EXHIBIT 10.4
SECOND AMENDED AND RESTATED
LEASE RECEIVABLES PURCHASE AGREEMENT
Dated as of August 5, 2002
among
HPSC BRAVO FUNDING, LLC,
as Seller
HPSC, INC.,
as Servicer
TRIPLE-A ONE FUNDING CORPORATION
and
CAPITAL MARKETS ASSURANCE CORPORATION,
as Administrative Agent and Collateral Agent
Table of Contents
Page
ARTICLE I DEFINITIONS...................................................................................1
SECTION 1.01. Certain Definitions.......................................................................1
SECTION 1.02. Accounting Terms..........................................................................2
SECTION 1.03. Other Terms...............................................................................2
SECTION 1.04. Computation of Time Periods...............................................................2
ARTICLE II AMOUNT AND TERMS OF THE PURCHASES.............................................................2
SECTION 2.01. Receivables Purchase Facility.............................................................2
SECTION 2.02. Making Purchases from the Seller..........................................................3
SECTION 2.03. Reduction of Facility Limit...............................................................5
SECTION 2.04. Settlement Procedures.....................................................................5
SECTION 2.05. Payments and Computations, Etc............................................................7
SECTION 2.06. Compensation..............................................................................7
SECTION 2.07. Dividing or Combining of Capital and Fixed Periods........................................8
SECTION 2.08. Increased Costs, Capital Adequacy.........................................................8
SECTION 2.09. Taxes.....................................................................................9
SECTION 2.10. Fees.....................................................................................10
SECTION 2.11. Grant of Security Interest in Equipment Collateral.......................................10
ARTICLE III CONDITIONS OF PURCHASES......................................................................11
SECTION 3.01. Conditions Precedent to Initial Receivables Purchase.....................................11
SECTION 3.02. Conditions Precedent to Each Receivables Purchase........................................12
ARTICLE IV REPRESENTATIONS AND WARRANTIES...............................................................12
SECTION 4.01. Representations and Warranties of the Seller.............................................12
ARTICLE V GENERAL COVENANTS............................................................................17
SECTION 5.01. Affirmative Covenants of the Seller......................................................17
SECTION 5.02. Reporting Requirements of the Seller.....................................................22
SECTION 5.03. Negative Covenants of the Seller.........................................................23
ARTICLE VI ADMINISTRATION AND COLLECTION................................................................26
SECTION 6.01. Designation of Servicer..................................................................26
SECTION 6.02. Duties of the Servicer...................................................................26
SECTION 6.03. Rights of the Collateral Agent...........................................................28
SECTION 6.04. Further Action Evidencing Transfers......................................................29
SECTION 6.05. Responsibilities of the Seller...........................................................30
SECTION 6.06. Administration of Collections by Servicer................................................30
SECTION 6.07. Application of Collections...............................................................30
SECTION 6.08. Servicing Fee............................................................................30
SECTION 6.09. Resignation; Successor Servicer..........................................................31
SECTION 6.10. Lock-Box Accounts; Collection Account....................................................31
SECTION 6.11. Collection Account.......................................................................32
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ARTICLE VII WIND-DOWN EVENTS; REMEDIES...................................................................35
SECTION 7.01. Wind-Down Events.........................................................................35
SECTION 7.02. Remedies.................................................................................36
ARTICLE VIII INDEMNIFICATION; REPURCHASES.................................................................37
SECTION 8.01. Indemnities by the Seller................................................................37
SECTION 8.02. Repurchases of Designated Receivables....................................................39
ARTICLE IX AGENCY.......................................................................................39
SECTION 9.01. Authorization and Action.................................................................39
SECTION 9.02. Delegation of Duties.....................................................................40
SECTION 9.03. Exculpatory Provisions...................................................................40
SECTION 9.04. Reliance by the Agent....................................................................40
SECTION 9.05. Non-Reliance on the Agent................................................................41
SECTION 9.06. Agent in its Individual Capacity.........................................................41
ARTICLE X MISCELLANEOUS................................................................................41
SECTION 10.01. Amendments, Etc.........................................................................41
SECTION 10.02. Notices, Etc............................................................................41
SECTION 10.03. No Waiver; Remedies.....................................................................41
SECTION 10.04. Binding Effect; Assignability...........................................................42
SECTION 10.05. GOVERNING LAW; WAIVER OF JURY TRIAL.....................................................42
SECTION 10.06. Costs, Expenses and Taxes...............................................................43
SECTION 10.07. Execution in Counterparts; Severability.................................................43
SECTION 10.08. No Bankruptcy Petition Against Triple-A.................................................43
SECTION 10.09. Subordination...........................................................................44
SECTION 10.10. MBIA Insurance Corporation a Beneficiary................................................44
SECTION 10.11. Reference to and Effect on Prior LRPA...................................................44
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SECOND AMENDED AND RESTATED
LEASE RECEIVABLES PURCHASE AGREEMENT
THIS SECOND AMENDED AND RESTATED LEASE RECEIVABLES PURCHASE AGREEMENT,
dated as of August 5, 2002 (as the same may be amended, restated, supplemented
or otherwise modified from time to time, the "TRIPLE-A PURCHASE AGREEMENT"), is
entered into by and among HPSC BRAVO FUNDING, LLC, a Delaware limited liability
company, as Seller (the "SELLER"), HPSC, INC., a Delaware corporation, as
Servicer (the "SERVICER"), TRIPLE-A ONE FUNDING CORPORATION, a Delaware
corporation ("TRIPLE-A") and CAPITAL MARKETS ASSURANCE CORPORATION, a New York
stock insurance company ("CAPMAC"), as Collateral Agent and as Administrative
Agent (in such capacities, the "COLLATERAL AGENT" or the "ADMINISTRATIVE
AGENT").
W I T N E S S E T H:
WHEREAS, the Seller, the Servicer, Triple-A, and CapMAC are parties to that
certain Lease Receivables Purchase Agreement, dated as of October 18, 1996 (as
amended, the "INITIAL LRPA"); and
WHEREAS, the Seller, the Servicer, Triple-A, and CapMAC amended and
restated the Initial LRPA in certain respects, as set forth in the Amended and
Restated Lease Receivable Purchase Agreement, dated as of March 31, 2000 (as
amended, the "PRIOR LRPA"); and
WHEREAS, the Seller, Triple-A and ING Capital LLC ("ING") will enter into a
Receivables Interest Purchase Agreement dated as of the date hereof, pursuant to
which ING will purchase from Triple-A certain ING Receivables Interest; and
WHEREAS, the Seller, the Servicer, Triple-A, and CapMAC desire to amend and
restate the Prior LRPA in certain respects;
NOW, THEREFORE, the Seller, the Servicer, Triple-A, and CapMAC have agreed
to amend and restate the Prior LRPA in its entirety as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. CERTAIN DEFINITIONS. As used in this Triple-A Purchase
Agreement or any certificate or other document made or delivered pursuant hereto
or thereto, the capitalized terms used herein and therein shall, unless
otherwise defined herein or therein, have the meanings assigned to them in the
Definitions List attached hereto as Appendix A, the terms of which are
incorporated herein by reference (the "DEFINITIONS LIST"). Any reference in the
Facility Documents to a note, instrument, or other agreement substantially in
the form of Exhibit
K-1, K-2, K-3, or K-4 to the Purchase Agreement, as applicable, shall mean and
be a reference to a note, instrument or other agreement in substantially one of
the forms included in such Exhibit.
SECTION 1.02. ACCOUNTING TERMS. As used herein and in any certificate or
other document made or delivered pursuant hereto and thereto, accounting terms
not defined in the Definitions List and accounting terms partly defined in the
Definitions List to the extent not defined, shall have the respective meanings
given to them under GAAP.
SECTION 1.03. OTHER TERMS. (a) All other undefined terms contained in this
Triple-A Purchase Agreement shall, unless the context indicates otherwise, have
the meanings provided for by the UCC to the extent the same are used or defined
therein.
(b) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Triple-A Purchase Agreement shall refer to this
Triple-A Purchase Agreement as a whole and not to any particular provision of
this Triple-A Purchase Agreement, and Section, subsection, Schedule and Exhibit
references are to this Triple-A Purchase Agreement unless otherwise specified.
(c) Capitalized terms used herein shall be equally applicable to both the
singular and plural forms of such terms.
SECTION 1.04. COMPUTATION OF TIME PERIODS. In this Triple-A Purchase
Agreement, in the computation of periods of time from a specified date to a
later specified date, the word "from" shall mean "from and including" and the
words "to" and "until" shall each mean "to but excluding."
ARTICLE II
AMOUNT AND TERMS OF THE PURCHASES
SECTION 2.01. RECEIVABLES PURCHASE FACILITY. Triple-A shall, subject to the
terms and conditions hereinafter set forth, make purchases of Receivables
("RECEIVABLES PURCHASES") from time to time on any Settlement Date (except that
the initial Receivables Purchase may be on a date other than a Settlement Date)
during the period from the date the conditions precedent in SECTION 3.01 are
satisfied to the Termination Date. Notwithstanding the foregoing, if, at any
time, two or more of the individuals who held the positions of Chief Executive
Officer, Chief Financial Officer and President of the Servicer as of April 30,
1998 no longer remain actively involved in the day-to-day management of the
Servicer, then Triple-A is no longer required to, but may, in its sole
discretion, make Receivables Purchases. Each Receivables Purchase shall
constitute an assignment and sale by the Seller, and a purchase and acquisition
by Triple-A of Purchased Assets, including, without limitation, Designated
Receivables identified as Eligible Receivables by the Seller, and Related
Security and Collections with respect thereto. Under no circumstances shall
Triple-A make any Receivables Purchase if, after giving effect to such
Receivables Purchase, the aggregate outstanding Capital hereunder would exceed
the least of (i) the Facility Limit, (ii) the Capital Limit, or (iii) the sum,
on such Receivables Purchase Date, of (A) the net proceeds from the sale of
Commercial Paper PLUS (B) the proceeds of Advances. The Capital Limit in effect
on any date shall be determined
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by reference to the most recent Settlement Report delivered by the Seller to
Triple-A in accordance with SECTION 5.02(f) hereof (i) as adjusted on the most
recent Settlement Date to reflect additional Eligible Receivables sold on such
Settlement Date since the delivery of such Settlement Report and (ii) as
adjusted on any other date of determination to eliminate from the Discounted
Eligible Receivables Balance any Receivables which were Eligible Receivables as
of the dates reflected in the Settlement Report but which no longer satisfy the
criteria for Eligible Receivables. It is the intention of the parties hereto
that each Receivables Purchase to be made hereunder shall constitute a sale of
accounts, payment intangibles, promissory notes or chattel paper, as such terms
are used in Article 9 of the UCC. If at any time a court characterizes the
transactions hereunder as loans by Triple-A (together with its assignees,
participants and successors) to the Seller, then the Seller hereby pledges,
grants a security interest in and assigns to the Collateral Agent, for the
benefit of Triple-A and ING (to the extent of ING's rights set forth under the
ING Purchase Agreement) and their respective successors and assignees, all of
the right and title to and interest in the Purchased Assets, including the
Purchased Receivables and the Related Security, Collections and Equipment
related thereto, as security for such loans and for the payment and performance
of all obligations of the Seller hereunder, and the Collateral Agent
acknowledges that it is holding on behalf of, and for the benefit of, Triple-A
and its successors, participants and assignees (including ING), all of such
right and title to and interest in the Purchased Assets, including the Purchased
Receivables and the Related Security, Collections and Equipment related thereto.
Notwithstanding any other provisions herein to the contrary, Triple-A shall
have no obligation to purchase any interest, right or title related to ING
Receivables Interests if ING does not make the corresponding purchase under the
ING Purchase Agreement and the Seller shall have no claim to Triple-A for
Triple-A's failure to purchase any ING Receivables Interest.
SECTION 2.02. MAKING PURCHASES FROM THE SELLER.
(a) SALE NOTICE. Whenever the Seller wishes to sell Receivables hereunder,
it shall deliver to Triple-A a notice ("SALE NOTICE") in substantially the form
of EXHIBIT A hereto no later than 10:00 A.M. (New York City time) on the
Business Day immediately prior to the proposed Receivables Purchase Date, with a
copy to ING; PROVIDED that, in the case of any Capital funded as part of a
Receivables Purchase with respect to which Yield is to be calculated at the
Eurodollar Rate, such Sale Notice must be given not later than 10:00 A.M. (New
York City time) at least three (3) Business Days prior to the proposed
Receivables Purchase Date. Each Sale Notice shall be by telephone, telex,
telecopy, cable or other facsimile transmission (in the case of any such Sale
Notice by telephone, confirmed immediately in writing) and shall specify therein
the (i) aggregate initial Capital to be funded in connection with such
Receivables Purchase, (ii) the date of such Receivables Purchase, (iii) the
duration of the initial Fixed Period(s) for such Capital and (iv) the amount, if
any, of any ING Receivables Interests to be funded pursuant to the ING Purchase
Agreement on such date. In addition to the foregoing, the Seller shall indicate
which Receivables subject to such Sale Notice are Designated Receivables and
which Receivables subject to such Sale Notice are Non-Designated Receivables.
(b) AMOUNT OF PURCHASED ASSETS; DEFERRED PURCHASE PRICE. The consideration
for each Receivables Purchase shall consist of the Capital funded under this
Agreement, the ING Capital, if any, funded pursuant to the ING Purchase
Agreement and the obligation of the
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Purchaser to remit to the Seller the Deferred Purchase Price. The amount of the
Deferred Purchase Price shall be initially computed as of the opening of
business of the Collection Agent on the date of the initial Receivables Purchase
hereunder. Thereafter, until the Termination Date, the amount of the Deferred
Purchase Price shall be automatically recomputed as of the close of business of
the Collection Agent on each day on which the aggregate Capital hereunder is
increased or decreased, on which the ING Capital is increased or decreased under
the ING Purchase Agreement or on which any funds are remitted to the Seller in
satisfaction thereof under clause (viii) of SECTION 6.11(b) or remitted to ING
in satisfaction thereof under clause (ii) of Section 2.04 of the ING Purchase
Agreement. From and after the Termination Date until the Combined Collection
Date, the Deferred Purchase Price shall be automatically recomputed on each
Business Day to reflect any reductions in the amount hereof on account of
accrued Yield, Carrying Costs, or other amounts owed by (or paid on behalf of)
the Seller under this Agreement or any ING Obligations under the ING Purchase
Agreement. The Purchased Assets shall become zero at such time as (i) Triple-A
shall have recovered the aggregate outstanding Capital and shall have received
all other amounts payable to Triple-A pursuant to this Triple-A Purchase
Agreement, (ii) ING shall have recovered the aggregate outstanding ING Capital
and shall have received all other amounts payable to ING pursuant to the ING
Purchase Agreement, and (iii) the Seller has received payment of the Deferred
Purchase Price. The Purchased Assets and the Deferred Purchase Price shall each
remain constant from the time as of which any such computation or recomputation
is made until the time as of which the next such recomputation, if any, shall be
made. Triple-A shall, in consideration of the sale of the Purchased Assets, from
and after the Combined Collection Date, remit to the Seller with the proceeds of
Collections in respect of the Purchased Assets, in satisfaction of the Deferred
Purchase Price; PROVIDED that, from and after the date that the Outstanding
Balance of the Purchased Receivables is less than or equal to 6.25% of the
Outstanding Balance of the Purchased Receivables as of the Termination Date, the
Administrative Agent may, in lieu of continuing to make such remittances, by at
least three (3) Business Days' prior written notice to the Seller, reassign to
the Seller all of Triple-A's and ING's right, title and interest in and to the
Purchased Assets in full satisfaction of the Deferred Purchase Price. It is
expressly understood and agreed that the Deferred Purchase Price shall be
payable solely through Collections and other proceeds of the Purchased Assets
and that none of Triple-A, ING, the Administrative Agent, the Collateral Agent
nor any Liquidity Bank shall have any personal liability for the payment of the
Deferred Purchase Price.
