Exhibit 10.3

 

EXECUTION COPY

 

SECOND AMENDED AND RESTATED

 

PURCHASE AND CONTRIBUTION AGREEMENT

 

Dated as of June 19, 2003

 

Between

 

HPSC BRAVO FUNDING, LLC

 

as the Buyer

 

and

 

HPSC, INC.

 

as the Seller and as Servicer

 

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ARTICLE I  DEFINITIONS

 

 

 

SECTION 1.01.  Certain Defined Terms

 

SECTION 1.02.  Other Terms

 

SECTION 1.03.  Computation of Time Periods

 

 

ARTICLE II  AMOUNTS AND TERMS OF THE PURCHASES

 

 

 

SECTION 2.01.  Agreement to Sell and Contribute

 

SECTION 2.02.  Purchases from the Seller

 

SECTION 2.03.  Servicing of Contracts and Equipment

 

SECTION 2.04.  Transfer of Records

 

SECTION 2.05.  Collections; Deemed Collections

 

SECTION 2.06.  Payments and Computations, Etc

 

SECTION 2.07.  Perfection of Liens; Further Assurances

 

 

ARTICLE III  CONDITIONS OF PURCHASES

 

 

 

SECTION 3.01.  Conditions Precedent to Initial Purchase

 

SECTION 3.02.  Conditions Precedent to All Purchases

 

SECTION 3.03.  Effect of Payment of Purchase Price

 

 

ARTICLE IV  REPRESENTATIONS AND WARRANTIES

 

 

 

SECTION 4.01.  Representations and Warranties of the Seller

 

 

ARTICLE V  GENERAL COVENANTS OF THE SELLER

 

 

 

SECTION 5.01.  Affirmative Covenants of the Seller

 

SECTION 5.02.  Reporting Requirements of the Seller

 

SECTION 5.03.  Negative Covenants of the Seller

 

SECTION 5.04.  Financial Covenants of the Seller

 

 

ARTICLE VI  ADMINISTRATION AND COLLECTION

 

 

 

SECTION 6.01.  Designation of Servicer

 

SECTION 6.02.  Duties of the Servicer

 

SECTION 6.03.  Rights of the Buyer

 

SECTION 6.04.  Further Action Evidencing Transfers

 

SECTION 6.05.  Responsibilities of the Seller

 

SECTION 6.06.  Administration of Collections by Servicer

 

SECTION 6.07.  Application of Collections

 

SECTION 6.08.  Servicing Fee

 

SECTION 6.09.  Resignation; Successor Servicer

 

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ARTICLE VII  EVENTS OF TERMINATION

 

 

 

SECTION 7.01.  Events of Termination

 

 

ARTICLE VIII  INDEMNIFICATION

 

 

 

SECTION 8.01.  Indemnities by the Seller

 

 

ARTICLE IX  MISCELLANEOUS

 

 

 

SECTION 9.01.  Amendments, Etc

 

SECTION 9.02.  Notices, Etc

 

SECTION 9.03.  No Waiver; Remedies

 

SECTION 9.04.  Binding Effect; Assignability

 

SECTION 9.05.  GOVERNING LAW; WAIVER OF JURY TRIAL

 

SECTION 9.06.  Costs, Expenses and Taxes

 

SECTION 9.07.  Execution in Counterparts; Severability

 

SECTION 9.08.  Reference to and Effect on Prior PCA

 

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LIST OF EXHIBITS

 

EXHIBIT A

List of Contracts

 

 

EXHIBIT B

Form of Notice of Assignment

 

 

EXHIBIT C

Form of Settlement Report

 

 

EXHIBIT D

Description of Credit and Collection Policy

 

 

EXHIBIT E

[Reserved]

 

 

EXHIBIT F

List of Offices of Seller where Records Are Kept

 

 

EXHIBIT G

Form of Lock-Box Agreement

 

 

EXHIBIT H

List of Lock-Box Banks

 

 

EXHIBIT I

Trade Names and Assumed Names

 

 

EXHIBIT J

List of Computer Software

 

 

EXHIBIT K-1

Form of Lease

 

 

EXHIBIT K-2

Form of Finance Agreement

 

 

EXHIBIT K-3

Form of Leasehold Improvement Note

 

 

EXHIBIT K-4

Form of Practice Finance Loan

 

 

EXHIBIT K-5

Forms of Related Contract Documents

 

 

EXHIBIT L

Form of Financial Covenants Compliance Certificate

 

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SECOND AMENDED AND RESTATED

 

PURCHASE AND CONTRIBUTION AGREEMENT

 

Dated as of June 19, 2003

 

HPSC BRAVO FUNDING, LLC, a Delaware limited liability company (the “Buyer”), and
HPSC, INC., a Delaware corporation, (the “Seller”) agree as follows:

 

PRELIMINARY STATEMENTS.  (1) Certain terms which are capitalized and used
throughout this Sale Agreement (in addition to those defined above) are defined
in the “Definitions List” (as defined in Article I of this Sale Agreement).

 

(2)  The Seller and the Buyer are parties to that certain Purchase and
Contribution Agreement, dated as of January 31, 1995 (the “Original PCA”).

 

(3)  The parties amended and restated the Original PCA by entering into that
certain Amended and Restated Purchase and Contribution Agreement dated as of
March 31, 2000 (as amended, supplemented and otherwise modified to the date
hereof, the “Prior PCA”).

 

(4)  The Seller and the Buyer have agreed to amend and restate the Prior PCA in
its entirety as follows:

 

NOW, THEREFORE, the parties agree as follows:

 

ARTICLE I

DEFINITIONS

 

SECTION 1.01.  CERTAIN DEFINED TERMS.  (A)  AS USED IN THIS SALE AGREEMENT,
CAPITALIZED TERMS USED HEREIN SHALL, UNLESS OTHERWISE DEFINED HEREIN, HAVE THE
MEANINGS ASSIGNED TO THEM IN THE DEFINITIONS LIST (THE “DEFINITIONS LIST”)
ATTACHED TO THAT CERTAIN THIRD AMENDED AND RESTATED LEASE RECEIVABLES PURCHASE
AGREEMENT OF EVEN DATE HEREWITH AMONG THE BUYER, THE SELLER AS SERVICER, THE
“PURCHASERS” AND “MANAGING AGENTS” PARTY THERETO, CAPITAL MARKETS ASSURANCE
CORPORATION AND MBIA INSURANCE CORPORATION, THE TERMS OF WHICH ARE INCORPORATED
HEREIN BY REFERENCE (SUCH MEANINGS TO BE EQUALLY APPLICABLE TO BOTH THE SINGULAR
AND PLURAL FORMS OF THE TERMS DEFINED).  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 THIS SALE 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.

 

(B)  THE WORDS “HEREOF”, “HEREIN” AND “HEREUNDER” AND WORDS OF SIMILAR IMPORT
WHEN USED IN THIS SALE AGREEMENT SHALL REFER TO THIS SALE AGREEMENT AS A WHOLE
AND NOT TO ANY PARTICULAR PROVISION OF THIS SALE AGREEMENT, AND SECTION,
SUBSECTION, SCHEDULE AND EXHIBIT REFERENCES ARE TO SECTIONS, SUBSECTIONS,
SCHEDULES AND EXHIBITS OF THIS SALE AGREEMENT UNLESS OTHERWISE SPECIFIED.

 

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SECTION 1.02.  OTHER TERMS.  ALL ACCOUNTING TERMS NOT SPECIFICALLY DEFINED
HEREIN SHALL BE CONSTRUED IN ACCORDANCE WITH GAAP.  ALL TERMS USED IN ARTICLE 9
OF THE UCC IN THE STATE OF NEW YORK, AND NOT SPECIFICALLY DEFINED HEREIN, ARE
USED HEREIN AS DEFINED IN SUCH ARTICLE 9.

 

SECTION 1.03.  COMPUTATION OF TIME PERIODS.  UNLESS OTHERWISE STATED IN THIS
SALE AGREEMENT, IN THE COMPUTATION OF A PERIOD OF TIME FROM A SPECIFIED DATE TO
A LATER SPECIFIED DATE, THE WORD “FROM” MEANS “FROM AND INCLUDING” AND THE WORDS
“TO” AND “UNTIL” EACH MEANS “TO BUT EXCLUDING.”

 

ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES

 

SECTION 2.01.  AGREEMENT TO SELL AND CONTRIBUTE.  (A)  ON THE TERMS AND
CONDITIONS HEREINAFTER SET FORTH, THE SELLER HEREBY AGREES, FROM TIME TO TIME
UNTIL THE TERMINATION DATE, TO SELL IN PART AND TO CONTRIBUTE IN PART TO THE
BUYER, AND THE BUYER HEREBY AGREES, FROM TIME TO TIME UNTIL THE TERMINATION
DATE, TO PURCHASE AND ACQUIRE FROM THE SELLER, ALL OF THE SELLER’S RIGHT, TITLE
AND INTEREST IN, TO AND UNDER THE RECEIVABLES, THE CONTRACTS, ALL EQUIPMENT, ALL
RELATED SECURITY WITH RESPECT TO THE FOREGOING, AND ALL COLLECTIONS AND OTHER
PROCEEDS OF THE FOREGOING.  EXCEPT AS PROVIDED IN THE IMMEDIATELY SUCCEEDING
SENTENCE, NOTHING CONTAINED IN THIS SALE AGREEMENT IS INTENDED TO, NOR SHALL IT
BE DEEMED TO, CONSTITUTE A COMMITMENT ON THE PART OF THE SELLER OR ON THE PART
OF THE BUYER TO CONSUMMATE ANY PURCHASE HEREUNDER, IT BEING UNDERSTOOD THAT ALL
SUCH PURCHASES SHALL BE MADE AT THE DISCRETION OF EACH SUCH PARTY BUT OTHERWISE
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH HEREIN.  NOTWITHSTANDING THE
FOREGOING, THE BUYER AGREES, SUBJECT TO THE SATISFACTION OF THE CONDITIONS SET
FORTH IN SECTION 3.02, TO CONSUMMATE ANY PURCHASE REQUESTED BY THE SELLER
PURSUANT TO SECTION 2.02(B) FOR WHICH THE NOTICE OF PURCHASE SPECIFIES THAT THE
ENTIRE PURCHASE PRICE SHALL BE PAID AS A CONTRIBUTION TO THE BUYER’S CAPITAL AND
NOT IN CASH.  NOTHING CONTAINED IN THIS SALE AGREEMENT IS INTENDED TO, NOR SHALL
IT BE DEEMED TO, CONSTITUTE AN ASSUMPTION BY THE BUYER OF ANY OBLIGATION UNDER
ANY CONTRACT.

 

(B)  IT IS THE INTENT OF THE SELLER AND THE BUYER THAT THE TRANSFER BY THE
SELLER TO THE BUYER OF THE TRANSFERRED ASSETS CONSTITUTE A SALE, IN PART, AND A
CONTRIBUTION TO CAPITAL, IN PART, WHICH SALES AND CONTRIBUTIONS ARE ABSOLUTE AND
IRREVOCABLE, WITHOUT RECOURSE EXCEPT AS OTHERWISE PROVIDED IN THIS SALE
AGREEMENT, AND WILL PROVIDE THE BUYER WITH FULL OWNERSHIP OF THE TRANSFERRED
ASSETS.  THE PARTIES FURTHER INTEND THAT EACH SUCH SALE AND CONTRIBUTION
CONSTITUTES A SALE OF ACCOUNTS, PAYMENT INTANGIBLES, PROMISSORY NOTES OR CHATTEL
PAPER, AS THE CASE MAY BE, AS SUCH TERMS ARE USED IN ARTICLE 9 OF THE UCC, AND
THAT THIS SALE AGREEMENT CONSTITUTES A SECURITY AGREEMENT WITHIN THE MEANING OF
ARTICLE 9 OF THE UCC.  EACH OF THE SELLER AND THE BUYER HEREBY AGREES TO TREAT
SUCH TRANSFER AS A SALE AND A CONTRIBUTION FOR TAX, REPORTING AND ACCOUNTING
PURPOSES (EXCEPT TO THE EXTENT THAT SUCH TRANSFER IS NOT RECOGNIZED DUE TO THE
REPORTING OF TAXES ON A CONSOLIDATED BASIS WHERE APPLICABLE AND THE APPLICATION
OF CONSOLIDATED FINANCIAL REPORTING PRINCIPLES UNDER GAAP).  THE SELLER AGREES
TO RESPOND TO ANY INQUIRIES WITH RESPECT TO THE TRANSFER HEREUNDER BY CONFIRMING
THE SALE AND CONTRIBUTION OF THE RECEIVABLES, THE CONTRACTS AND THE EQUIPMENT TO
THE BUYER, AND TO NOTE ON ITS FINANCIAL STATEMENTS THAT SUCH RECEIVABLES,
CONTRACTS AND EQUIPMENT HAVE BEEN SOLD AND/OR CONTRIBUTED TO THE BUYER.

 

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SECTION 2.02.  PURCHASES FROM THE SELLER.  (A)  UNDER THE ORIGINAL PCA AND THE
PRIOR PCA, THE SELLER HAS SOLD TO THE BUYER, AND THE BUYER HAS PURCHASED FROM
THE SELLER, ALL OF THE TRANSFERRED ASSETS ARISING UNDER OR IN CONNECTION WITH
VARIOUS CONTRACTS IDENTIFIED BY NOTICES OF SALE THEREUNDER.  THE OUTSTANDING
CONTRACTS SO PURCHASED AND NOT RESOLD BY THE BUYER ARE IDENTIFIED AS EXHIBIT A
HERETO.

 

(B)  EACH PURCHASE SHALL BE MADE ON A SETTLEMENT DATE UPON NOT LESS THAN ONE
BUSINESS DAY’S PRIOR WRITTEN NOTICE TO THE BUYER REQUESTING SUCH PURCHASE, WHICH
NOTICE SHALL CONTAIN A SUPPLEMENTAL EXHIBIT A HERETO SETTING FORTH A LIST OF THE
CONTRACTS TO BE TRANSFERRED TO THE BUYER ON SUCH SETTLEMENT DATE.  EACH SUCH
NOTICE OF A PROPOSED PURCHASE SHALL ACCOMPANY A SETTLEMENT REPORT AND SHALL
SPECIFY THAT PORTION OF THE PURCHASE PRICE WHICH IS PAYABLE IN CASH FOR THE
TRANSFERRED ASSETS TO BE TRANSFERRED.  SUCH NOTICE SHALL BE ACCOMPANIED BY A
CERTIFICATION FROM THE SELLER THAT, AFTER GIVING EFFECT TO THE PURCHASE PROPOSED
IN SUCH NOTICE, THE CONDITIONS SET FORTH IN SECTION 3.02 HERETO SHALL HAVE BEEN
SATISFIED.  THE PURCHASE PRICE (THE “PURCHASE PRICE”) FOR THE NEW TRANSFERRED
ASSETS INCLUDED IN ANY PURCHASE SHALL BE AGREED TO IN WRITING BY THE BUYER AND
THE SELLER ON OR BEFORE THE APPLICABLE SETTLEMENT DATE AND SHALL BE AN AMOUNT
NOT LESS THAN 95% NOR MORE THAN 100% TIMES THE AGGREGATE DISCOUNTED RECEIVABLES
BALANCE OF THE RECEIVABLES INCLUDED IN SUCH PURCHASE.

 

(C)  EXCEPT AS OTHERWISE PROVIDED BELOW IN THIS SECTION 2.02, THE PURCHASE PRICE
FOR THE TRANSFERRED ASSETS SOLD BY THE SELLER UNDER THIS SALE AGREEMENT SHALL BE
PAYABLE IN FULL IN CASH BY THE BUYER, IN EACH CASE ON THE DATE OF EACH SUCH
PURCHASE, EXCEPT THAT THE BUYER MAY, WITH RESPECT TO ANY PURCHASE, OFFSET
AGAINST SUCH PURCHASE PRICE ANY AMOUNTS OWED BY THE SELLER TO THE BUYER
HEREUNDER AND WHICH REMAIN UNPAID.  ON THE DATE OF EACH PURCHASE, THE BUYER
SHALL, UPON SATISFACTION OF THE APPLICABLE CONDITIONS SET FORTH IN ARTICLE III,
MAKE AVAILABLE TO THE SELLER THE PORTION OF THE PURCHASE PRICE PAYABLE IN CASH
REFERRED TO ABOVE IN SAME DAY FUNDS.

