Exhibit 10.6

 

EXECUTION COPY

 

 

AMENDED AND RESTATED INSURANCE AND INDEMNITY AGREEMENT

 

among

 

CAPITAL MARKETS ASSURANCE CORPORATION

 

TRIPLE-A ONE FUNDING CORPORATION

 

MERRILL LYNCH COMMERCIAL FINANCE CORP.

individually and as a Managing Agent

 

MBIA INSURANCE CORPORATION

as Insurer, Collateral Agent and a Managing Agent

 

NATIONAL AUSTRALIA BANK LIMITED

as Agent for the Liquidity Banks

and as an Insured Party

 

and

 

HPSC BRAVO FUNDING, LLC.

 

Dated as of June 19, 2003

 

 

This Amended and Restated Insurance and Indemnity Agreement has been entered
into by the parties hereto in connection with the Third Amended and Restated
Lease Receivables Purchase Agreement among HPSC Bravo Funding, LLC, a Delaware
limited liability company, HPSC, Inc., a Delaware corporation, Triple-A One
Funding Corporation, a Delaware corporation, Merrill Lynch Commercial Finance
Corp., a Delaware corporation, MBIA Insurance Corporation, a New York insurance
corporation, and Capital Markets Assurance Corporation, a New York Stock
insurance company.

 

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TABLE OF CONTENTS

 

ARTICLE I

 

DEFINITIONS

 

 

SECTION 1.01

General Definitions

SECTION 1.02

Other Terms

 

 

ARTICLE II

 

 

THE INSURANCE POLICIES AND PREMIUM

 

 

SECTION 2.01

Insurance Policies

SECTION 2.02

Fees

SECTION 2.03

Conditions Precedent to Issuance of the Insurance Policies

 

 

ARTICLE III

 

 

ASSIGNMENT; RIGHTS IN FURTHERANCE OF SUBROGATION

 

 

SECTION 3.01

Assignment Obligation

SECTION 3.02

Option to Purchase

SECTION 3.03

Reimbursement; Rights of Subrogation; Further Assurances

SECTION 3.04

No Recourse

 

 

ARTICLE IV

 

 

COVENANTS, REPRESENTATIONS AND WARRANTIES

 

 

SECTION 4.01

Affirmative Covenants of Triple-A, the Triple-A Managing Agent and the
Collateral Agent

SECTION 4.02

Negative Covenants of Triple-A, Merrill, the Triple-A Managing Agent and the
Collateral Agent

SECTION 4.03

Affirmative Covenants of MBIA

SECTION 4.04

Representations and Warranties of MBIA

 

 

ARTICLE V

 

 

FURTHER AGREEMENTS

 

 

SECTION 5.01

Right of Controlling Beneficiary to Direct Actions of the Insured Parties and
the Agents

SECTION 5.02

MBIA Obligations Absolute

SECTION 5.03

Liability of MBIA

SECTION 5.04

Reimbursement of Expenses

SECTION 5.05

No Proceedings

SECTION 5.06

Litigation

SECTION 5.07

Indemnification

 

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ARTICLE VI

 

 

MISCELLANEOUS

 

 

SECTION 6.01

Amendments, Etc

SECTION 6.02

Notices

SECTION 6.03

Payments

SECTION 6.04

No Waiver: Remedies and Severability

SECTION 6.05

Assignment, Etc

SECTION 6.06

Participations, Etc

SECTION 6.07

Termination of this Insurance Agreement and the Insurance Policies; Continuing
Obligations

SECTION 6.08

GOVERNING LAW

SECTION 6.09

No Recourse

SECTION 6.10

Counterparts

SECTION 6.11

Section Headings, Etc

SECTION 6.12

Reference to and Effect upon Prior Insurance Agreement

 

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AMENDED AND RESTATED INSURANCE AND INDEMNITY AGREEMENT

 

This AMENDED AND RESTATED INSURANCE AND INDEMNITY AGREEMENT (“Insurance
Agreement”), dated as of June 19, 2003, by and among CAPITAL MARKETS ASSURANCE
CORPORATION, a New York stock insurance company (“CapMAC”), TRIPLE-A ONE FUNDING
CORPORATION, a Delaware corporation (“Triple-A”), MERRILL LYNCH COMMERCIAL
FINANCE CORP., a Delaware corporation (“Merrill”), individually and as a
“Managing Agent” under the Receivables Purchase Agreement referred to below,
MBIA INSURANCE CORPORATION, a New York stock insurance company (“MBIA”), as
Insurer and in its capacity as a Managing Agent and as Collateral Agent (the
“Collateral Agent”) under the Receivables Purchase Agreement referred to below,
NATIONAL AUSTRALIA BANK LIMITED (“NAB”), as agent (the “Liquidity Agent”) for
the Liquidity Banks (as hereinafter defined) and as an “Insured Party” (as
hereinafter defined), and HPSC BRAVO FUNDING, LLC, a Delaware limited liability
company (the “Seller”).

 

PRELIMINARY STATEMENTS

 

WHEREAS, the parties hereto (other than Merrill and MBIA) are parties to an
Insurance and Indemnity Agreement dated as of January 31, 1995 (the “Prior
Insurance Agreement”), whereby CapMAC issued certain “Surety Bonds” (as defined
therein) for the benefit of Triple-A and the Liquidity Agent and issued certain
“Swap Bonds” for the benefit of the Seller; and

 

WHEREAS, the parties hereto (other than NAB) are entering into a Third Amended
and Restated Lease Receivables Purchase Agreement of even date herewith (as
amended or modified from time to time thereafter, the “Receivables Purchase
Agreement”) pursuant to which each of Triple-A and Merrill may from time to time
purchase interests in certain lease receivables and related assets owned by the
Seller; and

 

WHEREAS, the sale and financing transactions guaranteed by CapMAC under the
Prior Insurance Agreement are being amended and restated under the Receivables
Purchase Agreement and Merrill will be acquiring certain rights of Triple-A
under the pre-existing receivables purchase facility between Triple-A and the
Seller; and

 

WHEREAS, the rights and obligations of CapMAC as”Collateral Agent” under the
Prior Insurance Agreement and related documents are being assigned to and
assumed by MBIA;

 

WHEREAS, Triple-A will fund Capital under the Receivables Purchase Agreement
through the issuance and sale of its short-term promissory notes in the
commercial paper market (any such notes issued to fund any such Capital  being
the “Transaction Commercial Paper Notes”) and pay the Transaction Commercial
Paper Notes from, among other things, payments on such loans and advances under
the “Liquidity Facility” (as hereinafter defined); and

 

WHEREAS, MBIA is authorized to transact a surety and insurance business in the
State of New York and shall, upon entering into this Insurance Agreement,
subject to the conditions set forth below, issue (i) to Triple-A an insurance
policy in the form of Exhibit A hereto (as amended from time to time, the
“Triple-A Insurance Policy”) guaranteeing the repayment of all outstanding
Capital funded by Triple-A under the Receivables Purchase Agreement, together
with Yield thereon; (ii) to the Liquidity Agent an insurance policy in the

 

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form of Exhibit B hereto (as amended from time to time, the “Liquidity Insurance
Policy”) guaranteeing the advances made by the Liquidity Banks under the
Liquidity Facility, together with interest owing thereon and (iii) to Merrill an
insurance policy in the form of Exhibit C hereto (as amended from time to time,
the “Merrill Insurance Policy”) guaranteeing the repayment of all outstanding
Capital funded by Merrill under the Receivables Purchase Agreement, together
with Yield thereon; and

 

WHEREAS, the parties hereto wish to amend and restate the Prior Insurance
Agreement and enter into this Insurance Agreement in order to, among other
things, specify conditions precedent to the issuance by MBIA of the insurance
policies referenced in the preceding paragraph and to provide for certain other
matters related thereto;

 

NOW, THEREFORE, in consideration of the premises and of the agreements herein
contained, CapMAC, the Seller, Triple-A, Merrill, MBIA (including in its
capacities as Managing Agent and as Collateral Agent), and the Liquidity Agent
on behalf of the Liquidity Banks agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.01  General Definitions.  As used in this Insurance Agreement, the
following terms shall have the meanings provided herein (such meanings to be
equally applicable to both the singular and plural forms of the terms defined). 
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to them in the Receivables Purchase Agreement (including
Appendix A thereto).