(c) SELECTION OF FIXED PERIODS. Promptly upon receiving each Sale Notice,
the Administrative Agent shall, following its review of the Seller's proposal,
select Fixed Periods for all Capital so that all outstanding Capital is at all
times allocated to a Fixed Period (it being understood that if the Seller does
not propose a specific Fixed Period, the Administrative Agent shall select such
Fixed Period in its discretion). The initial Fixed Period for any Capital shall
be specified in the Sale Notice described in SUBSECTION (a) hereof. At least one
Business Day prior to the last day of each Fixed Period for any Capital
allocated to such Fixed Period, the Seller shall request new Fixed Periods for
such Capital; PROVIDED that, in the case of any Fixed Period for Capital for
which Yield is to be determined by reference to the Eurodollar Rate, such
request shall be given not later than 10:00 A.M. (New York City time) at least
three (3) Business Days prior to the last day of the relevant Fixed Period. The
Administrative Agent shall, on the date of any Receivables Purchase hereunder
and, so long as any Capital related to such Receivables Purchase is outstanding,
on the first day of each successive Fixed Period for such Capital, notify the
Collateral Agent and the Seller of the duration of the relevant Fixed Period and
the Yield
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which will be applicable to the Capital during such Fixed Period. Any Fixed
Period that commences before the Termination Date and would otherwise end on a
date occurring after the Termination Date shall end on the Termination Date and
the duration of any Fixed Period that commences on or after the Termination Date
shall be of such duration as shall be selected by the Administrative Agent. In
addition, if a CP Disruption shall have occurred and be continuing, Triple-A, or
the Administrative Agent on its behalf, may, upon notice to the Originator and
the Seller, terminate any Fixed Period then in effect if Triple-A has funded the
Capital allocated to such Fixed Period by issuing Commercial Paper. All
outstanding Capital shall be assigned a Fixed Period at all times, which Fixed
Periods will be limited as set forth in the definition thereof.
(d) FUNDING. Triple-A shall, before 3:00 P.M. (New York City time) on the
proposed Receivables Purchase Date of each Receivables Purchase, subject to the
applicable conditions set forth in ARTICLE IV, make available to the Seller a
wire transfer of such funds to the Seller in accordance with the Seller's
written wire transfer instructions. ING shall fund the purchase of its interest
in any Receivables Purchase pursuant to the terms of the ING Purchase Agreement.
(e) ING RECEIVABLES INTERESTS. The parties hereby acknowledge that the ING
Receivables Interest SHALL be transferred to ING pursuant to the terms of the
ING Purchase Agreement without any representation or warranty of any kind from
Triple-A. Any ING Capital received pursuant to the ING Purchase Agreement shall
be paid to the Seller and applied in reduction of the Deferred Purchase Price.
If ING fails to make the payment of any ING Receivables Interest in accordance
with the terms of the ING Purchase Agreement, such ING Receivables Interest
shall be deemed never to have been sold to Triple-A.
SECTION 2.03. REDUCTION OF FACILITY LIMIT. The Seller shall have the right,
at any time upon at least three (3) Business Days' notice to Triple-A, to
terminate in whole or reduce in part the unused portion of the Facility Limit in
a minimum amount of $10,000,000 and increments of $1,000,000 in excess thereof;
PROVIDED, that in no event shall the Facility Limit be reduced to less than the
amount of Capital then outstanding. Any such termination shall be without
premium or penalty of any kind, except for any indemnification which may be owed
in connection with such termination pursuant to SECTION 2.06 and SECTION 8.01.
SECTION 2.04. SETTLEMENT PROCEDURES.
(a) Any Collections of Purchased Receivables received (or deemed to have
been received) by the Seller shall be remitted directly to Triple-A by
depositing such Collections in the Lock-Box Account within one Business Day of
Seller's receipt (or deemed receipt) thereof. On each Payment Date, the Seller
shall pay to Triple-A (i), Yield on all outstanding Capital the Fixed Period for
which ends on such date PLUS (ii) to Triple-A, the CP Dealer Fees, if any, on
any Commercial Paper maturing on such date and raised to fund such Capital. On
each Settlement Date, the Seller shall pay to ING, the ING Yield, if any.
(b) On each Settlement Date to occur prior to the Designated Termination
Date, the Seller shall either:
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(i) if Triple-A has consented thereto, sell additional Receivables
hereunder in accordance with the procedures and subject to the conditions
set forth in SECTION 2.01 such that, immediately following such Receivables
Purchase, the Capital Limit equals or exceeds outstanding Capital and the
ING Capital Limit equals or exceeds the outstanding ING Capital, in which
event the Collateral Agent shall, subject to the order of priority set
forth in SECTION 6.11(b), remit the Collections so set aside to the Seller
in consideration of the purchase price for such Receivables Purchase; or
(ii) if Triple-A has not consented to such additional purchase, out of
the Collections so set aside, direct the Collateral Agent to remit to the
Administrative Agent, subject to the order of priority set forth in SECTION
6.11, an amount of such Collections to be applied toward the reduction of
outstanding Capital, or ING Capital, as applicable, such that, following
the application of such Collections to outstanding Capital or ING Capital,
the Capital Limit equals or exceeds the outstanding Capital and the ING
Capital Limit equals or exceeds the outstanding ING Capital.
(c) On each Payment Date from and after the Designated Termination Date,
the Seller shall direct the Collateral Agent to distribute to the Administrative
Agent for the benefit of Triple-A, to be applied toward the reduction of
outstanding Capital, all Collections so set aside but not to exceed the sum of
(i) the Capital allocated to such Fixed Period, (ii) all accrued and unpaid
Yield thereon, and (iii) the aggregate of all other amounts owed hereunder by
the Seller to Triple-A and/or the Administrative Agent, all as more fully set
forth in SECTION 6.11.
(d) If on any day the Outstanding Balance of any Purchased Receivable is
either (i) reduced or adjusted as a result of any defective, rejected, returned,
repossessed or foreclosed merchandise, any defective or rejected services, any
cash discount or any other adjustment made or performed by the Seller or any
other Person (including, without limitation, those described in the definition
of "DILUTION FACTORS"), or (ii) reduced or canceled as a result of a setoff in
respect of any claim by the Obligor thereof against the Seller or any other
Person (whether such claim arises out of the same or a related transaction or an
unrelated transaction), the Seller shall be deemed to have received on such day
a Collection of such Purchased Receivable in the amount of such reduction,
cancellation or adjustment. If on any day any of the representations or
warranties in SECTION 4.01(g) is no longer true with respect to a Purchased
Receivable or if the Seller has breached its obligations under SECTION 5.01(j),
then the Seller shall be deemed to have received on such day a Collection of
such Purchased Receivable: (x) if such representation, warranty or covenant
relates to the non-existence of any Adverse Claims, the Seller shall be deemed
to have received a Collection of such Purchased Receivable in the dollar amount
of the Adverse Claims attaching thereto and (y) if such representation or
warranty relates to the validity or perfection of the transfer of such Purchased
Receivable under this Triple-A Purchase Agreement or the perfection of
Triple-A's security interest in any Equipment as against the Obligor thereunder,
then the Seller be deemed to have received a Collection of such Purchased
Receivable in an amount equal to the Outstanding Balance thereof. To the extent
that any such deemed Collection reduces the Outstanding Balance of such
Purchased Receivable to zero, then, upon the Seller's payment to the Collateral
Agent of such deemed Collection, the Collateral Agent shall re-assign to the
Seller all of its right, title and interest in and to the relevant Purchased
Receivable, the Contract under which such Purchased Receivable arose and the
Related Security relating thereto.
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(e) Although the Originator, the Seller and Triple-A agree that the
Originator shall have no right to so terminate, reject or not assume a Contract,
if the Originator in its capacity as Servicer (or its successor in interest,
including a trustee appointed under the Bankruptcy Code) terminates, rejects or
does not assume a Contract, in whole or in part, prior to the expiration of the
original term of such Contract, whether such rejection, termination or
non-assumption is made pursuant to an equitable cause, statute, regulation,
judicial proceeding or other applicable law (including, without limitation,
Section 365 of the Bankruptcy Code), then (i) the Seller shall be deemed to have
received Collections with respect to Purchased Receivables arising under such
Contract in an amount equal to (A) in the event of a prepayment or termination
consented to by the Originator at the Obligor's request, the excess, if any, of
the Termination Amount over all amounts paid by the Obligor on account of such
termination or (B) in the event of any other rejection or non-assumption, the
amount, of the Outstanding Balance thereof that has not been, or may not be paid
as a result of such rejection, termination or non-assumption. Upon the Seller's
payment of any such deemed Collections described in this SECTION 2.05(e), the
Collateral Agent shall re-assign to the Seller all of its right, title and
interest in and to the relevant Purchased Receivable or Purchased Receivables,
the Contracts under which such Purchased Receivable(s) arose and the Related
Security relating thereto.
SECTION 2.05. PAYMENTS AND COMPUTATIONS, ETC. All amounts to be paid or
deposited by the Seller hereunder shall be paid or deposited by the Seller in
immediately available funds to Triple-A not later than 1:00 P.M. (New York City
time) on the date on which payable. Payments received by Triple-A after such
time shall be deemed to have been received on the next Business Day. All
payments by the Seller under this Triple-A Purchase Agreement shall be made
without setoff, deduction or counterclaim and the Seller agrees to pay on demand
any present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect to,
this Triple-A Purchase Agreement. Whenever any payment to be made hereunder
shall be stated to be due on a day which is not a Business Day, the due date
thereof shall be extended to the next applicable Business Day and interest shall
be payable at the applicable rate during such extension; PROVIDED, that if such
extension would be inconsistent with one of the provisions set forth in the
definition of "Fixed Period", then such provision shall control.
SECTION 2.06. COMPENSATION. The Seller shall compensate Triple-A and ING,
upon written request, for all losses, expenses and liabilities, including,
without limitation, any indemnification payments owed by Triple-A pursuant to
the Liquidity Agreement, on account of any liquidation or reemployment of
deposits or other funds acquired by such party to make, fund or maintain Capital
hereunder, (i) if for any reason a Receivables Purchase does not occur on a date
specified therefor in the Sale Notice; (ii) if for any reason any payment,
prepayment or conversion of any Capital occurs on a date which is not the last
day of the Fixed Period for such Capital or (iii) as a consequence of any
required conversion of any Eurodollar Rate Advance prior to the last day of the
Fixed Period for the relevant Capital. Any request for compensation under this
SECTION 2.06 shall be accompanied by a copy of a statement from Triple-A or ING,
as applicable, setting forth in reasonable detail the basis for requesting
compensation and the determination of the amount thereof in such statement shall
be conclusive and binding for all purposes, absent manifest error.
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SECTION 2.07. DIVIDING OR COMBINING OF CAPITAL AND FIXED PERIODS. The
Seller may, on notice to and with the consent of the Administrative Agent
received at least one Business Day prior to the last day of any Fixed Period,
either (a) divide such Capital so as to allocate such Capital to two or more
Fixed Periods, or (b) combine such Capital with other Capital originating on
such last day or having Fixed Periods ending on such last day so as to allocate
all such Capital to a single Fixed Period. On and after the Termination Date,
the Administrative Agent shall have the right to divide and/or combine Capital
for purposes of allocation to Fixed Periods in any manner which it may select in
its sole discretion.
SECTION 2.08. INCREASED COSTS, CAPITAL ADEQUACY.
(a) If, after the date hereof due to either (i) the introduction of or any
change in or to the interpretation of any law or regulation by the governmental
authority that promulgated or administers compliance with such law or regulation
(other than laws or regulations with respect to income taxes or any change by
way of imposition or increase of reserve requirements included in the Eurodollar
Reserve Percentage) or (ii) the compliance with any guideline or request from
any central bank or other governmental authority or similar agency (whether or
not having the force of law), and taking into account the obligations of the
Liquidity Banks under the Liquidity Agreement and otherwise in connection with
Triple-A's or ING's asset-supported financing business, any reserve or deposit
or similar requirement shall be imposed, modified or deemed applicable or, any
basis of taxation shall be changed or any other condition shall be imposed, and
there shall be any increase in the cost to Triple-A (either directly or
indirectly through any increase in the costs to the Liquidity Banks) or ING of
making, funding, or maintaining Receivables Purchases or in the cost to Triple-A
or ING of agreeing to make, fund, or maintain Receivables Purchases (including
the reduction of any sum received or Receivable hereunder), then the Seller
shall from time to time, upon demand by Triple-A or ING (as applicable) by the
submission of the certificate described below, pay to Triple-A or ING (as
applicable) additional amounts sufficient to compensate Triple-A or ING (as
applicable) for such increased cost. A certificate setting forth in reasonable
detail the amount of such increased cost submitted to the Seller by Triple-A or
ING (as applicable) shall be conclusive and binding for all purposes, absent
manifest error.
(b) If Triple-A, ING or any Liquidity Bank determines that compliance with
any law or regulation or any guideline or request or any written interpretation
from any central bank or other governmental authority or similar agency (whether
or not having the force of law) which is introduced, implemented or received by
Triple-A, ING or such Liquidity Bank after the date hereof, affects or would
affect capital adequacy or the amount of capital required or expected to be
maintained by Triple-A, ING or such Liquidity Bank or any corporation
controlling Triple-A, ING or such Liquidity Bank and that the amount of such
capital is increased by or based upon the Triple-A Loans or the existence of
this Triple-A Purchase Agreement, the ING Purchase Agreement or upon the
Advances or such Liquidity Bank's commitment to lend under the Liquidity
Agreement and other commitments of that type, or has or would have the effect of
reducing the rate of return on capital, then, upon demand by Triple-A or ING by
the submission of the certificate described below, the Seller shall pay to
Triple-A or ING (as applicable), from time to time as specified by Triple-A or
ING (as applicable), additional amounts sufficient to compensate Triple-A or ING
(as applicable) or such corporation in the light of such circumstances, to the
extent that Triple-A or ING (as applicable) reasonably
8
determines such increase in capital to be allocable to the Receivables Purchases
or the existence of this Triple-A Purchase Agreement or the ING Purchase
Agreement or to the extent that Triple-A owes compensation to a Liquidity Bank
in respect of or on account of such events. A certificate setting forth in
reasonable detail such amounts submitted to the Seller by Triple-A or ING (as
applicable) shall be conclusive and binding for all purposes, absent manifest
error.
(c) In the event that Triple-A requests compensation for increased costs on
behalf of any Liquidity Bank under this SECTION 2.08 and such increased costs
are not being requested by the other Liquidity Banks generally or, if only one
Liquidity Bank exists, by Triple-A's liquidity providers for similar
transactions, then Triple-A shall, promptly following identification by the
Seller of an "Eligible Assignee" (as defined in the Liquidity Agreement) willing
to accept such commitment, cause the Liquidity Bank requesting such increased
costs to assign its outstanding Advances and commitments under the Liquidity
Agreement to such Eligible Assignee, all as more particularly described in
SECTION 8.06(g) of the Liquidity Agreement.
SECTION 2.09. TAXES. (a) All payments made by the Seller under this
Triple-A Purchase Agreement shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any governmental
authority having taxing authority, excluding net income taxes and franchise
taxes (imposed in lieu of income taxes) imposed on Triple-A or ING, as a result
of any present or former connection between the jurisdiction of the government
or taxing authority imposing such tax or any political subdivision or taxing
authority thereof or therein and Triple-A or ING (excluding a connection arising
solely from Triple-A or ING having executed, delivered or performed its
obligations or received a payment under, or enforced, this Triple-A Purchase
Agreement or the ING Purchase Agreement, as applicable) (all such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions and withholdings being
hereinafter called "TAXES"). If any Taxes are required to be withheld from any
amounts payable by the Seller, (i) the sum payable shall be increased as may be
necessary so that, after making all required deductions (including deductions
applicable to additional sums payable under this SECTION 2.09), Triple-A or ING
(as applicable) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Seller shall make such deductions, and
(iii) the Seller shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, the Seller agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges, or similar
levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Triple-A
Purchase Agreement or ING Purchase Agreement(hereinafter "OTHER TAXES").