 

(D)  IF, ON ANY SETTLEMENT DATE, THE BUYER HAS INSUFFICIENT FUNDS TO PAY IN FULL
THE PURCHASE PRICE OWED ON SUCH DAY, THEN THE BUYER SHALL SO NOTIFY THE SELLER
PRIOR TO CONSUMMATING SUCH PURCHASE AND THE SELLER SHALL, IF IT ACCEPTS THE CASH
PROCEEDS TENDERED BY THE BUYER, BE DEEMED TO HAVE CONTRIBUTED TO THE CAPITAL OF
THE BUYER TRANSFERRED ASSETS HAVING A PURCHASE PRICE EQUAL TO THE OTHERWISE
UNPAID PORTION OF THE TOTAL PURCHASE PRICE OTHERWISE OWED ON SUCH DAY.

 

(E)  PROMPTLY AFTER EACH PURCHASE HEREUNDER (INCLUDING THE INITIAL PURCHASE),
THE SELLER WILL SEND TO EACH OBLIGOR UNDER THE CONTRACTS INCLUDED IN SUCH
PURCHASE, WITH THE NEXT INVOICE SENT TO SUCH OBLIGOR, A NOTICE OF ASSIGNMENT,
SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS EXHIBIT B, WHICH SHALL, INTER ALIA,
ADVISE SUCH OBLIGOR OF THE ABSOLUTE TRANSFER BY THE SELLER TO THE BUYER OF THAT
OBLIGOR’S CONTRACT, INCLUDING THE RECEIVABLES DUE THEREUNDER, AND ANY RELATED
EQUIPMENT.

 

SECTION 2.03.  SERVICING OF CONTRACTS AND EQUIPMENT.  IN CONNECTION WITH THE
CONTRIBUTION, ASSIGNMENT, TRANSFER, SALE AND CONVEYANCE OF THE TRANSFERRED
ASSETS TO THE BUYER, THE SELLER HEREBY AGREES TO SERVICE THE CONTRACTS AND
EQUIPMENT FOR THE BENEFIT OF THE BUYER AND ITS SUCCESSORS AND ASSIGNS IN
ACCORDANCE WITH THE TERMS AND PROVISIONS OF ARTICLE VI HEREOF.

 

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SECTION 2.04.  TRANSFER OF RECORDS.  (A)  THE TRANSFER OF TRANSFERRED ASSETS
HEREUNDER SHALL INCLUDE THE TRANSFER TO THE BUYER OF ALL OF THE SELLER’S RIGHT
AND TITLE TO AND INTEREST IN THE RECORDS RELATING TO SUCH TRANSFERRED ASSETS,
WHICH TRANSFER SHALL BE EFFECTED AUTOMATICALLY ON THE PURCHASE DATE FOR SUCH
TRANSFERRED ASSETS WITHOUT ANY FURTHER DOCUMENTATION.  IN CONNECTION WITH SUCH
TRANSFER, THE SELLER HEREBY GRANTS TO THE BUYER AN IRREVOCABLE, NON-EXCLUSIVE
LICENSE TO USE, WITHOUT ROYALTY OR PAYMENT OF ANY KIND, ALL SOFTWARE USED BY THE
SELLER TO ACCOUNT FOR THE RECEIVABLES AND THE CONTRACTS, TO THE EXTENT NECESSARY
TO ADMINISTER THE TRANSFERRED ASSETS, WHETHER SUCH SOFTWARE IS OWNED BY THE
SELLER OR IS OWNED BY OTHERS AND USED BY THE SELLER UNDER LICENSE AGREEMENTS
WITH RESPECT THERETO, SUCH USE TO BE SUBJECT TO THE TERMS AND CONDITIONS OF ANY
SUCH LICENSE AGREEMENTS WITH THIRD PARTIES WHERE APPLICABLE.  THE LICENSE
GRANTED HEREBY SHALL BE IRREVOCABLE, AND SHALL TERMINATE ON THE DATE ON WHICH
THE AGGREGATE RECEIVABLES BALANCE SHALL HAVE BEEN REDUCED TO ZERO.

 

(B)  THE SELLER SHALL TAKE SUCH ACTION REQUESTED BY THE BUYER, FROM TIME TO TIME
HEREAFTER, THAT MAY BE NECESSARY OR APPROPRIATE TO ENSURE THAT THE BUYER AND ITS
ASSIGNS HAVE (I) AN ENFORCEABLE OWNERSHIP INTEREST IN THE RECORDS RELATING TO
THE TRANSFERRED ASSETS AND (II) AN ENFORCEABLE RIGHT (WHETHER BY LICENSE OR
SUBLICENSE OR OTHERWISE) TO USE ALL OF THE COMPUTER SOFTWARE USED TO ACCOUNT FOR
THE TRANSFERRED ASSETS AND/OR TO RECREATE SUCH RECORDS, SUCH USE TO BE SUBJECT
TO THE TERMS AND CONDITIONS OF ANY LICENSE AGREEMENTS WITH THIRD PARTIES
PURSUANT TO WHICH THE SELLER HAS THE RIGHT TO USE THE APPLICABLE COMPUTER
SOFTWARE.

 

SECTION 2.05.  COLLECTIONS; DEEMED COLLECTIONS.  (A)  ANY COLLECTIONS OF
RECEIVABLES RECEIVED (OR DEEMED TO HAVE BEEN RECEIVED) BY THE SELLER SHALL BE
REMITTED DIRECTLY TO THE BUYER BY DEPOSITING SUCH COLLECTIONS IN THE LOCK-BOX
ACCOUNT WITHIN ONE BUSINESS DAY OF THE SELLER’S RECEIPT.

 

(B)  IF ON ANY DAY THE OUTSTANDING BALANCE OF ANY 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 CANCELLED 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 RECEIVABLE IN THE AMOUNT OF SUCH REDUCTION, CANCELLATION OR
ADJUSTMENT.  IF ON ANY DAY ANY OF THE REPRESENTATIONS OR WARRANTIES IN THE FIRST
SENTENCE OF SECTION 4.01(H) IS NO LONGER TRUE WITH RESPECT TO A 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 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 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 RECEIVABLE UNDER THIS SALE AGREEMENT OR THE PERFECTION OF
THE BUYER’S SECURITY INTEREST IN ANY EQUIPMENT AS AGAINST THE OBLIGOR
THEREUNDER, THEN THE SELLER BE DEEMED TO HAVE RECEIVED A COLLECTION OF SUCH
RECEIVABLE IN AN AMOUNT EQUAL TO THE OUTSTANDING BALANCE THEREOF.  TO THE EXTENT
THAT ANY SUCH DEEMED COLLECTION REDUCES THE OUTSTANDING BALANCE OF SUCH
RECEIVABLE TO ZERO, THEN, UPON THE SELLER’S PAYMENT TO THE BUYER OF SUCH DEEMED
COLLECTION, THE

 

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Buyer shall re-assign to the Seller all of its right, title and interest in and
to the relevant Receivable, the Contract under which such Receivable arose and
the Related Security relating thereto.  Prior to the 15th day of each month (or
if such day is not a Business Day, the immediately succeeding Business Day), the
Seller shall prepare and forward to the Buyer, a Settlement Report as of the
close of business of the Seller on the last day of the immediately preceding
month, in substantially the form set forth in Exhibit C.

 

(C)  ALTHOUGH THE SELLER AND THE BUYER AGREE THAT THE SELLER (EXCEPT IN ITS
CAPACITY AS SERVICER PURSUANT TO SECTION 6.02(A)), SHALL HAVE NO RIGHT TO SO
TERMINATE, REJECT OR NOT ASSUME A CONTRACT, IF THE SELLER 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
RECEIVABLES ARISING UNDER SUCH CONTRACT IN AN AMOUNT EQUAL TO (A) IN THE EVENT
OF A PREPAYMENT OR TERMINATION CONSENTED TO BY THE SELLER 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(C), THE BUYER SHALL RE-ASSIGN TO THE SELLER ALL
OF ITS RIGHT, TITLE AND INTEREST IN AND TO THE RELEVANT RECEIVABLE OR
RECEIVABLES, THE CONTRACTS UNDER WHICH SUCH RECEIVABLE(S) AROSE AND THE RELATED
SECURITY RELATING THERETO.

 

SECTION 2.06.  PAYMENTS AND COMPUTATIONS, ETC.  EXCEPT AS OTHERWISE PROVIDED
HEREIN, ALL AMOUNTS TO BE PAID OR DEPOSITED BY THE SELLER HEREUNDER SHALL BE
PAID OR DEPOSITED IN ACCORDANCE WITH THE TERMS HEREOF NO LATER THAN 11:00 A.M.
(NEW YORK CITY TIME) ON THE DAY WHEN DUE IN LAWFUL MONEY OF THE UNITED STATES OF
AMERICA IN IMMEDIATELY AVAILABLE FUNDS TO A SPECIAL ACCOUNT IN THE NAME OF THE
BUYER AND MAINTAINED AT BANK OF BOSTON.  THE SELLER SHALL, TO THE EXTENT
PERMITTED BY LAW, PAY TO THE BUYER INTEREST ON ALL AMOUNTS NOT PAID OR DEPOSITED
WHEN DUE HEREUNDER (WHETHER OWING BY THE SELLER INDIVIDUALLY OR AS SERVICER) AT
2% PER ANNUM ABOVE THE BASE RATE, PAYABLE ON DEMAND; PROVIDED, HOWEVER, THAT
SUCH INTEREST RATE SHALL NOT AT ANY TIME EXCEED THE MAXIMUM RATE PERMITTED BY
APPLICABLE LAW.  ALL COMPUTATIONS OF INTEREST AND OTHER FEES HEREUNDER SHALL BE
MADE ON THE BASIS OF A YEAR OF 360 DAYS FOR THE ACTUAL NUMBER OF DAYS (INCLUDING
THE FIRST BUT EXCLUDING THE LAST DAY) ELAPSED.

 

SECTION 2.07.  PERFECTION OF LIENS; FURTHER ASSURANCES.  UPON THE REQUEST OF THE
BUYER, 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 OR ASSIGNMENTS THEREOF), THAT MAY BE NECESSARY
OR DESIRABLE, OR THAT THE BUYER MAY REQUEST, IN ORDER TO (I) PERFECT AND PROTECT
ANY SECURITY INTEREST GRANTED OR PURPORTED TO BE GRANTED BY AN OBLIGOR UNDER ANY
CONTRACT AND (II) PERFECT AND PROTECT THE OWNERSHIP AND SECURITY INTERESTS
GRANTED OR PURPORTED TO BE GRANTED TO THE BUYER HEREUNDER OR (III) TO ENABLE THE
BUYER TO EXERCISE AND ENFORCE ITS RIGHTS AND REMEDIES HEREUNDER WITH RESPECT TO
ANY TRANSFERRED ASSETS; PROVIDED THAT THE SELLER SHALL NOT BE

 

5

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required to file financing statements or to maintain the effectiveness of
previously filed financing statements against any Obligor with respect to any
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 for which no such financing statements are in effect at
any time remains less than 7.5% of the Discounted Eligible Receivables Balance
at such time; 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
Buyer or the Collateral Agent on its behalf specifically requests otherwise.

 

ARTICLE III
CONDITIONS OF PURCHASES

 

SECTION 3.01.  CONDITIONS PRECEDENT TO INITIAL PURCHASE.  THE FIRST PURCHASE
HEREUNDER AFTER THE DATE HEREOF SHALL BE SUBJECT TO THE CONDITION PRECEDENT THAT
ALL CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THE RECEIVABLES PURCHASE
AGREEMENT SHALL BE SATISFIED AND THAT THE BUYER SHALL HAVE RECEIVED THE
FOLLOWING, EACH IN FORM AND SUBSTANCE SATISFACTORY TO THE BUYER

 

(A)  THIS SALE AGREEMENT EXECUTED BY THE BUYER AND THE SELLER;

 

(B)  A FULLY EXECUTED COPY OF THE RECEIVABLES PURCHASE AGREEMENT;

 

(C)  A COPY OF THE RESOLUTIONS OF THE BOARD OF DIRECTORS OF THE SELLER APPROVING
THIS SALE AGREEMENT AND THE OTHER FACILITY DOCUMENTS TO BE DELIVERED BY IT
HEREUNDER AND THE TRANSACTIONS CONTEMPLATED HEREBY, CERTIFIED BY ITS SECRETARY
OR ASSISTANT SECRETARY;

 

(D)  THE CERTIFICATE OF INCORPORATION OF THE SELLER CERTIFIED BY THE SECRETARY
OF STATE OF DELAWARE;

 

(E)  GOOD STANDING CERTIFICATES FOR THE SELLER ISSUED BY THE SECRETARIES OF
STATE OF DELAWARE AND MASSACHUSETTS; AND

 

(F)  A CERTIFICATE OF THE SECRETARY OR ASSISTANT SECRETARY OF THE SELLER
CERTIFYING (I) THE NAMES AND TRUE SIGNATURES OF THE OFFICERS AUTHORIZED ON ITS
BEHALF TO SIGN THIS SALE AGREEMENT AND THE OTHER FACILITY DOCUMENTS TO BE
DELIVERED BY IT HEREUNDER (ON WHICH CERTIFICATE THE BUYER (AND THE COLLATERAL
AGENT) MAY CONCLUSIVELY RELY UNTIL SUCH TIME AS THE BUYER (AND THE COLLATERAL
AGENT) SHALL RECEIVE FROM THE SELLER A REVISED CERTIFICATE MEETING THE
REQUIREMENTS OF THIS SUBSECTION (F)) AND (II) A COPY OF THE SELLER’S BY-LAWS.

 

SECTION 3.02.  CONDITIONS PRECEDENT TO ALL PURCHASES.  EACH PURCHASE (INCLUDING
THE INITIAL PURCHASE) BY THE BUYER FROM THE SELLER SHALL BE SUBJECT TO THE
FURTHER CONDITIONS PRECEDENT THAT (A) WITH RESPECT TO ANY SUCH PURCHASE, ON OR
PRIOR TO THE DATE OF SUCH PURCHASE, THE SELLER SHALL HAVE DELIVERED TO THE BUYER
IN FORM AND SUBSTANCE SATISFACTORY TO THE BUYER (I) A COMPLETED SETTLEMENT
REPORT AS OF THE END OF THE IMMEDIATELY PRECEDING CALENDAR MONTH CONTAINING ANY
ADDITIONAL INFORMATION AS MAY BE REASONABLY REQUESTED BY THE BUYER, (II) A
NOTICE OF PURCHASE AND LIST OF THE CONTRACTS TO BE PURCHASED AS PROVIDED IN
SECTION 2.02(B), AND (III) 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 FOR EACH CONTRACT TO BE

 

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included in such Purchase; and (b) on the date of such Purchase the following
statements shall be true and the Seller by accepting the cash portion of the
Purchase Price shall be deemed to have certified that:

 

(I)  THE REPRESENTATIONS AND WARRANTIES CONTAINED IN SECTION 4.01 ARE CORRECT ON
AND AS OF SUCH DAY AS THOUGH MADE ON AND AS OF SUCH DATE;

 

(II)  NO EVENT HAS OCCURRED AND IS CONTINUING, OR WOULD RESULT FROM SUCH
PURCHASE WHICH CONSTITUTES AN EVENT OF TERMINATION OR WOULD CONSTITUTE AN EVENT
OF TERMINATION BUT FOR THE REQUIREMENT THAT NOTICE BE GIVEN OR TIME ELAPSE OR
BOTH;

 

(III)  THE BUYER SHALL HAVE RECEIVED SUCH OTHER APPROVALS OR DOCUMENTS AS THE
BUYER MAY REASONABLY REQUEST; AND

 

(IV)  IF THE FOOTHILL CREDIT AGREEMENT REMAINS IN EFFECT, SUCH PURCHASE
CONSTITUTES A “PERMITTED DISPOSITION” UNDER AND AS DEFINED IN THE FOOTHILL
CREDIT AGREEMENT, AND THE SELLER HAS TAKEN ALL ACTIONS NECESSARY TO RELEASE THE
TRANSFERRED ASSETS THAT ARE THE SUBJECT OF SUCH PURCHASE FROM ANY LIEN OR
SECURITY INTEREST ARISING IN CONNECTION WITH THE FOOTHILL CREDIT AGREEMENT;
PROVIDED, THAT THIS CLAUSE (IV) SHALL NOT BE CONSTRUED TO LIMIT THE GENERALITY
OF THE REPRESENTATION AND WARRANTY SET FORTH IN SECTION 4.01(H).