 

“Adverse Claim” means a lien, security interest, charge, encumbrance or other
right or claim of any Person (it being understood that an ING Receivables
Interest in any Purchased Asset shall not constitute an Adverse Claim within the
meaning of this Agreement).

 

“Assigned Assets” has the meaning given to such term in Section 3.01 hereof.

 

“Assignment Obligation” has the meaning given to such term in Section 3.01
hereof.

 

“Bankruptcy Code” means Title 11 of the United States Code as now constituted or
as hereafter amended, or any successor law.

 

“Collateral Agent” has the meaning given to such term in the first paragraph
hereof.

 

“Commercial Paper Notes” means the short-term commercial paper notes issued from
time to time by Triple-A, including the Transaction Commercial Paper Notes.

 

“Controlling Beneficiary” shall mean MBIA unless an Insurer Default has occurred
and is continuing in which event the Majority Managing Agents shall be the

 

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Controlling Beneficiary; provided that if the Liquidity Security Agreement is
then in effect and the Trigger Date (as defined in the Liquidity Security
Agreement) has occurred, the Liquidity Collateral Agent shall be deemed to be
the Managing Agent on behalf of Triple-A for purposes of determining who is the
Controlling Beneficiary.

 

“Debt” means for any Person (i) all obligations of such Person for borrowed
money, all obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments, including letters of credit, banker’s acceptances and
similar instruments, all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable arising in the
ordinary course of business, and all obligations of such Person under leases
which have been or should be, in accordance with generally accepted accounting
principles, classified as a liability on the balance sheet of such Person, (ii)
all indebtedness or other obligations of any other Person of the type specified
in clause (i) above, the payment or collection of which such Person has
guaranteed (except by reason of endorsement for collection in the ordinary
course of business) or in respect of which such Person is liable, contingently
or otherwise, including, without limitation, liable by way of agreement to
purchase products or securities, to provide funds for payment, to maintain
working capital or other balance sheet conditions or otherwise to assure a
creditor against loss and (iii) in the case of Triple-A, all indebtedness or
other obligations of any other Person of the type specified in clause (i) or
(ii) above secured by (or for which the holder of such indebtedness has an
existing right contingent or otherwise, to be secured by) any lien, claim or
encumbrance upon or in property (including, without limitation, accounts and
contract rights) owned by Triple-A, whether or not Triple-A has assumed or
becomes liable for the payment of such indebtedness or obligations.

 

“Event of Termination” has the meaning given to such term in the Sale 
Agreement.

 

“Facility Documents” means the “Facility Documents” as defined in the
Receivables Purchase Agreement together with the Liquidity Agreement, the
Liquidity Security Agreement and all agreements and documents executed by
Triple-A in connection therewith.

 

“Insurance Policies” means, collectively, the Triple-A Insurance Policy, the
Liquidity Insurance Policy, the Merrill Insurance Policy and any Swap Policies
issued by MBIA.

 

“Insured Party” has the meaning set forth in Section 3.01 hereof.

 

“Liquidity Agent” has the meaning given to such term in the first paragraph
hereof.

 

“Liquidity Agreement” means the Second Amended and Restated Liquidity Agreement
of even date herewith, among Triple-A, the Liquidity Agent and the financial
institutions parties thereto from time to time as “Liquidity Banks”, as the same
may be amended, modified, or supplemented from time to time.

 

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“Liquidity Banks” has the meaning given to such term in the definition of
“Liquidity Agreement.”

 

“Liquidity Collateral Agent” has the meaning given to such term in the Liquidity
Security Agreement.

 

“Liquidity Facility” means the revolving line of credit described in the
Liquidity Agreement.

 

“Liquidity Obligations” has the meaning given to such term in the Liquidity
Agreement.

 

“Liquidity Security Agreement” means the Amended and Restated Liquidity Security
Agreement of even date herewith among Triple-A, MBIA, CapMAC, Banco Santander
Central Hispano, S.A. and NAB as the Liquidity Agent and as the Liquidity
Collateral Agent, as such agreement may be amended from time to time.

 

“Notice for Payment” means any notice received by MBIA pursuant to an Insurance
Policy demanding payment under such Insurance Policy.

 

“Option” has the meaning given to such term in Section 3.02 hereof.

 

“Option Price” means a price equal to (i) in the case of Merrill, the aggregate
amount of the Capital, Yield and all other amounts then accrued and unpaid or
otherwise owed to Merrill under the Receivables Purchase Agreement and (ii) in
the case of Triple-A, the greater of (x) the aggregate amount of the Capital,
Yield and all other amounts then accrued and unpaid or otherwise owed to
Triple-A under the Receivables Purchase Agreement and (y) the Liquidity
Obligations; and (iii) in the case of the Liquidity Agent, the Liquidity
Obligations.

 

“Payout Date” means:

 

(a)                                  with respect to Merrill, the earliest date
on which each of the following has occurred: (i) the Termination Date has
occurred, (ii) Merrill has received from the Seller and/or MBIA repayment of all
aggregate outstanding Capital funded by it together with Yield thereon, and
(iii) MBIA has satisfied all payment obligations under the Merrill Insurance
Policy, exclusive of the obligations with respect to Preference Amounts; and

 

(b)                                 with respect to Triple-A and the Liquidity
Agent, the earliest date on which each of the following has occurred: (i) the
Liquidity Commitment Termination Date, (ii) all Liquidity Obligations have been
paid in full, and (iii) MBIA has satisfied all payment obligations under the
Liquidity Insurance Policy, exclusive of the obligations with respect to
Preference Amounts.

 

“Periodic Premium” means the premium payable to MBIA pursuant to the MBIA Fee
Letter.

 

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“Preference Amounts” with respect to any Insurance Policy has the meaning given
to such term in such Insurance Policy.

 

“Receivables Program” means any program involving the issuance of Commercial
Paper Notes, medium term notes, bonds or other obligations, the proceeds of
which are used to purchase, or fund financing secured by, whole or partial
interests in pools of, or whole or partial interests in, accounts or notes
receivable or other obligations under circumstances similar to the circumstances
contemplated by this Insurance Agreement, the Insurance Policies and the other
Facility Documents.

 

“Swap Bonds” means any “Swap Bonds” issued by CapMAC under the Prior LRPA which
are not amended and restated through issuance of a Swap Policy.

 

“Surety Bonds” has the meaning given to such term in the Prior Insurance
Agreement.

 

“Termination Notice” has the meaning given to such term in Section 6.07 hereof.