(c) The Seller will indemnify Triple-A and ING for the full amount of Taxes
or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed
by any jurisdiction on amounts payable under this SECTION 2.09) paid by Triple-A
or ING and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto. Whenever any Taxes are payable by the Seller,
as promptly as possible thereafter the Seller shall
9
send to Triple-A and ING, a certified copy of an original official receipt
received by the Seller showing payment thereof. If the Seller fails to pay any
Taxes when due to the appropriate taxing authority or fails to remit to Triple-A
and ING the required receipts or other required documentary evidence, the Seller
shall indemnify Triple-A and ING for any incremental Taxes, interest or
penalties that Triple-A or ING is legally required to pay as a result of any
such failure. The agreements in this subsection shall survive the termination of
this Triple-A Purchase Agreement.
SECTION 2.10. FEES. In further consideration of the Receivables Purchases
to be made hereunder, the Seller agrees to pay to the Administrative Agent and
Triple-A all fees specified in the Fee Letter dated as of March 31, 2000, and
ING all fees specified in the ING Fee Letter dated as of the date hereof, which
fees will be due and payable at the times and in the manner set forth in such
Fee Letter and ING Fee Letter.
SECTION 2.11. GRANT OF SECURITY INTEREST IN EQUIPMENT COLLATERAL. (a) As
security for the payment and performance of all the obligations of the Seller
hereunder and as additional enhancement to enable Triple-A, ING, the Liquidity
Banks and CapMAC to fully recover Capital and accrued and unpaid Yield and fees
and the ING Obligations, the Seller hereby grants to the Collateral Agent, for
the benefit of Triple-A, ING, the Liquidity Banks and CapMAC, a security
interest in all of the Seller's right, title and interest in and to the
following, whether now owned or hereafter acquired and whether now existing or
hereafter arising (the "EQUIPMENT COLLATERAL"): all Equipment which is the
subject of a Contract for any Purchased Receivable and substitutions therefor
and products and proceeds thereof, including, without limitation, all payments
under insurance (whether or not the Collateral Agent is the loss payee thereof)
or any indemnity, warranty or guaranty, payable by reason of loss or damage to
or otherwise with respect to any of the foregoing.
(b) The Seller shall, at its expense, promptly execute and deliver all
further instruments and documents, and take all further action (including,
without limitation, the execution and filing of such financing or continuation
statements, or amendments thereto and assignments thereof), that may reasonably
be necessary or desirable, or that the Administrative Agent may request, in
order to perfect and protect any security interest granted or purported to be
granted to the Collateral Agent hereunder or to enable the Collateral Agent to
exercise and enforce its rights and remedies hereunder with respect to any
Equipment Collateral. The Seller hereby authorizes the Collateral Agent to file
one or more financing or continuation statements, and amendments thereto and
assignments thereof, relative to all or any part of the Equipment Collateral now
existing or hereafter arising without the signature of the Seller where
permitted by law. A carbon, photographic or other reproduction of the Triple-A
Purchase Agreement of any financing statement covering the Equipment Collateral
or any part thereof shall be sufficient as a financing statement.
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ARTICLE III
CONDITIONS OF PURCHASES
SECTION 3.01. CONDITIONS PRECEDENT TO INITIAL RECEIVABLES PURCHASE. The
agreement of Triple-A to make a Receivables Purchase on the occasion of the
first Receivables Purchase after the date hereof is subject to satisfaction of
the following conditions precedent:
(a) Triple-A shall have received, on or before the initial Receivables
Purchase Date, all of the following, each fully executed and in form and
substance satisfactory to Triple-A:
(i) This Triple-A Purchase Agreement;
(ii) The Master Amendment to the Purchase Agreement, dated as of the
date hereof, between the Seller and HPSC, Inc., acknowledged by Triple-A
and CapMAC;
(iii) A copy of the resolutions of the Board of Managers of the Seller
approving this Triple-A Purchase Agreement and all other documents and
instruments to be delivered hereunder or thereunder by the Seller,
certified by a Manager;
(iv) A certificate of a Manager of the Seller certifying (A) the names
and true signatures of the officers of the Seller authorized to sign this
Triple-A Purchase Agreement and the other documents and instruments to be
delivered by the Seller pursuant hereto or thereto (on which certificate
Triple-A may conclusively rely until such time as Triple-A shall receive
from the Seller a revised certificate meeting the requirements of this
subsection (iv)) and (B) a true and complete copy of the limited liability
company agreement of the Seller;
(v) A certificate executed by a Manager of the Seller certifying that
as of the initial Receivables Purchase Date, all of the representations and
warranties contained in ARTICLE IV hereof are true and accurate in all
material respects with the same force and effect as though such
representations and warranties had been made as of such time;
(vi) The Certificate of Formation of the Seller, certified by the
Secretary of State of Delaware;
(vii) Good Standing Certificates for the Seller issued by the
Secretaries of the States of Delaware and Massachusetts;
(viii) An Officer's Certificate in the form of EXHIBIT C, executed by
a Manager of the Seller;
(ix) The ING Purchase Agreement; and
(x) The Fee Letter.
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(b) All fees and expenses due and owing under the Fee Letter shall have
been paid; and
(c) Triple-A shall have received such other approvals or documents as it
may reasonably request.
SECTION 3.02. CONDITIONS PRECEDENT TO EACH RECEIVABLES PURCHASE. The
agreement of Triple-A to make a Receivables Purchase on the occasion of each
Receivables Purchase Date (including the initial Receivables Purchase) shall be
subject (i) to Triple-A's receipt of (A) a Settlement Statement for the most
recent calendar month then ended, (B) a notice from the Custodian in
substantially the form of Exhibit A to the Custodial Agreement confirming that
the Custodian has received the Contract Files required to be delivered to it
pursuant to SECTION 6.04(b) hereof and (c) such other approvals or documents as
Triple-A may reasonably request and (ii) to the condition precedent that on the
Receivables Purchase Date of such Receivables Purchase, before and after giving
effect to such Receivables Purchase and to the application of the proceeds
therefrom, the following statements shall be true (and each of the giving of the
applicable Sale Notice and the acceptance by the Seller of the proceeds of such
Receivables Purchase shall constitute a representation and warranty by the
Seller that on the Receivables Purchase Date of such Receivables Purchase,
before and after giving effect thereto and to the application of the proceeds
therefrom, such statements are true):
(i) the representations and warranties contained in Article IV hereof
and all representations and warranties of the Originator in the Purchase
Agreement are true and accurate as of the Receivables Purchase Date in all
material respects with the same force and effect as though such
representations and warranties had been made as of such time;
(ii) no event has occurred and is continuing, or would result from
such Receivables Purchase, which constitutes an Event of Termination or an
Unmatured Event of Termination or a Wind-Down Event or Unmatured Wind-Down
Event;
(iii) the outstanding amount of all Capital after giving effect to
such Receivables Purchase shall be equal to or less than the Capital Limit;
and
(iv) the proceeds of such Receivables Purchase shall be used to fund a
Purchase of Transferred Assets under the Purchase Agreement to occur
simultaneously with such Receivables Purchase and all conditions to such
Purchase under the Purchase Agreement on such date have been satisfied or
waived.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller
represents and warrants to Triple-A that:
(a) DUE INCORPORATION AND GOOD STANDING. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. The Seller is duly qualified to do business as a
foreign corporation and is in good standing
12
in every jurisdiction in which the nature of its business requires it to be so
qualified or where the ownership of its properties or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified would not materially adversely affect (i) the collectibility of the
Purchased Assets, (ii) the collectibility of any Receivable, (iii) the business,
properties, operations, prospects, profits or condition (financial or otherwise)
of the Seller or (iv) the ability of the Seller to perform its obligations
hereunder and under the other Facility Documents to which it is a party.
(b) DUE AUTHORIZATION AND NO CONFLICT. The execution, delivery and
performance by the Seller of this Triple-A Purchase Agreement and all other
Facility Documents and the transactions contemplated hereby and thereby,
including the acquisition of the Transferred Assets under the Purchase Agreement
and the purchases contemplated hereunder, are within the Seller's corporate
powers, have been duly authorized by all necessary corporate action, do not
contravene (i) the Seller's charter or by-laws, (ii) any law, rule or regulation
applicable to the Seller, (iii) any contractual restriction contained in any
indenture, loan or credit agreement, lease, mortgage, security agreement, bond,
note, or other agreement or instrument binding on or affecting the Seller or its
property or (iv) any order, writ, judgment, award, injunction or decree binding
on or affecting the Seller or its property, and do not result in or require the
creation of any Adverse Claim upon or with respect to any of its properties; and
no transaction contemplated hereby requires compliance with any bulk sales act
or similar law. This Triple-A Purchase Agreement and the other Facility
Documents to which the Seller is a party have been duly executed and delivered
on behalf of the Seller.
(c) GOVERNMENTAL AND OTHER CONSENTS. Except for the filing of financing
statements pursuant to the UCC required to perfect the security interests
granted hereunder or under the other Facility Documents and except for consents
under certain contractual agreements which have been obtained, no authorization,
consent, approval or other action by, and no registration, qualification,
designation, declaration, notice to or filing with, any governmental authority
or other Person is or will be necessary in connection with the execution and
delivery of this Triple-A Purchase Agreement or any other Facility Document to
which the Seller is a party or any of the other documents contemplated hereby or
thereby, consummation of the transactions herein or therein contemplated, or
performance of or compliance with the terms and conditions hereof or thereof, to
ensure the legality, validity or enforceability hereof or thereof.
(d) ENFORCEABILITY OF FACILITY DOCUMENTS. This Triple-A Purchase Agreement
and each of the other Facility Documents to which the Seller is a party have
been duly and validly executed and delivered by the Seller and constitute the
legal, valid and binding obligation of the Seller enforceable in accordance with
their respective terms, except as enforceability may be limited by bankruptcy,
insolvency or similar laws relating to or affecting creditors' rights generally
and by equitable principles.
(e) NO LITIGATION. There are no actions, suits or proceedings at law or in
equity or by or before any governmental authority now pending or, to the
knowledge of the Seller, threatened against or affecting the Seller or any
property or rights of the Seller which purport to challenge the legality,
validity or enforceability of this Triple-A Purchase Agreement or any other
Facility Document or which may materially impair the ability of the Seller to
carry on
13
business substantially as now being conducted or which may materially adversely
affect the condition (financial or otherwise), operations or properties of the
Seller.
(f) USE OF PROCEEDS. No proceeds of any Receivables Purchase will be used
by the Seller other than to fund a Purchase of Transferred Assets from the
Originator except that the Seller may net from the Purchase Price paid to the
Originator reasonable and necessary amounts for the funding of its operating
expenses.
(g) VALID TITLE AND PERFECTED INTEREST. Each Receivable, together with the
Contract related thereto, is owned by the Seller free and clear of any Adverse
Claim except as provided herein and, upon the making of each Receivables
Purchase, Triple-A shall acquire a valid and perfected first priority undivided
percentage ownership interest, to the extent of the Purchased Assets, in each
Purchased Receivable then existing or thereafter arising and in the Related
Security and Collections with respect thereto, in each case free and clear of
any Adverse Claim except as provided hereunder, the Liquidity Agreement or the
Liquidity Security Agreement (except that the Collateral Agent will not have a
perfected security interest in any Collateral constituting Equipment which is
owned by the Seller and located in a state other than The Commonwealth of
Massachusetts); and no effective financing statement or other instrument similar
in effect covering any Purchased Receivable or the Related Security or
Collections with respect thereto shall at any time be filed except in favor of
the Collateral Agent in accordance with this Triple-A Purchase Agreement.
(h) ACCURACY OF INFORMATION. All certificates, reports, financial
statements and similar writings furnished by or on behalf of the Seller to
Triple-A, the Collateral Agent, or the Administrative Agent at any time pursuant
to any requirement of, or in response to any written request of any such party
under, this Triple-A Purchase Agreement or any other Facility Document or any
transaction contemplated hereby or thereby, have been, and all such
certificates, reports, financial statements and similar writings hereafter
furnished by the Seller to such parties will be, true and accurate in every
respect material to the transactions contemplated hereby on the date as of which
any such certificate, report, financial statement or similar writing was or will
be delivered, and shall not omit to state any material facts or any facts
necessary to make the statements contained therein not materially misleading.
(i) GOVERNMENTAL REGULATIONS. The Seller is not an "investment company" or
a company controlled by an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended, or otherwise
subject to any other federal or state statute or regulation limiting its ability
to incur indebtedness.
(j) MARGIN REGULATIONS. The Seller is not engaged, principally or as one of
its important activities, in the business of extending credit for the purpose of
"purchasing" or "carrying" any "margin stock" (as each of the quoted terms is
defined or used in Regulation T, U or X). No part of the proceeds of any
Receivables Purchase has been used for so purchasing or carrying margin stock or
for any purpose which violates, or which would be inconsistent with, the
provisions of Regulation T, U or X.
(k) LOCATION OF CHIEF EXECUTIVE OFFICE AND RECORDS. The chief place of
business and chief executive office of the Seller are located at the address
referred to in EXHIBIT
14
D hereof and the locations of the offices where the Seller keeps all the Records
are listed on EXHIBIT D (or at such other locations, notified to the Collateral
Agent in accordance with SECTION 5.01(f), in jurisdictions where all action
required by SECTION 6.04 has been taken and completed).
(l) LOCK-BOX ACCOUNTS. Each Obligor under a Contract has, within one month
of the date of Purchase of such Contract, been instructed to remit payment on
the Receivables to a Post Office Box for remittance to a Lock-Box Account or
directly to a Lock-Box Account substantially in the form of EXHIBIT G to the
Purchase Agreement. From and after the initial Purchase Date, the Originator
will have no right, title and/or interest to any of the Lock-Box Accounts and
will maintain no lock-box accounts in its own name for the collection of such
Receivables. The Seller has caused the Originator to deliver to the Collateral
Agent a duplicate key to each Post Office Box and has filed a standing delivery
order with the United States Postal Service authorizing the Collateral Agent to
receive mail delivered to each such Post Office Box. The account numbers of all
Lock-Box Accounts, together with the names and addresses of all the Lock-Box
Banks maintaining such Lock-Box Accounts and the related Post Office Boxes, are
specified in EXHIBIT H to the Purchase Agreement. The Seller has no other
Lock-Box Accounts for the collection of the Transferred Assets except for the
Lock-Box Accounts.
(m) NO TRADE NAMES. The Seller has no trade names, fictitious names,
assumed names or "doing business as" names.
(n) SEPARATE IDENTITY. The Seller is operated as an entity separate from
the Originator and each other Subsidiary of the Originator and (i) has its own
board of directors, (ii) has at least one director who is reasonably acceptable
to Triple-A and who is not a direct, indirect or beneficial stockholder,
officer, director, employee, affiliate, associate, customer or supplier of the
Originator nor a relative of any thereof, nor a trustee in bankruptcy for any
Affiliate of the Originator, (iii) maintains its assets in a manner which
facilitates their identification and segregation from those of its Affiliates,
and has a separate telephone number from that of the Originator or any
Subsidiary of the Originator, (iv) has all office furniture, fixtures and
equipment necessary to operate its business and such furniture, fixtures and
equipment are either owned by the Seller or leased pursuant to written leases,
(v) conducts all intercompany transactions with the Originator and each other
Subsidiary of the Originator on terms which the Seller reasonably believes to be
on an arm's-length basis, (vi) has not guaranteed any obligation of the
Originator or any other Subsidiary of the Originator, nor has it had any of its
obligations guaranteed by any such entities and has not held itself out as
responsible for debts of any such entity or for the decisions or actions with
respect to the business and affairs of any such entity, (vii) has not, except as
otherwise expressly acknowledged under the Facility Documents, permitted the
commingling or pooling of its funds or other assets with the assets of the
Originator or any other Affiliate, (viii) has separate deposit and other bank
accounts to which neither the Originator nor any other Affiliate has any access
and does not at any time pool any of its funds with those of the Originator or
any such Affiliate, (ix) maintains financial records which are separate from
those of the Originator and each other Subsidiary of the Originator, (x)
compensates all employees, consultants and agents, or reimburses the Originator,
from the Seller's own funds, for services provided to the Seller by such
employees, consultants and agents, (xi) has agreed with the Originator to
allocate among themselves shared
15
corporate operating services and expenses which are not reflected in the
Servicing Fee (including, without limitation, the services of shared employees,
consultants and agents and reasonable legal and auditing expenses) on the basis
of actual use or the value of services rendered, and otherwise on a basis
reasonably related to actual use or the value of services rendered, (xii) pays
directly for its own account for accounting and payroll services, rent, lease
and other expenses and does not have such operating expenses paid by the
Originator or any other Subsidiary of the Originator, (xiii) conducts all of its
business (whether in writing or orally) solely in its own name, (xi) is not,
directly or indirectly, named as a direct or contingent beneficiary or loss
payee on any insurance policy covering the property of the Originator or any
other Subsidiary of the Originator and has entered into no agreement to be named
as such a beneficiary or payee, (xv) acknowledges that Triple-A, the
Administrative Agent, the Surety and the Liquidity Banks are entering into the
transactions contemplated by this Triple-A Purchase Agreement and the other
Facility Documents in reliance on the Seller's identity as a separate legal
entity from the Originator and each other Subsidiary of the Originator, and
(xvi) practices and adheres to corporate formalities such as complying with its
By-laws and corporate resolutions and the holding of regularly scheduled board
of directors meetings.