 

SECTION 3.03.  EFFECT OF PAYMENT OF PURCHASE PRICE.  UPON THE PAYMENT OF THE
PURCHASE PRICE FOR ANY PURCHASE, (WHETHER IN CASH OR THROUGH A CAPITAL
CONTRIBUTION), TITLE TO THE RELATED TRANSFERRED ASSETS SHALL VEST IN THE BUYER,
WHETHER OR NOT THE CONDITIONS PRECEDENT TO SUCH PURCHASE WERE IN FACT SATISFIED;
PROVIDED, HOWEVER, THAT THE BUYER SHALL NOT BE DEEMED TO HAVE WAIVED ANY CLAIM
IT MAY HAVE UNDER THIS SALE AGREEMENT FOR THE FAILURE BY THE SELLER IN FACT TO
SATISFY ANY SUCH CONDITION PRECEDENT.

 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES

 

SECTION 4.01.  REPRESENTATIONS AND WARRANTIES OF THE SELLER.  THE SELLER
REPRESENTS AND WARRANTS AS FOLLOWS:

 

(A)  DUE INCORPORATION AND GOOD STANDING.  THE SELLER IS A CORPORATION DULY
INCORPORATED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE
JURISDICTION NAMED AT THE BEGINNING HEREOF AND IS DULY QUALIFIED TO DO BUSINESS,
AND IS IN GOOD STANDING, IN EVERY JURISDICTION IN WHICH THE NATURE OF ITS
BUSINESS REQUIRES IT TO BE SO QUALIFIED, EXCEPT WHERE THE FAILURE TO BE SO
QUALIFIED WOULD NOT MATERIALLY ADVERSELY AFFECT (I) THE INTERESTS HEREUNDER OF
THE BUYER, (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 (INDIVIDUALLY OR AS SERVICER) TO
PERFORM ITS OBLIGATIONS HEREUNDER.

 

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(B)  DUE AUTHORIZATION AND NO CONFLICT.  THE EXECUTION, DELIVERY AND PERFORMANCE
BY THE SELLER OF THIS SALE AGREEMENT AND ALL OTHER AGREEMENTS, INSTRUMENTS AND
DOCUMENTS TO BE DELIVERED HEREUNDER, AND THE TRANSACTIONS CONTEMPLATED HEREBY
AND THEREBY (INCLUDING THE SALE AND CONTRIBUTION TO THE BUYER OF THE TRANSFERRED
ASSETS 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 MATERIAL
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
(OTHER THAN IN FAVOR OF THE BUYER AS CONTEMPLATED HEREUNDER); AND NO TRANSACTION
CONTEMPLATED HEREBY REQUIRES COMPLIANCE WITH ANY BULK SALES ACT OR SIMILAR LAW. 
THIS SALE AGREEMENT HAS 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 SALES OF ACCOUNTS AND
CHATTEL PAPER UNDER THIS SALE AGREEMENT AND THE SECURITY INTERESTS GRANTED UNDER
THE RECEIVABLES PURCHASE AGREEMENT 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 SALE 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 SALE AGREEMENT AND EACH OTHER
FACILITY DOCUMENTS TO BE DELIVERED BY THE SELLER IN CONNECTION HEREWITH
CONSTITUTE THE LEGAL, VALID AND BINDING OBLIGATIONS OF THE SELLER ENFORCEABLE
AGAINST THE SELLER 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)  FINANCIAL STATEMENTS.  (I) THE CONSOLIDATED BALANCE SHEETS OF THE SELLER
AND ITS CONSOLIDATED SUBSIDIARIES AS AT DECEMBER 31, 2002, AND THE RELATED
STATEMENTS OF INCOME, RETAINED EARNINGS AND CASH FLOWS OF THE SELLER AND ITS
CONSOLIDATED SUBSIDIARIES FOR THE FISCAL YEAR THEN ENDED, CERTIFIED BY DELOITTE
& TOUCHE, INDEPENDENT PUBLIC ACCOUNTANTS, AND THE UNAUDITED INTERIM CONSOLIDATED
BALANCE SHEETS OF THE SELLER AND ITS SUBSIDIARIES AS OF MARCH 31, 2003 AND THE
RELATED CONSOLIDATED STATEMENTS OF INCOME, RETAINED EARNINGS AND CASH FLOWS FOR
THE FISCAL YEAR AND THREE MONTHS THEN ENDING (THE “INTERIM FINANCIALS”), IN EACH
CASE FAIRLY PRESENT THE CONSOLIDATED FINANCIAL CONDITION OF THE SELLER AND ITS
CONSOLIDATED SUBSIDIARIES AS AT SUCH DATES AND THE CONSOLIDATED RESULTS OF THE
OPERATIONS OF THE SELLER AND ITS CONSOLIDATED SUBSIDIARIES FOR THE PERIOD ENDED
ON SUCH DATES, ALL IN ACCORDANCE WITH GAAP, AND SINCE DECEMBER 31, 2002, THERE
HAS BEEN NO MATERIAL ADVERSE CHANGE IN ANY SUCH CONDITION OR OPERATIONS, EXCEPT
AS REFLECTED IN THE INTERIM FINANCIALS.  NEITHER THE SELLER NOR ANY OF ITS
SUBSIDIARIES HAS ANY MATERIAL

 

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liabilities or obligations other than those disclosed in the financial
statements referred to above or for which adequate reserves are reflected in
such financial statements.

 

(F)  NO LITIGATION.  THERE ARE NO ACTIONS, SUITS OR PROCEEDINGS PENDING, OR TO
THE KNOWLEDGE OF THE SELLER THREATENED, AGAINST OR AFFECTING THE SELLER OR ANY
OF ITS SUBSIDIARIES, OR THE PROPERTY OF THE SELLER OR ANY OF ITS SUBSIDIARIES,
IN ANY COURT, OR BEFORE ANY ARBITRATOR OF ANY KIND, OR BEFORE OR BY ANY
GOVERNMENTAL BODY, WHICH MAY MATERIALLY ADVERSELY AFFECT (I) THE BUSINESS,
PROPERTIES, OPERATIONS, PROSPECTS, PROFITS OR CONDITION (FINANCIAL OR OTHERWISE)
FINANCIAL CONDITION OF THE SELLER OR (II) THE ABILITY OF THE SELLER TO PERFORM
ITS OBLIGATIONS UNDER THIS SALE AGREEMENT OR (III) THE COLLECTIBILITY OF THE
RECEIVABLES.  NEITHER THE SELLER NOR ANY OF ITS SUBSIDIARIES IS IN DEFAULT WITH
RESPECT TO ANY ORDER OF ANY COURT, ARBITRATOR OR GOVERNMENTAL BODY EXCEPT FOR
DEFAULTS WITH RESPECT TO ORDERS OF GOVERNMENTAL AGENCIES WHICH DEFAULTS ARE NOT
MATERIAL TO THE BUSINESS OR OPERATIONS OF THE SELLER OR ANY OF ITS SUBSIDIARIES
OR THE SELLER’S ABILITY TO PERFORM ITS OBLIGATIONS HEREUNDER.

 

(G)  USE OF PROCEEDS.  NO PROCEEDS OF ANY PURCHASE WILL BE USED BY THE SELLER TO
ACQUIRE ANY SECURITY IN ANY TRANSACTION WHICH IS SUBJECT TO SECTION 13 OR 14 OF
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

(H)  PERFECTION OF INTEREST IN TRANSFERRED ASSETS.  PRIOR TO THE BUYER’S
PURCHASE AND/OR ACQUISITION OF EACH TRANSFERRED ASSET HEREUNDER, THE SELLER IS
OR WILL BE THE LAWFUL OWNER OF, AND HAVE GOOD TITLE TO, SUCH TRANSFERRED ASSET
FREE AND CLEAR OF ANY ADVERSE CLAIM AND UPON EACH PURCHASE AND/OR ACQUISITION BY
THE BUYER OF TRANSFERRED ASSETS HEREUNDER, THE BUYER SHALL ACQUIRE A VALID AND
PERFECTED FIRST PRIORITY OWNERSHIP INTEREST IN EACH RECEIVABLE THEN EXISTING OR
THEREAFTER ARISING AND IN THE RELATED SECURITY, THE OTHER TRANSFERRED ASSETS AND
COLLECTIONS AND WITH RESPECT THERETO, IN EACH CASE FREE AND CLEAR OF ANY ADVERSE
CLAIM.  ALL SUCH PURCHASES OF RECEIVABLES AND RELATED TRANSFERRED ASSETS
CONSTITUTE TRUE AND VALID SALES, AND ALL SUCH PURCHASES AND CONTRIBUTIONS OF
RECEIVABLES AND RELATED TRANSFERRED ASSETS CONSTITUTE TRUE AND VALID TRANSFERS
AND ASSIGNMENTS OF ALL OF SELLER’S RIGHT, TITLE AND INTEREST IN, TO AND UNDER
SUCH TRANSFERRED ASSETS (AND NOT MERELY A PLEDGE OF SUCH RECEIVABLES AND RELATED
TRANSFERRED ASSETS FOR SECURITY PURPOSES), ENFORCEABLE AGAINST CREDITORS OF THE
SELLER AND NO SUCH TRANSFERRED ASSETS SHALL CONSTITUTE PROPERTY OF THE SELLER;
AND NO EFFECTIVE FINANCING STATEMENT OR OTHER INSTRUMENT SIMILAR IN EFFECT
COVERING ANY RECEIVABLE, THE RELATED SECURITY, COLLECTIONS OR THE OTHER
TRANSFERRED ASSETS SHALL AT ANY TIME BE ON FILE IN ANY RECORDING OFFICE EXCEPT
SUCH AS MAY BE FILED IN FAVOR OF THE BUYER (OR ITS ASSIGNEES) IN ACCORDANCE WITH
THIS SALE AGREEMENT.

 

(I)  ACCURACY OF INFORMATION.  NO SETTLEMENT REPORT (IF PREPARED BY THE SELLER,
OR TO THE EXTENT THAT INFORMATION CONTAINED THEREIN IS SUPPLIED BY THE SELLER),
INFORMATION, EXHIBIT, FINANCIAL STATEMENT, DOCUMENT, BOOK, RECORD OR REPORT
(OTHER THAN FORECASTS REQUIRED TO BE DELIVERED BY THE SELLER HEREUNDER)
FURNISHED OR TO BE FURNISHED BY THE SELLER TO THE BUYER IN CONNECTION WITH THIS
SALE AGREEMENT IS OR SHALL BE INACCURATE IN ANY MATERIAL RESPECT AS OF THE DATE
IT IS OR SHALL BE DATED OR (EXCEPT AS OTHERWISE DISCLOSED TO THE BUYER, AS THE
CASE MAY BE, AT SUCH TIME) AS OF THE DATE SO FURNISHED, OR CONTAINS OR SHALL
CONTAIN ANY MATERIAL MISSTATEMENT OF FACT OR OMITS OR SHALL OMIT TO STATE A
MATERIAL FACT OR ANY FACT NECESSARY TO MAKE THE STATEMENTS CONTAINED THEREIN NOT
MATERIALLY MISLEADING.

 

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(J)  LOCATION OF CHIEF EXECUTIVE OFFICE AND RECORDS.  THE CHIEF PLACE OF
BUSINESS AND CHIEF EXECUTIVE OFFICE OF THE SELLER ARE LOCATED AT THE ADDRESS OF
THE SELLER REFERRED TO IN SECTION 9.02 HEREOF AND THE LOCATIONS OF THE OFFICES
WHERE THE SELLER KEEPS ALL THE RECORDS ARE LISTED ON EXHIBIT F (OR AT SUCH OTHER
LOCATIONS, NOTIFIED TO THE BUYER IN ACCORDANCE WITH SECTION 5.01(F), IN
JURISDICTIONS WHERE ALL ACTION REQUIRED BY SECTION 6.03 HAS BEEN TAKEN AND
COMPLETED).

 

(K)  LOCK-BOX ACCOUNTS.  EACH OBLIGOR UNDER A CONTRACT HAS 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, AND EACH SUCH LOCK-BOX
ACCOUNT IS SUBJECT TO A LOCK-BOX AGREEMENT SUBSTANTIALLY IN THE FORM OF EXHIBIT
G.  THE SELLER 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 DELIVERED 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.

 

(L)  NO TRADE NAMES.  EXCEPT AS DESCRIBED IN EXHIBIT I, THE SELLER HAS NO TRADE
NAMES, FICTITIOUS NAMES, ASSUMED NAMES OR “DOING BUSINESS AS” NAMES.

 

(M)  SEPARATE EXISTENCE.  THE SELLER IS ENTERING INTO THE TRANSACTIONS
CONTEMPLATED BY THIS SALE AGREEMENT IN RELIANCE ON THE BUYER’S IDENTITY AS A
SEPARATE LEGAL ENTITY FROM THE SELLER AND EACH OF ITS AFFILIATES OTHER THAN THE
BUYER, AND ACKNOWLEDGES THAT THE BUYER AND THE OTHER PARTIES TO THE FACILITY
DOCUMENTS ARE SIMILARLY ENTERING INTO THE TRANSACTIONS CONTEMPLATED BY THE OTHER
FACILITY DOCUMENTS IN RELIANCE ON THE BUYER’S IDENTITY AS A SEPARATE LEGAL
ENTITY FROM THE SELLER AND EACH SUCH OTHER AFFILIATE, AND HAS TAKEN ALL ACTIONS
NECESSARY ON ITS PART FOR THE BUYER’S REPRESENTATION IN SECTION 4.01(N) OF THE
RECEIVABLES PURCHASE AGREEMENT TO BE TRUE AND CORRECT.

 

(N)  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 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 HAVE NOT GIVEN RISE TO ANY ADVERSE CLAIMS.

 

(O)  SOLVENCY.  THE SELLER (I) IS NOT “INSOLVENT” (AS SUCH TERM IS DEFINED IN
§101(32)(A) OF THE BANKRUPTCY CODE); (II) IS ABLE TO PAY ITS DEBTS AS THEY
MATURE; 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.

 

(P)  NO FRAUDULENT CONVEYANCE.  THE TRANSACTIONS CONTEMPLATED BY THIS SALE
AGREEMENT AND BY EACH OF THE FACILITY DOCUMENTS ARE BEING CONSUMMATED BY THE
SELLER IN FURTHERANCE OF THE SELLER’S ORDINARY BUSINESS, WITH NO CONTEMPLATION
OF INSOLVENCY AND WITH NO

 

10

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intent to hinder, delay or defraud any of its present or future creditors.  By
its receipt of the Purchase Prices hereunder and its ownership of the member
interests of the Buyer, the Seller shall have received reasonably equivalent
value for the Transferred Assets sold or otherwise conveyed to the Buyer under
this Sale Agreement.

 

(Q)  SOFTWARE.  ATTACHED AS EXHIBIT J IS A LIST OF ALL COMPUTER SOFTWARE USED BY
THE SELLER TO ADMINISTER THE RECEIVABLES AND OTHER TRANSFERRED ASSETS.  EACH OF
THE BUYER AND THE COLLATERAL AGENT, AS ASSIGNEE OF THE BUYER, HAS (OR WILL HAVE,
CONCURRENTLY WITH THE EFFECTIVENESS HEREOF) AN ENFORCEABLE RIGHT (WHETHER BY
LICENSE, SUBLICENSE OR ASSIGNMENT) TO USE ALL OF THE COMPUTER SOFTWARE USED TO
ACCOUNT FOR THE TRANSFERRED ASSETS TO THE EXTENT NECESSARY TO ADMINISTER THE
RECEIVABLES AND OTHER TRANSFERRED ASSETS, SUCH USE TO BE SUBJECT TO THE TERMS
AND CONDITIONS OF ANY LICENSE AGREEMENT FOR SUCH SOFTWARE BETWEEN THE SELLER AND
ANY THIRD PARTIES WHERE APPLICABLE.

