprietary
Information does not include information that is or becomes part of the public
domain. If a party is required by law to disclose Proprietary Information, the
disclosing party shall notify the non-disclosing party, in writing, of the
nature of such disclosure and the Proprietary Information to be disclosed, as
soon as is possible and/or practical, to permit the nondisclosing party the
opportunity to contest or limit such disclosure.



 









 





     Each party agrees that it shall not disclose to any person or entity,
either during the term of this Agreement or after termination of this Agreement
for any reason, any Proprietary Information of the other party, except as may
be necessary for the bona fide pursuit of this transaction. Similarly, a party
shall not use such information for the benefit of any person or entity other
than the disclosing party at any time. Notwithstanding the foregoing, the
parties agree that disclosure of Proprietary Information to the Financial
Institution pursuant to IFS’ obligations to the Financial Institution shall be
permitted. Each party acknowledges that this covenant of nondisclosure is an
integral term of this Agreement and is given in consideration of the party’s
contract and the other considerations granted in this Agreement.



XIV.

MISCELLANEOUS




     a. Attorneys Fees/Miscellaneous. In the event of litigation to enforce
this Agreement, the prevailing party shall be awarded its reasonable attorneys
fees, costs and expenses. No delay or failure on IFS’ part in exercising any
right, privilege, or option hereunder shall operate as a waiver of such or of
any other right, privilege, or option. No waiver, amendment or modification of
any provision of this Agreement shall be valid unless in writing signed by IFS
and Hospital and then only to the extent therein stated. The headings herein
are for convenience only, and shall not define or limit the scope, extent,
meaning or intent to this Agreement. This Agreement and its attachment embodies
the entire agreement between IFS and the Hospital as to the subject matter
hereof.



     b. Notice/Wire Transfers. All notices hereunder shall be in writing and
shall be deemed delivered if personally delivered, sent by certified mail,
return receipt requested, facsimile or nationally recognized overnight courier
service, to the address shown on the signature page. Notices shall be deemed
delivered when received. All transfers of funds hereunder shall be by wire
transfer to the accounts identified on the signature page.



     c. Assignability. This Agreement is not assignable by the Hospital without
the prior written consent of IFS. IFS may assign this Agreement or the
administration or servicing hereof without the prior consent of the Hospital.
IFS is expressly authorized to assign this Agreement and any Accounts purchased
hereunder to an affiliate or subsidiary of IFS or to a Financial Institution,
which assignee shall inure to the benefits provided to IFS under this Agreement
and such Accounts and who, shall be a third party beneficiary under this
Agreement with respect to such Accounts.



     d. Severability. If any part of this Agreement shall be held to be
invalid, illegal or unenforceable, the validity, legality or enforceability of
the remainder of the Agreement shall not in any way be affected or impaired
thereby.



     e. Injunctive Relief. Hospital agrees that a breach or threatened breach,
based on reasonable and good faith evidence of a breach on Hospital’s part, of
any covenant contained in Sections XII or XIII shall cause irreparable damage
to IFS. For that reason, Hospital further agrees that IFS shall be entitled to
seek an injunction from any court of competent jurisdiction, restraining any
further violation of any of such covenants by Hospital, Hospital’s future
contract partners, contractors, business partners, agents or any person or
entity related, directly or indirectly, to Hospital. The right to seek an
injunction is in addition to all other remedies IFS may have under this
Agreement, at law or otherwise.



 









 





     f. Survivability. The terms and provisions of Sections IV, XI, XII and
XIII shall survive any termination of this Agreement.



     g. Applicable Law. The Agreement shall be governed by, construed and
enforced according to the laws of the State of Colorado without giving
consideration to any Colorado rule of law that would apply the law to another
state. The parties stipulate and agree that the exclusive venue for any action
arising under this Agreement shall be in the State Courts of Arapahoe County,
Colorado or Federal Courts of Denver, Colorado.



[Signatures on following page]




 









 








     IN WITNESS WHEREOF, Hospital and IFS have caused this Agreement to be
executed by their authorized officers, on the date first above written.