(o) SUBSIDIARIES. The Seller has no Subsidiaries and does not own or hold,
directly or indirectly, any capital stock or equity security of, or any equity
interest in, any Person.
(p) FACILITY DOCUMENTS. The Purchase Agreement is the only agreement
pursuant to which the Seller purchases Receivables or other Transferred Assets.
The Seller has furnished to Triple-A and ING true, correct and complete copies
of each Facility Document to which the Seller is a party, each of which is in
full force and effect. Neither the Seller nor any Affiliate thereof is in
default of any of its obligations thereunder in any material respect. Upon the
Purchase of each Receivable pursuant to the Purchase Agreement, the Seller shall
be the lawful owner of, and have good title to, such Receivable and all
Transferred Assets relating thereto, free and clear of any Adverse Claims. All
such Transferred Assets are purchased without recourse to the Originator except
as described in the Purchase Agreement. The Purchases of the Transferred Assets
by the Seller constitute valid and true sales and transfers for consideration
(and not merely a pledge of such Transferred Assets for security purposes),
enforceable against creditors of the Originator and no Transferred Assets shall
constitute property of the Originator.
(q) BUSINESS. Since its incorporation, the Seller has conducted no business
other than the execution, delivery and performance of the Facility Documents
contemplated hereby, the purchase and servicing of Transferred Assets
thereunder, and such other activities as are incidental to the foregoing. The
Seller has incurred no Indebtedness except that expressly incurred hereunder and
under the other Facility Documents.
(r) OWNERSHIP OF THE SELLER. One hundred percent (100%) of the outstanding
capital stock of the Seller is directly owned (both beneficially and of record)
by HPSC, Inc. Such stock is validly issued, fully paid and nonassessable and
there are no options, warrants or other rights to acquire capital stock from the
Seller.
(s) TAXES. The Seller has filed or caused to be filed all Federal, state
and local tax returns which are required to be filed by it, and has paid or
caused to be paid all taxes
16
shown to be due and payable on such returns or on any assessments received by
it, other than any taxes or assessments, the validity of which are being
contested in good faith by appropriate proceedings and with respect to which the
Seller has set aside adequate reserves on its books in accordance with GAAP and
which proceedings have not given rise to any Adverse Claim.
(t) SOLVENCY. The Seller, both prior to and after giving effect to the
initial Purchase on the initial Purchase Date, and after giving effect to each
subsequent Purchase, (i) is not "insolvent" (as such term is defined in
Section 101(31)(A) of the Bankruptcy Code); (ii) is able to pay its debts as
they become due; and (iii) does not have unreasonably small capital for the
business in which it is engaged or for any business or transaction in which it
is about to engage.
(u) DIVERSIFICATION. After giving effect to the initial Receivables
Purchase on the initial Receivables Purchase Date, the number of Contracts and
the number of Obligors associated with the Purchased Receivables shall equal or
exceed 300.
(v) [intentionally left blank]
(w) IMPLICIT INTEREST RATE. As of the date of any Receivables Purchase, the
excess of (i) the average implicit interest rates being charged to Obligors in
respect of the Receivables then being purchased OVER (ii) the Discount Rate
applicable to such Receivables, shall not be greater than eight percent (8.0%).
(x) SELECTION OF RECEIVABLES. Each Receivable has been randomly selected
from the Originator's portfolio of receivables in accordance with its normal
standards and procedures used for all of its standard securitization
transactions and no selection procedures adverse to Triple-A have been employed
in such selections. In addition, (i) the designation of a Purchased Receivable
as a Designated Receivable or a Non-Designated Receivable and (ii) the
repurchase of any Designated Receivable pursuant to Section 8.02 shall be done
on a basis which is not adverse to Triple-A or CapMAC.
(y) HISTORIC LOSS DATA. Attached hereto as Exhibit F is a summary of
historical static loss data suffered by the Originator as a result of
charge-offs of the Originator's receivables, which summary is true and accurate
with respect to the periods described therein and does not omit any information
necessary to make such summary not misleading.
ARTICLE V
GENERAL COVENANTS
SECTION 5.01. AFFIRMATIVE COVENANTS OF THE SELLER. From the initial
Receivables Purchase Date until the later of the Termination Date or the
Combined Collection Date, the Seller will, unless Triple-A shall otherwise
consent in writing:
(a) COMPLIANCE WITH LAWS, ETC. Comply in all material respects with all
applicable laws, rules, regulations and orders with respect to it, its business
and properties and all Receivables and related Contracts.
17
(b) PRESERVATION OF CORPORATE EXISTENCE. Preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction of
its incorporation, and qualify and remain qualified in good standing as a
foreign corporation in each jurisdiction except where the failure to preserve
and maintain such existence, rights, franchises, privileges and qualifications
would not materially adversely affect (i) the collectibility of the Purchased
Assets, (ii) the collectibility of any Receivable, (iii) the business,
properties, operations, prospects, profits or condition (financial or otherwise)
condition of the Seller or (iv) the ability of the Seller to perform its
obligations hereunder and under the other Facility Documents to which it is a
party.
(c) AUDITS. At any time and from time to time upon prior written notice to
the Seller during regular business hours and on a quarterly basis if requested,
permit the Collateral Agent, or its agents or representatives, (i) to examine
and make copies of and abstracts from all Records, and (ii) to visit the offices
and properties of the Seller for the purpose of examining such Records, and to
discuss matters relating to the Receivables or the Seller's performance
hereunder with any of the officers or employees of the Seller having knowledge
of such matters. Each such audit shall be at the sole expense of the Seller
(subject to the Seller's right under the Purchase Agreement to recover such
expenses from the Originator); PROVIDED, that, so long as no Wind-Down Event has
occurred during any calendar year, the annual audit expenses during such year
for which the Seller is responsible hereunder shall not exceed $40,000 in the
aggregate.
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing the Receivables in the event of the
destruction of the originals thereof) and keep and maintain, all documents,
books, records and other information reasonably necessary or advisable for the
collection of all Receivables (including, without limitation, records adequate
to permit the daily identification of all collections of and adjustments to each
Purchased Receivable).
(e) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES AND CONTRACTS. At its
expense timely and fully perform and comply, and cause the Originator to comply,
in all material respects, with all material provisions, covenants and other
promises required to be observed by it or the Originator under the Contracts.
(f) LOCATION OF RECORDS. Keep its chief place of business and chief
executive office, and the offices where it keeps the Records, at the address of
the Seller referred to in SECTION 4.01(j), or, in any such case, upon 30 days'
prior written notice to the Collateral Agent, at such other locations within the
United States where all action required by SECTION 6.04 shall have been taken
and completed.
(g) CREDIT AND COLLECTION POLICIES. Comply in all material respects with
the Credit and Collection Policy in regard to each Purchased Receivable and the
related Contract.
(h) COLLECTIONS. Instruct all Obligors to cause all Collections to be
deposited directly to a Post Office Box or Lock-Box Account and if the Seller
shall receive any Collections, the Seller shall hold such Collections in trust
for the benefit of the Collateral Agent and deposit such Collections into a
Lock-Box Account or the Collection Account within one Business Day following
Seller's receipt thereof.
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(i) COMPLIANCE WITH ERISA. Comply in all material respects with the
provisions of ERISA, the IRC, and all other applicable laws, and the regulations
and interpretations thereunder.
(j) PERFECTED SECURITY INTEREST UNDER CONTRACTS. Take such action with
respect to each Purchased Receivable as is necessary to ensure that the Seller
maintains, as against the Obligor thereunder, a perfected security interest in
any Equipment relating thereto free and clear of Adverse Claims or, in the case
of any Lease, to ensure that the Seller would maintain such a perfected priority
security interest in the event that a court or other Person were to determine
that such Lease purported to transfer to the Obligor an ownership (rather than a
leasehold) interest in the Equipment subject thereto; PROVIDED, that the Seller
shall not be required to file financing statements or to maintain the
effectiveness of previously filed financing statements with respect to any
Eligible Receivables the Outstanding Balance of which originally is or has
thereafter been reduced below $5,000, respectively, so long as the aggregate
Outstanding Balance of Receivables hereunder for which no such financing
statements are in effect at any time remains less than 7.5% of the Discounted
Eligible Receivables Balance hereunder; provided that such seven and one-half
percent limitation shall not apply from and after the Termination Date unless
and to the extent that the Collateral Agent specifically requests otherwise.
(k) MAINTENANCE OF INSURANCE. Maintain, or cause the Originator or each
Obligor to maintain, with respect to the Contracts and the Equipment related
thereto, casualty and general liability insurance which provide at least the
same coverage as a fire and extended coverage insurance policy as is comparable
for other companies in related businesses. Such insurance policies (and
self-insurance where permitted) shall be maintained in an amount which is not
less than the aggregate Discounted Value of the Purchased Receivables hereunder
arising under the relevant Contracts hereunder. Each such casualty and liability
policy if maintained by an Obligor, shall name the Originator or the Seller as
loss payee and additional insured, and the Originator shall have assigned any
such interest to the Seller. The Seller shall remit, or shall cause to be
remitted, the proceeds of any such insurance policy to a Lock-Box Account or the
Collection Account.
(l) SEPARATE IDENTITY. Take all actions required to maintain the Seller's
status as a separate legal entity. Without limiting the foregoing, the Seller
shall:
(i) conduct all of its business, and make all communications to third
parties (including all invoices (if any), letters, checks and other
instruments) solely in its own name (and not as a division of any other
Person), and require that its employees, if any, when conducting its
business identify themselves as such and not as employees of any other
Affiliate of the Seller (including, without limitation, by means of
providing appropriate employees with business or identification cards
identifying such employees as the Seller's employees);
(ii) compensate all employees, consultants and agents directly or
indirectly through reimbursement of the Originator each calendar quarter,
from the Seller's bank accounts, for services provided to the Seller by
such employees, consultants and agents and, to the extent any employee,
consultant or agent of the Seller is also an employee, consultant or agent
of any Affiliate of the Seller, allocate the compensation of such
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employee, consultant or agent between the Seller and such Affiliate on a
basis which reflects the services rendered to the Seller and such
Affiliate;
(iii) pay its own operating expenses and liabilities from its own
funds, allocate all overhead expenses (including, without limitation,
telephone and other utility charges) for items shared between the Seller
and any Affiliate on the basis of actual use to the extent practicable and,
to the extent such allocation is not practicable, on a basis reasonably
related to actual use and allocate taxes on the basis of their respective
incomes in accordance with applicable federal regulations;
(iv) at all times have at least one "Independent Director", as defined
in and as required under the Seller's Certificate of Incorporation and have
at least one officer responsible for managing its day-to-day business and
manage such business by or under the direction of its board of directors;
(v) maintain its books and records separate from those of any
Affiliate;
(vi) prepare its financial statements separately from those of its
other Affiliates and insure that any consolidated financial statements of
the Originator have notes to the effect that the Seller is a separate
corporate entity whose creditors have a claim on its assets prior to those
assets becoming available to its equity holders and therefore to any
creditors of the Originator;
(vii) use its best efforts not to commingle its funds or other assets
with those of any other Affiliate, and not to hold its assets in any manner
that would create an appearance that such assets belong to any other
Affiliate, and not maintain bank accounts or other depository accounts to
which any Affiliate is an account party, into which any Affiliate makes
deposits or from which any Affiliate has the power to make withdrawals;
(viii) not permit any Affiliate to pay its operating expenses (except
pursuant to allocation arrangements that comply with the requirements of
SUBSECTION (ii) or (iii) of this SECTION 5.01(l) or pursuant to the terms
of the Purchase Agreement);
(ix) not guarantee any obligation of any Affiliate nor (to the extent
that the Seller has the legal power to prevent such) have any of its
obligations guaranteed by any such Affiliate, (either directly or by
seeking credit based on the assets of such Affiliate) or otherwise hold
itself out as responsible for the debts of any Affiliate;
(x) maintain at all times stationery and a telephone number separate
from that of any Affiliate and which telephone number will be answered in
its own name, and have all its officers and employees conduct all of its
business solely in its own name;
(xi) hold regular meetings of its board of directors in accordance
with the provisions of its Certificate of Incorporation and otherwise take
such actions as are necessary on its part to ensure that all corporate
procedures required by its Certificate of Incorporation and by-laws are
duly and validly taken;
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(xii) maintain a separate office from the offices of any of its
Affiliates and identify such office by a sign in its own name;
(xiii) pay dividends only if (A) no other dividend has been paid
during the calendar month in which such dividend is paid, (B) such dividend
has been duly authorized by its board of directors in accordance with
applicable law and (C) its net worth, determined immediately after giving
effect to such dividend is at least $2,000,000; and
(xiv) take such other actions as are necessary on its part to ensure
that the facts and assumptions set forth in the opinion described in
SECTION 3.01(x) remain true and correct at all times.
(m) TAXES. File or cause to be filed, and (to the extent it has legal power
to cause such) cause each of its Affiliates with whom it shares consolidated tax
liability to file, all federal, state and local tax returns which are required
to be filed by it, except where the failure to file such returns could not
reasonably be expected to have a material adverse effect on the collectibility
of the Transferred Assets or the ability of the Seller to perform its
obligations hereunder or under any other Facility Document to which it is a
party or which could otherwise be reasonably expected to expose the Seller to a
material liability. The Seller shall pay or cause to be paid all taxes shown to
be due and payable on such returns or on any assessments received by it, other
than any taxes or assessments, the validity of which are being contested in good
faith by appropriate proceedings and with respect to which the Seller or the
applicable subsidiary shall have set aside adequate reserves on its books in
accordance with GAAP and which proceedings could not reasonably be expected to
have a material adverse effect on the collectibility of the Transferred Assets
or the ability of the Seller to perform its obligations hereunder or under any
other Facility Document to which it is a party or which could otherwise be
reasonably expected to expose the Seller to a material liability.
(n) INTEREST RATE XXXXXX. Concurrently with each Receivables Purchase,
enter into an Interest Rate Hedge with the Swap Provider as contemplated in the
definition of "Discount Rate", and transfer, assign and otherwise convey to the
Collateral Agent all of the Seller's rights in, to and under such Interest Rate
Hedge pursuant to an Interest Rate Hedge Assignment in substantially in the form
of EXHIBIT E hereto, together with a certificate executed by the Swap Provider
in substantially the form of Exhibit A to such Interest Rate Hedge Assignment.
