Exhibit 10.02
ADMINISTRATIVE SERVICES AGREEMENT
THIS ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement") is entered into as
of August 4, 2000, by and between MEDICAL CAPITAL CORPORATION, a Nevada
corporation ("MCC") and MEDICAL CAPITAL MANAGEMENT, INC., a Delaware Corporation
("MCM").
WHEREAS, MCM is in the business of (i) raising capital through the sale of
notes, (ii) purchasing accounts receivable from health care providers and other
types of businesses, and (iii) holding other forms of collateral, such as
equity, equipment, buildings and notes;
WHEREAS, MCC provides certain administrative, management and underwriting
services, makes available its offices, personnel, facilities, equipment and
services. MCC also provides other good and valuable services required and
necessary in administering receivables and other forms of collateral; and
WHEREAS, MCM desires MCC to provide the aforementioned offices, personnel,
facilities, equipment and services to its Business and MCC desires to provide
such offices, personnel, facilities, equipment and services, upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
AGREEMENT
1. RESPONSIBILITIES OF MCC
1.01 MANAGEMENT SERVICES. MCC shall provide such offices, personnel,
facilities, equipment and services. MCC will also provide administrative
and management services as are determined to be reasonably necessary for
the proper and efficient operation of the Business, including the
services set forth elsewhere in this Article and Agreement
1.02 PREMISES. MCC hereby leases to MCM, in accordance with this Agreement,
such portion of the premises located at 2100 South State College Blvd.,
Anaheim, CA 92806 as are determined to be reasonably necessary for the
proper and efficient operation of MCM, together with all necessary
appurtenances, improvements, and fixtures (collectively the "Premises").
1
<PAGE>
1.03 UTILITIES, BUILDING SERVICES AND SUPPLIES. MCC shall provide or cause to
be provided to MCM all utilities, building services and supplies as are
determined to be reasonably necessary for the proper and efficient
conduct of the Business, including, but not limited to, water, gas,
heat, air conditioning, power, light, telephone, janitorial and
maintenance services, telephone answering services and office supplies.
1.04 EQUIPMENT, FURNITURE AND FURNISHINGS. MCC shall provide for the use of
MCM such equipment, furniture, furnishings and personal property as may
be reasonably necessary for the proper and efficient operation of the
Business. MCM shall have no title or interest (other than as specified
herein) in the Equipment provided by MCC pursuant to this Agreement,
which shall at all times remain the sole property of MCC. If MCM
acquires personal property of its own, such property shall be and remain
the exclusive property of MCM.
1.05 REPAIRS AND MAINTENANCE OF PREMISES AND EQUIPMENT. MCC shall maintain
the Premises and the Equipment in good order and repair, and shall
refurbish or replace the same as it becomes worn out or obsolete.
1.06 PERSONNEL. Except as otherwise provided, MCC shall furnish the services
of all personnel as are determined to be reasonably necessary for the
proper and efficient operation of the Business. All such personnel shall
be either employees or independent contractors of MCC as determined by
MCC to be appropriate.
1.07 SUPPORT. MCC shall provide MCM with such clerical and administrative
support as is determined to be reasonably necessary for the proper and
efficient administration of its responsibilities under this Agreement,
including its employment or other relationships with persons employed by
or contracted to MCM.
1.08 BOOKKEEPING, PAYROLL AND ACCOUNTING SERVICES. MCC shall perform all
bookkeeping, payroll and accounting services as are determined to be
reasonably necessary for the proper and efficient operation of the
Business, including administration of all promissory notes, and interest
payments related thereto.
1.09 MARKETING AND PUBLIC RELATIONS SERVICES. MCC shall provide such
marketing and public relations services as are determined by MCM and MCC
to be reasonably necessary to promote and market the services of the
Business.
1.10 MANAGEMENT INFORMATION SYSTEMS. MCC shall provide such computer-based
management information systems as are jointly determined by MCC and MCM
to be reasonably necessary for the proper and efficient operations of
the Business.
1.11 EVALUATION OF RECEIVABLES. MCC shall assist in the examination and
evaluation of receivables of health care providers and other types of
businesses to determine if they are suitable for purchase by MCM.