 

(R)  REPRESENTATIONS WITH RESPECT TO RECEIVABLES AND CONTRACTS.  WITH RESPECT TO
EACH RECEIVABLE:

 

(I)  EACH SUCH RECEIVABLE, AT THE TIME OF PURCHASE THEREOF, IS AN ELIGIBLE
RECEIVABLE.  EACH CONTRACT RELATING TO A RECEIVABLE: (A) IF IT CONSTITUTES A
LEASE, IS IN SUBSTANTIALLY THE FORM OF EXHIBIT K-1 HERETO; (B) IF IT CONSTITUTES
A FINANCE AGREEMENT, IS IN SUBSTANTIALLY THE FORM OF EXHIBIT K-2 HERETO; (C) IF
IT CONSTITUTES A LEASEHOLD IMPROVEMENT NOTE, IS IN SUBSTANTIALLY THE FORM OF
EXHIBIT K-3 HERETO; (D) IF IT CONSTITUTES A PRACTICE FINANCE LOAN, IS IN
SUBSTANTIALLY THE FORM OF EXHIBIT K-4 HERETO, UNDERWRITTEN IN ACCORDANCE WITH
THE PRACTICE FINANCE LOAN UNDERWRITING CRITERIA AS ATTACHED TO EXHIBIT K-4, AND
(E) IF IT CONSTITUTES A NON-MEDICAL CONTRACT, IS IN SUBSTANTIALLY THE FORM OF
EXHIBIT K-1, EXHIBIT K-2, EXHIBIT K-3 OR EXHIBIT K-4 HERETO.

 

(II)  THERE ARE NO FACTS OR CIRCUMSTANCES EXISTING AS OF THE PURCHASE DATE
THEREOF WHICH GIVE RISE TO ANY RIGHT OF RESCISSION, OFFSET, COUNTERCLAIM OR
DEFENSE, INCLUDING THE DEFENSE OF USURY, TO THE OBLIGATIONS OF ANY OBLIGOR,
INCLUDING THE OBLIGATION OF SUCH OBLIGOR TO PAY ALL AMOUNTS DUE THEREUNDER, WITH
RESPECT TO ANY CONTRACT TO WHICH SUCH OBLIGOR IS A PARTY; AND NEITHER THE
OPERATION OF ANY OF THE TERMS OF ANY CONTRACT NOR THE EXERCISE OF ANY RIGHT
THEREUNDER WILL RENDER SUCH CONTRACT UNENFORCEABLE IN WHOLE OR IN PART OR
SUBJECT TO ANY RIGHT OF RESCISSION, OFFSET, COUNTERCLAIM OR DEFENSE, INCLUDING
THE DEFENSE OF USURY (OTHER THAN LIMITATIONS ON ENFORCEMENT WHICH MAY
SUBSEQUENTLY ARISE AS A RESULT OF BANKRUPTCY, INSOLVENCY, REORGANIZATION OR
SIMILAR LAWS RELATING TO OR AFFECTING THE ENFORCEMENT OF CREDITORS, RIGHTS
GENERALLY AND BY GENERAL EQUITABLE PRINCIPLES), AND NO SUCH RIGHT OF RESCISSION,
OFFSET, COUNTERCLAIM OR DEFENSE HAS BEEN ASSERTED WITH RESPECT THERETO.

 

(III)  AS OF MAY 31, 2003, (I) THE AGGREGATE DISCOUNTED RECEIVABLES BALANCE OF
CONTRACTS THAT ARE LEASES IS $49,778,000, (II) THE AGGREGATE

 

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DISCOUNTED RECEIVABLES BALANCE OF CONTRACTS THAT ARE FINANCE AGREEMENTS PURSUANT
TO WHICH THE SELLER FINANCES AN OBLIGOR’S PURCHASE OF EQUIPMENT IS $178,495,000,
(III) THE AGGREGATE DISCOUNTED RECEIVABLES BALANCE OF CONTRACTS THAT ARE
LEASEHOLD IMPROVEMENT NOTES IS $25,059,000 AND (IV) THE AGGREGATE DISCOUNTED
BOOK VALUE OF ANTICIPATED RESIDUALS ON THE EQUIPMENT SUBJECT TO LEASES IS
$6,753,000.

 

(IV)  EACH LEASE CONTAINS A “HELL OR HIGH WATER” PROVISION AND REQUIRES THE
OBLIGOR TO ASSUME ALL RISK OF LOSS OR MALFUNCTION OF THE RELATED EQUIPMENT. 
EACH LEASE AND FINANCE AGREEMENT PURSUANT TO WHICH THE SELLER FINANCES AN
OBLIGOR’S PURCHASE OF EQUIPMENT REQUIRES THE OBLIGOR TO PAY ALL SALES, USE,
PROPERTY, EXCISE AND OTHER SIMILAR TAXES IMPOSED ON OR WITH RESPECT TO THE
RELATED EQUIPMENT AND PERMITS THE RIGHTS WITH RESPECT TO SUCH CONTRACT, AND ALL
COLLATERAL RELATED THERETO, TO BE ASSIGNED BY THE SELLER WITHOUT THE CONSENT OF
ANY PERSON.  NO CONTRACT PERMITS EARLY TERMINATION OR PREPAYMENT, UNLESS THE
AMOUNT REQUIRED TO BE PAID BY OR ON BEHALF OF OBLIGOR IN RESPECT THEREOF IS
EQUAL TO OR GREATER THAN THE APPLICABLE TERMINATION AMOUNT.  NO CONTRACT
PROVIDES FOR THE SUBSTITUTION, EXCHANGE OR ADDITION OF ANY EQUIPMENT SUBJECT
THERETO WHICH WOULD RESULT IN ANY REDUCTION OF THE AMOUNT OF PAYMENTS OR CHANGE
THE TIMING OF PAYMENTS DUE UNDER SUCH CONTRACT.

 

(V)  EACH LEASE REQUIRES THE RELATED OBLIGOR TO MAINTAIN THE RELATED EQUIPMENT,
IF ANY, IN GOOD AND WORKABLE ORDER AND BEAR THE COSTS OF OPERATING SUCH
EQUIPMENT.  EACH LEASE AND FINANCE AGREEMENT PURSUANT TO WHICH THE SELLER
FINANCES AN OBLIGOR’S PURCHASE OF EQUIPMENT REQUIRES THE RELATED OBLIGOR TO
OBTAIN AND MAINTAIN PHYSICAL DAMAGE INSURANCE ON THE EQUIPMENT SUBJECT THERETO
AND TO NAME THE LESSOR OR LENDER THEREUNDER AS LOSS PAYEE AND AN ADDITIONAL
INSURED WITH RESPECT THERETO.  THE COLLATERAL AGENT IS NAMED AS LOSS PAYEE UNDER
ALL PHYSICAL DAMAGE INSURANCE ON THE EQUIPMENT THAT IS CARRIED BY THE SELLER OR
THE BUYER.  TO THE BEST OF SELLER’S KNOWLEDGE, THE EQUIPMENT WAS PROPERLY
DELIVERED TO THE OBLIGOR IN GOOD REPAIR, WITHOUT DEFECTS AND IN SATISFACTORY
ORDER AND THE RELATED EQUIPMENT, IF ANY, IS IN GOOD OPERATING CONDITION AND
REPAIR.  TO THE BEST OF THE SELLER’S KNOWLEDGE, THE RELATED EQUIPMENT WAS
ACCEPTED BY THE OBLIGOR AFTER REASONABLE OPPORTUNITY TO INSPECT AND TEST THE
SAME AND NO OBLIGOR HAS INFORMED THE SELLER OF ANY DEFECTS THEREIN.

 

(VI)  ON EACH PURCHASE DATE, AFTER GIVING EFFECT TO THE PURCHASES TO BE MADE ON
SUCH DATE, THE AGGREGATE DISCOUNTED RECEIVABLES BALANCE OF ALL CONTRACTS WITH
OBLIGORS LOCATED IN ANY ONE STATE DOES NOT EXCEED 30% OF THE DISCOUNTED
RECEIVABLES BALANCE FOR ALL CONTRACTS.

 

(VII)  AS OF MAY 31, 2003, THE WEIGHTED AVERAGE REMAINING TERM OF THE CONTRACTS
WAS 53 MONTHS.  ON EACH SUBSEQUENT PURCHASE DATE, AFTER GIVING

 

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EFFECT TO THE PURCHASES TO BE MADE ON SUCH DATE, THE WEIGHTED AVERAGE REMAINING
TERM DOES NOT EXCEED 65 MONTHS.

 

(VIII)  AS OF MAY 31, 2003, THE LOWEST OUTSTANDING BALANCE OF THE RECEIVABLES
UNDER ANY CONTRACT IS NO LESS THAN $18 AND THE HIGHEST OUTSTANDING BALANCE OF
THE RECEIVABLES UNDER ANY CONTRACT IS NO GREATER THAN $752,000.  AS OF EACH
PURCHASE DATE, AFTER GIVING EFFECT TO THE PURCHASES TO BE MADE ON SUCH DATE, THE
AVERAGE OUTSTANDING BALANCE OF THE RECEIVABLES IS NO GREATER THAN $50,000.

 

(IX)  AS OF THE PURCHASE DATE THEREOF, THE SELLER HAS DELIVERED THE CONTRACT
FILE FOR THE RELATED CONTRACT TO THE BUYER OR TO THE CUSTODIAN ON THE BUYER’S
BEHALF TOGETHER WITH DULY EXECUTED INSTRUMENTS OF TRANSFER OR ASSIGNMENT IN
BLANK FOR EACH CONTRACT CONSTITUTING AN INSTRUMENT OR CHATTEL PAPER.

 

(X)  AS OF THE PURCHASE DATE THEREOF, THE AVERAGE ORIGINAL TERMS OF THE
CONTRACTS INCLUDED IN SUCH PURCHASE DOES NOT EXCEED 5.0 YEARS.

 

(XI)  AS OF THE PURCHASE DATE THEREOF, 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%).

 

(S)  OTHER INDEBTEDNESS.  THE SELLER IS NOT IN DEFAULT UNDER ANY MATERIAL
INDENTURE, LOAN OR CREDIT AGREEMENT WITH RESPECT TO ANY INDEBTEDNESS, THE EFFECT
OF WHICH IS TO CAUSE, OR WHICH WOULD, WITH THE GIVING OF NOTICE OF THE LAPSE OF
TIME OR BOTH, PERMIT THE HOLDER OR HOLDERS THEREOF TO CAUSE, SUCH INDEBTEDNESS
TO BECOME DUE PRIOR TO ITS STATED MATURITY.

 

(T)  INVESTMENT COMPANY.  THE SELLER IS NOT AN “INVESTMENT COMPANY” OR A COMPANY
CONTROLLED BY AN “INVESTMENT COMPANY” WITHIN THE MEANING OF THE INVESTMENT
COMPANY ACT OF 1940.

 

(U)  ERISA.  NEITHER THE SELLER NOR ANY OF ITS ERISA AFFILIATES MAINTAINS,
CONTRIBUTES TO OR HAS ANY OBLIGATION TO CONTRIBUTE TO ANY PLAN WHICH COULD
REASONABLY BE EXPECTED TO, INDIVIDUALLY OR IN THE AGGREGATE, MATERIALLY
ADVERSELY AFFECT THE ABILITY OF THE SELLER TO PERFORM ITS OBLIGATIONS UNDER THIS
SALE AGREEMENT OR ANY OTHER FACILITY DOCUMENT TO WHICH IT IS A PARTY OR WHICH
COULD EXPOSE THE BUYER TO ANY MATERIAL LIABILITY UNDER ERISA.  NO ACCUMULATED OR
WAIVED FUNDING DEFICIENCY (AS DEFINED IN SECTION 302(A)(2) OF ERISA OR SECTION
412(A) OF THE INTERNAL REVENUE CODE) EXISTS WITH RESPECT TO ANY BENEFIT PLAN,
AND THE SELLER HAS NOT FAILED TO SATISFY THE MINIMUM FUNDING REQUIREMENTS UNDER
ERISA OR THE INTERNAL REVENUE CODE WITH RESPECT TO ANY BENEFIT PLAN.  NEITHER
THE SELLER NOR ANY OF ITS ERISA AFFILIATES HAS INCURRED ANY LIABILITY TO OR ON
ACCOUNT OF A BENEFIT PLAN OR MULTIEMPLOYER PLAN PURSUANT TO SECTION 515, 4062,
4063, 4064, 4201 OR 4204 OF ERISA OR EXPECTS TO INCUR ANY LIABILITY UNDER ANY OF
THE FOREGOING SECTIONS ON ACCOUNT OF THE TERMINATION OF PARTICIPATION IN OR
CONTRIBUTIONS TO ANY SUCH PLAN OR MULTIEMPLOYER PLAN.

 

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(V)  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.

 

(W)  HISTORIC LOSS DATA.  ATTACHED HERETO AS A PART OF EXHIBIT D IS A SUMMARY OF
HISTORICAL STATIC LOSS DATA OF THE ORIGINATOR SUFFERED 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 OF THE SELLER

 

SECTION 5.01.  AFFIRMATIVE COVENANTS OF THE SELLER.  FROM THE DATE HEREOF UNTIL
THE LATER OF THE TERMINATION DATE OR THE COLLECTION DATE, THE SELLER WILL,
UNLESS THE BUYER 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.

 

(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 INTERESTS HEREUNDER OF THE BUYER,
(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 (INDIVIDUALLY OR AS SERVICER) 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 AND DURING REGULAR BUSINESS HOURS AND ON A QUARTERLY BASIS IF REQUESTED,
PERMIT THE BUYER AND ITS DESIGNEES (INCLUDING THE COLLATERAL AGENT), OR THEIR
RESPECTIVE 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; PROVIDED, HOWEVER, THAT
SO LONG AS NO EVENT OF TERMINATION HAS OCCURRED IN ANY CALENDAR YEAR, THE ANNUAL
COSTS OF THE AUDITS DURING SUCH YEAR FOR WHICH THE SELLER IS RESPONSIBLE SHALL
NOT EXCEED $75,000 FOR EACH PURCHASER UNDER THE RECEIVABLES PURCHASE AGREEMENT.

 

(D)  KEEPING OF RECORDS AND BOOKS OF ACCOUNT.  MAINTAIN AND IMPLEMENT
ADMINISTRATIVE AND OPERATING PROCEDURES (INCLUDING, WITHOUT LIMITATION, AN
ABILITY TO RECREATE

 

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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 Receivable).

 

(E)  PERFORMANCE AND COMPLIANCE WITH RECEIVABLES AND CONTRACTS.  AT ITS EXPENSE
TIMELY AND FULLY PERFORM AND COMPLY, IN ALL MATERIAL RESPECTS, WITH ALL MATERIAL
PROVISIONS, COVENANTS AND OTHER PROMISES REQUIRED TO BE OBSERVED BY IT 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(ES) OF THE
SELLER REFERRED TO IN SECTION 4.01(J), OR, IN ANY SUCH CASE, UPON 30 DAYS’ PRIOR
WRITTEN NOTICE TO THE BUYER, AT SUCH OTHER LOCATIONS WITHIN THE UNITED STATES
WHERE ALL ACTION REQUIRED BY SECTION 2.08 AND BY SECTION 6.04 SHALL HAVE BEEN
TAKEN AND COMPLETED.

 

(G)  CREDIT AND COLLECTION POLICIES.  COMPLY IN ALL MATERIAL RESPECTS WITH ITS
CREDIT AND COLLECTION POLICY ATTACHED HERETO AS EXHIBIT D IN REGARD TO EACH
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 (INCLUDING, WITHOUT LIMITATION, ANY COLLECTIONS
DEEMED TO HAVE BEEN RECEIVED PURSUANT TO SECTION 2.05), THE SELLER SHALL HOLD
SUCH COLLECTIONS IN TRUST FOR THE BENEFIT OF THE BUYER AND REMIT SUCH
COLLECTIONS TO THE BUYER BY DEPOSITING SUCH COLLECTIONS INTO A LOCK-BOX ACCOUNT
WITHIN ONE BUSINESS DAY FOLLOWING SELLER’S IDENTIFICATION THEREOF AND IN ANY
EVENT WITHIN FOUR BUSINESS DAYS FOLLOWING SELLER’S RECEIPT THEREOF.

 

(I)  COMPLIANCE WITH ERISA.  ESTABLISH, MAINTAIN AND OPERATE ALL PLANS TO 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 RECEIVABLE AS IS NECESSARY TO ENSURE THAT THE BUYER 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 BUYER 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 AGAINST ANY OBLIGOR WITH
RESPECT TO ANY 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 FOR WHICH NO SUCH FINANCING STATEMENTS ARE IN
EFFECT AT ANY TIME REMAINS LESS THAN 7.5% OF THE DISCOUNTED RECEIVABLES BALANCE
OF ALL RECEIVABLES AT SUCH TIME; 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 BUYER OR THE COLLATERAL AGENT ON ITS BEHALF SPECIFICALLY
REQUESTS OTHERWISE.