The Seller shall thereafter maintain such Interest Rate Xxxxxx in full force and
effect at all times until the Capital associated with such Receivables Purchase
has been recovered in full by Triple-A, in a notional amount equal to no less
than 96% and no more than 105% of the sum of the outstanding Capital related
thereto and based on an amortization schedule which matches the amortization of
the aggregate Receivables then outstanding and the terms of which are otherwise
reasonably satisfactory to the Collateral Agent. The Seller acknowledges that
Triple-A and/or the Surety on behalf of Triple-A have guaranteed the Seller's
performance of its obligations under the Interest Rate Xxxxxx. The Seller shall
perform all of its obligations under the Interest Rate Xxxxxx to the same extent
as if its rights under the Interest Rate Xxxxxx has not been assigned hereunder
and shall indemnify each of Triple-A and the Surety against any payments by
either such party on account of the Seller's failure to perform its obligations
under the Interest Rate Xxxxxx, including, without limitation, any payments by
the Surety under the
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Swap Bond, which indemnity shall survive any termination of this Triple-A
Purchase Agreement. The exercise by the Collateral Agent of any of its rights
hereunder or under the Interest Rate Hedge Assignment shall not relieve the
Seller from such obligations.
(o) FACILITY DOCUMENTS. Comply in all material respects with the terms of
and employ the procedures outlined in and enforce the obligations of the
Originator under the Purchase Agreement, and all of the other Facility Documents
to which it is a party, take all such action to such end as may be from time to
time reasonably requested by the Collateral Agent, maintain all such Facility
Documents in full force and effect and make to the Originator such reasonable
demands and requests for information and reports or for action as the Seller is
entitled to make thereunder and as may be from time to time reasonably requested
by the Collateral Agent.
(p) SEGREGATION OF COLLECTIONS. Prevent the deposit into any of the
Lock-Box Accounts of any funds other than Collections in respect of the
Transferred Assets and, to the extent that any such funds are nevertheless
deposited into any of such Lock-Box Accounts, promptly identify any such funds
to the Servicer for segregation and remittance to the owner thereof.
SECTION 5.02. REPORTING REQUIREMENTS OF THE SELLER. From the initial
Receivables Purchase Date until the later of the Termination Date or the
Combined Collection Date, the Seller will, unless the Collateral Agent shall
otherwise consent in writing, furnish to the Collateral Agent, ING and to
CapMAC:
(a) as soon as available and in any event within 45 days after the end of
each of the first three quarters of each fiscal year of the Seller, balance
sheets of the Seller as of the end of such quarter, and (to the extent
available) statements of income and retained earnings of the Seller for the
period commencing at the end of the previous fiscal year and ending with the end
of such quarter, certified by the chief financial officer, chief accounting
officer or treasurer of the Seller;
(b) as soon as available and in any event within 105 days after the end of
each fiscal year of the Seller, a copy of the balance sheet of the Seller as of
the end of such year and the related statements of income and retained earnings
of the Seller for such year each reported on by nationally recognized
independent public accountants acceptable to the Collateral Agent (the
Collateral Agent acknowledges that [any of the "Big 5" accounting firms] will be
acceptable to the Collateral Agent);
(c) promptly upon receipt thereof, copies of (i) all annual and quarterly
financial statements delivered to the Seller by the Originator pursuant to the
Purchase Agreement and (ii) all other reports and other written information not
specified above which are required to be delivered by the Originator
(individually, or as Servicer) to the Seller pursuant to the terms of the
Purchase Agreement;
(d) as soon as possible and in any event within five Business Days after
the occurrence of each Event of Termination or Wind-Down Event or each Unmatured
Event of Termination or Unmatured Wind-Down Event, the statement of the chief
financial officer, chief
22
accounting officer or treasurer of the Seller setting forth details of such
Event of Termination, Wind-Down Event, Unmatured Event of Termination or
Unmatured Wind-Down Event and the action which the Seller proposes to take with
respect thereto;
(e) promptly after the filing or receiving thereof, copies of all reports
and notices with respect to any Reportable Event defined in Article IV of ERISA
which the Seller or any Affiliate files under ERISA with the IRS or the PBGC or
the DOL or which the Seller receives from the PBGC;
(f) on or before the 15th day of each month (or if such day is not a
Business Day, the immediately succeeding Business Day), a copy of the Settlement
Report for the most recent calendar month, which shall include a summary of the
portfolio of Interest Rate Xxxxxx as of such day; and
(g) promptly, from time to time, such other information, documents, records
or reports respecting the Purchased Receivables or the conditions or operations,
financial or otherwise, of the Seller as the Collateral Agent may from time to
time reasonably request in order to protect the interests of the Collateral
Agent or of Triple-A under or as contemplated by this Triple-A Purchase
Agreement.
SECTION 5.03. NEGATIVE COVENANTS OF THE SELLER. From the initial
Receivables Purchase Date until the later of the Termination Date or the
Combined Collection Date, the Seller will not, without the written consent of
the Collateral Agent:
(a) SALES, LIENS, ETC. AGAINST RECEIVABLES AND RELATED SECURITY. Except as
otherwise provided herein, sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist, any Adverse Claim upon or
with respect to, any Purchased Receivable, Related Security, Collections, or any
related Contract, or upon or with respect to any Lock-Box Account to which any
Collections of any Purchased Receivable are sent, or assign any right to receive
income in respect thereof, or upon any other Transferred Asset, except that the
Seller shall have no responsibility for any Adverse Claim created by an Obligor
upon or with respect to any Equipment owned by such Obligor so long as such
Adverse Claim is subordinate to the security interest of the Seller in such
Equipment.
(b) EXTENSION OR AMENDMENT OF RECEIVABLES. Except for actions of the
Servicer otherwise permitted hereunder and in the Purchase Agreement, extend,
amend or otherwise modify, the terms of any Receivable, or amend, modify or
waive, any term or condition of any Contract related thereto, whether for any
reason relating to a negative change in the related Obligor's creditworthiness
or inability to make any payment under the related Contract or otherwise.
(c) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. Make any change in
the character of its business or in the Credit and Collection Policy, which
change would, in either case, impair the collectibility of any Transferred
Asset.
(d) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. Add or terminate any bank
as a Lock-Box Bank from those listed in EXHIBIT I to the Purchase Agreement or
make any change in its instructions to Obligors regarding payments to be made to
the Seller or payments to
23
be made to any Lock-Box Bank, unless the Collateral Agent shall have received
(i) ten Business Days' prior notice of such addition, termination or change and
(ii) prior to the effective date of such addition, termination or change, (x)
executed copies of Lock-Box Agreements executed by each new Lock-Box Bank and
the Seller and (y) copies of all agreements and documents signed by either the
Seller or the respective Lock-Box Bank with respect to any new Lock-Box Account.
(e) STOCK, MERGER, CONSOLIDATION, ETC. Sell any shares of any class of its
capital stock to any Person (other than the Originator) or consolidate with or
merge into or with any other corporation, or purchase or otherwise acquire all
or substantially all of the assets or capital stock, or other ownership interest
of, any Person or sell, transfer, lease or otherwise dispose of all or
substantially all of its assets to any Person, except for the conveyances of a
security interest in favor of the Collateral Agent as expressly permitted under
the terms of this Triple-A Purchase Agreement.
(f) CHANGE IN CORPORATE NAME. Make any change to its corporate name or use
any trade names, fictitious names, assumed names or "doing business as" names.
(g) ERISA MATTERS. (i) Engage or permit any ERISA Affiliate to engage in
any prohibited transaction for which an exemption is not available or has not
previously been obtained from the DOL; (ii) permit to exist any accumulated
funding deficiency, as defined in Section 302(a) of ERISA and Section 412(a) of
the IRC, or funding deficiency with respect to any Benefit Plan other than a
Multiemployer Plan; (iii) fail to make any payments to any Multiemployer Plan
that the Seller or any ERISA Affiliate may be required to make under the
agreement relating to such Multiemployer Plan or any law pertaining thereto;
(iv) terminate any Benefit Plan so as to result in any liability; or (v) permit
to exist any occurrence of any reportable event described in Title IV of ERISA
which represents a material risk of a liability of the Seller or any ERISA
Affiliate under ERISA or the IRC; PROVIDED, HOWEVER, the Seller's ERISA
Affiliates may take or allow such prohibited transactions, accumulated funding
deficiencies, payments, terminations and reportable events described in clauses
(i) through (iv) above so long as such events occurring within any fiscal year
of the Seller, in the aggregate, involve a payment of money by or an incurrence
of liability of any such ERISA Affiliate in an amount which does not exceed
$500,000.
(h) TERMINATE OR REJECT CONTRACTS. Without limiting Section 5.03(b),
terminate or reject any Contract prior to the term of such Contract, whether
such rejection or early termination is made pursuant to an equitable cause,
statute, regulation, judicial proceeding or other applicable law (including,
without limitation, Section 365 of the Bankruptcy Code), unless prior to such
termination or rejection, the Seller pays the Collateral Agent, for the benefit
of Triple-A, an amount equal to the Termination Amount owed with respect
thereto.
(i) INDEBTEDNESS. Create, incur, assume or suffer to exist any Indebtedness
except for (i) Indebtedness to Triple-A, the Collateral Agent or any Liquidity
Bank expressly contemplated hereunder, (ii) ordinary course expenses (to the
extent, if any, that such ordinary course expenses constitute Indebtedness) in
an aggregate amount outstanding at any time not to exceed $10,000 (exclusive of
taxes) and (iii) Indebtedness to the Originator pursuant to the Purchase
Agreement.
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(j) GUARANTEES. Guarantee, endorse or otherwise be or become contingently
liable (including by agreement to maintain balance sheet tests) in connection
with the obligations of any other Person, except endorsements of negotiable
instruments for collection in the ordinary course of business and reimbursement
or indemnification obligations in favor of Triple-A, the Collateral Agent, or
any Liquidity Bank as provided for under this Triple-A Purchase Agreement.
(k) LIMITATION ON TRANSACTIONS WITH AFFILIATES. Enter into, or be a party
to any transaction with any Affiliate, except for:
(i) the transactions contemplated by the Purchase Agreement;
(ii) transactions related to the allocation of shared overhead
expenses or taxes as described in clause (iii) of SECTION 5.01(l); and
(iii) to the extent not otherwise prohibited under this Triple-A
Purchase Agreement, other transactions in the nature of employment
contracts and directors' fees, upon fair and reasonable terms materially no
less favorable to the Seller than would be obtained in a comparable
arm's-length transaction with a Person not an Affiliate.
(l) FACILITY DOCUMENTS. Except as otherwise permitted under Section 9.01,
(a) terminate, amend or otherwise modify any Facility Document to which it is a
party, or grant any waiver or consent thereunder, (b) without the prior consent
of the Collateral Agent, exercise any discretionary rights granted to the Seller
under the Purchase Agreement pursuant to provisions thereof providing for
certain actions to be taken "with the consent of the Buyer", "acceptable to the
Buyer" as "specified by the Buyer", "in the reasonable judgment of the Buyer" or
similar provisions (it being understood that inaction by the Seller shall not be
considered to be an exercise of such discretionary rights) or (c) without the
prior written consent of the Collateral Agent, consent to any amendment or
modification of the Credit and Collection Policy.
(m) CHARTER AND BY-LAWS. Amend or otherwise modify its Certificate of
Incorporation or By-laws in any manner which requires the consent of the
"Independent Director" (as defined in the Seller's Certificate of Incorporation)
without the prior written consent of the Collateral Agent and delivery of an
opinion of counsel that such amendment shall not alter the conclusions set forth
in the legal opinion described in SECTION 3.01(x).
(n) LINES OF BUSINESS. Conduct any business other than that described in
SECTION 4.01(q), or enter into any transaction with any Person which is not
contemplated by or incidental to the performance of its obligations under the
Facility Documents.
(o) ACCOUNTING TREATMENT. Prepare any financial statements or other
statements (including any tax filings which are not consolidated with those of
the Originator) which shall account for the transactions contemplated by the
Purchase Agreement in any manner other than as the sale of, or a capital
contribution of, the Transferred Assets by the Originator to the Seller (it
being understood that non-recognition of such transaction due to the application
of consolidated financial reporting principles under GAAP or the filing of tax
returns on a consolidated basis shall not constitute a violation of this
covenant).
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(p) LIMITATION ON INVESTMENTS. Make or suffer to exist any loans or
advances to, or extend any credit to, or make any investments (by way of
transfer of property, contributions to capital, purchase of stock or securities
or evidences of indebtedness, acquisition of the business or assets, or
otherwise) in, any Affiliate or any other Person except for (i) Permitted
Investments, (ii) the purchase of Receivables and other Transferred Assets
pursuant to the terms of the Purchase Agreement and (iii) so long as the
aggregate outstanding Capital hereunder is less than the Capital Limit then in
effect, the acceptance of investments in exchange for Defaulted Receivables in
an effort to maximize the recoveries thereon.
ARTICLE VI
ADMINISTRATION AND COLLECTION
SECTION 6.01. DESIGNATION OF SERVICER. The servicing, administering and
collection of the Purchased Receivables and the other Purchased Assets shall be
conducted by the Person (the "SERVICER") designated by the Collateral Agent from
time to time in accordance with this SECTION 6.01. Until the Collateral Agent
gives notice to the Originator of the designation of a new Servicer, the
Originator is hereby designated as, and hereby agrees to perform the duties and
obligations of, the Servicer pursuant to the terms hereof. The Collateral Agent
may at any time from and after a Servicing Termination Event, or earlier upon
the written request of the Seller, designate the Back-up Servicer or any other
Person to succeed the Originator or any Successor Servicer, on the condition in
each case that any such Person so designated shall agree to perform the duties
and obligations of the Servicer pursuant to the terms hereof. The Servicer may,
with the prior written consent of Triple-A and the Collateral Agent, subcontract
with any other Person for servicing, administering or collecting the Purchased
Assets, provided that the Servicer shall remain liable for the performance of
the duties and obligations of the Servicer pursuant to the terms hereof. The
Servicer shall use reasonable care in performing its duties as Servicer
hereunder and, without limiting the foregoing, shall service the Purchased
Receivables in accordance with the Credit and Collection Policy.
SECTION 6.02. DUTIES OF THE SERVICER. (a) The Servicer shall take or cause
to be taken all such actions as may be necessary or advisable to collect each
Purchased Receivables from time to time, all in accordance with applicable laws,
rules and regulations, with reasonable care and diligence, and in accordance
with the Credit and Collection Policy. Each of the Seller, Triple-A, ING, the
Administrative Agent and the Collateral Agent hereby appoints as its agent the
Servicer, from time to time designated pursuant to SECTION 6.01, to enforce its
respective rights and interests in and under the Purchased Receivables, the
Related Security related thereto and the related Collections. The Servicer will
at all times apply the same standards and follow the same procedures with
respect to the decision to commence, and in prosecuting and litigating with
respect to Purchased Receivables as it applies and follows with respect to
accounts, chattel paper and instruments which are not Purchased Receivables. In
no event shall the Servicer be entitled to make the Collateral Agent, Triple-A,
ING or the Administrative Agent a party to any litigation without the Collateral
Agent's, Triple-A's, ING's and the Administrative Agent's express prior written
consent. The Servicer shall segregate and set aside for the account of Triple-A
and ING all Collections of the Purchased Receivables and Related Security in
accordance with SECTION 2.05 of the Purchase Agreement and SECTION 6.06 hereof
and shall cause all such Collections to be remitted to a Lock-Box Account and/or
deposited directly into the
26
Collection Account within one Business Day after identification thereof by the
Servicer and in any event within four Business Days after the Servicer's receipt
thereof. The Servicer shall promptly review all checks and other instruments
returned to it by the Lock-Box Bank on account of restrictive endorsements,
improper payees, incorrect amounts or for any other reason and shall not deposit
any such checks or instruments in its own accounts unless it is determined to
the Collateral Agent's satisfaction that such amounts do not constitute
Collections; any such checks or instruments which are determined to be
Collections of the Purchased Receivables or Related Security related thereto
shall be promptly remitted to the Lock-Box Account or the Collection Account as
provided above. Provided that the Termination Date shall not have occurred, the
Originator, while it is Servicer, may, in accordance with the Credit and
Collection Policy, (i) amend, modify or waive any term or condition of any
Contract to reflect any Permitted Extension, (ii) adjust the Outstanding Balance
of any Purchased Receivable to reflect the reductions, adjustments or
cancellations described in the first sentence of SECTION 2.04(d) of this
Triple-A Purchase Agreement, (iii) so long as such prepayment would not cause a
Wind-Down Event under this Triple-A Purchase Agreement, and subject to the
payment of the Termination Amount, consent to the prepayment or early
termination of a Contract, and (iv) amend, modify or waive any provision of a
Delinquent Receivable or Defaulted Receivable so as to maximize the
collectibility thereof. The Servicer shall hold in trust for the Seller,
Triple-A and ING, in accordance with their respective interests, all Records.