	 	 	 
	INTEGRATED FINANCIAL SYSTEMS, INC.,

a Colorado Corporation

	 	HOSPITAL (METROPLEX)
	 
	 	 
	By: /s/ JOHN C. HERBERS
   
                            

Its: President

	 	By: /s/ JANICE HAGENSICKER
      
              

Its: VP/CFO
	 
	 	 
	Address:

	 	Address:
	 
	 	 
	7807 E. Peakview Avenue

Suite 300

Greenwood Village, CO 80111

Attn:                        
                               
              

Telephone:             
                               
              

Facsimile:                
                               
              

Email:                       
                               
              

	 	2201 Clear Creek Road

Killeen, Texas 76549
 
 

Telephone:             
                               
              

Facsimile:                
                               
              

Email:                       
                               
              
	Wire Instructions

	 	Wire Instructions
	                   
                               
                            

	 	                          
                        
                            
	                   
                               
                            

	 	                          
                        
                            
	                   
                               
                            

	 	                          
                        
                            







 









 





EXHIBIT A




FINANCIAL ADDENDUM




	 	 	 	 	 	 	 	 	 
	Advance Rate
	 	 	—	 	 	85%	 
	Service Fee
	 	 	—	 	 	***% of the face amount of the Account
	Servicing Account Fee
	 	 	—	 	 	***% of the amount collected with respect to a Servicing Account
	Repurchase Interest Rate
	 	 	—	 	 	8% per annum.
	Set-Up and Installation Fee
	 	 	—	 	 	$***







Example 1: Repurchase of Account (no principal repayment)



	 	 	 	 	 
	Total Value of Account
	 	$	100.00	 
	Advance Rate
	 	 	80%	 
	Advance Rate Amount
	 	$	80.00	 
	Less Service Fee
	 	$	***	 
	Net Proceeds Paid to Hospital
	 	$	***	 
	Remaining Unpaid Principal Balance
	 	$	***	 
	Plus Repurchase Interest* (assuming 90 days)
	 	$	***	 
	Less Servicing Refund Amount
	 	$	***	 
	Repurchase Price
	 	$	***	 







* 8%o per annum, 360 day year



Example 2: Repurchase of Account ($50 principal repayment)



	 	 	 	 	 
	Total Value of Account
	 	$	100.00	 
	Advance Rate
	 	 	80%	 
	Advance Rate Amount
	 	$	80.00	 
	Less Service Fee
	 	$	***	 
	Net Proceeds Paid to Hospital
	 	$	***	 
	Repayment of Principal
	 	$	***	 
	Remaining Unpaid Principal Balance
	 	$	***	 
	Plus Repurchase Interest* (assuming 90 days)
	 	$	***	 
	Less Servicing Refund Amount
	 	$	***	 
	Repurchase Price
	 	$	***	 







* 8% per annum, 360 day year








	***	 	Text has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested under Rule 406 of the Securities Act of 1933.





 









 





EXHIBIT B




ACCOUNT CRITERIA



With respect to any Account, “Account Criteria” means that the following
conditions are satisfied with respect to such Account:





	1.	 	except in the case of a Backlog Account, the Hospital or IFS is in possession of a fully
completed Patient Financing Agreement with respect to each Account,
executed by the
patient or other financially responsible person (the “Obligor”) which has
been endorsed in
blank by the Hospital; and
	 
	2.	 	the documents constituting the Patient Account Agreement have been fully and
accurately completed;
	 
	3.	 	the Account satisfies the following conditions:





     (a) the Obligor has not claimed any offset, disputed the Account, asserted
any claim against the Hospital, asserted any defense to payment of the
obligation, retained legal counsel with respect to the Account, threatened or
initiated legal action against IFS or the Hospital;



     (b) the Account has been earned by the final delivery of goods or the
rendition of services by the Hospital;



     (c) the Account is not payable by or subject to reimbursement from (i) the
United States of America acting under the Medicaid/Medicare program established
pursuant to the Social. Security Act, (ii) any state acting pursuant to a
health plan adopted pursuant to Title XIX of the Social Security Act, (iii) any
agent, carrier, administrator or intermediary for any of the foregoing, or (iv)
a commercial medical insurance carrier;



     (d) the Obligor (i) is located in the United States, (ii) is not deceased,
and (iii) has provided to the Hospital up-to-date and accurate contact and
billing information;



     (e) the Account is owed by an Obligor who is solvent and not the subject
of any bankruptcy proceedings;



     (f) the Account is not subject to any lien, security interest or claim in
favor of any person or entity other than IFS;



     (g) the Account has not been extended, restructured, amended or
modified;



     (h) no fraud has occurred with respect to the Account; and



     (i) the Account does not arise from charity care or indigent care.



 









 





EXHIBIT C




FORM OF PURCHASE REQUEST




___________ ___, 20___



Integrated Financial Systems, Inc.

