WARRANT AND LICENSE AGREEMENT

Exhibit 10.16

HEALTHCARE SERVICES, INC.

WARRANT AND LICENSE AGREEMENT

TABLE OF CONTENTS

Exhibits

Exhibit 1 — Form of Warrant
Exhibit 2 — Stockholder Agreement

DEFINED TERMS

WARRANT AND LICENSE AGREEMENT

     WARRANT AND LICENSE AGREEMENT, made as of January       , 2005 (the “Agreement”) , by and between HEALTHCARE SERVICES, INC., a Delaware corporation (“Accretive”) , and MICHAEL ZIMMERMAN and ZIMMERMAN AND ASSOCIATES, a Wisconsin limited liability corporation (“Zimmerman”, Zimmerman and Michael Zimmerman shall be referred to hereafter, collectively, as the “Zimmerman Entities”) .

Recitals

     A. Pursuant to the binding term sheet dated as of February 17, 2004 (the “Letter Agreement”) , by and between the Zimmerman Entities and Accretive, the Zimmerman Entities have agreed to license certain of their intellectual property and other proprietary rights to Accretive, to provide sales support to Accretive, to enter into certain restrictive covenants for the benefit of Accretive and to assist Accretive in the development of Accretive’s business by making referrals to certain potential customers of Accretive.

     B. Pursuant to the Letter Agreement, Accretive has agreed, in consideration of the foregoing, to issue to Michael Zimmerman one or more warrants to purchase shares of Accretive’s Series C Common Stock pursuant to the terms of this Agreement. Michael Zimmerman is the sole owner of Zimmerman and Associates.

     NOW, THEREFORE, in consideration of the foregoing and the other provisions of this Agreement, and other good valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Accretive and Zimmerman agree as follows:

     1.  Business Development and Sales Support . Accretive hereby acknowledges that the Zimmerman Entities have provided support to Accretive’s sales efforts by providing independent, objective assessments of the potential impact of a revenue cycle managed service solution to one or more customers of Accretive. Zimmerman hereby agrees to continue to support Accretive’s sales efforts by providing independent, objective assessments and by facilitating introductions of potential customers to Accretive. In addition, Zimmerman hereby agrees to provide prominent advertising space in its publications, at no cost to Accretive, and to provide presentation opportunities for Accretive, at no cost to Accretive, at conferences and other events sponsored or organized by Zimmerman, as may reasonably be requested by Accretive. Collectively, the services heretofore provided and to be provided by Zimmerman pursuant to this Section 1 shall be referred to herein as the “Services.”

     2. License and Use of Proprietary Rights. Subject to the terms and conditions of this Agreement, the Zimmerman Entities hereby grant to Accretive and its Affiliates an exclusive, worldwide, royalty-free, perpetual, irrevocable, transferable, sub-licensable right and license to use the Zimmerman Licensed Materials, in any lawful manner, and in any media and any jurisdiction, as Accretive may desire, including, but not limited to, the unrestricted right to use, modify, combine with other information or materials, create derivative works based on, and commercially exploit the Zimmerman Licensed Material (the “License”) . The Zimmerman Entities have delivered the Licensed Material to Accretive, or has otherwise made the Licensed Material available to Accretive. The Zimmerman Entities shall have the obligation to continue to make the Licensed Material available to Accretive and shall provide to Accretive the materials

and information necessary to permit Accretive to utilize the Zimmerman Licensed Material as may be requested by Accretive. The Zimmerman Entities shall provide Accretive with all logins and passwords necessary to access the Licensed Material electronically and shall update its delivery of the Licensed Materials annually.

     3.  Authorization and Issuance of Securities .

          3.1 Subject to the terms and conditions hereof, in consideration of the Services heretofore provided and to be provided hereunder pursuant to Section 1, Accretive agrees to authorize and issue to Michael Zimmerman a warrant (the “Service Warrant”) , substantially in the form of Exhibit 1 hereto, in each case to purchase 416,667 shares of Common Stock (the “Service Warrant Shares”) , at a price per share of $ 1.12 (the “ Service Warrant Exercise Price”) . The Service Warrants shall expire on the earlier of (i) January 15, 2015 or (ii) the consummation of a Change of Control (the “Expiration Date”) .