Notwithstanding anything to the contrary contained herein, following the
occurrence of an Event of Termination, the Collateral Agent shall have the
absolute and unlimited right to direct the Servicer (whether the Servicer is the
Originator or otherwise) to commence or settle any legal action to enforce
collection of any Receivable or other Transferred Asset or to foreclose upon or
repossess any Related Security.
(b) The Servicer shall, as soon as practicable following receipt, turn over
to the Originator the collections of any receivable which is not a Purchased
Asset, in either case less, in the event the Originator is not the Servicer, all
reasonable and appropriate out-of-pocket costs and expenses of such Servicer of
servicing, collecting and administering such receivable.
(c) Notwithstanding anything to the contrary contained in this Agreement,
the Servicer, if the Collateral Agent or its designee, shall have no obligation
to collect, enforce or take any other action described in this ARTICLE VI with
respect to any receivable that is not a Purchased Receivable other than to
deliver to the Seller the Collections and documents with respect to any such
receivable as described in the first two sentences of SECTION 6.02(b) and to
exercise the same degree of care with respect to Collections and documents in
its possession as it would exercise with respect to its own property.
(d) In the event the Servicer accepts in payment of any Purchased
Receivable the taking of repossession of the Equipment the sale or lease of
which gave rise to such Purchased Receivable, the Servicer agrees to use its
reasonable efforts to resell or re-lease such Equipment for the account of
Triple-A (including its assignees, participants and successors) and shall remit
to the Collateral Agent the gross sale proceeds thereof or, to the extent such
Equipment is re-leased, shall deliver to the Collateral Agent the chattel paper
or other documents evidencing the rights to payment arising from such re-lease,
all of which documents shall constitute Contracts and which rights to payment
shall constitute Purchased Receivables, and all of which Contracts and Purchased
Receivables shall constitute part of the Purchased Assets.
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None of Triple-A, ING or the Collateral Agent shall have any obligation to take
any action or commence any proceedings to realize upon any Purchased Receivable
or to enforce any of its rights or remedies with respect thereto. Any moneys
collected by the Servicer pursuant to this SUBSECTION 6.02(d) shall be
segregated by the Servicer, held in trust by the Servicer for Triple-A and ING
and shall be remitted to a Lock-Box Account or to the Collection Account within
one Business Day after identification thereof by the Servicer and in any event
within four Business Days after the Servicer's receipt thereof.
(e) The Servicer shall maintain all books of account and other records
pertaining to the Purchased Receivables and the other Purchased Assets in such
form as will enable Triple-A, ING or their respective designees to determine at
any time the status thereof. The Servicer will permit Triple-A, ING, the
Collateral Agent and any Person designated by Triple-A, ING or the Collateral
Agent, during regular business hours, to inspect, audit, check and make
abstracts from all books, accounts, records, or other papers pertaining to such
Purchased Assets. From time to time, at the request of Triple-A, ING or the
Collateral Agent, the Servicer, at its own expense, will (i) deliver to
Triple-A, ING and the Collateral Agent and any Person designated by Triple-A,
ING or the Collateral Agent any records and invoices pertaining to the Purchased
Assets and evidence thereof as Triple-A, ING, the Collateral Agent or such
designee may deem necessary to enable it to enforce its rights thereunder and
(ii) xxxx each computer record relating to, and each invoice or other evidence
of, the Purchased Assets (whether or not such computer record or other item is
the property of Triple-A and ING) as Triple-A, ING or the Collateral Agent may
direct to reflect the interests of Triple-A, ING and the Collateral Agent in
such Purchased Assets. The Servicer will either (i) segregate, from all the
documents relating to other receivables then owned or being serviced by the
Servicer, all documents relating to the Purchased Assets or (ii) xxxx all such
documents relating to the Purchased Assets so as to make such documents readily
identifiable as property of Triple-A and ING and with such legend as shall be
specified by the Collateral Agent, and will, in either such event, hold all such
documents in trust for Triple-A and ING and safely keep such documents in filing
cabinets or other suitable containers marked to show Triple-A's and ING's
interest.
SECTION 6.03. RIGHTS OF THE COLLATERAL AGENT. At any time:
(a) The Collateral Agent may notify the Obligors of the Purchased
Receivables, or any of them, of Triple-A's ownership interest in the
Purchased Assets and direct such Obligors, or any of them, that payment of
all amounts payable under any Purchased Receivable be made directly to
Triple-A or its designee (including, without limitation, the Collateral
Agent or ING).
(b) The Seller shall, at the Collateral Agent's or Triple-A's request
and at the Seller's expense, give notice of Triple-A's and ING's interest
in the Purchased Assets to each Obligor (in substantially the form of the
Notice of Assignment) and direct that payments be made directly to Triple-A
or its designee (including, without limitation, the Collateral Agent or
ING).
(c) The Seller shall, at the Collateral Agent's request, assemble all
Records which the Collateral Agent reasonably believes are necessary or
appropriate for the administration and enforcement of the Purchased Assets,
and shall make the same
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available to the Collateral Agent at a place selected by the Collateral
Agent or its designee.
(d) Each of the Seller, Triple-A and ING hereby authorize the
Collateral Agent to take any and all steps in the Seller's name and on
behalf of the Seller necessary or desirable, in the determination of the
Collateral Agent, to collect all amounts due under any and all Purchased
Receivables or Related Security related thereto, including, without
limitation, endorsing the Seller's name on checks and other instruments
representing Collections and enforcing such Purchased Receivables and the
related Contracts.
SECTION 6.04. FURTHER ACTION EVIDENCING TRANSFERS. (a) The Seller agrees
that from time to time, at its expense, it will promptly execute and deliver all
further instruments and documents, and take all further action that Triple-A may
reasonably request in order to protect or more fully evidence Triple-A's and
ING's ownership interest in the Purchased Receivables, the Related Security and
the Collections related thereto, or to enable Triple-A to exercise or enforce
any of its rights hereunder or under any related document. Without limiting the
generality of the foregoing, the Seller will xxxx its master data processing
records evidencing such Purchased Receivables, Related Security and Collections
related thereto with a legend, acceptable to Triple-A and ING, evidencing that
Triple-A and ING have acquired an ownership interest therein as provided in this
Agreement and, upon the request of Triple-A, will execute and file such
financing or continuation statements, or amendments thereto or assignments
thereof, and such other instruments or notices, as may be necessary or
appropriate or as Triple-A may reasonably request. The Seller hereby authorizes
Triple-A to file one or more financing or continuation statements, and
amendments thereto and assignments thereof, relative to all or any of the
Purchased Receivables, Related Security and Collections related thereto now
existing or hereafter arising without the signature of the Seller where
permitted by law. A carbon, photographic or other reproduction of this Agreement
or any financing statement covering the Purchased Receivables, Related Security
and Collections related thereto, or any part thereof, shall be sufficient as a
financing statement. If the Seller fails to perform any of its agreements or
obligations under this Agreement, Triple-A may (but shall not be required to)
itself perform, or cause performance of, such agreement or obligation, and the
expenses of Triple-A incurred in connection therewith shall be payable by the
Seller upon Triple-A's demand therefor; PROVIDED, HOWEVER, prior to taking any
such action, Triple-A shall give notice of such intention to the Seller and
provide the Seller with a reasonable opportunity to take such action itself.
(b) The Seller shall, on or prior to the date of each Receivables Purchase
hereunder, deliver or cause to be delivered the related Contract File to the
Custodian, in suitable form for transfer by delivery, or accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to Triple-A (and ING to the extent there is a
simultaneous ING Purchase). In the event that the Seller or the Servicer
receives any other instrument or any writing constituting chattel paper which,
in either event, evidences a Purchased Receivable or other Purchased Assets, the
Seller or the Servicer as applicable shall deliver such instrument or chattel
paper to the Custodian on behalf of Triple-A and ING within three (3) Business
Days after receipt, in suitable form for transfer by delivery, or accompanied by
duly executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to Triple-A(and ING to the extent there is a simultaneous
ING Purchase). If ING is not satisfied with any delivery or any other condition,
such lack of satisfaction shall not affect
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Triple-A's purchase of the assets other than ING Receivables Interest and the
Seller shall be deemed to have requested a purchase without any simultaneous ING
Purchase.
SECTION 6.05. RESPONSIBILITIES OF THE SELLER. Anything herein to the
contrary notwithstanding, the Seller shall (i) perform all of its obligations
under the Contracts to the same extent as if such Contracts had not been
transferred to Triple-A or ING hereunder and the exercise by Triple-A or ING or
their respective assigns of their respective rights hereunder shall not relieve
Seller from such obligations and (ii) pay when due any taxes, including without
limitation, sales, excise and personal property taxes payable in connection with
the Purchased Assets, unless the Seller is contesting the payment of such taxes
in good faith and by appropriate proceedings and with respect to which no
Adverse Claim has been asserted or filed.
SECTION 6.06. ADMINISTRATION OF COLLECTIONS BY SERVICER. (a) The Servicer
shall identify on a timely basis all Collections which are on account of the
Purchased Assets, including all deposits to Lock Box Accounts. On each Business
Day, all Collections received in the Lock Box Accounts for the prior Business
Day (and such Business Day, if practicable) shall be transferred to the
Collection Account. If the Servicer receives any cash or checks, drafts, wire
transfers or other instruments for the payment of money on account or otherwise
in respect of the Purchased Assets, the Servicer shall segregate such cash and
other items, hold such cash and other items in trust for the benefit of Triple-A
and ING, and the Collateral Agent and shall cause such cash and other items
(properly endorsed, where required, so that such items may be collected by
Triple-A) to be deposited in a Lock Box Account or directly in the Collection
Account immediately after the date any such cash or other item shall have been
identified as being on account of a Purchased Assets.
SECTION 6.07. APPLICATION OF COLLECTIONS. All Collections on account of the
Purchased Receivables of each Obligor shall be applied in the order of maturity
thereof unless specifically identified otherwise in writing by such Obligor or
directed by a court of competent jurisdiction. Any payment by an Obligor in
respect of any indebtedness or other obligations owed by such Obligor to the
Seller or the Servicer shall, except as otherwise specified by such Obligor or
otherwise required by law, be applied as a Collection of a Receivable of such
Obligor (in the order of the age by invoice date of such Receivables, starting
with the oldest such Receivable) to the extent of any amounts then due and
payable thereunder before being applied to any other indebtedness of such
Obligor to the Seller or the Servicer. The Servicer shall not influence or
instruct any Obligor who is indebted to the Seller in respect of any
indebtedness not included in the Purchased Assets to direct that its remittances
be applied to any such indebtedness prior to being applied to the Purchased
Assets.
SECTION 6.08. SERVICING FEE. On each Settlement Date, as full compensation
for its servicing activities hereunder, the Servicer shall be entitled to
receive a fee (the "SERVICING FEE") in an amount equal to 1.0% TIMES the
Outstanding Balance of the Purchased Receivables as of the last day of the prior
calendar month TIMES a fraction, the numerator of which is the number of actual
days elapsed in such calendar month and the denominator of which equals 360,
PROVIDED, THAT, if the Servicer hereunder is also the Servicer under the
Purchase Agreement, the Servicing Fee hereunder shall be deemed paid to the
extent of any payment by the Seller of the "Servicing Fee" specified and defined
in the Purchase Agreement. Notwithstanding the foregoing, to the extent that
Advances under the Liquidity Agreement are used to fund or
30
maintain Borrowings or Purchases, then the Servicing Fee shall be .75% TIMES the
Outstanding Balance of the Receivables as of the last day of the prior calendar
month TIMES a fraction, the numerator of which is the number of actual days
elapsed in such calendar month and the denominator of which equals 360. In the
event that Triple-A (or the Collateral Agent) appoints a successor Servicer, the
Servicing Fee may be adjusted as required by such successor Servicer and as
agreed to by Triple-A and the Collateral Agent.
SECTION 6.09. RESIGNATION; SUCCESSOR SERVICER. (a) The obligation of the
Servicer to service the Purchased Receivables is personal to the Servicer and
the parties recognize that another Person may not be qualified to perform such
obligations. Accordingly, the Servicer's obligation to service the Purchased
Assets hereunder shall be specifically enforceable and shall be absolute and
unconditional in all circumstances, including, without limitation, after the
occurrence and during the continuation of any Event of Termination or Servicing
Termination Event hereunder; PROVIDED, HOWEVER, that a Successor Servicer may be
appointed pursuant to this SECTION 6.09.
(b) Notwithstanding the foregoing, the Servicer may resign from the
obligations and duties hereby imposed on it as Servicer upon determination that
(i) the performance of its duties hereunder is no longer permissible under any
applicable law and (ii) there is no reasonable action which the Servicer could
take to make the performance of its duties hereunder permissible under any such
applicable law. Any determination permitting the resignation of the Servicer
shall be evidenced as to clause (i) above by an opinion of counsel to such
effect delivered to Triple-A, ING and the Collateral Agent. Except to the extent
inconsistent with any such applicable law, no such resignation shall become
effective until a Successor Servicer shall have assumed the responsibilities and
obligations of the Servicer in accordance with the remaining provisions of this
SECTION 6.09.
(c) The Collateral Agent shall, as promptly as possible after the Servicer
has given notice pursuant to SECTION 6.09(b) above or at any time after the
Collateral Agent's designation of a successor Servicer pursuant to SECTION 6.01,
appoint the Back-up Servicer or other successor servicer (the "SUCCESSOR
SERVICER") and such Successor Servicer shall accept its appointment by a written
assumption in a form acceptable to the Collateral Agent. Upon its appointment,
the Successor Servicer shall be the successor in all respects to the Servicer
with respect to servicing functions under this Agreement shall be subject to all
the responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof, and all references in this
Agreement or any other Facility Documents to the Servicer shall be deemed to
refer to the Successor Servicer. The Servicer agrees to cooperate with the
Successor Servicer in effecting the transfer of its responsibilities, duties,
liabilities and rights hereunder, including, without limitation, the execution
and delivery of assignments of financing statements, the transfer to the
Successor Servicer of all cash amounts held by the Servicer or thereafter
received with respect to the Purchased Assets, the transfer of electronic
records relating to the Purchased Assets in such form as the Successor Servicer
may reasonably request and the transfer of all related Records, correspondence
and other documents relating to the Purchased Assets.
SECTION 6.10. LOCK-BOX ACCOUNTS; COLLECTION ACCOUNT. The Seller has
established and will maintain a system of operations, accounts and instructions
to the Lock-Box Banks and will establish and maintain the Collection Account as
provided in this SECTION 6.10.
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Pursuant to a Lock-Box Agreement, each Lock-Box Account shall be irrevocably
instructed to wire all funds to the Collection Account, which Collection Account
shall be maintained in the name of the Collateral Agent. Neither the Seller, nor
any Person claiming by, through or under the Seller shall have any control over
the use of, or any right to withdraw any item or amount from, any Lock-Box
Account or the Collection Account except as expressly provided in the Lock-Box
Agreements. The Collateral Agent on behalf of Triple-A and ING is hereby
irrevocably authorized and empowered, as the Seller's attorney-in-fact, to
endorse any item deposited in a lock-box or presented for deposit in any
Lock-Box Account or the Collection Account requiring the endorsement of the
Seller, which authorization is coupled with an interest.