 

“Triple-A Managing Agent” means MBIA in its capacity as the “Administrative
Agent” for Triple-A and/or in its capacity as a Managing Agent on behalf of
Triple-A under the Receivables Purchase Agreement.

 

SECTION 1.02  OTHER TERMS.  THE WORDS “HEREIN,” “HEREBY,” “HEREOF,” “HERETO,”
“HEREINBEFORE,” AND “HEREINAFTER,” AND WORDS OF SIMILAR IMPORT, REFER TO THIS
INSURANCE AGREEMENT IN ITS ENTIRETY AND NOT TO ANY PARTICULAR PARAGRAPH, CLAUSE,
OR OTHER SUBDIVISION, UNLESS OTHERWISE SPECIFIED.  ANY REFERENCES HEREIN TO
EXHIBITS, SCHEDULES, SECTIONS, OR ARTICLES ARE REFERENCES TO EXHIBITS,
SCHEDULES, SECTIONS, OR ARTICLES OF THIS INSURANCE AGREEMENT, UNLESS OTHERWISE
SPECIFIED.

 

ARTICLE II

 

THE INSURANCE POLICIES AND PREMIUM

 

SECTION 2.01  INSURANCE POLICIES.  MBIA AGREES, SUBJECT TO THE CONDITIONS
HEREINAFTER SET FORTH, TO ISSUE THE INSURANCE POLICIES.

 

SECTION 2.02  FEES.  THE SELLER WILL PAY, OR CAUSE TO BE PAID, TO MBIA, THE
PERIODIC PREMIUM WHEN DUE IN ACCORDANCE WITH THE MBIA FEE LETTER.

 

SECTION 2.03  CONDITIONS PRECEDENT TO ISSUANCE OF THE INSURANCE POLICIES.  THE
OBLIGATIONS OF MBIA UNDER THIS INSURANCE AGREEMENT, INCLUDING ITS OBLIGATION TO
ISSUE THE INSURANCE POLICIES, ARE SUBJECT TO THE FOLLOWING CONDITIONS PRECEDENT:

 

(a)                                  No statute, rule, regulation or order shall
have been enacted, entered or deemed applicable by any government or
governmental or administrative agency or court which would make the transactions
contemplated

 

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by this Insurance Agreement or any of the other Facility Documents illegal or
otherwise prevent the consummation hereof and thereof;

 

(b)                                 This Insurance Agreement and all other
Facility Documents shall have been duly executed and delivered by each of the
parties thereto (with an executed copy of each such document delivered to MBIA)
and shall be in form and substance satisfactory to MBIA;

 

(c)                                  MBIA shall have received an executed copy
of all legal opinions, certificates and other documents which MBIA may
reasonably request, including, without limitation, opinions and certificates of
Triple-A and the Seller, and shall have approved the form and substance of each
legal opinion, certificate, and other document required to be furnished by
Triple-A or the Seller under the Facility Documents;

 

(d)                                 MBIA shall have received any information
which MBIA shall have reasonably requested regarding the Seller, the
Receivables, the Facility Documents and all other financing arrangements with
respect thereto, and MBIA shall have approved and accepted all such matters; and

 

(e)                                  MBIA shall have received payment of all
amounts to be paid to it under the MBIA Fee Letter as of such date.

 

ARTICLE III

 

ASSIGNMENT; RIGHTS IN FURTHERANCE OF SUBROGATION

 

SECTION 3.01  ASSIGNMENT OBLIGATION.  (A) IN CONSIDERATION FOR THE ISSUANCE OF
EACH INSURANCE POLICY, EACH OF TRIPLE-A, MERRILL AND THE LIQUIDITY AGENT, ON
BEHALF OF THE LIQUIDITY BANKS (COLLECTIVELY, THE “INSURED PARTIES” AND EACH AN
“INSURED PARTY”) HEREBY AGREES THAT IF A PAYMENT IS MADE TO SUCH INSURED PARTY
UNDER AN INSURANCE POLICY, SUCH INSURED PARTY SHALL, ON THE PAYOUT DATE FOR SUCH
INSURED PARTY, RESPECTIVELY, TRANSFER, ASSIGN, AND CONVEY TO MBIA ALL OF ITS
RESPECTIVE RIGHT, TITLE AND INTEREST IN THE FOLLOWING:

 

(i)                                     the Receivables Purchase Agreement;

 

(ii)                                  the Purchased Assets and all other rights
and interests in property created in favor of such Insured Party pursuant to the
Receivables Purchase Agreement;

 

(iii)                               all UCC Financing Statements filed against
the Seller and the Originator in connection with the Receivables Purchase
Agreement;

 

(iv)                              all other Facility Documents; and

 

(v)                                 all other documents, instruments, agreements
and property relating to the foregoing;

 

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and, in addition, the Liquidity Agent, on behalf of the Liquidity Banks, shall,
on the Payout Date for the Liquidity Agent, assign to MBIA all right, title and
interest in and to the Advances made under and as defined in the Liquidity
Agreement (collectively, all of the foregoing property and interests in property
being, the “Assigned Assets”) (the obligations of the Insured Parties to
transfer, assign, and convey the Assigned Assets are herein collectively
referred to as the “Assignment Obligation”).  Each Insured Party agrees that the
transfer, assignment and conveyance of its interest in the Assigned Assets shall
become effective automatically on the applicable Payout Date, without any
further act by MBIA or such Insured Party or the Managing Agents; provided,
however, that MBIA may request any Insured Party to execute and deliver to MBIA,
on or after the applicable Payout Date, an assignment substantially in the form
of Exhibit D hereto.  The Insured Parties further agree that any payments made
by MBIA under the Insurance Policies or under Section 3.02 hereof will not be
deemed to discharge the Seller of its obligation to pay such amounts and will
therefore not be deemed to reduce the Capital, Yield or any other amount payable
by the Seller under the Receivables Purchase Agreement.

 

SECTION 3.02  OPTION TO PURCHASE.

 

(a)                                  Each Insured Party hereby grants to MBIA an
option (each, an “Option”), in lieu of making a payment to such Insured Party
under the applicable Insurance Policy, to purchase, at any time after the
presentation of a Notice for Payment by or on behalf of such Insured Party, all
of such Insured Party’s respective right and title to, and interest in the
Assigned Assets, at the applicable Option Price owed to such Insured Party. 
Payments made by MBIA of the Option Price shall be made in immediately available
funds to the applicable Insured Party by 2:00 p.m. New York City time on the
second day next succeeding the date of receipt of a Notice for Payment, and all
calculations of amounts of the Capital, Yield, and all other amounts then
accrued and unpaid or otherwise outstanding under the Receivables Purchase
Agreement shall be made as of such day.  Each of the Options is irrevocable by
any Insured Party for so long as MBIA has any liability under any Insurance
Policy.  MBIA may exercise any of the Options by telephonic notice confirmed in
writing by MBIA to the applicable Insured Party  immediately thereafter.

 

(b)                                 Any purchase pursuant to the exercise of any
of the Options hereunder will be without recourse to any Insured Party other
than for a breach by such Insured Party of a representation that all its right,
title, and interest in and to such Assigned Assets have passed to MBIA free and
clear of any Adverse Claim created by or arising as a result of actions by such
Insured Party.

 

(c)                                  Simultaneously with the payment of the
Option Price, the applicable Insured Party will deliver an assignment
substantially in the form of Exhibit D hereto to MBIA as evidence of the
Assigned Assets sold pursuant to such Option.

 

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SECTION 3.03  REIMBURSEMENT; RIGHTS OF SUBROGATION; FURTHER ASSURANCES.