2
<PAGE>
1.12 ACCOUNT CONSULTANTS. MCC may maintain a network of account consultants
to develop and maintain MCM's relationships with health care providers
and to assist such providers with processing certain paperwork.
1.13 PURCHASE OF NEW PROVIDER RECEIVABLES. MCC shall locate and enter into
purchase agreements for the purchase of new accounts receivable. This
shall include but not be limited to entering into a purchase agreement
on behalf of MCM and the client.
1.14 OTHER CONSULTING AND PROFESSIONAL SERVICES. MCC shall employ and / or
maintain contact with consultants skilled in helping MCM evaluate and
purchase other types of receivables, businesses and other business
opportunities.
1.15 BANK ACCOUNTS. MCC shall work with the designated Lockbox Bank to
facilitate the operation of the lockbox bank accounts for the sole
benefit of MCM, and shall be responsible for:
A. Opening and maintaining a concentration bank account
("Concentration Account") for the purpose of: concentrating
collections on all purchased receivables into one account.
B. Opening and monitoring each seller's lockbox account(s) for the
purpose of receiving all proceeds from the collection of purchased
receivables. Such lockbox account(s) shall be zero-balance swept into
the Concentration Account.
C. The Concentration Account shall also be used to pay all interest
to noteholders, receive all proceeds from new promissory notes, and
pay all related expenses for the benefit of MCM and MCC including,
but not limited to:
Accounting expenses,
Legal expenses,
Due Diligence Costs,
Costs of lien and other credit searches,
Costs of filing UCC-1 liens,
Collection & recovery expenses of receivables presently owned by MCM,
Administrator expenses related to this Agreement,
Expenses to maintain the bank accounts as described herein,
Taxes, corporation fees, and preparation and representation thereof,
Fees to Servicer,
Fees to Trustee,
Brokers/Sales Agents Fees and Commissions,
Commissions to internal marketing staff and
Other expenses.
3
<PAGE>
2. MCC'S COMPENSATION
2.01 COMPENSATION. In consideration of the personnel, facilities, equipment
and other services furnished by MCC during the term of this Agreement
("Term"), MCM shall pay MCC compensation as provided in this Article 2.
2.02 ADMINISTRATIVE FEE. MCC's Administration Fee shall be calculated as the
lesser of 2%, or one-quarter of the discount fee of the amounts of the
(ENR) purchases of Receivables of the MCM clients. The Administrator may
not collect any fee if the payment of such fee would cause the
Collateral Coverage Requirement to go below the minimum threshold set
forth in the Note and Security Agreement. If other types of assets or
businesses are purchased by MCM, the Administrative fee will be
calculated as one percent of the total loan or purchase amount,
whichever method is more appropriate under the circumstance. The
Administrative Fee is to be paid on at least a monthly basis.
2.03 ORIGINATION FEE. In addition, any origination fee shat be paid to MCC.
2.04 SUBORDINATION OF ADMINISTRATIVE FEE. The payment of the Administrative
Fee shall be subject to the prior payment of certain fees and expenses
as set forth in the Note and Security Agreement.
2.05 COST REIMBURSEMENT. In addition to the Administrative Fee set forth in
Section 2.02, MCC shall be reimbursed by MCM for the actual cost of out
of pocket expenses (examples of which are in section 1.15 of this
agreement) plus an overhead factor of 20%. These cost reimbursements are
to be paid on at least a monthly basis. Payments for estimated monthly
cost reimbursements may be paid in advance, however, MCC must provide a
detailed monthly billing to MCM to support reimbursements requested, the
detail must be adequate enough to satisfy the reporting to the Trustee.
3. TERM AND TERMINATION
3.01. TERM. This Agreement shall commence as of the date hereof, and shall
continue for an initial term of five (5) years, or until the last note
issued matures. This Agreement will automatically renew on each
subsequent anniversary, unless a notice of cancellation is issued by
either party one hundred eighty (180) days before the annual renewal
date.
