SHALL BE THE LAWFUL OWNER OF, AND HAVE GOOD TITLE TO, SUCH
RECEIVABLE AND ALL TRANSFERRED ASSETS RELATING THERETO, FREE AND CLEAR OF ANY
ADVERSE CLAIMS.
ALL SUCH TRANSFERRED ASSETS ARE PURCHASED WITHOUT RECOURSE TO
THE ORIGINATOR EXCEPT AS DESCRIBED IN THE SALE AGREEMENT.
THE PURCHASES OF THE
TRANSFERRED ASSETS BY THE SELLER CONSTITUTE VALID AND TRUE SALES AND TRANSFERS
FOR CONSIDERATION (AND NOT MERELY A PLEDGE OF SUCH TRANSFERRED ASSETS FOR
SECURITY PURPOSES), ENFORCEABLE AGAINST CREDITORS OF THE ORIGINATOR AND NO
TRANSFERRED ASSETS SHALL CONSTITUTE PROPERTY OF THE ORIGINATOR.
(Q)
BUSINESS.
SINCE ITS FORMATION (WHICH SHALL
DATE TO THE DATE OF INCORPORATION OF THE SELLER'S PREDECESSOR IN INTEREST, HPSC
BRAVO FUNDING CORP.), THE SELLER HAS CONDUCTED NO BUSINESS OTHER THAN THE
EXECUTION, DELIVERY AND PERFORMANCE OF THE FACILITY DOCUMENTS CONTEMPLATED
HEREBY, THE PURCHASE AND SERVICING OF TRANSFERRED ASSETS THEREUNDER, AND SUCH
OTHER ACTIVITIES AS ARE INCIDENTAL TO THE FOREGOING.
THE SELLER HAS INCURRED NO
INDEBTEDNESS EXCEPT THAT EXPRESSLY INCURRED HEREUNDER AND UNDER THE OTHER
FACILITY DOCUMENTS.
(R)
OWNERSHIP OF THE SELLER.
ONE HUNDRED
PERCENT (100%) OF THE OUTSTANDING MEMBERSHIP INTEREST OF THE SELLER IS DIRECTLY
OWNED (BOTH BENEFICIALLY AND OF RECORD) BY HPSC, INC.
SUCH MEMBERSHIP INTEREST
IS VALIDLY ISSUED, FULLY PAID AND NONASSESSABLE AND THERE ARE NO OPTIONS,
WARRANTS OR OTHER RIGHTS TO ACQUIRE ANY MEMBERSHIP INTEREST IN THE SELLER.
(S)
TAXES.
THE SELLER HAS FILED OR CAUSED TO
BE FILED ALL FEDERAL, STATE AND LOCAL TAX RETURNS WHICH ARE REQUIRED TO BE FILED
BY IT, AND HAS PAID OR CAUSED TO BE PAID ALL TAXES SHOWN TO BE DUE AND PAYABLE
ON SUCH RETURNS OR ON ANY ASSESSMENTS RECEIVED BY IT, OTHER THAN ANY TAXES OR
ASSESSMENTS, THE VALIDITY OF WHICH ARE BEING CONTESTED IN GOOD FAITH BY
APPROPRIATE PROCEEDINGS AND WITH RESPECT TO WHICH THE SELLER HAS SET ASIDE
ADEQUATE RESERVES ON ITS BOOKS IN ACCORDANCE WITH GAAP AND WHICH PROCEEDINGS
HAVE NOT GIVEN RISE TO ANY ADVERSE CLAIM.
(T)
SOLVENCY.
THE SELLER, BOTH PRIOR TO AND
AFTER GIVING EFFECT TO THE INITIAL RECEIVABLES PURCHASE ON THE INITIAL PURCHASE
DATE, AND AFTER GIVING EFFECT TO EACH SUBSEQUENT RECEIVABLES PURCHASE, (I) IS
NOT "INSOLVENT" (AS SUCH TERM IS DEFINED IN §101(31)(A) OF THE BANKRUPTCY CODE);
(II) IS ABLE TO PAY ITS DEBTS AS THEY BECOME DUE; AND (III) DOES NOT HAVE
UNREASONABLY SMALL CAPITAL FOR THE BUSINESS IN WHICH IT IS ENGAGED OR FOR ANY
BUSINESS OR TRANSACTION IN WHICH IT IS ABOUT TO ENGAGE.
(U)
DIVERSIFICATION.
AFTER GIVING EFFECT TO THE
INITIAL RECEIVABLES PURCHASE ON THE INITIAL RECEIVABLES PURCHASE DATE, THE
NUMBER OF CONTRACTS AND THE NUMBER OF OBLIGORS ASSOCIATED WITH THE PURCHASED
RECEIVABLES SHALL EQUAL OR EXCEED 300.
(V)
[INTENTIONALLY LEFT BLANK]
(W)
IMPLICIT INTEREST RATE. AS OF THE DATE OF ANY
RECEIVABLES PURCHASE, THE EXCESS OF (I) THE AVERAGE IMPLICIT INTEREST RATES
BEING CHARGED TO OBLIGORS IN RESPECT OF THE
18
Receivables then being purchased over (ii) the Discount Rate applicable to such
Receivables, shall not be greater than eight percent (8.0%).
(X)