SECTION 6.11. COLLECTION ACCOUNT. (a) The Seller has established for the
sole and exclusive benefit of the Collateral Agent for the benefit of Triple-A,
ING, the Surety and their respective assigns, a cash collateral account (the
"COLLECTION ACCOUNT"). The Collection Account shall be a special purpose
segregated trust account maintained with Fleet National Bank or other bank
satisfactory to Collateral Agent but shall be under the sole dominion and
control of, and in the name of, the Collateral Agent. All funds held in the
Collection Account, including investment earnings thereon, shall be invested in
Permitted Investments at the direction of the Seller; PROVIDED, HOWEVER, that
from and after the Termination Date or otherwise upon the occurrence and during
the continuance of any Event of Termination, the Collateral Agent shall have the
sole right to restrict the maturities of any investments held in the Collection
Account and to direct the withdrawal of any such investments for the purposes of
paying Capital, Yield, any Obligations and any ING Obligations owed hereunder.
The Collateral Agent shall have the sole and exclusive right to withdraw or
order a transfer of funds from the Collection Account in accordance with the
terms and provisions of this SECTION 6.11; PROVIDED however, that the Collateral
Agent agrees to turn over to the Originator any funds which are deposited in the
Collection Account and which do not constitute Collections or other proceeds of
Purchased Assets, less all reasonable and appropriate out-of-pocket costs and
expenses incurred by the Collateral Agent in connection with such misdirected
funds.
(b) All Collections and other proceeds of the Purchased Assets in the
Collection Account shall be held in trust for the benefit of Triple-A, ING and
the Surety and, except as otherwise provided in SECTION 6.11(d) below with
respect to any Business Day from and after the Designated Termination Date, such
Collections and other proceeds shall be used solely for the following purposes
and in the following order of priority:
(i) To remit to the Seller any Collections representing sales or other
taxes or insurance payments for the purpose of satisfying the Seller's
obligations in respect of such taxes or insurance;
(ii) To pay Yield and other Carrying Costs which are then due and
payable;
(iii) To pay Priority ING Yield;
(iv) To repay Capital, as provided in SECTION 2.04;
(v) To pay any other Obligations which may be due and owing at such
time;
(vi) To pay any ING Yield not paid pursuant to clause (iii) above;
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(vii) To repay ING Capital, as provided in the ING Purchase Agreement;
(viii) To pay any other ING Obligations which may be due and owing at
such time, pursuant to the ING Purchase Agreement; and
(ix) If such day is a Settlement Date, to be remitted to the Seller in
consideration of the Deferred Purchase Price, PROVIDED, THAT such funds
shall only be remitted to the Seller to the extent that, after giving
effect to such transfer of funds and such Purchases, the amount of Capital
then outstanding does not exceed the Capital Limit then in effect, and the
amount of Combined Capital then outstanding does not exceed the Combined
Capital Limit the in effect.
The Seller, in making any request for funds to be withdrawn from the Collection
Account, shall certify to each of the Collateral Agent and the Collection
Account Bank that the funds will be used for one of the purposes described above
in this SECTION 6.11(b).
If, on any Business Day prior to the Designated Termination Date, the
Collections of Purchased Assets on deposit in the Collection Account and
available for withdrawal under CLAUSE (ii) above are less than the amount of the
obligations described in such CLAUSE, such available funds shall be allocated in
the priority set forth in SECTION 6.11(c) below; if, on any such Business Day,
the Collections of Purchased Assets on deposit in the Collection Account and
available for withdrawal under CLAUSE (v) above are less than the amount of the
obligations described in such CLAUSE, such available funds shall be allocated to
the Persons to whom such obligations are owed ratably according to the
respective amounts owed.
(c) On each Business Day prior to the Designated Termination Date, to the
extent that the Collections of Purchased Assets on deposit in the Collection
Account and available under CLAUSE (ii) of SECTION 6.11(b) are insufficient to
pay all Carrying Costs which are then due and payable, such funds shall be
applied to the Carrying Costs in the following order of priority:
(i) To pay any accrued and unpaid Yield (either directly, by paying to
the Swap Provider amounts owed under the Interest Rate Xxxxxx or by
reimbursing Triple-A and/or the Surety for payments made by either of them
to the Swap Provider on account of amounts owed under the Interest Rate
Xxxxxx);
(ii) To pay the pro-rata portion of any accrued and unpaid fees owing
under the Fee Letter which are allocable to this Agreement;
(iii) To pay the pro-rata portion of any accrued and unpaid expenses
of the Collateral Agent which are allocable to this Agreement;
(iv) To pay any accrued and unpaid Servicing Fee and fees due and
payable to the Back-Up Servicer; and
(v) To pay ordinary course expenses of the Seller to the extent the
same are due or past due.
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If, on any such Business Day, the Collections of Purchased Assets on deposit in
the Collection Account and available for withdrawal under either CLAUSE (ii) or
(v) above are less than the amount of the obligations described in such CLAUSE,
such available funds shall be allocated to the Persons to whom such obligations
are owed ratably according to the respective amounts owed.
(d) On each Business Day from and after the Designated Termination Date,
Collections and other proceeds of Purchased Assets shall be withdrawn from the
Collection Account solely upon direction of the Collateral Agent to be applied
against the Obligations in the following order of priority;
(i) To remit to the Seller any Collections representing sales or other
taxes or insurance payments for the purpose of satisfying the Seller's
obligations in respect of such taxes or insurance;
(ii) To pay any accrued and unpaid Servicing Fee (if the Servicer is a
party other than the Originator or an Affiliate thereof);
(iii) To pay accrued and unpaid Yield (either directly or by paying to
the Swap Provider amounts owed under the Interest Rate Xxxxxx or by
reimbursing Triple-A and/or the Surety for payments made by either of them
to the Swap Provider on account of amounts owed under the Interest Rate
Xxxxxx);
(iv) To pay the pro-rata portion of any accrued and unpaid fees owing
under the Fee Letter which are allocable to this Agreement;
(v) To pay Priority ING Yield, PROVIDED, however, if ING purchases any
ING Receivables Interest after August 5, 2003, no Priority ING Yield shall
thereafter be paid under this clause;
(vi) To repay all outstanding Capital;
(vii) To pay the pro-rata portion of the accrued and unpaid expenses
of the Collateral Agent which are allocable to this Agreement;
(viii) To pay any other accrued and unpaid Obligations which have not
been paid pursuant to clauses (i) through (viii) above;
(ix) To pay any other Carrying Costs which are due and owing but have
not been paid pursuant to clauses (i) through (ix) above;
(x) To pay any ING Obligations pursuant to the ING Purchase Agreement;
and (xi) To pay any accrued and unpaid Servicing Fee owed to the Originator
or an Affiliate thereof.
If, on any such Business Day, the funds on deposit in the Collection Account and
available for withdrawal under either CLAUSE (iii), (iv), (x), or (xi) above are
less than the amount of the
34
obligations described in such CLAUSE, such available funds shall be allocated to
the Persons to whom such obligations are owed ratably according to the
respective amounts owed. Any funds remaining in the Collection Account after
payment of the foregoing Obligations and the ING Obligations and other fees and
expenses shall be remitted to the Seller in consideration of the Deferred
Purchase Price.
ARTICLE VII
WIND-DOWN EVENTS; REMEDIES
SECTION 7.01. WIND-DOWN EVENTS. Each of the following events shall
constitute a "WIND-DOWN EVENT" within the meaning of this Triple-A Purchase
Agreement:
(a) The occurrence of any Event of Termination under the Purchase Agreement
or any ING Wind-Down Event;
(b) The Servicer (if the Seller or any Affiliate of the Seller) shall fail
to perform or observe any term, covenant or agreement hereunder (other than as
referred to in clause (ii) of this SECTION 7.01(b)) and such failure shall
remain unremedied for three Business Days after written notice from the
Collateral Agent or (ii) either the Servicer (if the Seller or any Affiliate of
the Seller) or the Seller shall fail to make any payment or deposit to be made
by it hereunder when due and, solely in the case of any such payments which do
not constitute payments of Capital or Yield, such failure shall remain
unremedied for three (3) Business Days after written notice from the Collateral
Agent; or
(c) The Seller shall fail to perform or observe any term, covenant or
agreement contained in SECTION 5.03 and any such failure shall remain unremedied
for five (5) Business Days after written notice from the Collateral Agent; or
(d) Any representation or warranty made or deemed to be made by the Seller
(or any of its officers) under or in connection with this Triple-A Purchase
Agreement, any Settlement Report or other information or report delivered
pursuant hereto shall prove to have been false or incorrect in any material
respect when made; PROVIDED, HOWEVER, that (i) to the extent any breach of any
such representation or warranty may be cured within ten (10) Business Days, the
Seller shall have ten (10) Business Days after learning of such breach to make
such representation and warranty true and correct and (ii) if any such false or
incorrect representation or warranty has given rise to a deemed Collection as
provided under SECTION 2.04 of this Triple-A Purchase Agreement, then, upon the
Seller's payment of such deemed Collection at the time and in the manner
required under this Triple-A Purchase Agreement, the breach of such
representation or warranty shall not give rise to a Wind-Down Event under this
subsection (d); or;
(e) The Seller shall fail to perform or observe any other term, covenant or
agreement contained in this Triple-A Purchase Agreement on its part to be
performed or observed and any such failure shall remain unremedied for ten (10)
Business Days after written notice from the Collateral Agent (it being
understood that if any such failure gives rise to a deemed Collection under
SECTION 2.04 of this Triple-A Purchase Agreement, then, the payment
35
of such deemed Collection at the time and in the manner required under this
Triple-A Purchase Agreement shall be deemed a remedy of such failure); or
(f) The interest of the Collateral Agent in the Purchased Assets shall for
any reason, except to the extent permitted by the terms hereof, cease to create
a valid and perfected first priority interest in such Purchased Assets;
PROVIDED, HOWEVER, if any such failure results in a deemed Collection under
SECTION 2.04 of this Triple-A Purchase Agreement and the Seller satisfies in
full its payment obligations under such section with respect to such deemed
Collection, then such failure shall not give rise to a Wind-Down Event under
this subsection (f); or
(g) (i) An Insolvency Event shall occur with respect to the Seller or the
Originator or (ii) the Seller or the Originator shall take any corporate action
to authorize the filing of any Insolvency Proceeding; or
(h) As of the close of business on any Settlement Date, the Capital Limit
shall be less than the aggregate outstanding Capital; or
(i) The Originator shall cease to own 100% of the issued and outstanding
stock of the Seller; or
(j) There shall have occurred, since the initial Receivables Purchase Date,
a material adverse change in the financial condition of the Seller or there
shall have occurred any event which materially and adversely affects the
collectibility or the Receivables generally or the ability of the Seller to
perform hereunder; or
(k) Triple-A or the Surety shall determine that continuation of this
Triple-A Purchase Agreement without exercise of remedies under Section 7.02 will
impose a material adverse regulatory impact on Triple-A or the Surety, as the
case may be.
SECTION 7.02. REMEDIES. During the existence of a Wind-Down Event, the
Collateral Agent on behalf of Triple-A may, by written notice to the Seller,
take any or all of the following actions, at the same or different times: (i)
declare the Termination Date to have occurred; (ii) declare the Obligations to
be immediately due and payable; (iii) pursue any other remedy under this
Triple-A Purchase Agreement and the other Facility Documents and (iv) exercise
any rights and remedies of a secured party under Article 9 of the UCC, which
rights and remedies shall be cumulative to those provided for under this
Triple-A Purchase Agreement and the other Facility Documents; PROVIDED, HOWEVER,
that in the case of any event described in clause (i) of SUBSECTION 7.01(g)
above, then, automatically upon the occurrence of such event without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Seller, anything contained herein to the contrary
notwithstanding, the Termination Date shall be deemed to have occurred
automatically and any Obligations owed hereunder shall be immediately due and
payable. The rights and remedies of a secured party which may be exercised by
the Collateral Agent pursuant to clause (iv) of this SECTION 7.02 shall include,
without limitation, the right to (y) identify and engage a Successor Servicer to
act as servicer for the Receivables in the event of a Servicing Termination
Event, and (z) without notice except as specified below solicit and accept bids
for and sell the Purchased Assets or any part
36
thereof in one or more parcels at a public or private sale, at any exchange,
broker's board or at any of the Collateral Agent's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as the
Collateral Agent may deem commercially reasonable. The Seller agrees that, to
the extent notice of sale shall be required by law, 10 Business Days' notice to
the Seller of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification and that it
shall be commercially reasonable for the Collateral Agent to sell the Purchased
Assets on an as-is basis, without representation or warranty of any kind. The
Collateral Agent shall not be obligated to make any sale of Purchased Assets
regardless of notice of sale having been given and may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.
ARTICLE VIII
INDEMNIFICATION; REPURCHASES
SECTION 8.01. INDEMNITIES BY THE SELLER. (a) Without limiting any other
rights which Triple-A or ING may have hereunder or under applicable law, the
Seller hereby agrees to indemnify Triple-A, ING and their respective permitted
successors and assigns (including, without limitation, Triple-A, the Collateral
Agent and the Surety) and their respective officers, directors, agents and
employees (each, an "INDEMNIFIED PARTY"), from and against any and all damages,
losses, claims, liabilities and related costs and expenses, including reasonable
attorneys' fees and disbursements (all of the foregoing being collectively
referred to as "INDEMNIFIED AMOUNTS") awarded against or incurred by any
Indemnified Party relating to or resulting from any of the following (excluding,
however, (i) Indemnified Amounts to the extent resulting from gross negligence
or willful misconduct on the part of an Indemnified Party or (ii) recourse
(except with respect to payment and performance obligations provided for in this
Agreement) for uncollectible Receivables):
(i) the transfer of any Receivable which was not, as of the
Receivables Purchase Date, an Eligible Receivable;
(ii) any representation or warranty made or deemed made by the Seller
or the Originator (or any of their respective officers) under or in
connection with the Purchase Agreement or this Triple-A Purchase Agreement,
any Settlement Report or any other information or report delivered by the
Seller or the Originator pursuant hereto, which shall have been false or
incorrect in any material respect when made or deemed made or delivered;
(iii) the failure by the Seller or the Originator (individually or as
Servicer) to comply with any term, provision or covenant contained in this
Triple-A Purchase Agreement or the Purchase Agreement (other than any
covenant contained in SECTION 5.04 of the Purchase Agreement, a breach of
which shall constitute an Event of Termination but shall not give rise to
indemnification under this SECTION 8.01), or any agreement executed in
connection with this Triple-A Purchase Agreement or the Purchase Agreement
or with any applicable law, rule or regulation with respect to any
Purchased Receivable, the related Contract, the Related Security or the
other Purchased
37
Assets, or the nonconformity of any Purchased Receivable, the related
Contract, the Related Security or the other Purchased Assets with any such
applicable law, rule or regulation;
(iv) the failure to vest and maintain vested in Triple-A (including
its assignees, participants and successors) or to transfer to Triple-A an
ownership interest in the Purchased Assets, free and clear of any Adverse
Claim (including, without limitation, free and clear of any Permitted Lien
except in favor of Triple-A) whether existing on the Receivables Purchase
Date or at any time thereafter;
(v) the failure to file, or any delay in filing (other than solely as
a result of the action or inaction of Triple-A), financing statements or
other similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws against the Obligor with respect to
any Contract or Receivables which are, or are purported to be, Purchased
Assets, whether at the time of any Purchase or at any subsequent time;
(vi) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Purchased
Receivable (including, without limitation, a defense based on such
Purchased Receivable or the related Contract not being a legal, valid and
binding obligation of such Obligor enforceable against it in accordance
with its terms), or any other claim resulting from the sale or lease of the
Equipment and/or services related thereto or the furnishing or failure to
furnish such Equipment and/or services;
(vii) any failure of the Seller or the Originator, as Servicer or
otherwise, to perform its duties or obligations in accordance with the
provisions of Article VI hereof or Article VI of the Purchase Agreement;
(viii) any products liability claim or personal injury or property
damage suit or other similar or related claim or action of whatever sort
arising out of or in connection with the Equipment or any other goods,
merchandise and/or services which are the subject of any Receivable or
Contract;
(ix) the failure to pay when due any taxes, including, without
limitation, sales, excise or personal property taxes payable in connection
with the Purchased Assets;
(x) the termination, rejection or non-assumption by the Seller of any
Contract prior to the original term of such Contract, whether such
rejection, early termination or non-assumption is made pursuant to an
equitable cause, statute, regulation, judicial proceeding or other
applicable laws (including, without limitation, Section 365 of the
Bankruptcy Code);
(xi) the failure of the Seller, the Originator and the Obligors under
the Contracts to maintain casualty and liability insurance for the
Equipment related to the Purchased Receivables in an amount at least equal
to the Discounted Receivables Balance for such Purchased Receivables;
38
(xii) the failure of any Lock-Box Bank to remit any funds in the
Lock-Box Accounts as required hereunder; and
(xiii) the commingling of Collections of any Transferred Assets with
any other funds of the Seller.