          3.2 Subject to the terms and conditions hereof, in consideration of the License granted to Accretive pursuant to Section 2, Accretive agrees to authorize and issue to Michael Zimmerman a warrant (the “License Warrant”) , substantially in the form of Exhibit 1 hereto, to purchase 416,667 shares of Common Stock (the “License Warrant Shares”), at a price per share of $1.12 (the “License Warrant Exercise Price”) . The License Warrant shall expire on the Expiration Date.

          3.3 The term “Warrants” as used herein shall mean the Service Warrant and the License Warrant being delivered pursuant to this Agreement and all warrants issued in exchange or substitution therefor; the term “Warrant Shares” as used herein shall mean the shares of Common Stock issuable upon exercise of the Warrants and all shares of Common Stock issued in exchange or substitution therefor; and the term “Exercise Price” shall mean the Service Warrant Exercise Price or the License Warrant Exercise Price, as applicable.

     4.  Delivery of Warrants . Promptly following the execution and delivery of this Agreement by each of the parties hereto, Accretive shall deliver to Michael Zimmerman the Warrants, registered in its name.

     5.  Stockholder Agreement . The Zimmerman Entities hereby acknowledge and agree that the Warrants are, and the Warrant Shares received upon exercise thereof will be, subject to a Stockholder’s Agreement which carries restrictions in a form substantially similar to that which is attached hereto as Exhibit 2. The Zimmerman Entities hereby agree to be, and to cause each subsequent transferee of any Warrant or Warrant Shares to be, bound by the terms and conditions of the Stockholders Agreement as an Investor (as defined therein), and to execute or cause to be executed such documentation as may be reasonably requested by Accretive to give effect to the foregoing.

     6.  Representations and Warranties by Accretive . Accretive represents and warrants to the Zimmerman Entities that:

          6.1 Organization, Standing, etc . Accretive is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has the requisite corporate power and authority to own its properties and to carry on its business in all

material respects as it is now being conducted. Accretive has the requisite corporate power and authority to issue the Warrants and the Warrant Shares, and to otherwise perform its obligations under this Agreement and the Warrants.

          6.2 Qualification . Accretive is duly qualified or licensed as a foreign corporation in good standing in each jurisdiction wherein the nature of its activities or of its properties owned or leased makes such qualification or licensing necessary and failure to be so qualified or licensed would have a material adverse impact on its business.

          6.3 Warrants and Warrant Shares . The Warrants, when issued pursuant to the terms of this Agreement, will be duly authorized, validly issued and outstanding, fully paid, nonassessable and free and clear of all pledges, liens, encumbrances and restrictions, except as set forth in Section 5 hereof.

          6.4 Corporate Acts and Proceedings . This Agreement has been duly authorized by all necessary corporate action on behalf of Accretive, and has been duly executed and delivered by authorized officers of Accretive. All corporate action necessary to the authorization, creation, issuance and delivery of the Warrants and the Warrant Shares has been taken on the part of Accretive. This Agreement is, and each of the Warrants when issued pursuant to the terms of this Agreement will be, a valid and binding agreement of Accretive enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting the enforcement of creditors’ rights generally, and except for judicial limitations on the enforcement of the remedy of specific enforcement and other equitable remedies.

     7.  Representations and Warranties of the Zimmerman Entities . The Zimmerman Entities represent and warrant that:

          7.1 Organization, Standing, etc . Zimmerman is a limited liability corporation, duly organized, validly existing and in good standing under the laws of the State of Wisconsin, and has the requisite power and authority to own its properties and to carry on its business in all material respects as it is now being conducted. Zimmerman has the requisite power and authority to perform the Services, to grant to Accretive the License, to agree to and perform the restrictive covenants set forth in Section 9, and to otherwise perform its obligations under this Agreement and the Warrants. Michael Zimmerman is the sole owner of Zimmerman.