 

(a)                                  In accordance with Section 6.11(f) of the
Receivables Purchase Agreement, MBIA shall be entitled to reimbursement from the
Seller for any payment made under any Insurance Policy or for any payment made
under Section 3.02 hereof, which reimbursement shall be payable to MBIA on the
date that any amount is to be paid pursuant to a Notice for Payment.  Such
reimbursement shall be made in an amount (the “Repayment Amount”) equal to (i)
the sum of the amount paid or to be paid under any Insurance Policy or under
Section 3.02 hereof and all such amounts previously paid by MBIA that remain
unreimbursed plus (ii) interest on any and all amounts remaining unreimbursed
(to the extent permitted by law, if in respect of any unpaid amounts
representing interest) from the date such amounts became due until paid in full
(after as well as before judgment), at a rate of interest equal to the Base Rate
plus two percent (2.0%).  Such reimbursement shall be subject to the priority of
payments set forth in the Receivables Purchase Agreement as set forth therein.

 

(b)                                 The interests, rights, and remedies of MBIA
described in Sections 3.01, 3.02, 3.03(a) and 5.01 and of this Insurance
Agreement are in addition to, and not in lieu of, MBIA’s equitable rights of
subrogation, and MBIA reserves all of such rights.  Each of the Insured Parties
and the Collateral Agent agrees to take, or cause to be taken, all actions
deemed desirable by MBIA to preserve, enforce, perfect, or maintain the
perfection in MBIA’s favor of such interests, rights, and remedies and such
equitable rights of subrogation.  Each of the Insured Parties and the Collateral
Agent agrees to promptly and duly take, execute, acknowledge, and deliver such
further acts, documents, instruments and assurances as MBIA may from time to
time reasonably request to more effectively evidence any assignments under
Section 3.01 or 3.02, respectively, and to perfect all of MBIA’s other rights as
against the Seller.

 

SECTION 3.04  NO RECOURSE.  NO RECOURSE SHALL BE HAD FOR THE PAYMENT OF ANY
AMOUNT OWING HEREUNDER OR ANY OTHER OBLIGATION OR CLAIM ARISING OUT OF OR BASED
UPON THIS INSURANCE AGREEMENT AGAINST ANY SHAREHOLDER, EMPLOYEE, OFFICER,
DIRECTOR, OR INCORPORATOR OF ANY INSURED PARTY EXCEPT FOR ANY CLAIM ARISING OUT
OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH SHAREHOLDER, EMPLOYEE,
OFFICER, DIRECTOR, OR INCORPORATOR OF SUCH INSURED PARTY.  THE PROVISIONS OF
THIS SECTION 3.04 SHALL SURVIVE THE TERMINATION OF THIS INSURANCE AGREEMENT.

 

ARTICLE IV

 

COVENANTS, REPRESENTATIONS AND WARRANTIES

 

SECTION 4.01  AFFIRMATIVE COVENANTS OF TRIPLE-A, THE TRIPLE-A MANAGING AGENT AND
THE COLLATERAL AGENT.  EACH OF TRIPLE-A, AND EACH OF THE TRIPLE-A MANAGING AGENT
AND THE COLLATERAL AGENT (TO THE EXTENT MBIA IS NO LONGER THE TRIPLE-A MANAGING
AGENT OR THE COLLATERAL AGENT, AS APPLICABLE), HEREBY COVENANTS AND AGREES THAT
DURING THE TERM OF THIS INSURANCE AGREEMENT IT WILL:

 

(a)                                  Reports.  Furnish to MBIA (unless already
received by MBIA) promptly after receipt thereof, a copy of each certificate,
report, statement, notice, demand, or other communication received by it from
any Person in connection

 

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with the Transaction Commercial Paper Notes, this Insurance Agreement or any
Facility Document.

 

(b)                                 Other Information.  Furnish to MBIA the
following (unless already received by MBIA):

 

(i)                                     within one Business Day after obtaining
actual knowledge of the occurrence of an Event of Termination or a Wind-Down
Event, notice of such event, and immediately after receiving any certificate,
report, statement, notice, or other communication from the Seller relating to
any such event, a copy of any such communication;

 

(ii)                                  within one Business Day after receipt
thereof, a copy of each Settlement Report furnished by the Servicer;

 

(iii)                               within one Business Day after receipt
thereof, such information received by it pursuant to the Receivables Purchase
Agreement respecting the business, properties or the condition or operations,
financial or otherwise, of the Seller; and

 

(iv)                              such other information available to it and
relating to the Receivables Purchase Agreement, as MBIA may from time to time
reasonably request in writing.

 

(c)                                  Audits.  Upon written request by MBIA, in
the event MBIA is neither the Collateral Agent nor the Managing Agent for
Triple-A,

 

(i)                                     permit MBIA to participate in any audit
conducted by the Collateral Agent or the Managing Agent for Triple-A pursuant to
Section 5.01(c) of the Receivables Purchase Agreement; and

 

(ii)                                           at any time on or after any Event
of Termination or a Wind-Down Event, cause notice requesting an audit to be
given to the Seller and permit MBIA to participate in such audit.

 

MBIA’s participation in any audit pursuant to this Section 4.01(c) shall
include, without limitation, scheduling of such audit, selection of the scope
and methodology of such audit and the auditor’s report, and review by MBIA and
its accountants of the work papers, books and records examined by the auditors
in the course of their audit.  In addition, the Collateral Agent shall notify
MBIA at least five Business Days prior to undertaking any audit.

 

SECTION 4.02  NEGATIVE COVENANTS OF TRIPLE-A, MERRILL, THE TRIPLE-A MANAGING
AGENT AND THE COLLATERAL AGENT.  EACH OF (X) TRIPLE-A, (Y), SOLELY WITH RESPECT
TO PARAGRAPHS (A), (E), (F), (G) AND (H), THE TRIPLE-A MANAGING AGENT AND THE
COLLATERAL AGENT (TO THE EXTENT MBIA IS NO LONGER THE TRIPLE-A MANAGING AGENT OR
THE COLLATERAL AGENT, AS APPLICABLE) AND (Z) SOLELY WITH RESPECT TO PARAGRAPHS
(E) AND (F), MERRILL, AGREES AND COVENANTS THAT, WITHOUT MBIA’S PRIOR WRITTEN
CONSENT, IT WILL NOT DURING THE TERM OF THIS INSURANCE AGREEMENT:

 

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(a)                                  Liens.  Create, incur or assume any Adverse
Claim upon or with respect to any Purchased Asset or other Collateral other than
pursuant to any of the Facility Documents.

 

(b)                                 Mergers, Sales of Assets.  Merge into or
consolidate with any Person or assign, transfer, sell, or otherwise dispose of
all or any part of its property or assets to any Person other than in the
ordinary course of business.

 

(c)                                  Limited Business.  Engage in any business
or other activity, directly or indirectly (including through a subsidiary),
except Receivables Programs (including such activities as may be incidental
thereto) that, at the inception of each such Receivables Program, are rated at
least A-1 by Standard & Poor’s Ratings Group (“S&P”), P-1 by Moody’s Investors
Service, Inc. (“Moody’s”), or the approximate equivalent as approved in writing
by MBIA.