7807 East Peakview Avenue, 3rd Floor

Englewood, Colorado 801.11




	 	Re:	 	Patient Account Purchase Agreement, dated as of ___, 2003
(the “Agreement”), by and between Integrated Financial Systems, Inc. (“IFS “) and
(the “Hospital”)





Ladies and Gentlemen:



     Pursuant to Section II of the Agreement, the Hospital hereby requests that
IFS purchase the Accounts listed on Schedule 1 to this Purchase Request (the
“Scheduled Accounts”). The Hospital hereby certifies the following to IFS:



	 	 	 
	Current Outstanding Balance

Advance Rate

Purchase Price

(Outstanding Balance times

Advance Rate)

	 	$_______

_______%

$_______
	 
	Less Service Fee ( %)

	 	$_______
	 
	TOTAL Net Proceeds

	 	$_______
	 
	Purchase Date

(first Friday following the Friday
delivery of this Notice)

	 	________







     The Hospital hereby certifies to IFS that: (i) the representations and
warranties of the Hospital are true and correct as of the date hereof, and (ii)
each Scheduled Account satisfies the Account Criteria as set forth in Exhibit B
to the Agreement.



 









 





Please make payment by wiring the Net Proceeds to the Hospital as follows:





















	 	 	 
	

	 	Very truly yours,
	 
	

	 	[HOSPITAL]
	 
	

	 	By: _____________

Name: ___________

Its: _____________







 









 





EXHIBIT D




FORM OF REPURCHASE NOTICE




_________ ___, 20___



[HOSPITAL]
















	 	Re:	 	Patient Account Purchase Agreement, dated as of ___, 2003 (the
“Agreement”), by and between Integrated Financial Systems, Inc.
(“IFS”) and ___(the “Hospital”)





Ladies and Gentlemen:



     Pursuant to Section IV, the Agreement, IFS gives notice that a Repurchase
Event has occurred with respect to the Accounts listed on Schedule 1 (the
“Repurchase Accounts”). IFS hereby demands that the Hospital repurchase the
Repurchase Accounts. The Repurchase Price for the Repurchase Accounts is
calculated as follows:



	 	 
	Aggregate Purchase Price of

Repurchase Accounts
	$______________________
	 

	Less Principal Payments Received
	$______________________
	 

	Plus Repurchase Interest Amount
	$______________________
	 

	TOTAL Repurchase Price
	$______________________
	 

	Repurchase Date
	  ______________________
	(first Friday following the Friday

delivery of this Notice)

	 

	Payments should be made by wire as follows:


	


	


	


	










	 	 
	 	Very truly yours,

	 	 

	 	INTEGRATED FINANCIAL SYSTEMS, INC.

	 	 

	 	By: ____________________________

Name: __________________________

Its:_____________________________








 









 





EXHIBIT E




SERVICING PROCEDURES




     This Exhibit E sets forth the “Servicing Procedures” applicable to the
Patient Account Purchase Agreement, dated as of ___, 2003 (the
“Agreement”), by and between Integrated Financial Systems, Inc. (“IFS”) and
___(the “Hospital”). The provisions set forth herein are in addition
to the provisions relating to servicing set forth in the Agreement and are not
intended to alter or amend the terms and conditions of the Agreement.
Capitalized terms not defined herein shall have the same meanings given those
terms in the Agreement.




	 	1.	 	IFS shall proceed diligently to collect all payments called for
under the terms and provisions of the Accounts.
	 
	 	2.	 	IFS shall service and administer the Accounts in accordance with
the terms of the Agreement and, to the extent consistent with such
terms, giving due consideration to customary and usual standards of
practice of reasonable institutional commercial purchasers of patient
accounts in the health-care industry, and with a view to the
maximization of timely and complete recovery of principal, interest and
other amounts payable in respect of the Accounts.
	 
	 	3.	 	Subject to the Agreement and the, Servicing Procedures set forth
herein, IFS shall have full power and authority to do or cause to be
done any and all things in connection with the servicing and
administration of the Accounts as IFS deems necessary or desirable.
	 
	 	4.	 	IFS shall service and administer the Accounts in accordance with
applicable state and federal law and shall maintain all necessary state
and federal licenses.
	 
	 	5.	 	The Hospital shall furnish to IFS such powers of attorney and other
documents necessary or appropriate to enable IFS to carry out its
administrative and servicing duties hereunder and under the Agreement.
	 