 

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(K)  MAINTENANCE OF INSURANCE.  CAUSE 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 IN AN AMOUNT WHICH IS NOT LESS THAN THE DISCOUNTED VALUE FOR THE
RECEIVABLES ARISING UNDER THE RELEVANT CONTRACTS AND NAMING THE SELLER OR BUYER
AS LOSS PAYEE AND ADDITIONAL INSURED, AND THE SELLER SHALL HAVE ASSIGNED ANY
SUCH INTEREST TO THE BUYER; PROVIDED, THAT IF AN OBLIGOR FAILS TO MAINTAIN SUCH
INSURANCE, THE SELLER SHALL MAINTAIN SUCH INSURANCE ON BEHALF OF THE OBLIGOR AND
SUCH INSURANCE (I) MAY BE INCLUDED IN A CASUALTY AND GENERAL LIABILITY POLICY
PROVIDED THAT SUCH POLICY HAS (A) A LOSS LIMIT PER ANNUM EQUAL TO THE GREATER
OF  (1) $10,000,000 AND (2) FIVE TIMES THE HIGHEST AGGREGATE AMOUNT OF CLAIMS
ARISING UNDER THE POLICY, OR ANY PREDECESSOR POLICY, IN ANY YEAR AND (B) A LOSS
LIMIT PER OCCURRENCE OR LOCATION GREATER THAN OR EQUAL TO THE DISCOUNTED VALUE
FOR THE RECEIVABLES ARISING UNDER THE RELEVANT CONTRACTS OR (II) MAY BE A
SEPARATE INSURANCE POLICY COVERING THE DISCOUNTED VALUE FOR THE RECEIVABLES
ARISING UNDER THE RELEVANT CONTRACTS.  THE SELLER SHALL REMIT, OR SHALL CAUSE TO
BE REMITTED, THE PROCEEDS OF ANY SUCH INSURANCE POLICY TO A LOCK-BOX ACCOUNT..

 

(L)  SEPARATE IDENTITY.  TAKE ALL ACTIONS REQUIRED TO MAINTAIN THE BUYER’S
STATUS AS A SEPARATE LEGAL ENTITY, INCLUDING, WITHOUT LIMITATION, (I) NOT
HOLDING THE BUYER OUT TO THIRD PARTIES AS OTHER THAN AN ENTITY WITH ASSETS AND
LIABILITIES DISTINCT FROM THE SELLER AND THE SELLER’S OTHER SUBSIDIARIES; (II)
NOT HOLDING ITSELF OUT TO BE RESPONSIBLE FOR THE DEBTS OF THE BUYER OR, OTHER
THAN BY REASON OF OWNING MEMBER INTERESTS OF THE BUYER, FOR ANY DECISIONS OR
ACTIONS RELATING TO THE BUSINESS AND AFFAIRS OF THE BUYER; (III) CAUSING ANY
FINANCIAL STATEMENTS CONSOLIDATED WITH THOSE OF THE BUYER TO ADDRESS (BY
FOOTNOTE OR OTHERWISE AND IN LANGUAGE REASONABLY SATISFACTORY TO THE BUYER AND
THE COLLATERAL AGENT) THE SEPARATE CORPORATE EXISTENCE OF THE BUYER AND THE
BUYER’S OWNERSHIP OF THE RECEIVABLES; (IV) TAKING SUCH OTHER ACTIONS AS ARE
NECESSARY ON ITS PART TO ENSURE THAT ALL PROCEDURES REQUIRED BY ITS CERTIFICATE
OF INCORPORATION AND BY-LAWS AND THE BUYER’S LIMITED LIABILITY COMPANY AGREEMENT
ARE DULY AND VALIDLY TAKEN; (V) KEEPING CORRECT AND COMPLETE RECORDS AND BOOKS
OF ACCOUNT AND CORPORATE MINUTES; (VI) NOT ACTING IN ANY OTHER MATTER THAT COULD
FORESEEABLY MISLEAD OTHERS WITH RESPECT TO THE BUYER’S SEPARATE IDENTITY; AND
(VII) TAKING SUCH OTHER ACTIONS AS MAY BE NECESSARY ON ITS PART TO ENSURE THAT
THE BUYER IS IN COMPLIANCE AT ALL TIMES WITH SECTION 5.01(L) OF THE RECEIVABLES
PURCHASE AGREEMENT.

 

(M)  TAXES.  FILE OR CAUSE TO BE FILED, AND CAUSE EACH OF ITS SUBSIDIARIES 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 BUYER 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

 

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party or which could otherwise be reasonably expected to expose the Buyer to a
material liability.

 

(N)  SEGREGATION OF COLLECTIONS.  PREVENT THE DEPOSIT INTO ANY OF THE LOCK-BOX
ACCOUNTS OF ANY FUNDS OTHER THAN (X) COLLECTIONS IN RESPECT OF THE TRANSFERRED
ASSETS AND (Y) SO LONG AS THE SELLER AND THE BUYER ARE PARTIES TO THE ESCROW
AGREEMENT, OTHER FUNDS THAT ARE SUBJECT TO THE ESCROW AGREEMENT, AND, TO THE
EXTENT THAT ANY FUNDS OTHER THAN THOSE DESCRIBED IN CLAUSE (X) OR (Y) 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 DATE HEREOF UNTIL
THE LATER OF THE TERMINATION DATE OR THE COLLECTION DATE, THE SELLER WILL,
UNLESS THE BUYER SHALL OTHERWISE CONSENT IN WRITING, FURNISH TO THE BUYER:

 

(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, (X) THE FINANCIAL
COVENANTS COMPLIANCE CERTIFICATE FOR SUCH FISCAL QUARTER, AND (Y) THE FINANCIAL
STATEMENTS (INCLUDING THE BALANCE SHEET, INCOME STATEMENT AND CASH FLOW
STATEMENT) OF THE SELLER AND ITS CONSOLIDATED SUBSIDIARIES FOR SUCH FISCAL
QUARTER AND FOR THE PERIOD COMMENCING AT THE END OF THE PREVIOUS FISCAL YEAR AND
ENDING WITH THE END OF SUCH QUARTER, IN EACH SUCH CASE CERTIFIED BY THE CHIEF
FINANCIAL OFFICER, CHIEF ACCOUNTING OFFICER OR TREASURER OF THE SELLER;

 

(B)  AS SOON AS AVAILABLE AND IN ANY EVENT WITHIN 90 DAYS AFTER THE END OF EACH
FISCAL YEAR OF THE SELLER, (X) THE FINANCIAL COVENANTS COMPLIANCE CERTIFICATE
FOR SUCH FISCAL YEAR CERTIFIED BY THE CHIEF FINANCIAL OFFICER, CHIEF ACCOUNTING
OFFICER OR TREASURER OF THE SELLER AND (Y) THE FINANCIAL STATEMENTS (INCLUDING
THE BALANCE SHEET, INCOME STATEMENT, STATEMENT OF RETAINED EARNINGS AND CASH
FLOW STATEMENT) OF THE SELLER AND ITS CONSOLIDATED SUBSIDIARIES FOR THE LAST
FISCAL QUARTER OF SUCH FISCAL YEAR (EACH CERTIFIED BY THE CHIEF FINANCIAL
OFFICER, CHIEF ACCOUNTING OFFICER OR TREASURER OF THE SELLER) AND FOR SUCH
FISCAL YEAR (EACH AUDITED AND REPORTED WITH UNQUALIFIED OPINIONS BY NATIONALLY
RECOGNIZED INDEPENDENT PUBLIC ACCOUNTANTS ACCEPTABLE TO THE BUYER.  THE BUYER
ACKNOWLEDGED THAT ANY OF  THE “BIG 4” ACCOUNTING FIRMS WILL BE ACCEPTABLE TO THE
BUYER);

 

(C)  PROMPTLY AFTER THE SENDING OR FILING THEREOF, COPIES OF ALL REPORTS WHICH
THE SELLER SENDS TO ANY OF ITS SECURITY HOLDERS AND COPIES OF ALL REPORTS AND
REGISTRATION STATEMENTS WHICH THE SELLER FILES WITH THE SECURITIES AND EXCHANGE
COMMISSION OR ANY NATIONAL SECURITIES EXCHANGE OTHER THAN REGISTRATION
STATEMENTS RELATING TO EMPLOYEE BENEFIT PLANS AND TO REGISTRATIONS OF SECURITIES
FOR SELLING SECURITY HOLDERS;

 

(D)  AS SOON AS POSSIBLE AND IN ANY EVENT WITHIN FIVE BUSINESS DAYS AFTER THE
OCCURRENCE OF EACH EVENT OF TERMINATION OR EACH EVENT WHICH, WITH THE GIVING OF
NOTICE OR LAPSE OF TIME OR BOTH, WOULD CONSTITUTE AN EVENT OF TERMINATION, THE
STATEMENT OF THE CHIEF FINANCIAL OFFICER, CHIEF ACCOUNTING OFFICER OR TREASURER
OF THE SELLER SETTING FORTH DETAILS OF SUCH EVENT OF TERMINATION OR EVENT AND
THE ACTION WHICH THE SELLER PROPOSES TO TAKE WITH RESPECT THERETO;

 

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(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 SUBSIDIARY OF THE SELLER FILES UNDER ERISA WITH THE IRS
OR THE PBGC OR THE DOL OR WHICH THE SELLER OR ANY SUBSIDIARY OF THE SELLER
RECEIVES FROM THE PBGC;

 

(F)  PROMPTLY, FROM TIME TO TIME, SUCH OTHER INFORMATION, DOCUMENTS, RECORDS OR
REPORTS RESPECTING THE RECEIVABLES OR THE CONDITIONS OR OPERATIONS, FINANCIAL OR
OTHERWISE, OF THE SELLER OR ANY SUBSIDIARY OF THE SELLER AS THE BUYER MAY FROM
TIME TO TIME REASONABLY REQUEST IN ORDER TO PROTECT THE INTERESTS OF THE BUYER
UNDER OR AS CONTEMPLATED BY THIS SALE AGREEMENT;

 

(G)  AT THE TIME OF DELIVERY THEREOF TO THE “AGENT” UNDER THE FOOTHILL CREDIT
AGREEMENT, COPIES OF THE “COMPLIANCE CERTIFICATE” AND THE “BORROWER’S
PROJECTIONS” (AS DEFINED THEREUNDER), AND COPIES OF THE CERTIFICATE OF
INDEPENDENT ACCOUNTANTS PREPARED PURSUANT TO SECTION 6.3(B) (II) THEREOF (OR ANY
SUCCESSOR PROVISION); AND

 

(H)  AS SOON AS POSSIBLE AND IN ANY EVENT WITH FIVE BUSINESS DAYS AFTER THE
OCCURRENCE THEREOF, NOTIFICATION OF:  (I) ANY MATERIAL CHANGES IN THE SELLER’S
BANK AGREEMENTS, INDENTURES OR OTHER MATERIAL AGREEMENTS GOVERNING INDEBTEDNESS
AND/OR (II) ANY EVENT WHICH CONSTITUTES (OR WHICH, WITH THE GIVING OF NOTICE OR
THE PASSAGE OF TIME OR BOTH, WOULD CONSTITUTE)  A DEFAULT UNDER ANY SUCH
AGREEMENT OR PERMITS OR (III) ANY OTHER EVENT WHICH PERMITS (OR WHICH, WITH THE
GIVING OF NOTICE OR THE PASSAGE OF TIME, WOULD PERMIT) THE HOLDER OF SUCH
INDEBTEDNESS TO ACCELERATE THE MATURITY THEREOF.

 

SECTION 5.03.  NEGATIVE COVENANTS OF THE SELLER.  FROM THE DATE HEREOF UNTIL THE
LATER OF THE TERMINATION DATE OR THE COLLECTION DATE, THE SELLER WILL NOT,
WITHOUT THE WRITTEN CONSENT OF THE BUYER:

 

(A)  SALES, LIENS, ETC. AGAINST RECEIVABLES AND TRANSFERRED ASSETS.  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 RECEIVABLE, RELATED SECURITY OR COLLECTIONS, OR ANY RELATED
CONTRACT, OR UPON OR WITH RESPECT TO ANY LOCK-BOX ACCOUNT TO WHICH ANY
COLLECTIONS OF ANY 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.  EXTEND, AMEND OR OTHERWISE MODIFY,
THE TERMS OF ANY RECEIVABLE, OR AMEND, MODIFY OR WAIVE, ANY TERM OR CONDITION OF
ANY CONTRACT RELATED THERETO, EXCEPT TO THE EXTENT THAT THE SELLER, IN ITS
CAPACITY AS SERVICER, MAY MAKE SUCH AMENDMENTS IN ACCORDANCE WITH THE CREDIT AND
COLLECTION POLICY OR AS OTHERWISE PERMITTED UNDER ARTICLE VI HEREOF.

 

(C)  CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY.  WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COLLATERAL AGENT, MAKE ANY MATERIAL CHANGE IN THE
CHARACTER OF ITS BUSINESS

 

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or make any change 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.  (I) AFTER GIVING THE PAYMENT
INSTRUCTIONS DESCRIBED IN THE FIRST SENTENCE OF SECTION 4.01(K), MAKE ANY CHANGE
IN SUCH INSTRUCTIONS TO OBLIGORS REGARDING PAYMENTS TO BE MADE TO THE BUYER OR
PAYMENTS TO BE MADE TO ANY LOCK-BOX BANK OR (II) ADD OR TERMINATE ANY BANK AS A
LOCK-BOX BANK FROM THOSE LISTED IN EXHIBIT H UNLESS THE BUYER SHALL HAVE
RECEIVED (A) TEN BUSINESS DAYS’ PRIOR NOTICE OF SUCH ADDITION, TERMINATION OR
CHANGE AND (B) 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 (Y) COPIES OF ALL AGREEMENTS AND DOCUMENTS SIGNED BY THE SELLER OR THE
RESPECTIVE LOCK-BOX BANK WITH RESPECT TO ANY NEW LOCK-BOX ACCOUNT.

 

(E)  MERGER ETC.  (I)  MERGE WITH OR INTO OR CONSOLIDATE WITH OR INTO OR CONVEY,
TRANSFER, LEASE OR OTHERWISE DISPOSE OF (WHETHER IN ONE TRANSACTION OR IN A
SERIES OF TRANSACTIONS) ALL OR SUBSTANTIALLY ALL OF ITS ASSETS (WHETHER NOW
OWNED OR HEREAFTER ACQUIRED) OR ACQUIRE ALL OR SUBSTANTIALLY ALL OF THE ASSETS
OR CAPITAL STOCK OR OTHER OWNERSHIP INTEREST OF, ANY PERSON, OR PERMIT ANY
SUBSIDIARY OF SELLER TO DO SO, EXCEPT THAT (A) ANY SUBSIDIARY OF SELLER MAY
MERGE OR CONSOLIDATE WITH OR TRANSFER ASSETS TO OR ACQUIRE ASSETS FROM ANY OTHER
SUBSIDIARY OF SELLER, (B) ANY SUBSIDIARY OF SELLER MAY MERGE INTO OR TRANSFER
ASSETS TO THE SELLER OR ANY OTHER PERSON AND (C) THE SELLER OR ANY SUBSIDIARY OF
THE SELLER MAY ACQUIRE THE CAPITAL STOCK OR ASSETS OF ANY OTHER PERSON, PROVIDED
IN EACH CASE THAT IMMEDIATELY AFTER GIVING EFFECT TO SUCH PROPOSED TRANSACTION,
NO EVENT OF TERMINATION OR EVENT WHICH, WITH THE GIVING OF NOTICE OR LAPSE OF
TIME, OR BOTH, WOULD CONSTITUTE AN EVENT OF TERMINATION, WOULD EXIST, AND IN THE
CASE OF ANY SUCH MERGER TO WHICH THE SELLER IS A PARTY, THE SELLER IS THE
SURVIVING ENTITY.