 

(d)                                 Creation of Indebtedness.  Create, incur,
assume, or suffer to exist any Debt other than with respect to any Facility
Document or any Receivables Program complying with paragraph (c) above, except
for (i) obligations, if any, under agreements for the purchase of receivables or
interests therein or loans secured by receivables or interests therein; (ii)
payments with respect to Commercial Paper Notes and any other rated
indebtedness; (iii) indebtedness hereunder, (iv) unsecured indebtedness incurred
in the ordinary course of business (including open accounts extended by
suppliers on normal trade terms in connection with purchases of goods and
services, but excluding indebtedness incurred through the borrowing of money or
guaranties); (v) indebtedness in respect of taxes, assessments or governmental
charges, and indebtedness in respect of claims for labor, materials or supplies
to the extent that the nonpayment thereof shall result in the creation of a
Lien; and (vi) interest rate swaps, caps, collars or similar agreements or
arrangements designed to protect Triple-A against fluctuations in interest
rates.

 

(e)                                  Impairment of Rights.  Take any action not
required by law, or fail to take any lawful action, if such action or failure to
take such action will interfere with the enforcement of any rights of MBIA
hereunder or under any Facility Document, other than actions directly relating
to or resulting from any breach of any obligation of MBIA hereunder or under any
Insurance Policy.

 

(f)                                    Amendments or Waivers.  Amend, waive or
otherwise modify, after the date hereof, any provision of the Facility
Documents, including, without limitation, any waiver of any Event of Termination
or Wind-Down Event or any of the eligibility criteria set forth in the
definition of “Eligible Receivable” in the Definitions List attached to the
Receivables Purchase Agreement.

 

(g)                                 MBIA Information.  Include in any
information memorandum for the Transaction Commercial Paper Notes or any loan
syndication memorandum, correspondence or other communication relating to the
Receivables (as applicable), any information concerning MBIA that is not
supplied or consented to in writing by MBIA expressly for inclusion therein.

 

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(h)                                 Delegation of Obligations.  Delegate in
whole or in part, except to MBIA, any of its obligations under this Insurance
Agreement.

 

SECTION 4.03  AFFIRMATIVE COVENANTS OF MBIA.  MBIA AGREES AND COVENANTS WITH
EACH INSURED PARTY THAT DURING THE TERM OF THIS INSURANCE AGREEMENT IT WILL:

 

(a)                                  Compliance with Laws.  Comply with all
applicable laws, rules, regulations and orders to the extent that noncompliance
would have a material adverse effect upon it, its business or its properties.

 

(b)                                 Corporate Existence.  Maintain its corporate
existence and at all times continue to be a corporation organized under the laws
of the State of New York, duly qualified to do business in each jurisdiction in
which the failure to be so qualified would have a material adverse effect on the
conduct of its business or on the performance of its obligations under this
Insurance Agreement or the Insurance Policies.

 

(c)                                  Financial Statements.  Provide to each
Managing Agent as soon as available and in any event within 120 days after the
end of each fiscal year of MBIA, a copy of MBIA’s financial statements, as
delivered to the Superintendent of Insurance for the State of New York, for such
fiscal year then ended.

 

SECTION 4.04  REPRESENTATIONS AND WARRANTIES OF MBIA.  MBIA REPRESENTS AND
WARRANTS TO THE INSURED PARTIES THAT:

 

(a)                                  Due Organization.  It is a duly
incorporated and subsisting New York insurance corporation authorized under an
effective certificate of authority to do business in the State of New York, and
in each jurisdiction where the failure to be so authorized under an effective
certificate of authority would have a material adverse effect on MBIA’s
performance of its obligations under this Insurance Agreement, the Insurance
Policies or the other Facility Documents to which it is a party, individually or
taken as a whole.

 

(b)                                 Power and Authority.  MBIA has all necessary
power and authority to execute and deliver this Insurance Agreement and each
Facility Document to which it is a party, to issue the Insurance Policies and to
perform all of its obligations hereunder and thereunder.

 

(c)                                  Due Authorization.  The execution,
delivery, and performance by MBIA of this Insurance Agreement, the Insurance
Policies and the other Facility Documents to which it is a party:

 

(i)                                     have been duly authorized by all
necessary corporate action; and

 

(ii)                                  do not require any approvals or consents
of, or any notice to or filing with, any person or governmental agency or
department (except for filings with the Insurance Department of the State of New
York, all of which have been made), the failure to obtain or make which would
have a material adverse effect on MBIA’s performance of its

 

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obligations under this Insurance Agreement, the Insurance Policies or the other
Facility Documents to which it is a party, individually or taken as a whole.

 

(d)                                 Valid and Binding Agreement.  This Insurance
Agreement, the Insurance Policies and the other Facility Documents to which MBIA
is a party, when executed and delivered by all the parties thereto, will
constitute the legal, valid and binding obligations of MBIA, enforceable against
MBIA in accordance with their terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, conservation, moratorium or
similar laws affecting the enforcement of creditors’ rights generally and by
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or law).

 

(e)                                  No Conflict.  The execution, delivery and
performance of this Insurance Agreement, the Insurance Policies and the other
Facility Documents to which MBIA is a party do not contravene (i) MBIA’s charter
or by-laws, (ii) any law, rule or regulation applicable to MBIA, (iii) any
material indenture, loan or credit agreement or other instrument binding on MBIA
or its property or (iv) any order, writ, judgment, award or injunction binding
on oraffecting MBIA.

 

(f)                                    No Litigation.  There are no actions,
suits or proceedings at law or in equity by or before any governmental authority
now pending, or, to MBIA’s knowledge, threatened, against MBIA or its property
which purport to challenge the legality, validity or enforceability of this
Insurance Agreement or the other Facility Documents to which MBIA is a party or
which may reasonably be expected to have a material adverse effect on MBIA’s
ability to perform its obligation under this Insurance Agreement, the Insurance
Policies or the other Facility Documents to which it is a party, individually or
taken as a whole.

 

ARTICLE V

 

FURTHER AGREEMENTS

 

SECTION 5.01  RIGHT OF CONTROLLING BENEFICIARY TO DIRECT ACTIONS OF THE INSURED
PARTIES AND THE AGENTS.  EACH OF THE INSURED PARTIES AND EACH AGENT AGREES THAT,
FOLLOWING THE CONTROLLING BENEFICIARY’S WRITTEN REQUEST, IT WILL TAKE OR REFRAIN
FROM TAKING ANY ACTION, AND EXERCISE OR REFRAIN FROM EXERCISING ANY RIGHTS OF
SUCH PERSON UNDER THE FACILITY DOCUMENTS IN THE MANNER DESCRIBED IN THE
CONTROLLING BENEFICIARY’S WRITTEN REQUEST; PROVIDED, HOWEVER, THAT (I) THE
OBLIGATION OF SUCH INSURED PARTY OR AGENT TO TAKE OR REFRAIN FROM TAKING, OR TO
EXERCISE OR REFRAIN FROM EXERCISING ANY SUCH ACTION OR RIGHTS SHALL BE LIMITED
TO THOSE ACTIONS AND RIGHTS THAT CAN BE EXERCISED OR TAKEN (OR NOT EXERCISED OR
TAKEN, AS THE CASE MAY BE) IN FULL COMPLIANCE WITH THE PROVISIONS OF THE
FACILITY DOCUMENTS AND APPLICABLE LAW AND (II) TO THE EXTENT THAT A FACILITY
DOCUMENT EXPRESSLY GRANTS AN INSURED PARTY OR AN AGENT THE RIGHT TO CONSENT TO
ANY AMENDMENTS OR WAIVERS, NOTHING IN THIS SECTION 5.01 SHALL OVERRIDE THE TERMS
OF SUCH FACILITY DOCUMENT.  WITHOUT LIMITING THE GENERALITY OF THE PRECEDING
SENTENCE, EACH INSURED PARTY AND EACH AGENT AGREES THAT, SUBJECT TO THE PROVISO
CLAUSE IN THE PRECEDING SENTENCE, IT WILL, UPON THE CONTROLLING BENEFICIARY’S
PRIOR WRITTEN REQUEST FOLLOWING THE OCCURRENCE OF THE RESPECTIVE EVENTS OR
CONDITIONS DESCRIBED BELOW, TAKE, OR CAUSE TO BE TAKEN, THE FOLLOWING ACTIONS:

 

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(i)                                     upon a Servicing Termination Event,
designate a Person selected by the Controlling Beneficiary as the Successor
Servicer under the Sale Agreement and the Receivables Purchase Agreement;

 

(ii)                                  upon an Event of Termination or Wind-Down
Event and the replacement of the Servicer as provided in clause (i) above, (a)
declare an Event of Termination and/or Wind-Down Event, (b) instruct the
Collection Account Bank to remit all funds on deposit therein on a daily basis
to the Collateral Agent or its designee, (c) determine that the Purchasers shall
cease to fund Purchases under the Receivables Purchase Agreement, (d) pursuant
to the Receivables Purchase Agreement, direct the Servicer to commence or settle
any legal action to enforce collection of any Receivables or to enforce,
foreclose upon or repossess any Receivable, and (e) notify account debtors on
Receivables to make payments thereon as designated by the Controlling
Beneficiary and exercise all other remedies of the Purchasers, the Managing
Agents and/or the Collateral Agent on its behalf set forth in the Receivables
Purchase Agreement; and

 

(iii)                               request from the Seller, under the
Receivables Purchase Agreement, any information, documents, records, or reports
respecting the Purchased Assets or the conditions or operations, financial or
otherwise, of the Seller as the Controlling Beneficiary may specify from time to
time.

 

SECTION 5.02  MBIA OBLIGATIONS ABSOLUTE.  THE OBLIGATIONS OF MBIA UNDER THE
INSURANCE POLICIES ARE ABSOLUTE AND UNCONDITIONAL AS SET FORTH THEREIN.

 

SECTION 5.03  LIABILITY OF MBIA.  EACH INSURED PARTY AND EACH AGENT AGREES THAT
NEITHER MBIA, ANY OF ITS AFFILIATES, NOR ANY OF THEIR RESPECTIVE OFFICERS,
DIRECTORS, OR EMPLOYEES, IS OR WILL BE LIABLE OR RESPONSIBLE FOR (EXCEPT TO THE
EXTENT OF ITS OWN OR THEIR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT):

 

(a)                                  the use which may be made of the Insurance
Policies by another Person, or for any acts or omissions of such other Person in
connection therewith; or

 

(b)                                 the validity, sufficiency, accuracy, or
genuineness of documents, or of any endorsement(s) thereon, even if such
documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent, or forged;

 

provided, that nothing in this Section 5.03 shall relieve MBIA from any
obligation to pay under the Insurance Policies.  In furtherance and not in
limitation of the foregoing, MBIA may accept documents that appear on their face
to be in order, without responsibility for further investigation.

 

SECTION 5.04  Reimbursement of Expenses.  The Seller hereby agrees to pay to
MBIA, and each Agent agrees to remit to MBIA, promptly upon receipt by such
Agent of any amount in respect of any of the following, in each case after
written demand therefor by MBIA, all reasonable out-of-pocket costs, expenses,
and disbursements, including attorneys’ fees and expenses and other costs and
expenses incurred by MBIA in connection with the preparation,

 

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execution, delivery, administration, modification, amendment, termination,
waiver or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Insurance Agreement, each of the other Facility Documents to which it is a
party, and any other agreement related to the foregoing (including, without
limitation, any initial and ongoing audit expenses of MBIA incurred in
connection with this transaction), and each Agent agrees to pay over to MBIA any
amounts received by it under the Receivables Purchase Agreement in respect of
any such demand for payment by MBIA.  Without prejudice to the foregoing, the
Seller agrees that in the event that MBIA seeks to enforce any of its rights
under the Facility Documents against the Seller, and Triple-A agrees that in the
event that MBIA seeks to enforce any of its rights hereunder against Triple-A,
then, in either such event, the Seller or Triple-A, as applicable, shall remit
to MBIA, after written demand therefor, all reasonable out-of-pocket costs,
expenses, and disbursements, including attorneys’ fees and expenses and other
costs and expenses incurred by MBIA in connection with the enforcement of such
rights.  The reimbursement provisions of this Section 5.04 will survive the
termination of this Insurance Agreement.

 

SECTION 5.05  No Proceedings.  Each of MBIA, the Seller, the Insured Parties and
each Agent hereby agrees (which agreement shall, pursuant to the terms of this
Insurance Agreement, be binding upon its successors and assigns) that it shall
not institute against, or join any other Person in instituting against, Triple-A
any bankruptcy, reorganization, arrangement, insolvency, or liquidation
proceeding, or other proceeding under any federal or state bankruptcy or similar
law, for one year and a day after payment in full of the latest maturing
Commercial Paper Notes or other rated indebtedness issued by it (whether or not
issued to fund Receivables Purchases or the maintenance of Capital under the
Receivables Purchase Agreement).

 

SECTION 5.06  Litigation.  Each Insured Party and each Agent (but without
duplication) shall (i) provide written notice to the Controlling Beneficiary
immediately upon obtaining actual knowledge of the commencement of any judicial
proceeding (including, without limitation, bankruptcy, insolvency, receivership,
and other such proceedings) which relates to, or arises in connection with, the
Receivables Purchase Agreement, the Purchased Assets or the Transferred Assets
(each, a “Relevant Proceeding”); (ii) consult with the Controlling Beneficiary
with respect to, and permit the Controlling Beneficiary to participate in, any
discussions and decisions relating to any such Relevant Proceeding with a view
towards minimizing the potentially adverse effect that such Relevant Proceeding
may have on the Controlling Beneficiary’s interest in the Transferred Assets,
the Purchased Assets or the Receivables Purchase Agreement and (iii) not agree
to any settlement of any such Relevant Proceeding without the Controlling
Beneficiary’s prior written consent.  The Controlling Beneficiary may elect at
any time after receipt of the notice described in the first sentence of this
Section 5.06, to assume responsibility for and control over the Relevant
Proceeding.  Such election shall be made by delivery to the Insured Parties and
the Collateral Agent of a written notice thereof, signed by the Controlling
Beneficiary, which notice shall contain the Controlling Beneficiary’s agreement
to assume responsibility for, and not seek reimbursement from any Insured Party
or Agent for, any claims, demands, liabilities, damages, losses, costs, and
expenses (including attorneys’ fees and expenses accrued only after the date the
Controlling Beneficiary assumed control over such Relevant Proceeding) that may
be incurred by the Controlling Beneficiary in connection with such Relevant
Proceeding.

