Exhibit
10.4


 


Execution Copy


 


AMENDMENT NO. 2 TO THIRD AMENDED AND RESTATED

LEASE RECEIVABLES PURCHASE AGREEMENT


 


Dated as of
October 17, 2003


 


THIS
AMENDMENT NO. 2 dated as of October 17, 2003 (“Amendment”), to the
THIRD AMENDED AND RESTATED LEASE RECEIVABLES PURCHASE AGREEMENT, dated as of
June 19, 2003 (as amended, restated, supplemented or otherwise modified
from time to time, the “LRPA”), among HPSC Bravo Funding, LLC, a
Delaware limited liability company (“HPSC Bravo”), as the Seller
thereunder, HPSC, Inc., a Delaware corporation (“HPSC”), as the Servicer
thereunder, Triple-A One Funding Corporation, a Delaware corporation, as a
Purchaser thereunder, Merrill Lynch Commercial Finance Corp. (“Merrill”),
as a Purchaser and as a Managing Agent thereunder, Capital Markets Assurance
Corporation, and MBIA Insurance Corporation, successor in interest to Capital
Markets Assurance Corporation (“MBIA”), as Managing Agent, as the
Insurer and as the Collateral Agent thereunder, is entered into as of the date
hereof by HPSC Bravo and the Collateral Agent (on behalf of itself and the
Purchasers).  Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to
such terms in the Definitions List referenced in the LRPA.


 


PRELIMINARY STATEMENTS


 


WHEREAS,
pursuant to Section 3.02(i) of the LRPA, the Seller has represented and
warranted, with respect to each Purchased Receivable, that at least one
Scheduled Contract Payment had been made by the related Obligor prior to the
related Purchase Date in accordance with clause (xxvi) of the definition of
“Eligible Receivable” (as such clause was in effect prior to the effectiveness
of this Amendment); and


 


WHEREAS,
it has come to the attention of the parties hereto that, with respect to
certain Purchased Receivables, no Scheduled Contract Payments had been made by
the Obligors prior to the related Purchase Dates; and


 


WHEREAS,
as a result of the foregoing, and also the resulting inaccuracy of the
calculations of the Discounted Eligible Receivables Balance as set forth in
certain Settlement Reports delivered by the Seller pursuant to
Section 5.02(f), Wind-Down Events have occurred pursuant to
Section 7.01(d) of the LRPA (collectively, the “Eligibility Default”);
and


 


WHEREAS, pursuant to Section 7.01(h) of the LRPA,
a Wind-Down Event has occurred, as reflected by the Settlement Report delivered
by the Seller to MBIA and Merrill on September 17, 2003, in accordance
with Section 5.02(f) of the LRPA (the “Collateral Shortfall Default”);
and


 


WHEREAS, HPSC Bravo has requested that MBIA waive, and
MBIA has agreed to waive, subject to the terms and conditions set forth herein,
the Eligibility Default and the Collateral Shortfall Default pursuant to
Section 11.01 of the LRPA; and


 

















 


WHEREAS, pursuant to Section 11.01 of the LRPA,
HPSC Bravo and MBIA, as Insurer and as Collateral Agent, and with the consent
of each Managing Agent, wish to amend the LRPA in certain respects and have
agreed to amend the LRPA on the terms and subject to the conditions set forth herein;


 


NOW, THEREFORE, in consideration of the premises set
forth above, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, HPSC Bravo and MBIA agree as
follows:


 


SECTION 1.                  Waiver.  Effective as
of the date first above written, subject to the satisfaction of the conditions
precedent set forth in Section 5 below, the Insurer and the
Collateral Agent hereby waive the Eligibility Default and the Collateral
Shortfall Default.


 


SECTION 2.                  Amendment to the LRPA.  Effective as
of the date first above written, subject to the satisfaction of the conditions
precedent set forth in Section 5 below, the LRPA is hereby amended
as follows:


 


(a)                    Appendix A to the LRPA is amended by deleting the
definition of “Default Reserve Ratio” in its entirety and replacing it with the
following:


 


“Default Reserve Ratio” means the ratio
(expressed as a percentage), computed as of the last day of each month in
accordance with the following formula:


 


	
  DRR

  	
   

  	
  =

  	
   

  	
  DRSF X DR X WRT, where

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DRR

  	
   

  	
  =

  	
   

  	
  the Default Reserve Ratio;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DRSF

  	
   

  	
  =

  	
   

  	
  the Default Reserve Stress Factor as of
  such day;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DR

  	
   

  	
  =

  	
   

  	
  the Default Ratio as of such day; and

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  WRT

  	
   

  	
  =

  	
   

  	
  the Weighted Average Remaining Term as
  expressed in years of the Purchased Receivables as of such day.