 

(F)  CHANGE IN NAME OR JURISDICTION.  MAKE ANY CHANGE TO ITS NAME OR USE ANY
TRADE NAMES, FICTITIOUS NAMES, ASSUMED NAMES OR “DOING BUSINESS AS” NAMES OTHER
THAN THOSE DESCRIBED IN EXHIBIT I, OR MAKE ANY CHANGE IN ITS JURISDICTION OF
ORGANIZATION (INCLUDING BY BECOMING AN ORGANIZED ENTITY UNDER THE LAWS OF MORE
THAN ONE STATE ) UNLESS THE SELLER HAS GIVEN TO THE BUYER AT LEAST THIRTY (30)
DAYS’ PRIOR WRITTEN NOTICE THEREOF AND, PRIOR TO THE EFFECTIVE DATE OF ANY SUCH
CHANGE OR USE, SELLER DELIVERS TO THE BUYER SUCH FINANCING STATEMENTS (FORM
UCC-1 AND UCC-3) EXECUTED BY SELLER WHICH THE BUYER MAY REASONABLY REQUEST TO
REFLECT SUCH CHANGE OR USE, TOGETHER WITH SUCH OTHER DOCUMENTS AND INSTRUMENTS
THAT THE BUYER MAY REQUEST IN CONNECTION THEREWITH.

 

(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 AND ITS ERISA

 

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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 the Seller or any ERISA Affiliate (collectively, “ERISA
Liabilities”) in an amount which does not exceed $500,000.

 

(H)  TERMINATE OR REJECT CONTRACTS.  WITHOUT LIMITING SECTION 5.03(B) AND EXCEPT
AS OTHERWISE EXPRESSLY PERMITTED PURSUANT TO SECTION 2.05, 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 SHALL HAVE PAID TO THE BUYER AN AMOUNT EQUAL TO THE
TERMINATION AMOUNT THEREOF.

 

(I)  ACCOUNTING TREATMENT.  PREPARE ANY FINANCIAL STATEMENTS OR OTHER STATEMENTS
WHICH SHALL ACCOUNT FOR THE TRANSACTIONS CONTEMPLATED BY THIS SALE AGREEMENT IN
ANY MANNER OTHER THAN AS THE SALE OF, OR A CAPITAL CONTRIBUTION OF, THE
TRANSFERRED ASSETS BY THE SELLER TO THE BUYER (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).

 

(J)  LIMITED LIABILITY COMPANY AGREEMENT.  CAUSE THE BUYER TO AMEND ITS LIMITED
LIABILITY COMPANY AGREEMENT IN ANY MANNER WHICH WOULD REQUIRE THE CONSENT OF THE
BUYER’S INDEPENDENT MANAGER OR MANAGERS, WITHOUT THE COLLATERAL AGENT’S PRIOR
WRITTEN CONSENT.

 

SECTION 5.04.  FINANCIAL COVENANTS OF THE SELLER.  (A) FROM THE DATE HEREOF
UNTIL THE LATER OF THE TERMINATION DATE OR THE COLLECTION DATE, THE SELLER
COVENANTS AS FOLLOWS:

 

(I)  THE SELLER WILL NOT SUFFER OR PERMIT, AS OF EACH OF THE DATES SET FORTH
BELOW, ITS TANGIBLE NET WORTH TO BE LESS THAN THE AMOUNT SET FORTH OPPOSITE SUCH
DATE PLUS 100% OF THE PROCEEDS OF ANY SALE DURING THE PERIOD FROM JUNE 30, 2002
TO SUCH DATE BY THE SELLER OR ANY OF ITS SUBSIDIARIES OF (A) EQUITY SECURITIES
ISSUED BY THE SELLER OR ANY OF ITS SUBSIDIARIES, OR (B) WARRANTS OR SUBSCRIPTION
RIGHTS FOR EQUITY SECURITIES ISSUED BY THE SELLER OR ANY OF ITS SUBSIDIARIES, OR
AS OF THE END OF ANY FISCAL QUARTER AFTER JUNE 30, 2005, TO BE LESS THAN THE SUM
OF (X) $45,300,000, PLUS (Y) 75% OF ACTUAL POSITIVE NET INCOME FOR ALL FISCAL
QUARTERS COMMENCING AFTER MARCH 31, 2005, PLUS (Z) 100% OF THE PROCEEDS OF ANY
SALE DURING THE PERIOD FROM JUNE 30, 2002 TO SUCH DATE BY THE SELLER OR ANY OF
ITS SUBSIDIARIES OF (A) EQUITY SECURITIES ISSUED BY THE SELLER OR ANY OF ITS
SUBSIDIARIES, OR (B) WARRANTS OR SUBSCRIPTION RIGHTS FOR EQUITY SECURITIES
ISSUED BY THE SELLER OR ANY OF ITS SUBSIDIARIES.

 

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Applicable Date

 

Applicable Amount

 

March 31, 2003

 

$

35,400,000

 

June 30, 2003

 

$

36,300,000

 

September 30, 2003

 

$

37,250,000

 

December 31, 2003

 

$

38,250,000

 

March 31, 2004

 

$

39,300,000

 

June 30, 2004

 

$

40,400,000

 

September 30, 2004

 

$

41,550,000

 

December 31, 2004

 

$

42,750,000

 

March 31, 2005

 

$

44,000,000

 

June 30, 2005

 

$

45,300,000

 

 

(II)  THE SELLER WILL NOT PERMIT OR SUFFER ITS DEBT TO WORTH RATIO AS OF THE END
OF MARCH 31, 2003 TO BE MORE THAN 7.70:1 AND WILL NOT PERMIT OR SUFFER ITS DEBT
TO WORTH RATIO AS OF THE END OF ANY SUBSEQUENT FISCAL QUARTER TO BE MORE THAN
7.50:1; PROVIDED, THAT IT SHALL NOT BE A VIOLATION OF THIS CLAUSE (II) IF, AT
THE END OF NO MORE THAN ONE FISCAL QUARTER ENDING AFTER THE DATE HEREOF BUT ON
OR PRIOR TO JUNE 30, 2005, THE DEBT TO WORTH RATIO EXCEEDS 7.50:1 AND THE
FOLLOWING CONDITIONS ARE THEN SATISFIED:  (X) AMOUNTS ARE ON DEPOSIT IN A
PREFUNDING ACCOUNT ESTABLISHED IN CONNECTION WITH A SECURITIZATION TRANSACTION
IN WHICH THE SELLER IS THE ORIGINATING SELLER AND (Y) THE SELLER’S DEBT TO WORTH
RATIO WOULD HAVE BEEN NO MORE THAN 7.50:1 HAD THE AMOUNT OF THE SELLER’S DEBT
OUTSTANDING BEEN REDUCED BY THE AMOUNT ON DEPOSIT IN SUCH PREFUNDING ACCOUNT.

 

(III)  THE SELLER WILL NOT PERMIT OR SUFFER ITS NET INCOME FOR THE FISCAL
QUARTER ENDING MARCH 31, 2003, TO BE LESS THAN $900,000 AND WILL NOT SUFFER OR
PERMIT ITS NET INCOME FOR ANY SUBSEQUENT FISCAL QUARTER TO BE LESS THAN THE SUM
OF (I) $900,000 PLUS (II) THE PRODUCT OF (X) $50,000 TIMES (Y) THE NUMBER OF
FISCAL QUARTERS FROM MARCH 31, 2003 TO AND INCLUDING SUCH SUBSEQUENT FISCAL
QUARTER (E.G., SO THAT THE MINIMUM NET INCOME FOR THE FISCAL QUARTER ENDING
JUNE 30, 2003 IS $950,000 AND THE MINIMUM NET INCOME FOR THE FISCAL QUARTER
ENDING SEPTEMBER 30, 2003 IS $1,000,000 AND SO FORTH).

 

(IV)  THE SELLER WILL MAINTAIN A CREDIT LINE IN AN AMOUNT NOT LESS THAN
$50,000,000 UNDER THE TERMS OF AT LEAST ONE COMMITTED CREDIT FACILITY NOT
INSURED BY MBIA INSURANCE CORPORATION WHERE SUCH FACILITY IS EXTENDED TO THE
SELLER BY A FINANCIAL INSTITUTION (WITH THE UNDERSTANDING THAT SUCH FINANCIAL
INSTITUTION MAY NOT OFFER SUCH FACILITY THROUGH A COMMERCIAL PAPER CONDUIT) AND
THE TERMS AND CONDITIONS OF SUCH FACILITY ARE IN FORM AND SUBSTANCE SIMILAR TO
THE TERMS AND CONDITIONS SET FORTH IN THE FOOTHILL CREDIT AGREEMENT.

 

(V)  THE SELLER WILL NOT PERMIT OR SUFFER ITS RETAINED INTEREST RATIO AS OF THE
END OF ANY FISCAL QUARTER TO BE GREATER THAN 1.75:1.

 

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(B)  AS USED IN THIS SECTION 5.04, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING
MEANINGS:

 

“Allowable Subordinated Debt” means, the subordinated Indebtedness, the
aggregate outstanding balance of which does not exceed $25,000,000 and which
consists of (a) the 11% Senior Subordinated Notes due 2007 issued by the Seller
in the original aggregate principal amount of $20,000,000 pursuant to the
Indenture, and (b) other subordinated Indebtedness having an original maturity
of no less than four years, the terms and conditions of which expressly
subordinate such Indebtedness to the general unsecured Indebtedness of the
Seller.

 

“Debt to Worth Ratio” means a ratio of (a) the outstanding amount of
Indebtedness (excluding Allowable Subordinated Debt) of the Seller and its
Subsidiaries on a consolidated basis, to (b) the sum of (i) Tangible Net Worth,
plus (ii) the outstanding amount of the Allowable Subordinated Debt.

 

“Intangible Assets” means, with respect to any Person, that portion of the book
value of all of such Person’s assets that would be treated as intangibles under
GAAP.

 

“Net Income” means, for any period, the net income (exclusive of minority
interests and extraordinary items) for such period of Seller and its
Subsidiaries on a consolidated basis, determined in accordance with GAAP.

 

“Retained Interest Ratio” means, as of any date of determination, a ratio, (a)
the numerator of which equals the Seller’s “retained interest in leases and
notes sold”  as such term is calculated in accordance with GAAP and the Seller’s
existing financial statements (or such equivalent concept as may be used in
subsequent financial statements of the Seller) and (b) the denominator of which
equals Tangible Net Worth.

 

“Tangible Net Worth” means, as of any date of determination, the result of (a)
Seller’s total stockholder’s equity, minus (b) the sum of (i) all Intangible
Assets of the Seller, (ii) all of the Seller’s prepaid expenses, and (iii) all
amounts due to the Seller from Affiliates, calculated on a consolidated basis in
accordance with GAAP (except that such calculation of Tangible Net Worth shall
be made without regard to the accounting adjustments required by Financial
Accounting Standard No. 133).

 

ARTICLE VI
ADMINISTRATION AND COLLECTION

 

SECTION 6.01.  DESIGNATION OF SERVICER.  CONSISTENT WITH THE BUYER’S OWNERSHIP
OF THE TRANSFERRED ASSETS, THE BUYER SHALL HAVE AS AGAINST THE SELLER THE SOLE
RIGHT TO SERVICE, ADMINISTER AND COLLECT THE RECEIVABLES, TO ASSIGN SUCH RIGHT
AND TO DELEGATE SUCH RIGHT.  THE SERVICING, ADMINISTERING AND COLLECTION OF THE
RECEIVABLES AND THE OTHER TRANSFERRED ASSETS SHALL BE CONDUCTED BY THE PERSON
(THE “SERVICER”) SO DESIGNATED BY THE BUYER FROM TIME TO TIME IN ACCORDANCE WITH
THIS SECTION 6.01.  UNTIL THE COLLATERAL AGENT GIVES NOTICE TO THE SELLER OF THE
DESIGNATION OF A NEW SERVICER, THE SELLER IS HEREBY DESIGNATED AS, AND HEREBY
AGREES TO PERFORM THE DUTIES AND OBLIGATIONS OF, THE SERVICER PURSUANT TO THE
TERMS HEREOF.  THE BUYER MAY, AT ANY

 

22

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time upon ten Business Days prior written notice, designate as Servicer any
Person to succeed the Seller on the condition any such Person so designated
shall agree to perform the duties and obligations of the Servicer pursuant to
the terms hereof and shall be acceptable to the Collateral Agent; provided that
the Buyer’s right to so designate a successor Servicer at any time is personal
to the Buyer and may not be assigned to any other Person (including the
Collateral Agent).  The Collateral Agent may at any time from and after a
Servicing Termination Event designate as Servicer any other Person to succeed
the Seller 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 the Buyer, the Majority Managing Agents and the Collateral
Agent, subcontract with any other Person for servicing, administering or
collecting the Transferred 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 Transferred Assets in accordance with the Credit and
Collection Policy.  The Servicer acknowledges that the Buyer has, pursuant to
the Receivables Purchase Agreement, sold to the Purchasers thereunder Purchased
Assets which will be serviced pursuant to Article VI of the Receivables Purchase
Agreement.

 

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
TRANSFERRED ASSET 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.  THE BUYER 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 RECEIVABLES, THE RELATED
SECURITY, THE RELATED CONTRACTS AND THE OTHER TRANSFERRED ASSETS.  THE SERVICER
WILL AT ALL TIMES APPLY THE SAME STANDARDS AND FOLLOW THE SAME PROCEDURES WITH
RESPECT TO THE DECISION TO COMMENCE PROSECUTION AND LITIGATION WITH RESPECT TO
RECEIVABLES AND IN CONDUCTING ANY SUCH PROSECUTION AND LITIGATION WITH RESPECT
TO RECEIVABLES AS IT APPLIES AND FOLLOWS WITH RESPECT TO ACCOUNTS, CHATTEL
PAPER, PAYMENT INTANGIBLES AND INSTRUMENTS WHICH ARE NOT TRANSFERRED ASSETS.  
IN NO EVENT SHALL THE SERVICER BE ENTITLED TO MAKE THE COLLATERAL AGENT, ANY
PURCHASER, THE BUYER OR ANY MANAGING AGENT A PARTY TO ANY LITIGATION WITHOUT THE
BUYER’S, THE COLLATERAL AGENT’S AND ANY SUCH OTHER PERSON’S EXPRESS PRIOR
WRITTEN CONSENT. THE SERVICER SHALL SEGREGATE AND SET ASIDE FOR THE ACCOUNT OF
THE BUYER ALL COLLECTIONS OF TRANSFERRED ASSETS IN ACCORDANCE WITH SECTION 2.05
HEREOF, AND SECTION 6.06 OF THE RECEIVABLES PURCHASE AGREEMENT AND SHALL CAUSE
ALL SUCH COLLECTIONS TO BE REMITTED TO A LOCK-BOX ACCOUNT AND/OR DEPOSITED
DIRECTLY INTO 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.  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 BUYER’S SATISFACTION THAT SUCH AMOUNTS DO NOT
CONSTITUTE COLLECTIONS; ANY SUCH CHECKS OR INSTRUMENTS WHICH ARE DETERMINED TO
BE COLLECTIONS 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 SELLER, 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

 

23

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Permitted Extension, (ii) adjust the Outstanding Balance of any Transferred
Asset to reflect the reductions, adjustments or cancellations described in the
first sentence of Section 2.05 hereof and Section 6.06 of the Receivables of the
Purchase Agreement, (iii) so long as such prepayment would not cause an Event of
Termination under Section 7.01(m) hereof 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 Seller shall deliver to the Servicer, and the Servicer shall hold
in trust for the Seller and the Buyer 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 Seller 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 SELLER THE COLLECTIONS OF ANY RECEIVABLE WHICH IS NOT A TRANSFERRED ASSET
LESS, IN THE EVENT THE SELLER 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 SALE 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 TRANSFERRED ASSET 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 SUCH COLLECTIONS AND DOCUMENTS IN ITS
POSSESSION AS IT WOULD EXERCISE WITH RESPECT TO ITS OWN PROPERTY.