 

SECTION 5.07  Indemnification.  In addition to any and all rights of
reimbursement, subrogation or any other rights pursuant hereto or under law or
equity, and without limiting any reimbursement, subrogation or indemnification
right of MBIA under any other Facility

 

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Document, the Seller hereby agrees to pay, indemnify, and hold MBIA and its
affiliates and the officers, directors, employees of MBIA or any such affiliates
(each an “Indemnitee”) harmless from and against any and all out-of-pocket
liabilities (including penalties), obligations, losses, damages, actions, suits,
demands, claims, judgments, taxes, costs, expenses or disbursements of any kind
or nature whatsoever that arise out of or in any way relate to or result from or
out of (a) the transactions contemplated by the Facility Documents or (b) any
investigation or defense of, or participation in, any legal proceeding relating
to the execution, delivery, enforcement, performance or administration of the
Facility Documents (whether or not such Indemnitee is a party thereto)
(collectively, the “Indemnified Liabilities”); provided that the Seller shall
have no obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities arising from the gross negligence or willful misconduct of any
Indemnitee.  Any payments required to be made by the Seller under this section
shall be due upon demand.  The indemnity provisions of this section shall
survive the termination of this Insurance Agreement.

 

ARTICLE VI

 

MISCELLANEOUS

 

SECTION 6.01  Amendments, Etc.  No amendment, waiver or modification of any
provision of this Insurance Agreement, or any consent to any departure
therefrom, shall in any event be effective unless in writing and signed by each
of MBIA, Triple-A, Merrill, the Collateral Agent and the Liquidity Agent;
provided that, (i) any amendment, waiver or modification of Sections 4.01, 4.02,
5.04 or 5.07, insofar as such Sections impose no duties nor confer any rights on
the Liquidity Agent or the Liquidity Banks nor any rights or obligations of any
other party with respect thereto, or any consent to any departure therefrom, may
be effective without the consent of the Liquidity Agent; (ii) any amendment,
waiver or modification of any provision of Section 3.03(a) or of Sections 5.04,
5.05, 5.07 or of this Article VI insofar as such sections affect the Seller
shall require the prior written consent of the Seller; and (iii) in any event,
any waiver so granted shall extend only to the specific event or occurrence so
waived and not to any other similar event or occurrence which occurs subsequent
to the date of such waiver.  No amendment to this Insurance Agreement or the
Triple-A Insurance Policy or the Liquidity Insurance Policy shall in any event
be effective until S&P and Moody’s confirm that such amendment would not cause
the then current rating assigned to the Commercial Paper Notes to be reduced or
withdrawn.

 

SECTION 6.02  Notices.  Except to the extent otherwise expressly provided
herein, all notices, requests, and demands to or upon the respective parties
hereto to be effective shall be in writing (and if sent by mail, certified or
registered, return receipt requested) or facsimile transmission and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made when delivered by hand, or three business days after being deposited in the
mail, postage prepaid, or, in the case of facsimile transmission, when sent,
addressed as follows:

 

If to the Seller:

 

HPSC Bravo Funding, LLC

Sixty State Street, 35th Floor

Boston, Massachusetts  02109-1803

Attention:  President

Telephone:  (617) 720-7251

 

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Telecopier:  (617) 720-7272

 

If to Triple-A:

 

Triple-A One Funding Corporation

c/o MBIA Insurance Corporation

113 King Street

Armonk, New York  10504

Attention:  Head of Exposure Management

Telephone: (914) 273-4545

Telecopier: (914) 765-3810

 

If to MBIA (including as agent):

 

MBIA Insurance Corporation

113 King Street

Armonk, New York  10504

Attention: Head of Exposure Management

Telephone: (914) 273-4545

Telecopier: (914) 765-3810

 

If to Merrill (including as Managing Agent)

 

Merrill Lynch Commercial Finance Corp.

4 World Financial Center

10th Floor

New York, NY  10080

Attention: Grant Jones

Telephone: (212) 449-2695

Telecopier: (212) 449-9015

 

If to the Liquidity Agent:

 

National Australia Bank Limited

200 Park Avenue

34th Floor

New York, NY  10166

Attention:  Dave Hummer

Telephone:  (212) 916-9513

Telecopier:  (212) 983-1969

 

SECTION 6.03  Payments.  All payments to MBIA hereunder shall be made in lawful
currency of the United States and in immediately available funds and shall be
made prior to 2:00 p.m. (New York City time) on the date such payment is due by
wire transfer to such office or account as MBIA may direct from time to time. 
Payments received by MBIA after 2:00 p.m. (New York City time) shall be deemed
to have been received on the next succeeding Business Day, and such extension of
time shall be included in the computation of interest or fees, if any, in
connection with such payment.

 

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Whenever any payment under this Insurance Agreement shall be stated to be due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in computing interest or fees, if any, in connection with such payment.

 

SECTION 6.04  No Waiver: Remedies and Severability.  No failure on the part of
MBIA or the Controlling Beneficiary to exercise, and no delay in exercising, any
right hereunder will operate as a waiver thereof; nor will any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right.  The remedies herein provided are cumulative and
not exclusive of any remedies provided elsewhere or by law.  The parties hereto
further agree that the holding by any court of competent jurisdiction that any
remedy pursued by the parties hereto and hereunder is unavailable or
unenforceable will not affect in any way the ability of such parties to pursue
any other remedy available to them.  In the event any provision of this
Insurance Agreement shall be held to be invalid or unenforceable by any court of
competent jurisdiction, such provision shall be ineffective only to the extent
of such invalidity or unenforceability, without invalidating the remainder of
such provision or any other provisions of this Insurance Agreement.

 

SECTION 6.05  Assignment, Etc.  This Insurance Agreement shall be binding upon
and inure to the benefit of the parties hereto (including the Liquidity Agent on
behalf of the Liquidity Banks) and their respective successors and permitted
assigns.  No Purchaser or Managing Agent nor the Collateral Agent shall sell,
assign or transfer to any Person (other than to MBIA pursuant to the terms of
this Insurance Agreement, or the assignment by Triple-A contemplated pursuant to
the terms of the Liquidity Security Agreement), or otherwise dispose of, at any
time, any of its rights or obligations hereunder or under any of the Facility
Documents, or any of its interests herein or therein, unless the assignee agrees
to be bound by the terms and provisions of this Insurance Agreement and such
sale, assignment, transfer or other disposition otherwise complies with the
requirements and restrictions set forth therefor in the applicable Facility
Documents and any restrictions under applicable law.

 

SECTION 6.06  Participations, Etc.  (a) MBIA shall have the right to grant
participations in its rights under this Agreement and to enter into contracts of
reinsurance with respect to the Insurance Policies upon such terms and
conditions as MBIA may in its discretion determine; provided, however, that no
such participation or reinsurance agreement or arrangement shall relieve MBIA of
any of its obligations hereunder or under the Insurance Policies and no such
reinsurer or participant may have any direct rights against the other parties
hereto and that no Insured Party will have any obligation to communicate or have
any relationship whatsoever with any reinsurer or participant in order to
enforce the obligations of MBIA under the Insurance Policies.

 

(b)                                 In addition, MBIA shall be entitled to
assign or pledge to any bank or other lender providing liquidity or credit with
respect to the Receivables Purchase Agreement or the obligations of MBIA in
connection therewith, any rights of MBIA under the Facility Documents, any real
or personal property or other interests pledged to MBIA, or in which MBIA has a
security interest, in connection with the Receivables Purchase Agreement.

 

(c)                                  Except as provided herein with respect to
participants and reinsurers and in Section 6.05 with respect to assignees,
nothing in this

 

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Agreement shall confer any right, remedy or claim, express or implied, upon any
Person, other than the parties hereto, and all the terms, covenants, conditions,
promises and agreements contained herein shall be for the sole and exclusive
benefit of the parties hereto.