  



 


(b)                   Appendix A to the LRPA is further amended by deleting
the definition of “Delinquent Receivable” in its entirety and replacing it with
the following:


 


“Delinquent Receivable” means a Purchased
Receivable or HPSC Portfolio Receivable (i) that is not a Defaulted Receivable
and (ii) (a) as to which any Scheduled Contract Payment or part thereof, is
unpaid more than 90 days from its original due date, (b) which, consistent with
the Credit and Collection Policy, has been or should be classified as
delinquent by the Originator or (c) with respect to which, if, on the related
Purchase Date, no Scheduled Contract Payment shall have yet been due and
payable under the related Contract, the first Scheduled Contract Payment due
after such Purchase Date is not paid in full on the due date therefor; provided,
that, upon receipt from the Obligor of payment in full of such first Scheduled
Contract Payment, such Receivable shall no longer constitute a “Delinquent
Receivable” pursuant to this clause (ii)(c).


 


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(c)                    Appendix A to the LRPA is further amended by deleting
clauses (xxvi) and (xxvii) of the definition of “Eligible Receivable” in their
entirety and replacing them with the following:


 


(xxvi)  (a) the
Contract for which was originated no later than the date that is one month
prior to the related Purchase Date therefor and (b) (1) such Receivable is an
Eligible Deferred Receivable or (2) on the date of such Purchase by the Buyer,
the Obligor shall have made at least one Scheduled Contract Payment pursuant to
the related Contract in full and in a timely manner;


 


(xxvii) 
[Intentionally left blank]


 


(d)                   Appendix A to the LRPA is further amended by adding
the following definitions thereto in their appropriate alphabetical locations:


 


“Default Reserve Stress Factor” means (i) for
the last day of the calendar month preceding each Settlement Date from and
including October 20, 2003 to and including December 22, 2003, (x) if
the Default Ratio determined as of such day is greater than or equal to 1.20%,
3.0, and (y) if the Default Ratio determined as of such day is less than 1.20%,
2.2, and (ii) for the last day of the calendar month preceding the
January 20, 2004 Settlement Date and each Settlement Date thereafter, 3.0.


 


“Eligible Deferred Receivable” means a
Receivable (i) with respect to which the first Scheduled Contract Payment
required to be paid by the Obligor under such Contract is due not more than 90
days after the date of such Contract but which Scheduled Contract Payment is
not yet due on the Purchase Date on which such Receivable is purchased pursuant
to the Sale Agreement, (ii) that is not a Delinquent Receivable and (iii) (a)
that is purchased by the Buyer under the Sale Agreement before October 20,
2003 or (b) (1) that is purchased by the Buyer under the Sale Agreement on or
after October 20, 2003 and (2) the Outstanding Balance of which, on such
Purchase Date, when added to the Outstanding Balance of all other Receivables
purchased by the Buyer under the Sale Agreement on such Purchase Date and to
which clauses (i) and (ii) above are applicable on such Purchase
Date, does not exceed 33% of the Outstanding Balance of all Eligible
Receivables purchased by the Buyer under the Sale Agreement on such Purchase
Date.


 


(e)                    The LRPA is further amended by adding the following
SECTION 3.03 at the end of Article III:


 


SECTION 3.03 
Effect of Payment of Consideration for Receivables Purchase.  Upon receipt by the Seller of the
consideration for any Receivables Purchase pursuant to Section 2.02
(including without limitation the assumption by the Collateral Agent of the
obligation to remit to the Seller any Deferred Purchase Price), all right,
title and interest of the Seller in and to the Receivables and Related Security
that are the subject of such Receivables Purchase and that are assigned by the
Seller pursuant to Section 2.01 shall vest in the Purchasers (or
the Collateral Agent, as applicable), whether or not the conditions precedent
to such Receivables Purchase were in fact satisfied; provided, however,
that none of the Purchasers, the Managing Agents or the Collateral Agent shall
be deemed to have waived any claim it may have under this 


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Receivables Purchase Agreement for the failure by the Seller in fact to
satisfy any such condition precedent.


 


SECTION 3.                  Acknowledgment of Transfer. 
For the avoidance of doubt, each of HPSC Bravo, the Collateral Agent and
each Managing Agent on behalf of the applicable Purchasers hereby acknowledges
and agrees that, notwithstanding the Eligibility Default or any other failure
by the Seller to satisfy any conditions precedent to any Receivables Purchase
occurring prior to the date hereof, upon receipt by the Seller of the
consideration for any Receivables Purchase pursuant to Section 2.02 of the
LRPA (including without limitation the assumption by the Collateral Agent of
the obligation to remit to the Seller any Deferred Purchase Price), all right,
title and interest of the Seller in and to the Receivables and Related Security
that were the subject of such Receivables Purchase and that were assigned by
the Seller pursuant to Section 2.01 of the LRPA have vested in the
Purchasers, whether or not the conditions precedent to such Receivables
Purchase were in fact satisfied; provided, however, that, other
than as expressly set forth in this Amendment, none of the Purchasers, the
Managing Agents, the Collateral Agent or the Insurer shall be deemed to have
waived any claim it may have for the failure by the Seller in fact to satisfy
any such condition precedent.