 

(D)  THE SERVICER WILL, AT THE SERVICER’S COST AND EXPENSE AND AS AGENT IN THE
NAME OF AND ON BEHALF OF THE BUYER, BUT SUBJECT AT ANY TIME TO THE RIGHT OF THE
BUYER TO DIRECT AND CONTROL, ENDEAVOR TO COLLECT, AS AND WHEN THE SAME BECOMES
DUE, ALL AMOUNTS OWING ON EACH RECEIVABLE.  IN THE EVENT OF DEFAULT BY AN
OBLIGOR UNDER ANY RECEIVABLE, THE SERVICER SHALL HAVE THE POWER AND AUTHORITY,
ON BEHALF OF THE BUYER, TO TAKE SUCH ACTION IN RESPECT OF THE ENFORCEMENT AND
COLLECTION OF SUCH RECEIVABLE AS THE SERVICER, IN THE ABSENCE OF CONTRARY
INSTRUCTIONS FROM THE BUYER, MAY DEEM ADVISABLE.  IN ANY SUCH SUIT FOR
ENFORCEMENT OR COLLECTION, THE SERVICER SHALL BE ENTITLED TO SUE THEREON IN ITS
OWN NAME OR AS AGENT FOR THE BUYER, IN EITHER CASE, FOR THE ACCOUNT OF THE
BUYER.

 

(E)  IN THE EVENT THE SERVICER ACCEPTS IN PAYMENT OF ANY RECEIVABLE THE TAKING
OF REPOSSESSION OF THE EQUIPMENT THE SALE OR LEASE OF WHICH GAVE RISE TO SUCH
RECEIVABLE, THE SERVICER AGREES TO USE ITS REASONABLE EFFORTS TO RESELL OR
RE-LEASE SUCH EQUIPMENT FOR THE ACCOUNT OF THE BUYER AND SHALL REMIT TO THE
BUYER THE GROSS SALE PROCEEDS THEREOF OR, TO THE EXTENT SUCH EQUIPMENT IS
RE-LEASED, SHALL DELIVER TO THE BUYER THE CHATTEL PAPER, INSTRUMENTS 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 RECEIVABLES, AND ALL OF WHICH CONTRACTS AND RECEIVABLES SHALL
CONSTITUTE PART OF THE TRANSFERRED ASSETS.  NEITHER THE BUYER NOR THE COLLATERAL
AGENT (UNLESS THE COLLATERAL AGENT SHALL HAVE BECOME THE SERVICER) SHALL

 

24

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have any obligation to take any action or commence any proceedings to realize
upon any 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(e) shall be segregated by the Servicer, held in trust by the Servicer for
the Buyer 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.

 

(F)  THE SERVICER SHALL MAINTAIN ALL BOOKS OF ACCOUNT AND OTHER RECORDS
PERTAINING TO THE RECEIVABLES AND THE OTHER TRANSFERRED ASSETS IN SUCH FORM AS
WILL ENABLE THE BUYER OR ITS DESIGNEES TO DETERMINE AT ANY TIME THE STATUS
THEREOF.  THE SERVICER WILL PERMIT THE BUYER, THE COLLATERAL AGENT AND ANY
PERSON DESIGNATED BY THE BUYER 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 TRANSFERRED ASSETS.  FROM TIME TO
TIME, AT THE REQUEST OF THE BUYER OR THE COLLATERAL AGENT, THE SERVICER, AT ITS
OWN EXPENSE, WILL (I) DELIVER TO THE BUYER AND THE COLLATERAL AGENT AND ANY
PERSON DESIGNATED BY THE BUYER OR THE COLLATERAL AGENT ANY RECORDS AND INVOICES
PERTAINING TO THE TRANSFERRED ASSETS AND EVIDENCE THEREOF AS THE BUYER, THE
COLLATERAL AGENT OR SUCH DESIGNEE MAY DEEM NECESSARY TO ENABLE IT TO ENFORCE ITS
RIGHTS THEREUNDER AND (II) MARK EACH COMPUTER RECORD RELATING TO, AND EACH
INVOICE OR OTHER EVIDENCE OF, THE TRANSFERRED ASSETS (WHETHER OR NOT SUCH
COMPUTER RECORD OR OTHER ITEM IS THE PROPERTY OF THE BUYER) AS THE BUYER OR
COLLATERAL AGENT MAY DIRECT TO REFLECT THE INTERESTS OF THE BUYER AND THE
COLLATERAL AGENT IN SUCH TRANSFERRED 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 TRANSFERRED ASSETS
OR (II) MARK ALL SUCH DOCUMENTS RELATING TO THE TRANSFERRED ASSETS SO AS TO MAKE
SUCH DOCUMENTS READILY IDENTIFIABLE AS PROPERTY OF THE BUYER 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 THE BUYER AND SAFELY KEEP SUCH
DOCUMENTS IN FILING CABINETS OR OTHER SUITABLE CONTAINERS MARKED TO SHOW THE
BUYER’S INTEREST.

 

SECTION 6.03.  RIGHTS OF THE BUYER.  AT ANY TIME:

 

(A)  THE BUYER MAY NOTIFY THE OBLIGORS OF THE RECEIVABLES, OR ANY OF THEM, OF
THE BUYER’S OWNERSHIP INTEREST IN TRANSFERRED ASSETS AND DIRECT SUCH OBLIGORS,
OR ANY OF THEM, THAT PAYMENT OF ALL AMOUNTS PAYABLE UNDER ANY RECEIVABLE BE MADE
DIRECTLY TO THE BUYER OR ITS DESIGNEE (INCLUDING, WITHOUT LIMITATION, THE
COLLATERAL AGENT).

 

(B)  THE SELLER SHALL, AT THE COLLATERAL AGENT’S OR BUYER’S REQUEST AND AT THE
SELLER’S EXPENSE, GIVE NOTICE OF THE BUYER’S INTEREST IN THE TRANSFERRED ASSETS
TO EACH OBLIGOR (IN SUBSTANTIALLY THE FORM OF THE NOTICE OF ASSIGNMENT) AND
DIRECT THAT PAYMENTS BE MADE DIRECTLY TO THE BUYER OR ITS DESIGNEE (INCLUDING,
WITHOUT LIMITATION, THE COLLATERAL AGENT).

 

(C)  THE SELLER SHALL, AT THE BUYER’S REQUEST, ASSEMBLE ALL RECORDS WHICH THE
BUYER REASONABLY BELIEVES ARE NECESSARY OR APPROPRIATE FOR THE ADMINISTRATION
AND ENFORCEMENT OF THE TRANSFERRED ASSETS, AND SHALL MAKE THE SAME AVAILABLE TO
THE BUYER AT A PLACE SELECTED BY THE BUYER OR ITS DESIGNEE.

 

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(D)  THE SELLER HEREBY AUTHORIZES THE BUYER AND 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 BUYER AND/OR THE COLLATERAL AGENT, TO
COLLECT ALL AMOUNTS DUE UNDER ANY AND ALL TRANSFERRED ASSETS OR RELATED
RECEIVABLES, INCLUDING, WITHOUT LIMITATION, ENDORSING THE SELLER’S NAME ON
CHECKS AND OTHER INSTRUMENTS REPRESENTING COLLECTIONS AND ENFORCING SUCH
RECEIVABLES AND THE RELATED CONTRACTS.

 

SECTION 6.04.  FURTHER ACTION EVIDENCING TRANSFERS.  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 THE BUYER MAY
REASONABLY REQUEST IN ORDER TO PERFECT, PROTECT OR MORE FULLY EVIDENCE THE
BUYER’S INTEREST IN THE TRANSFERRED ASSETS, OR TO ENABLE THE BUYER TO EXERCISE
OR ENFORCE ANY OF ITS RIGHTS HEREUNDER OR UNDER ANY RELATED DOCUMENT.  WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, THE SELLER WILL MARK ITS MASTER DATA
PROCESSING RECORDS EVIDENCING SUCH TRANSFERRED ASSETS WITH A LEGEND, ACCEPTABLE
TO THE BUYER, EVIDENCING THAT THE BUYER HAS ACQUIRED AN OWNERSHIP INTEREST
THEREIN AS PROVIDED IN THIS SALE AGREEMENT AND, UPON THE REQUEST OF THE BUYER,
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 THE BUYER MAY REASONABLY REQUEST.  THE SELLER
HEREBY AUTHORIZES THE BUYER TO FILE ONE OR MORE FINANCING OR CONTINUATION
STATEMENTS, AND AMENDMENTS THERETO AND ASSIGNMENTS THEREOF, RELATIVE TO ALL OR
ANY OF THE TRANSFERRED ASSETS NOW EXISTING OR HEREAFTER ARISING WITHOUT THE
SIGNATURE OF THE SELLER WHERE PERMITTED BY LAW.  A CARBON, PHOTOGRAPHIC OR OTHER
REPRODUCTION OF THIS SALE AGREEMENT OR ANY FINANCING STATEMENT COVERING THE
TRANSFERRED ASSETS, 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 SALE AGREEMENT, THE BUYER MAY (BUT SHALL NOT BE REQUIRED TO) ITSELF
PERFORM, OR CAUSE PERFORMANCE OF, SUCH AGREEMENT OR OBLIGATION, AND THE EXPENSES
OF THE BUYER INCURRED IN CONNECTION THEREWITH SHALL BE PAYABLE BY THE SELLER
UPON THE BUYER’S DEMAND THEREFOR; PROVIDED, HOWEVER, PRIOR TO TAKING ANY SUCH
ACTION, THE BUYER SHALL GIVE NOTICE OF SUCH INTENTION TO THE SELLER AND PROVIDE
THE SELLER WITH A REASONABLE OPPORTUNITY TO TAKE SUCH ACTION ITSELF.

 

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
THE BUYER UNDER THE PURCHASE AGREEMENT AND THE EXERCISE BY THE BUYER OR ITS
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
TRANSFERRED 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.  THE SERVICER SHALL
IDENTIFY ON A TIMELY BASIS ALL COLLECTIONS WHICH ARE ON ACCOUNT OF THE
TRANSFERRED 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 TRANSFERRED ASSETS, THE SERVICER SHALL SEGREGATE SUCH CASH AND
OTHER ITEMS, HOLD SUCH CASH AND

 

26

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other items in trust for the benefit of the Buyer and the Collateral Agent and
shall cause such cash and other items (properly endorsed, where required, so
that such items may be collected by the Buyer) 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
Transferred Asset., and in no event later than four Business Days after receipt
thereof by the Servicer.

 

SECTION 6.07.  APPLICATION OF COLLECTIONS.  ALL COLLECTIONS ON ACCOUNT OF THE
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 TRANSFERRED ASSETS TO DIRECT THAT ITS REMITTANCES BE APPLIED TO
ANY SUCH INDEBTEDNESS PRIOR TO BEING APPLIED TO THE TRANSFERRED 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 THE SERVICING FEE RATE 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 THE BUYER (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 THE BUYER AND THE COLLATERAL AGENT.

 

SECTION 6.09.  RESIGNATION; SUCCESSOR SERVICER.  (A)  THE OBLIGATION OF THE
SERVICER TO SERVICE THE 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 TRANSFERRED 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 SECTION 6.01 OR 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 THE BUYER, EACH MANAGING AGENT AND THE COLLATERAL AGENT. 
EXCEPT TO THE EXTENT INCONSISTENT WITH ANY SUCH APPLICABLE LAW, NO SUCH
RESIGNATION SHALL BECOME EFFECTIVE UNTIL A SUCCESSOR SERVICER

 

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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 BUYER’S
OR THE COLLATERAL AGENT’S DESIGNATION OF A SUCCESSOR SERVICER PURSUANT TO
SECTION 6.01, APPOINT A 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 SALE AGREEMENT AND THE RECEIVABLES PURCHASE
AGREEMENT SHALL BE SUBJECT TO ALL THE RESPONSIBILITIES, DUTIES AND LIABILITIES
RELATING THERETO PLACED ON THE SERVICER BY THE TERMS AND PROVISIONS HEREOF AND
THEREOF, AND ALL REFERENCES IN THIS SALE 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 TRANSFERRED
ASSETS, THE TRANSFER OF ELECTRONIC RECORDS RELATING TO THE TRANSFERRED 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
TRANSFERRED ASSETS.

 

ARTICLE VII
EVENTS OF TERMINATION

 

SECTION 7.01.  EVENTS OF TERMINATION.  IF ANY OF THE FOLLOWING EVENTS (“EVENTS
OF TERMINATION”) SHALL OCCUR:

 

(A)  (I) 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(A)) AND SUCH FAILURE SHALL
REMAIN UNREMEDIED FOR THREE BUSINESS DAYS AFTER WRITTEN NOTICE FROM THE BUYER 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 WITH RESPECT TO SUCH PAYMENTS WHICH DO NOT RELATE TO THE REMITTANCE OF
COLLECTIONS, SUCH FAILURE SHALL REMAIN UNREMEDIED FOR THREE BUSINESS DAYS AFTER
WRITTEN NOTICE FROM THE BUYER; OR

 

(B)  THE SELLER SHALL FAIL TO PERFORM OR OBSERVE ANY TERM, COVENANT OR AGREEMENT
CONTAINED IN ARTICLE VI AND ANY SUCH FAILURE SHALL REMAIN UNREMEDIED FOR FIVE
BUSINESS DAYS AFTER WRITTEN NOTICE FROM THE BUYER; OR

 

(C)  ANY REPRESENTATION OR WARRANTY MADE OR DEEMED TO BE MADE BY THE SELLER (OR
ANY OF ITS OFFICERS) UNDER OR IN CONNECTION WITH THIS SALE 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 BUSINESS DAYS, THE SELLER SHALL HAVE TEN
BUSINESS DAYS AFTER LEARNING OF SUCH BREACH TO MAKE SUCH REPRESENTATION AND
WARRANTY TRUE AND

 

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correct and (ii) if any such false or incorrect representation or warranty has
given rise to a deemed collection as provided under Section 2.05, then, upon the
Seller’s payment of such deemed Collection at the time and in the manner
required under this Sale Agreement, the breach of such representation or
warranty shall not give rise to an Event of Termination under this subsection
(c); or

 

(D)  THE SELLER SHALL FAIL TO PERFORM OR OBSERVE ANY OTHER TERM, COVENANT OR
AGREEMENT CONTAINED IN THIS SALE AGREEMENT ON ITS PART TO BE PERFORMED OR
OBSERVED AND ANY SUCH FAILURE SHALL REMAIN UNREMEDIED FOR TEN BUSINESS DAYS
AFTER WRITTEN NOTICE FROM THE BUYER (IT BEING UNDERSTOOD THAT, IF ANY SUCH
FAILURE GIVES RISE TO A DEEMED COLLECTION AS PROVIDED UNDER SECTION 2.05, THEN
THE PAYMENT OF SUCH DEEMED COLLECTION AT THE TIME AND IN THE MANNER REQUIRED
UNDER THIS SALE AGREEMENT SHALL BE DEEMED A REMEDY OF SUCH FAILURE); OR

 

(E)  THE SELLER SHALL FAIL TO PAY ANY PRINCIPAL OF OR PREMIUM OR INTEREST ON ANY
INDEBTEDNESS WHEN THE SAME BECOMES DUE AND PAYABLE (WHETHER BY SCHEDULED
MATURITY, REQUIRED PREPAYMENT, ACCELERATION, DEMAND OR OTHERWISE) AND SUCH
FAILURE SHALL CONTINUE AFTER THE APPLICABLE GRACE PERIOD, IF ANY, SPECIFIED IN
THE AGREEMENT OR INSTRUMENT RELATING TO SUCH INDEBTEDNESS; OR ANY OTHER DEFAULT
UNDER ANY AGREEMENT OR INSTRUMENT RELATING TO ANY SUCH INDEBTEDNESS OF THE
SELLER OR ANY OTHER EVENT, SHALL OCCUR AND SHALL CONTINUE AFTER THE APPLICABLE
GRACE PERIOD, IF ANY, SPECIFIED IN SUCH AGREEMENT OR INSTRUMENT IF THE EFFECT OF
SUCH DEFAULT OR EVENT IS TO ACCELERATE, OR TO PERMIT THE ACCELERATION OF, THE
MATURITY OF SUCH INDEBTEDNESS; OR ANY SUCH INDEBTEDNESS SHALL BE DECLARED TO BE
DUE AND PAYABLE OR REQUIRED TO BE PREPAID (OTHER THAN BY A REGULARLY SCHEDULED
REQUIRED PREPAYMENT) PRIOR TO THE STATED MATURITY THEREOF; OR

 

(F)  ANY PURCHASE OR ACQUISITION BY THE BUYER OF TRANSFERRED 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 EACH RECEIVABLE, THE RELATED
SECURITY AND THE EQUIPMENT AND COLLECTIONS WITH RESPECT THERETO; PROVIDED,
HOWEVER, IF ANY SUCH FAILURE RESULTS IN A DEEMED COLLECTION UNDER SECTION 2.05
HEREOF AND THE SELLER SATISFIES IN FULL ITS PAYMENT OBLIGATIONS UNDER SUCH
SECTION, THEN SUCH FAILURE SHALL NOT GIVE RISE TO AN EVENT OF TERMINATION UNDER
THIS SUBSECTION (F); OR