3.02. TERMINATION. Either party may terminate this Agreement if the other
party:
(a) Applies for, or consents to the appointment of a receiver, trustee
or liquidator of all or a substantial part of its assets; files a
voluntary petition in bankruptcy; makes a general assignment for the
benefit of its creditors; files a petition or answer seeking
reorganization or arrangement with its creditors; admits in writing its
inability to pay its debts when due; or
4
<PAGE>
(b) Suffers any order, judgment or decree to be entered by any court of
competent jurisdiction, adjudicating such party bankrupt or approving a
petition seeking its reorganization or the appointment of a receiver,
trustee or liquidator of such party or of all or a substantial part of
its assets, and such order, judgment or decree continues unstayed and in
effect for thirty (30) days after its entry; or
(c) Fails to perform any material obligation required hereunder, and
such default continues for sixty (60) days after the giving of written
notice by the terminating party, specifying the nature and extent of
such default; provided, however, that if such default is capable of
being cured within a reasonable period, but not within sixty (60) days,
this Agreement shall not terminate as provided herein if such defaulting
party commences to cure said default within sixty (60) day period and
thereafter diligently and in good faith continues to cure said default.
(d) Either party may terminate this Agreement with mutual consent by
giving a one hundred eighty (180) day notice to the other party.
(e) This Agreement may be terminated when the last note issue matures.
(f) and, This Agreement shall terminate if MCM or MCC shall cease
engaging in the Business.
4. RECORDS
4.01 ACCESS TO INFORMATION. Each party shall at all times during the term of
this Agreement permit the other party to have access to its documents,
books and records relating to this Agreement, during normal business
hours.
4.02 OWNERSHIP OF RECORDS. All business records and information relating
exclusively to the business and activities of either party shall be the
property of that party, irrespective of the identity of the party
responsible for producing or maintaining such records and information.
5. PROPRIETARY PROPERTY
5.01 COPYRIGHTS. MCC is and shall be the sole owner and holder of all right,
title and interest to the name "Medical Capital Corporation" and all
derivatives thereof, and all copyright, service mark and trademark
rights and interests in the logo, systems, forms, form contracts, policy
manuals, marketing and public relations materials, business and
management methods, and customer and client lists furnished or developed
by MCC and relating to the Business. MCM is and shall be the sole owner
of its own proprietary property. As a function of this Agreement, MCM
conveys its permission to the Trademark and above items.
5
<PAGE>
5.02 PROPRIETARY INFORMATION. Each party agrees that the other party's
proprietary property shall not be possessed, used or disclosed otherwise
than as may be necessary for the performance of this Agreement. Each
party acknowledges that its violation of this Agreement would cause the
other party irreparable harm, and may (without limiting the other
party's remedies for such breach) be enjoined at the instance of the
other party. Each party agrees that upon termination of this Agreement
for any reason, absent the prior written consent of the other party, it
shall have no right to and shall cease all use of the other party's
proprietary property.
6. GENERAL PROVISIONS
6.01 EXCLUSIVE MANAGEMENT SERVICES. MCC shall be the exclusive provider of
management services to MCM.
6.02 DELEGATION AND ASSIGNMENT; BENEFIT.
(a) It is understood and agreed that MCM's rights under this Agreement
will be assigned by MCM to the Trustee as security for the Notes (as
defined in the Indenture), and such assignment is hereby consented to by
MCC. Upon foreclosure by the Trustee under the Indenture, the Trustee
may exercise all of MCM's rights and accept all of MCM's benefits
hereunder. Upon receipt by MCC of notice from the Trustee that an "event
of default" has occurred under the Indenture, MCC will cease to accept
instruction from MCM hereunder and will accept instructions only from
the Trustee, or such other Person as the Trustee may designate, in
performance of its obligations hereunder. Prior to such an event of
default, MCC shall follow directions given by MCM.
(b) Except as expressly provided herein, no party shall delegate its
duties or assign its rights hereunder in whole or in part, without the
prior written consent of the other; except that MCC shall have the right
to delegate or subcontract for the performance of any and all duties
required to be performed by MCC as set forth herein to any subsidiary or
affiliate of MCC.