	 	6.	 	Following the occurrence of a default or event of default with
respect to an Account, if IFS determines that a modification, waiver or
amendment of the terms of such Account is reasonably likely to produce
a greater recovery in terms of collection of such Account, IFS shall so
advise the Hospital. IFS shall agree to a modification, waiver or
amendment of any of the terms of such Account (and shall, under such
circumstances, have the authority to agree to such modification, waiver
or amendment only with the concurrence of the Hospital).
	 
	 	7.	 	IFS will provide Flexible PayTM system orientation and patient
materials at no cost to the Hospital prior to or simultaneously with
Flexible PayTM System deployment.
	 
	 	8.	 	IFS will maintain the Hospital’s access to the automated Flexible
PayTM system with telephonic support Monday through Friday from 8:00 AM to 5:00 PM, and
email support for all hours and days not specified.
	 
	 	9.	 	IFS will design and implement for the benefit of the Hospital an
“Affinity Card” program within thirty (30) days following the
Hospital’s final acceptance of the Affinity Card program’s design.





 









 






	 	10.	 	IFS will assign a named account executive who will be onsite to
serve the Hospital’s needs once per month, or more or less frequently
as requested by the Hospital.
	 
	 	11.	 	IFS will provide mutually agreed-to monthly benchmarking reports to
designated
Hospital executives and managers.





 









 





EXHIBIT F




FORM OF TERMINATION NOTICE




_________ ___, 20___



[HOSPITAL]
















	 	Re:	 	Patient Account Purchase Agreement, dated as of ___, 2003 (the
“Agreement”), by and, between Integrated Financial Systems, Inc.
(“IFS’”) and (the “Hospital”)





Ladies and Gentlemen:



     Pursuant to Section IV(c) of the Agreement, IFS hereby notifies the
Hospital that a Termination Event has occurred under the Agreement and,
accordingly, IFS hereby demands that the Hospital repurchase all of the
Accounts previously purchased by IFS under the Agreement and currently owned by
IFS, which Accounts are listed on Schedule 1 to this Repurchase Notice (the
“Termination Accounts”). The applicable Termination Event is as follows:




	 	o	 	either party has given the other party thirty (30) days written
notice of its desire to terminate the Agreement in accordance with
Section IX of the Agreement; or
	 
	 	o	 	a default by the Hospital has occurred under Section X of the
Agreement and any applicable notice and cure periods set forth
therein have expired.





The Repurchase Price for the Termination Accounts is calculated as follows:



	 	 	 	 	 	 	 
	

	 	Aggregate Purchase Price of
Termination Accounts
	 	 	$____________	 
	 
	 	 	 	 	 	 
	

	 	Less Principal Payments Received
	 	 	$____________	 
	 
	 	 	 	 	 	 
	

	 	Plus Repurchase Interest Amount
	 	 	$____________	 
	 
	 	 	 	 	 	 
	

	 	TOTAL Repurchase Price
	 	 	$____________	 







     In accordance with Section IV(c) of the Agreement, payment of the
Repurchase Price is due to IFS within thirty (30) days of the date of this
Termination Notice. Payment should be made by wire transfer as follows:

















 









 





     In accordance with Section IX of this Agreement, as of the date of this
Termination Notice, IFS shall have no further obligation or commitment to make
advances for the purchase of Accounts under the Agreement.



	 	 	 
	

	 	Very truly yours,







 









 






EXHIBIT G




FORM OF NOTICE OF ASSIGNMENT

TO FINANCIAL INSTITUTION




__________ ___, 20



[HOSPITAL]




	 	Re:	 	Patient Account Purchase Agreement, dated as of ________ ___, 2003 (the “Agreement”), by and between Integrated Financial
Systems, Inc. (“IFS”) and (the “Hospital”)





Ladies and Gentlemen:



     Be advised that IFS has assigned its interest in the Agreement to
[Financial Institution]. In this regard, [Financial Institution] is a third
party beneficiary of the Agreement pursuant to Section XIV(c) of the Agreement.



     Additionally, all funds to be paid by the Hospital to IFS pursuant to the
Agreement shall be wired transferred to:



	 
	[Financial Institution]

ABA No. ___________________

Account No. ________________

for the account of Integrated Financial Systems, Inc.









	 	 	 
	

	 	Very truly yours,
	 
	 	 
	

	 	INTEGRATED FINANCIAL SYSTEMS,
INS.
	 
	 	 
	

	 	By: __________________
	

	 	Name: ________________
	

	 	Its: __________________







 









 





ACKNOWLEDGED AND AGREED TO:



HOSPITAL



By: ___________________________

Name: _________________________

Its: ___________________________