Any amounts subject to the indemnification provisions of this SECTION 8.01 shall
be paid by the Seller to the applicable Indemnified Party within two Business
Days following the Indemnified Party's demand therefor.
SECTION 8.02. REPURCHASES OF DESIGNATED RECEIVABLES. The following rights
are in addition to and not in limitation of any other rights or remedies that
Triple-A, ING or CapMAC may have hereunder.
(a) The Seller may, at any time upon not less than five Business Days'
prior written notice to the Collateral Agent, elect to repurchase any Designated
Receivable and the Purchased Assets relating thereto, which purchase shall take
place on the first Settlement Date to occur after the Collateral Agent's receipt
of such notice, for the repurchase price specified in SUBSECTION (b) of this
SECTION 8.02.
(b) In the case of a repurchase from Triple-A and ING by the Seller of a
Purchased Asset pursuant to this SECTION 8.02, the Seller shall, on the
Settlement Date coinciding with such repurchase pay to the Collateral Agent as a
reduction of Capital and ING Capital an amount equal to the Outstanding Balance
of the related Designated Receivable. The proceeds of any such repurchase shall
be deemed to be Collections of such Purchased Asset received by the Seller, and
the amount of each such Collection shall be applied as provided in SECTION 2.04.
The repurchase of any Purchased Asset shall not relieve the Seller of its
obligation under SECTION 2.04(a) to pay Yield on the Capital outstanding or ING
Yield on the ING Capital with respect to such Purchased Asset through the
Payment Date relating to such Capital or ING Capital. Any such repurchase shall
be made without recourse or warranty, express or implied (other than a
representation and warranty that such Asset is free and clear of any Adverse
Claim created by or through Triple-A and ING).
ARTICLE IX
AGENCY
SECTION 9.01. AUTHORIZATION AND ACTION. Triple-A hereby designates and
appoints CapMAC to act as the Collateral Agent and Administrative Agent (each,
an "AGENT") hereunder and under each other Facility Document, and authorizes
each Agent to take such actions as agent on its behalf and to exercise such
powers as are delegated to such Agent by the terms of this Triple-A Purchase
Agreement and the other Facility Documents together with such powers as are
reasonably incidental thereto. No Agent shall have any duties or
responsibilities, except those expressly set forth herein or in any other
Facility Document, or any fiduciary relationship with Triple-A, ING or any
Liquidity Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities on the part of either Agent shall be read into any
Facility Document or otherwise exist for such Agent. In performing its functions
and duties
39
hereunder and under the other Facility Documents, each Agent shall act solely as
agent does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for the Seller or the Servicer. No Agent
shall be required to take any action that exposes such Agent to personal
liability or that is contrary to any Facility Document or applicable law. The
appointment and authority of each Agent hereunder shall terminate upon the
indefeasible payment in full of all Obligations.
SECTION 9.02. DELEGATION OF DUTIES. Each Agent may execute any of its
duties under any Facility Document by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to such
duties. No Agent shall be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.
SECTION 9.03. EXCULPATORY PROVISIONS. Neither any Agent nor any of its
directors, officers, agents or employees shall be (i) liable to any Person for
any action lawfully taken or omitted to be taken by it or them under or in
connection with any Facility Document (except for its, their or such person's
own gross negligence or willful misconduct), (ii) responsible in any manner for
any recitals, statements, representations or warranties made by the Seller or
the Servicer contained in any Facility Document or any certificate, report,
statement or other document referred to or provided for in, or received under or
in connection with, any Facility Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any Facility
Document or any other document furnished in connection herewith or therewith, or
for any failure of the Seller or the Servicer to perform its obligations under
any Facility Document, or for the satisfaction of any condition specified in any
Facility Agreement, or for the perfection, priority, condition, value or
sufficiency of any collateral pledged in connection herewith, or (iii) the
receipt by ING of any communication, information or notice received by such
Agent. No Agent shall be under any obligation to ascertain or to inquire as to
the observance or performance of any of the agreements or covenants contained
in, or conditions of, any Facility Document, or to inspect the properties, books
or records of the Seller or the Servicer. No Agent shall be deemed to have
knowledge of any Event of Termination, any Unmatured Event of Termination or any
ING Wind-down Event unless that Agent has received notice from Seller.
SECTION 9.04. RELIANCE BY THE AGENT. Each Agent shall in all cases be
entitled to rely, and shall be fully protected in relying, upon any document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to Seller), independent
accountants and other experts selected by that Agent. Each Agent shall in all
cases be fully justified in failing or refusing to take any action under any
Facility Document unless it shall first receive such advice or concurrence of
Triple-A or ING (as applicable), as it deems appropriate and it shall first be
indemnified to its satisfaction by Triple-A or ING (as applicable), provided
that unless and until an Agent shall have received such advice, such Agent may
take or refrain from taking any action, as such Agent shall deem advisable. Each
Agent shall in all cases be fully protected in acting, or in refraining from
acting, in accordance with a request of Triple-A or, if applicable, ING, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon Triple-A and ING.
40
SECTION 9.05. NON-RELIANCE ON THE AGENT. Triple-A and ING each expressly
acknowledges that neither any Agent, nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates, has made any representations
or warranties to it and that no act by either Agent hereafter taken, including,
without limitation, any review of the affairs of the Seller or the Servicer,
shall be deemed to constitute any representation or warranty by that Agent. Each
of Triple-A and ING represents and warrants to each Agent that it has and will,
independently and without reliance upon such Agent or the other Person and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of Seller and
made its own decision to enter into the Facility Documents.
SECTION 9.06. AGENT IN ITS INDIVIDUAL CAPACITY. Each Agent and its
Affiliates may make loans to, accept deposits from, issue bonds and generally
engage in any kind of business with Seller or any Affiliate of Seller as though
such Agent were not an Agent hereunder.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. AMENDMENTS, ETC. No amendment to or waiver of any provision
of this Triple-A Purchase Agreement nor consent to any departure by the Seller,
shall in any event be effective unless the same shall be in writing and signed
by (i) the Collateral Agent on behalf of itself and Triple-A and the Seller
(with respect to an amendment) or (ii) the Collateral Agent on behalf of itself
and Triple-A (with respect to a waiver or consent by it) or the Seller (with
respect to a waiver or consent by it), as the case may be, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given. This Triple-A Purchase Agreement contains a final and
complete integration of all prior expressions by the parties hereto with respect
to the subject matter hereof and shall constitute the entire agreement (together
with the exhibits hereto) among the parties hereto with respect to the subject
matter hereof, superseding all prior oral or written understandings.
SECTION 10.02. NOTICES, ETC. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including
telex communication and communication by facsimile copy) and mailed, telexed,
transmitted or delivered, as to each party hereto, at its address set forth
under its name on the signature pages hereof or at such other address as shall
be designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective, upon receipt, or in the case
of delivery by mail, five days after being deposited in the mails, or, in the
case of notice by telex, when telexed against receipt of answer back, or in the
case of notice by facsimile copy, when verbal communication of receipt is
obtained, in each case addressed as aforesaid, except that notices and
communications pursuant to Article II shall not be effective until received.
SECTION 10.03. NO WAIVER; REMEDIES. No failure on the part of the
Collateral Agent or Triple-A to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other
41
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
SECTION 10.04. BINDING EFFECT; ASSIGNABILITY. This Triple-A Purchase
Agreement shall be binding upon and inure to the benefit of the Seller,
Triple-A, the Collateral Agent and their respective successors and permitted
assigns (which successors of the Seller shall include a trustee in bankruptcy).
The Seller may not assign any of its rights and obligations hereunder or any
interest herein without the prior written consent of Triple-A and the Collateral
Agent. Each of Triple-A and the Collateral Agent may assign at any time its
rights and obligations hereunder and interests herein to any other Person
without the consent of the Seller. Without limiting the foregoing, the Seller
hereby acknowledges that Triple-A has agreed pursuant to the Liquidity Agreement
and certain related agreements that, subject to the restrictions set forth
therein, certain parties providing credit enhancements and/or liquidity for
Triple-A in connection with the Triple-A Purchase Agreement shall be entitled to
exercise Triple-A's rights under this Triple-A Purchase Agreement and in
addition, shall constitute third-party beneficiaries of this Agreement. In
addition, the Seller hereby acknowledges that Triple-A has agreed pursuant to
the ING Purchase Agreement to sell an interest in the Purchased Assets to ING,
subject to the terms set forth therein and that upon the occurrence of the
Collection Date, ING shall be entitled to exercise all the rights and remedies
of Triple-A contained herein and in the other ING Facility Documents. The Seller
hereby consents to the foregoing and agrees to cooperate with any such Person
electing to exercise Triple-A's rights under this Triple-A Purchase Agreement.
This Triple-A Purchase Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms, and shall remain
in full force and effect until such time, after the Termination Date, as the
Combined Collection Date shall occur; PROVIDED, HOWEVER, that the rights and
remedies with respect to any breach of any representation and warranty made by
the Seller pursuant to Article IV and Article VIII shall be continuing and shall
survive any termination of this Triple-A Purchase Agreement.
SECTION 10.05. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS TRIPLE-A PURCHASE
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF
THE INTERESTS OF THE COLLATERAL AGENT IN THE COLLATERAL OR REMEDIES HEREUNDER OR
THEREUNDER, IN RESPECT THEREOF, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK. THE SELLER HEREBY AGREES TO THE JURISDICTION OF ANY
FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK, AND WAIVES PERSONAL SERVICE
OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE
MADE BY REGISTERED MAIL DIRECTED TO THE SELLER AT THE ADDRESS SET FORTH ON THE
SIGNATURE PAGE HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE
(5) DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE
PREPAID, OR, AT THE OPTION OF EITHER TRIPLE-A OR THE COLLATERAL AGENT, BY
SERVICE UPON CT CORPORATION SYSTEM, 0000 XXXXXXXX, XXX XXXX, XXX XXXX 00000,
WHICH THE SELLER HEREBY IRREVOCABLY APPOINTS AS ITS AGENT FOR THE PURPOSE OF
ACCEPTING SERVICE OF PROCESS. THE SELLER HEREBY WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
42
IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE SELLER AND TRIPLE-A AND/OR THE
COLLATERAL AGENT ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS TRIPLE-A PURCHASE
AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH
TRIAL WITHOUT A JURY. WITH RESPECT TO THE FOREGOING CONSENT TO JURISDICTION, THE
SELLER HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY
OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE
COURT. NOTHING IN THIS SECTION 9.05 SHALL AFFECT THE RIGHT OF TRIPLE-A OR THE
COLLATERAL AGENT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
AFFECT THE RIGHT OF TRIPLE-A OR THE COLLATERAL AGENT TO BRING ANY ACTION OR
PROCEEDING AGAINST THE SELLER OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION.
SECTION 10.06. COSTS, EXPENSES AND TAXES. (a) The Seller agrees to pay on
demand all reasonable costs and expenses in connection with the preparation,
execution, delivery and administration (including periodic auditing fees as
provided for in SECTION 5.01(c) and any requested amendments, waivers or
consents) of this Triple-A Purchase Agreement, the ING Purchase Agreement and
the other documents to be delivered hereunder, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel for Triple-A, ING and
the Collateral Agent with respect thereto and with respect to advising Triple-A,
ING and the Collateral Agent as to its rights and remedies under this Triple-A
Purchase Agreement or the ING Purchase Agreement, and the other agreements
executed pursuant hereto and all costs and expenses, if any (including
reasonable counsel fees and expenses), in connection with the enforcement of
this Triple-A Purchase Agreement, the ING Purchase Agreement and the other
agreements and documents to be delivered hereunder.
(b) In addition, the Seller shall pay any and all stamp, sales, excise and
other taxes and fees payable or determined to be payable in connection with the
execution, delivery, filing and recording of this Triple-A Purchase Agreement,
the ING Purchase Agreement or the other agreements and documents to be delivered
hereunder, and agrees to indemnify the Collateral Agent, Triple-A, ING and their
respective assignees against any liabilities with respect to or resulting from
any delay in paying or omission to pay such taxes and fees.
SECTION 10.07. EXECUTION IN COUNTERPARTS; SEVERABILITY. This Triple-A
Purchase Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement. In case any provision in or
obligation under this Triple-A Purchase Agreement shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 10.08. NO BANKRUPTCY PETITION AGAINST TRIPLE-A. Each of the Seller
and ING covenants and agrees that it will not institute against Triple-A, or
join any other Person
43
in instituting against Triple-A, any Insolvency Proceeding under bankruptcy law
or under any similar federal or state law.
SECTION 10.09. SUBORDINATION. Notwithstanding any other provisions, all
payments made to ING hereunder or under any other ING Facility Documents shall
be subject to SECTION 5.01 of the ING Purchase Agreement, and ING's rights to
take any Enforcement Action shall be limited to as set forth in SECTION 5.02 of
the ING Purchase Agreement.
SECTION 10.10. MBIA INSURANCE CORPORATION A BENEFICIARY. To the extent that
MBIA Insurance Corporation issues any Swap Bond, MBIA Insurance Corporation is a
third party beneficiary under this Triple-A Purchase Agreement through CapMAC as
its agent. The Seller shall be obligated to reimburse, indemnify or otherwise
pay CapMAC for the benefit of MBIA Insurance Corporation the same way it would
be obligated to pay CapMAC if CapMAC had issued such Swap Bond. All of Seller's
obligations to MBIA Insurance Corporation in connection with any Swap Bond shall
be deemed obligations owed to CapMAC for all purposes of this Agreement.
SECTION 10.11. REFERENCE TO AND EFFECT ON PRIOR LRPA. Each of the parties
hereto ratifies the sales, conveyances, payments, representations, warranties,
covenants and indemnities made by such party in the Prior LRPA and agrees that
such agreement is, as of the date hereof, in full force and effect. From and
after the effectiveness of the initial Receivables Purchase under this Agreement
in accordance with Section 3.01, (i) the terms and provisions of this Agreement
shall amend and supersede the terms and provisions of the Prior LRPA in their
entirety, (ii) the continuing rights, remedies and obligations of the parties
with respect to any Receivables and other Purchased Assets acquired under the
Prior LRPA shall be governed by the terms and provisions of this Agreement to
the same extent as if such Purchased Assets had been conveyed under this
Agreement, and (iii) all references in any other Facility Documents to the Prior
LRPA or Appendix A thereto shall mean and be a reference to this Agreement and
Appendix A hereto. It is expressly understood and agreed that the execution and
delivery of this Agreement is not intended to be, and shall not be construed as,
a novation of the Prior LRPA nor of any liens granted or indebtedness incurred
thereunder.
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IN WITNESS WHEREOF, the parties below have caused this
Triple-A Purchase Agreement to be duly executed by their duly authorized
officers and delivered as of the day and year first above written.
HPSC BRAVO FUNDING, LLC, as Seller
By: /s/ Xxxx Xxxxxxxx
-------------------------------------------
Title: Manager
Address: Sixty Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, XX 00000-0000
Attn: President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
HPSC, INC., as Servicer
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------------
Title: Chairman and Chief Executive Officer
------------------------------------
Address: Sixty Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, XX 00000-0000
Attn: Vice President, Finance
Telephone:
Telecopy:
TRIPLE-A ONE FUNDING CORPORATION
By: Capital Markets Assurance Corporation, its
Attorney-in-Fact
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------------
Title: Director
Address: 000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attn: Head of Exposure Management
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
CAPITAL MARKETS ASSURANCE CORPORATION
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------------
Title: Director
Address: 000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attn: Head of Exposure Management
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