6.03 NOTICES. All notices required to be given hereunder shall be in writing
and shall be deemed given or delivered if personally delivered or three
days following the date it is dispatched by certified or registered
mail, return receipt requested, postage prepaid, or, if sent by
facsimile transmission, upon confirmation of receipt, addressed to the
parties as set forth opposite their respective names below:
6
<PAGE>
MCC: Medical Capital Corporation
2100 South State College Blvd.
Anaheim, California 92806
Attn: Sid Field, Chief Executive Officer
MCM: Medical Capital Management
2100 South State College Blvd.
Anaheim, California 92806
Attn: Joseph J. Lampariello, Chief Operating Officer
Any party may change the address at which to send notices by notifying
the other party of such change of address in writing in accordance with
the foregoing.
6.04 DOCUMENTS. Each of the parties hereto shall execute and deliver all
documents, papers and instruments necessary or advisable to carry out
the terms of the Agreement.
6.05 GOVERNING LAW. This Agreement and all rights, duties and obligations
hereunder shall be construed and interpreted in accordance with the laws
of the State of Nevada.
6.06 ENTIRE AGREEMENT. This Agreement supersedes all prior oral and written
understandings and agreements between the parties hereto. The parties
acknowledge and agree that this document, together with its Schedules
and Exhibits, and all other documents expressly referred to herein,
constitutes the entire agreement between the parties regarding the
services to be provided by the parties hereto. Except as set forth in
such other documents, no representations, promises, conditions or
warranties with reference to the execution of this document, including,
but not limited to pro forma and other financial information, have been
made or entered into between the parties hereto.
6.07 WAIVER OF PROVISIONS. Any waiver of any term or condition hereof must be
in writing and signed by the party giving the waiver. A waiver of any of
the terms and conditions hereof shall not be construed as a waiver of
any other terms and conditions hereof.
6.08 SEVERABILITY. Nothing contained in this Agreement shall be construed so
as to require the commission of an act contrary to law and whenever
there is any conflict between any provision of this Agreement and any
present statute, law, ordinance or regulation contrary to which the
parties have no legal right to contract, the latter shall prevail, but
in such event, the provisions of this Agreement affected shall be
curtailed and limited only to the extent necessary to bring it within
the requirements of the law and to carry out the purposes of this
Agreement.
6.09 FORCE MAJEURE. Neither party shall be liable nor deemed to be in default
for any delay or failure in performance under the Agreement or other
interruption of service or employment deemed resulting, directly or
indirectly, from acts of God, civil or military authority, acts of
public enemy, war, accidents, fires, explosions, earthquakes, floods,
7
<PAGE>
failure of transportation, machinery or supplies, vandalism, strikes or
other work interruptions beyond the reasonable control of either party.
However, both parties shall make good faith efforts to perform under
this Agreement in the event of any such circumstances.
6.10 CAPTIONS. Any captions to or headings of the articles, sections,
subsections, paragraphs or subparagraphs of this Agreement are solely
for the convenience of the parties to this Agreement, are not a part of
this Agreement, and shall not be used for the interpretation or
determination of validity of this Agreement or any provision hereof.
6.11 GENDER AND NUMBER. Whenever the context hereof requires, the gender of
all words shall include the masculine, feminine and neuter, and the
number of all words shall include the singular and plural.
6.12 INTERPRETATION. The language in all parts of this Agreement in all cases
shall be construed in accordance with its fair meaning, as if prepared
by all of the parties to this Agreement and not strictly for or against
any of the parties. The legal doctrine of construction of ambiguities
against the drafting party shall not be employed in any interpretation
of this Agreement.
6.13 NO PARTNERSHIP. The relationship of the Parties set forth in this
Agreement shall not be construed as, constitute, or be deemed to create
a partnership, joint venture, affiliation, association or any other
relationship except as explicitly set forth herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first written above.
MEDICAL CAPITAL CORPORATION, MEDICAL CAPITAL MANAGEMENT, Inc.
a Nevada Corporation a Delaware Corporation
By: /s/ Sid Field By: /s/ Joseph J. Lampariello
--------------------------------- ------------------------------------
Sid Field, its Chief Joseph J. Lampariello, its Chief
Executive Officer Operating Officer
8