 

(G)  (I)  AN INSOLVENCY EVENT SHALL OCCUR WITH RESPECT TO THE SELLER OR THE
BUYER OR (II) THE SELLER OR THE BUYER SHALL TAKE ANY CORPORATE ACTION TO
AUTHORIZE THE FILING OF ANY INSOLVENCY PROCEEDING; OR

 

(H)  THERE SHALL HAVE BEEN ANY MATERIAL ADVERSE CHANGE IN THE FINANCIAL
CONDITION OR OPERATIONS OF THE SELLER SINCE DECEMBER 31, 2002, (EXCEPT AS
DISCLOSED IN THE INTERIM FINANCIALS DESCRIBED IN SECTION 4.01(E)), OR THERE
SHALL HAVE OCCURRED ANY EVENT WHICH MATERIALLY ADVERSELY AFFECTS THE
COLLECTIBILITY OF THE RECEIVABLES GENERALLY OR THERE SHALL HAVE OCCURRED ANY
OTHER EVENT WHICH MATERIALLY ADVERSELY AFFECTS THE ABILITY OF THE SELLER TO
COLLECT RECEIVABLES GENERALLY OR THE ABILITY OF THE SELLER TO PERFORM HEREUNDER;
OR

 

(I)  THE SELLER SHALL FAIL TO OBSERVE ANY COVENANT CONTAINED IN SECTION 5.04; OR

 

(J)  AS OF THE LAST DAY OF ANY MONTH, THE DEFAULT RATIO SHALL BE GREATER THAN
3.5%; OR

 

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(K)  AS OF THE LAST DAY OF ANY MONTH, THE DELINQUENCY RATIO SHALL BE GREATER
THAN 2.0%; OR

 

(L)  ANY “WIND-DOWN EVENT” SHALL OCCUR UNDER THE RECEIVABLES PURCHASE AGREEMENT;
OR

 

(M)  A CHANGE OF CONTROL OCCURS; OR

 

(n)    the Seller shall have failed, on or before December 31, 2004, to have
consummated a Permitted Take-Out the net proceeds of which are greater than or
equal to $300,000,000;

 

then, and in any such event, the Buyer may by notice to the Seller declare the
Termination Date to have occurred, except that, in the case of any event
described in clause (i) of subsection (g) above, the Termination Date shall be
deemed to have occurred automatically upon the occurrence of such event.  Upon
any such declaration or automatic occurrence, the Buyer shall have, in addition
to all other rights and remedies under this Sale Agreement or otherwise, all
other rights and remedies provided under the UCC of the applicable jurisdiction
and other applicable laws, which rights shall be cumulative.

 

ARTICLE VIII
INDEMNIFICATION

 

SECTION 8.01.  INDEMNITIES BY THE SELLER.  (A) WITHOUT LIMITING ANY OTHER RIGHTS
WHICH THE BUYER MAY HAVE HEREUNDER OR UNDER APPLICABLE LAW, THE SELLER HEREBY
AGREES TO INDEMNIFY THE BUYER AND ITS 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 SALE
AGREEMENT) FOR UNCOLLECTIBLE RECEIVABLES):

 

(I)  THE TRANSFER OF ANY RECEIVABLE WHICH WAS NOT, AS OF THE DATE OF PURCHASE,
AN ELIGIBLE RECEIVABLE;

 

(II)  ANY REPRESENTATION OR WARRANTY MADE OR DEEMED MADE BY THE SELLER (OR ANY
OF ITS OFFICERS) UNDER OR IN CONNECTION WITH THIS SALE AGREEMENT, ANY SETTLEMENT
REPORT OR ANY OTHER INFORMATION OR REPORT DELIVERED BY THE SELLER 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 (INDIVIDUALLY OR AS SERVICER) TO COMPLY WITH
ANY TERM, PROVISION OR COVENANT CONTAINED IN THIS SALE AGREEMENT (OTHER

 

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THAN ANY COVENANT CONTAINED IN SECTION 5.04, 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 SALE AGREEMENT
OR WITH ANY APPLICABLE LAW, RULE OR REGULATION WITH RESPECT TO ANY RECEIVABLE,
THE RELATED CONTRACT, THE RELATED SECURITY OR THE OTHER TRANSFERRED ASSETS, OR
THE NONCONFORMITY OF ANY RECEIVABLE, THE RELATED CONTRACT, THE RELATED SECURITY
OR THE OTHER TRANSFERRED ASSETS WITH ANY SUCH APPLICABLE LAW, RULE OR
REGULATION;

 

(IV)  THE FAILURE TO VEST AND MAINTAIN VESTED IN THE BUYER OR TO TRANSFER TO THE
BUYER VALID LEGAL AND EQUITABLE TITLE TO AND OWNERSHIP OF THE TRANSFERRED
ASSETS, FREE AND CLEAR OF ANY ADVERSE CLAIM (INCLUDING, WITHOUT LIMITATION, FREE
AND CLEAR OF ANY PERMITTED ENCUMBRANCE EXCEPT IN FAVOR OF THE BUYER OR ITS
ASSIGNEES) WHETHER EXISTING AT THE TIME OF THE PURCHASE OF SUCH RECEIVABLE 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 THE BUYER), FINANCING STATEMENTS OR OTHER SIMILAR
INSTRUMENTS OR DOCUMENTS UNDER THE UCC OF ANY APPLICABLE JURISDICTION OR OTHER
APPLICABLE LAWS AGAINST THE SELLER WITH RESPECT TO ANY CONTRACT OR RECEIVABLES
WHICH ARE, OR ARE PURPORTED TO BE, TRANSFERRED 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 RECEIVABLE (INCLUDING,
WITHOUT LIMITATION, A DEFENSE BASED ON SUCH 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, AS SERVICER OR OTHERWISE, TO PERFORM ITS
DUTIES OR OBLIGATIONS IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE VI;

 

(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
TRANSFERRED ASSETS;

 

(X)  THE TERMINATION, REJECTION OR NON-ASSUMPTION BY THE SELLER OF ANY CONTRACT
PRIOR TO THE ORIGINAL TERM OF SUCH CONTRACT, WHETHER SUCH

 

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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 AND THE OBLIGORS UNDER THE CONTRACTS TO MAINTAIN
CASUALTY AND LIABILITY INSURANCE FOR THE EQUIPMENT RELATED TO THE RECEIVABLES IN
AN AMOUNT AT LEAST EQUAL TO THE DISCOUNTED RECEIVABLES BALANCE FOR ALL
RECEIVABLES AT SUCH TIME;

 

(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, OTHER THAN, FOR AS LONG AS THE SELLER AND THE BUYER ARE
PARTIES TO THE ESCROW AGREEMENT, TO THE EXTENT SUCH COMMINGLING IS CONTEMPLATED
THEREUNDER.

 

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.

 

ARTICLE IX
MISCELLANEOUS

 

SECTION 9.01.  AMENDMENTS, ETC.  NO AMENDMENT TO OR WAIVER OF ANY PROVISION OF
THIS SALE 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
SELLER AND THE BUYER (WITH RESPECT TO AN AMENDMENT) OR (II) THE BUYER (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 SALE 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 9.02.  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.

 

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SECTION 9.03.  NO WAIVER; REMEDIES.  NO FAILURE ON THE PART OF THE BUYER 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 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 9.04.  BINDING EFFECT; ASSIGNABILITY.  THIS SALE AGREEMENT SHALL BE
BINDING UPON AND INURE TO THE BENEFIT OF THE SELLER, THE BUYER 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 THE BUYER AND THE COLLATERAL AGENT.  THE BUYER 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 ACKNOWLEDGES THAT THE BUYER HAS SOLD TO THE PURCHASERS AND GRANTED TO THE
COLLATERAL AGENT ALL OF ITS RIGHT, REMEDIES, POWERS AND PRIVILEGES HEREUNDER
WITH RESPECT TO PURCHASED ASSETS (AS DEFINED IN THE RECEIVABLES PURCHASE
AGREEMENT), AND THAT SUCH PURCHASERS AND/OR THE COLLATERAL AGENT MAY FURTHER
ASSIGN SUCH RIGHTS, REMEDIES, POWERS AND PRIVILEGES TO THE EXTENT PERMITTED IN
THE RECEIVABLES PURCHASE AGREEMENT.  THE SELLER AGREES THAT THE COLLATERAL
AGENT, AS THE ASSIGNEE OF THE BUYER, OR TRIPLE-A, AS APPROPRIATE, SHALL, SUBJECT
TO THE TERMS OF THE RECEIVABLES PURCHASE AGREEMENT, HAVE THE RIGHT TO ENFORCE
THIS SALE AGREEMENT AND TO EXERCISE DIRECTLY ALL OF THE BUYER’S RIGHTS AND
REMEDIES UNDER THIS SALE AGREEMENT (INCLUDING, WITHOUT LIMITATION, THE RIGHTS
AND REMEDIES UNDER SECTIONS 6.01, 6.02, 6.03, 6.04 AND 8.01) AND THE SELLER
AGREES TO COOPERATE FULLY WITH THE COLLATERAL AGENT AND/OR THE PURCHASERS IN THE
EXERCISE OF SUCH RIGHTS AND REMEDIES.  WITHOUT LIMITING THE FOREGOING, THE
SELLER HEREBY ACKNOWLEDGES THAT THE BUYER AND THE PURCHASERS HAVE AGREED,
PURSUANT TO THE RECEIVABLES PURCHASE AGREEMENT AND CERTAIN RELATED AGREEMENTS,
THAT, SUBJECT TO THE RESTRICTIONS SET FORTH THEREIN, THE COLLATERAL AGENT AND
CERTAIN PARTIES PROVIDING CREDIT ENHANCEMENTS AND/OR LIQUIDITY FOR THE
PURCHASERS IN CONNECTION WITH THE RECEIVABLES PURCHASE AGREEMENT SHALL BE
ENTITLED TO EXERCISE THE BUYER’S RIGHTS UNDER THIS SALE AGREEMENT.  THE SELLER
HEREBY CONSENTS TO THE FOREGOING AND AGREES TO COOPERATE WITH ANY SUCH PERSON
ELECTING TO EXERCISE THE BUYER’S RIGHTS UNDER THIS SALE AGREEMENT.  THIS SALE
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 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
THE INDEMNIFICATION AND PAYMENT PROVISIONS OF ARTICLE VIII AND ARTICLE X SHALL
BE CONTINUING AND SHALL SURVIVE ANY TERMINATION OF THIS SALE AGREEMENT.

 

SECTION 9.05.  GOVERNING LAW; WAIVER OF JURY TRIAL.  THIS SALE 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 BUYER IN THE TRANSFERRED ASSETS 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

 

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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 BUYER’S OPTION, BY SERVICE UPON CT
CORPORATION SYSTEM, 1633 BROADWAY, NEW YORK, NEW YORK 10019, 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 IN CONTRACT, TORT, OR OTHERWISE BETWEEN
THE SELLER AND THE BUYER ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS SALE
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 THE BUYER TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF
THE BUYER TO BRING ANY ACTION OR PROCEEDING AGAINST THE SELLER OR ITS PROPERTY
IN THE COURTS OF ANY OTHER JURISDICTION.

 

SECTION 9.06.  COSTS, EXPENSES AND TAXES.  (A)  IN ADDITION TO THE RIGHTS OF
INDEMNIFICATION UNDER ARTICLE VIII HEREOF, THE SELLER AGREES TO PAY ON DEMAND
ALL REASONABLE COSTS AND EXPENSES IN CONNECTION WITH THE PREPARATION, EXECUTION,
DELIVERY AND ADMINISTRATION (INCLUDING PERIODIC AUDITING AND ANY REQUESTED
AMENDMENTS, WAIVERS OR CONSENTS) OF THIS SALE AGREEMENT AND THE OTHER DOCUMENTS
TO BE DELIVERED HEREUNDER, INCLUDING, WITHOUT LIMITATION, THE REASONABLE FEES
AND OUT-OF-POCKET EXPENSES OF COUNSEL FOR THE BUYER (AND TO THE EXTENT OWED
UNDER THE RECEIVABLES PURCHASE AGREEMENT, TO THE PURCHASERS AND THE COLLATERAL
AGENT) WITH RESPECT THERETO AND WITH RESPECT TO ADVISING THE BUYER (AND TO THE
EXTENT OWED UNDER THE RECEIVABLES PURCHASE AGREEMENT, TO THE PURCHASERS AND THE
COLLATERAL AGENT) AS TO ITS RIGHTS AND REMEDIES UNDER THIS SALE 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 SALE 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 SALE AGREEMENT OR THE OTHER
AGREEMENTS AND DOCUMENTS TO BE DELIVERED HEREUNDER, AND AGREES TO INDEMNIFY THE
BUYER AND ITS ASSIGNEES AGAINST ANY LIABILITIES WITH RESPECT TO OR RESULTING
FROM ANY DELAY IN PAYING OR OMISSION TO PAY SUCH TAXES AND FEES.

 

SECTION 9.07.  EXECUTION IN COUNTERPARTS; SEVERABILITY.  THIS SALE 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

 

34

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of which when taken together shall constitute one and the same agreement.  In
case any provision in or obligation under this Sale 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 9.08.  REFERENCE TO AND EFFECT ON PRIOR PCA.  EACH OF THE PARTIES HERETO
RATIFIES THE SALES, CONVEYANCES, PAYMENTS, REPRESENTATIONS, WARRANTIES,
COVENANTS AND INDEMNITIES MADE BY SUCH PARTY IN THE PRIOR PCA AND AGREES THAT
SUCH AGREEMENT IS, AS OF THE DATE HEREOF, IN FULL FORCE AND EFFECT.  FROM AND
AFTER THE EFFECTIVENESS OF THIS SALE AGREEMENT IN ACCORDANCE WITH SECTION 3.01,
(I) THE TERMS AND PROVISIONS OF THIS SALE AGREEMENT SHALL AMEND AND SUPERSEDE
THE TERMS AND PROVISIONS OF THE PRIOR PCA IN ITS ENTIRETY, (II) THE CONTINUING
RIGHTS, REMEDIES AND OBLIGATIONS OF THE PARTIES WITH RESPECT TO ANY RECEIVABLES
ACQUIRED UNDER THE PRIOR PCA SHALL BE GOVERNED BY THE TERMS AND PROVISIONS OF
THIS SALE AGREEMENT TO THE SAME EXTENT AS IF SUCH RECEIVABLES HAD BEEN CONVEYED
UNDER THIS SALE AGREEMENT, AND (III)  ALL REFERENCES IN ANY OTHER FACILITY
DOCUMENTS TO THE PRIOR PCA OR APPENDIX A THERETO SHALL MEAN AND BE A REFERENCE
TO THIS SALE AGREEMENT AND APPENDIX A HERETO.  IT IS EXPRESSLY UNDERSTOOD AND
AGREED THAT THE EXECUTION AND DELIVERY OF THIS SALE AGREEMENT IS NOT INTENDED TO
BE, AND SHALL NOT BE CONSTRUED AS, A NOVATION OF THE PRIOR PCA NOR OF ANY LIENS
GRANTED OR INDEBTEDNESS INCURRED THEREUNDER.

 

35

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IN WITNESS WHEREOF, the parties have caused this Sale Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

 

SELLER/SERVICER:

HPSC, INC.

 

 

 

 

 

 

By:

 

/s/ John W. Everets

 

 

 

 

Name:  John W. Everets

 

 

 

 

Title:   Chairman

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Address:

Sixty State Street

 

 

 

 

35th Floor

 

 

 

 

Boston, MA 02109-1803

 

 

 

Attn: Vice President, Finance

 

 

 

 

 

 

 

 

 

 

BUYER:

HPSC BRAVO FUNDING, LLC

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Stephen K. Ballou

 

 

 

 

Name:  Stephen K. Ballou

 

 

 

 

Title:  Manager

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Address:

Sixty State Street

 

 

 

 

35th Floor

 

 

 

 

Boston, MA 02109-1803

 

 

 

Attn:  Manager

 

Signature Page to Amended and Restated Purchase and Contribution Agreement

 

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