 

SECTION 6.07  Termination of this Insurance Agreement and the Insurance
Policies; Continuing Obligations.  This Insurance Agreement shall create and
constitute continuing obligations of the Seller and the other parties hereto in
accordance with its terms, and such obligations will terminate on the date which
occurs after the termination of the Insurance Policies when MBIA has recovered
all of the payments it has made, if any, under the Insurance Policies or
pursuant to Section 3.02.  Any termination of this Insurance Agreement will be
effective only upon the delivery to MBIA of the Insurance Policies, whereupon
the Insurance Policies will be cancelled and MBIA’s liability thereunder will
cease except as specified therein with respect to Preference Amounts.

 

SECTION 6.08  GOVERNING LAW.  THIS INSURANCE AGREEMENT IS TO BE CONSTRUED, AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER ARE TO BE
DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

SECTION 6.09  No Recourse.  Anything contained in this Insurance Agreement or
any other Facility Document to the contrary notwithstanding, all payments to be
made by Triple-A under this Insurance Agreement shall be made by Triple-A solely
from available cash, which shall be limited to the (a) proceeds of collections
and other amounts payable by or on behalf of the Seller to Triple-A in
connection with any of the Facility Documents and (b) drawings made by Triple-A
under the Triple-A Insurance Policy (collectively “Available Funds”).  No
recourse shall be had against Triple-A personally or against any incorporator,
shareholder, officer, director or employee of Triple-A with respect to any of
the covenants, agreements, representations or warranties of Triple-A contained
in this Insurance Agreement, or any other Facility Document, it being understood
that such covenants, representations or warranties are enforceable only against
Available Funds.  The provisions of this Section shall survive the termination
of this Insurance Agreement.  The parties to this Insurance Agreement hereby
acknowledge that, pursuant to the terms and conditions of this Insurance
Agreement and the other Facility Documents, Triple-A is or may be required, from
time to time, to make certain payments to such parties, either as compensation
for services rendered, reimbursement for out of pocket expenses,
indemnification, or otherwise, as set forth herein and therein.  Such parties
hereby agree that, notwithstanding any provision of any Facility Document, (i)
Triple-A shall not make any such payment to any such party, (ii) Triple-A shall
have no duty, liability or obligation to make any such payment to any such
party, (iii) no such payment shall be due from Triple-A and (iv) no such party
shall have any right to enforce any claim against Triple-A in respect of any
such payment, in each case at any time that any Commercial Paper Note is
outstanding and no Insolvency Event (as defined below) has occurred and is
continuing, and in each case unless and except to the extent that (x) the making
of such payment by Triple-A would not render Triple-A insolvent and (y) Triple-A
has received Available Funds with respect to such obligations which may be used
to make such payment and which funds are not required to pay Commercial Paper
Notes when due; provided, however, that the foregoing shall not be construed to
prohibit a drawing on the Liquidity Insurance Policy by the Liquidity Agent.  As
used in this Section the term “Insolvency Event” shall mean the entry against
Triple-A of a decree or order by a court or agency or supervisory authority
having jurisdiction in the premises for the

 

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appointment of a trustee, conservator, receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding up or liquidation of its affairs, and, in the
case of any such proceeding instituted against Triple-A, either such proceeding
shall remain undismissed or unstayed for a period of 60 consecutive days or an
order for relief as described below has been entered, or the consent by Triple-A
to or the entry of an order for the appointment of a trustee, conservator,
receiver or liquidator in any insolvency, readjustment of debt, order of relief,
marshalling of assets and liabilities of or relating to Triple-A or the filing
by Triple-A of a petition to take advantage of any applicable insolvency or
reorganization statute.

 

SECTION 6.10  Counterparts.  This Insurance Agreement may be executed in
counterparts by the parties hereto, and each such counterpart will be considered
an original and all such counterparts will constitute one and the same
instrument.

 

SECTION 6.11  Section Headings, Etc.  The headings of sections, paragraphs and
clauses contained in this Insurance Agreement are provided for convenience
only.  They form no part of this Insurance Agreement and do not and will not
affect its construction or interpretation.

 

SECTION 6.12  Reference to and Effect upon Prior Insurance Agreement.

 

(a)                                  From and after the Effective Date, (i) the
terms and provisions of this Insurance Agreement shall amend and supersede the
terms and provisions of the Prior Insurance Agreement and (ii) all references in
any other Facility Documents to the Insurance Agreement shall mean and be a
reference to this Insurance Agreement.  It is expressly understood and agreed
that the execution and delivery of this Insurance Agreement is not intended to
be, and shall not be construed as, a novation of the Prior Insurance Agreement. 
Each of the parties hereto (other than Merrill) ratifies the representations,
warranties, covenants and indemnities made in the Prior Insurance Agreement, and
each of the parties hereto agrees that such agreement is, as of the date hereof,
in full force and effect except to the extent expressly modified hereby. 
Without limiting the foregoing, each of the parties hereto agrees that CapMAC
shall retain all rights of reimbursement, subrogation and indemnification under
the Prior Insurance Agreement and each Swap Bond until such Swap Bond shall be
terminated by the issuance by MBIA of a swap insurance policy in replacement
thereof.

 

(b)                                 Each of Triple-A and the Liquidity Agent on
behalf of the Liquidity Banks hereby agrees that, upon receipt by such Person of
the Triple-A Insurance Policy and the Liquidity Insurance Policy, respectively,
(i) the Surety Bond issued by CapMAC under the Prior Insurance Agreement for the
benefit of such Person and all obligations of CapMAC thereunder will be
immediately terminated without further action on the part of such Person or of
CapMAC and (ii) such Person shall promptly return all originals of such Surety
Bond to CapMAC or to MBIA.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Insurance Agreement,
all as of the day and year first above mentioned.

 

 

CAPITAL MARKETS ASSURANCE
CORPORATION

 

 

 

 

 

By:

  /s/ Glenn H. Roder

 

 

 

 Name: Glenn H. Roder

 

 

 

 Title: Vice President

 

 

 

 

 

 

TRIPLE-A ONE FUNDING
CORPORATION

 

 

 

 

 

 

By:  MBIA Insurance Corporation,
its attorney-in-fact

 

 

 

 

 

By:

  /s/ Glenn H. Roder

 

 

 

 Name: Glenn H. Roder

 

 

 

 Title: Vice President

 

 

 

 

 

 

MBIA INSURANCE CORPORATION, as Insurer,
Collateral Agent and Triple-A Managing Agent

 

 

 

 

 

By:

  /s/ Glenn H. Roder

 

 

 

 Name: Glenn H. Roder

 

 

 

 Title: Vice President

 

 

 

 

 

 

MERRILL LYNCH COMMERCIAL FINANCE
CORP., individually and as a Managing Agent

 

 

 

 

 

By:

  /s/ Joshua A. Green

 

 

 

 Name: Joshua A. Green

 

 

 

 Title: Director

 

 

 

 

 

 

NATIONAL AUSTRALIA BANK LIMITED

 

as Liquidity Agent

 

 

 

 

 

By:

  /s/ David Hummer

 

 

 

 Name: David Hummer

 

 

 

 Title: Director

 

 

 

 

 

 

HPSC BRAVO FUNDING, LLC

 

 

 

 

 

 

By:

  /s/ Stephen K. Ballou

 

 

 

 Name: Stephen K. Ballou

 

 

 

 Title: Manager

 

 

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