          7.2 Qualification . Zimmerman is duly qualified or licensed as a foreign entity in good standing in each jurisdiction wherein the nature of its activities or of its properties owned or leased makes such qualification or licensing necessary and failure to be so qualified or licensed would have a material adverse impact on its business.

          7.3 Acts and Proceedings . This Agreement has been duly authorized by all necessary action on behalf of Zimmerman, and has been duly executed and delivered by authorized representatives of Zimmerman. This Agreement is a valid and binding agreement of Zimmerman enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting the enforcement of creditors’ rights generally, and except for judicial limitations on the enforcement of the remedy of specific enforcement and other equitable remedies.

          7.4 Information Provided . The information provided to Accretive by the Zimmerman Entities and any of their officers, directors, employees, consultants or other agents or representatives in connection with this Agreement, the Services or the License with respect to the Zimmerman Entities is true, complete and correct in all respects.

          7.5 Information Received . The Zimmerman Entities:

     (a) have received such documents, materials and information as they deem necessary or appropriate for evaluating an investment in Accretive;

     (b) have carefully read and understand these materials; and

     (c) have made such further investigation as was deemed appropriate to obtain additional information to verify the accuracy of such materials and to evaluate the merits and risks of its investment in the Warrants and the Warrant Shares.

          7.6 Due Diligence . The Zimmerman Entities have had an opportunity to ask questions of and receive answers from the officers of Accretive, concerning the terms and conditions of this investment, and all such questions have been answered to the full satisfaction of the undersigned.

          7.7 No Solicitation . The Zimmerman Entities confirm that the Warrants and the Warrant Shares were not offered to them by any means of general solicitation or general advertising.

          7.8 Investor Status . The Zimmerman Entities:

     (a) were not formed for the specific purpose of investing in the Warrants or the Warrant Shares;

     (b) have total assets in excess of US$5,000,000;

     (c) have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in Accretive;

     (d) are able to bear the economic risks of an investment in the Warrants and the Warrant Shares, and at the present time could afford a complete loss of such investment; and

     (e) are acquiring the Warrants and the Warrant Shares for their own account, for investment purposes only, and not with a view towards the sale or other distribution thereof, in whole or in part.

          7.9 No Registration . The Zimmerman Entities understand that the Warrants have not been, and that the Warrant Shares will not be, registered under the securities laws of any state, under the Securities Act of 1933, as amended (the “ Act ”) or under the securities laws of any other country and are offered in reliance on exemptions therefrom (which depend upon, among other things, the bona fide nature of the investment intent and the truth and accuracy of the representations of the Zimmerman Entities as expressed herein), and that the Warrants and

the Warrant Shares have not been approved or disapproved by the Securities and Exchange Commission (the “Commission”) , by any other federal or state agency or by any other equivalent foreign agency.

          7.10 Nature of Investment . The Zimmerman Entities recognize that Accretive is a highly speculative venture involving a high degree of financial risk and the Zimmerman Entities are familiar with the nature of, and risks attendant to, investments in securities of the type being subscribed for and has determined that the purchase of such securities is consistent with their investment objectives.

          7.11 Transferability . The Zimmerman Entities understand that: (a) there will be no public market for the Warrants or the Warrant Shares; and (b) it may not be possible to liquidate their investment in Accretive and accordingly, they may have to hold the Warrants and the Warrant Shares, and bear the economic risk of this investment, indefinitely.

          7.12 Restrictions on Disposition . Except as expressly provided in Section 7.13 hereof, and notwithstanding the provisions of any other agreement to which the Company and the Zimmerman Entities are a party, or are bound under, until such time as there is a Public Market for the Common Stock of the Company, may not, directly or indirectly, voluntarily or involuntarily,