 


SECTION 4.                  Representations and Warranties. 
HPSC Bravo represents and warrants as follows:


 


(a)                    This Amendment and the LRPA as amended hereby,
constitute legal, valid and binding obligations of HPSC Bravo and are
enforceable against HPSC Bravo in accordance with their terms.


 


(b)                   Upon the effectiveness of this Amendment, HPSC Bravo
hereby reaffirms that the representations and warranties contained in Article IV
of the LRPA are true and correct.


 


(c)                    Upon the effectiveness of this Amendment, HPSC Bravo
hereby reaffirms all covenants made in the LRPA and the other Facility
Documents to which it is a party to the extent the same are not amended hereby
and agrees that all such covenants shall be deemed to have been remade as of
the effective date of this Amendment.


 


(d)                   Upon the effectiveness of this Amendment, no Wind-Down
Event or Unmatured Wind-Down Event, Event of Termination or Unmatured Event of
Termination shall have occurred and shall be continuing.


 


SECTION 5.                  Conditions Precedent.  This
Amendment shall become effective as of the date hereof on the date on which the
Collateral Agent shall receive (i) a Settlement Report for the October 20,
2003 Settlement Date, generated using the definitions set forth in Appendix A
to the LRPA after giving effect to this Amendment, (ii) a copy of this
Amendment, duly executed and delivered by each of HPSC Bravo and MBIA and
acknowledged by each of MBIA and Merrill in their capacity as Managing Agents,
and (iii) a copy of Amendment No. 2 to the Sale Agreement, dated as of the date
hereof, duly executed and delivered by each of HPSC and HPSC Bravo and
acknowledged by MBIA in its capacities as Insurer and as Collateral Agent.


 


SECTION 6.                  Reference to and Effect on the LRPA. 
(a) Except as specifically set forth above, the LRPA, and all other
documents, instruments and agreements executed and/or 


 


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delivered
in connection therewith, shall remain in full force and effect, and are hereby
ratified and confirmed.  The execution,
delivery and effectiveness of this Amendment shall not, except as expressly
provided herein and for the limited purposes set forth herein, operate as a
waiver of any right, power or remedy of any Purchaser, any Managing Agent, the
Collateral Agent or the Insurer, nor constitute a waiver of any provision of
the LRPA, or any other documents, instruments and agreements executed and/or
delivered in connection therewith.


 


(b) Upon the effectiveness of this Amendment, each
reference in the LRPA to “this Receivables Purchase Agreement”, “hereunder”,
“hereof”, “herein” or words of like import shall mean and be a reference to the
LRPA as amended hereby, and each reference to the LRPA in any other document,
instrument or agreement executed and/or delivered in connection with the LRPA
shall mean and be a reference to the LRPA as amended hereby.


 


SECTION 7.                  Consent to Amendment and Waiver. 
MBIA, in its capacity as the Insurer, hereby consents, for the purposes
of Section 4.02 of the Insurance Agreement, to the acknowledgment of and
consent to the amendments and waivers contained in this Amendment by Merrill in
its capacity as a Managing Agent.


 


SECTION 8.                  Headings. 
Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute part of this Amendment
for any other purpose.


 


SECTION 9.                  Governing Law.  This
Amendment shall be governed by and construed in accordance with the laws of the
State of New York.


 


SECTION 10.            Counterparts.  This
Amendment may be executed by one or more of the parties to this Amendment on
any number of separate counterparts and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.


 


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IN
WITNESS WHEREOF, this Amendment has been duly executed as of the day and year
first above written.


 


	
   

  	
  HPSC BRAVO FUNDING, LLC, as Seller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rene Lefebvre

  	
   

  
	
   

  	
  Name: Rene Lefebvre

  
	
   

  	
  Title: 
  Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MBIA INSURANCE CORPORATION, as

  Collateral Agent and as Insurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Glenn H. Roder

  	
   

  
	
   

  	
  Name: Glenn H. Roder

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
  Agreed and Acknowledged:

  	
   

  
	
   

  	
   

  
	
  MBIA INSURANCE
  CORPORATION,

  as a Managing Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Andrew Laterza

  	
   

  	
   

  
	
  Name: Andrew P.
  Laterza

  	
   

  
	
  Title:   Vice
  President

  	
   

  
	
   

  	
   

  
	
  MERRILL LYNCH
  COMMERCIAL

  FINANCE CORP., as a Managing Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Joseph Magnus

  	
   

  	
   

  
	
  Name: Joseph
  Magnus

  	
   

  
	
  Title:   Director

  	
   

  
								



 


Signature Page to Amendment No. 2 to Lease
Receivables Purchase Agreement