Document:

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

 

 

	
  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

  

 

 

	
  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

  

 

 

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

  

 

 

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.

 

 

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.

 

2

 

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.

 

3

 

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

 

4

 

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

 

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

 

6

 

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.

 

7

 

(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

 

8

 

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.

 

9

 

(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

 

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

 

11

 

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

 

12

 

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.

 

13

 

(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

 

14

 

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.

 

15

 

(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

 

16

 

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;

 

17

 

(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

 

18

 

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

 

19

 

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.

 

20

 

	
  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.

 

21

 

(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

 

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

 

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

 

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.

 

25

 

(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

 

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

 

27

 

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

 

28

 

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

 

29

 

(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

 

30

 

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

 

31

 

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.

 

32

 

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

 

33

 

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

 

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

 

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 AgreementExhibit
10.4

 

EXECUTION COPY

 

THIRD AMENDED AND RESTATED

 

LEASE RECEIVABLES PURCHASE AGREEMENT

 

Dated as of June 19, 2003

 

among

 

HPSC BRAVO FUNDING, LLC,

 

as Seller

 

HPSC, INC.,

 

as Servicer

 

TRIPLE-A ONE FUNDING CORPORATION,

 

as a Purchaser,

 

MERRILL LYNCH COMMERCIAL FINANCE CORP.

 

as a Purchaser and as a Managing Agent,

 

CAPITAL MARKETS ASSURANCE CORPORATION

 

and

 

MBIA INSURANCE CORPORATION,

successor in interest to Capital Markets Assurance Corporation,

 

as a Managing Agent, as the Insurer and as the Collateral
Agent

 

 

Table of Contents

 

	
  ARTICLE I

  	
  DEFINITIONS

  
	
   

  	
  SECTION 1.01.

  	
  Certain
  Definitions

  
	
   

  	
  SECTION
  1.02.

  	
  Accounting
  Terms

  
	
   

  	
  SECTION
  1.03.

  	
  Other Terms

  
	
   

  	
  SECTION
  1.04.

  	
  Computation
  of Time Periods

  
	
   

  	
   

  
	
  ARTICLE II

  	
  AMOUNT AND TERMS OF THE
  PURCHASES

  
	
   

  	
  SECTION
  2.01.

  	
  Receivables
  Purchase Facility

  
	
   

  	
  SECTION
  2.02.

  	
  Making
  Purchases from the Seller

  
	
   

  	
  SECTION
  2.03.

  	
  Reduction
  of Facility Limit

  
	
   

  	
  SECTION
  2.04.

  	
  Settlement
  Procedures

  
	
   

  	
  SECTION
  2.05.

  	
  Payments
  and Computations, Etc

  
	
   

  	
  SECTION
  2.06.

  	
  Compensation

  
	
   

  	
  SECTION
  2.07.

  	
  Dividing or
  Combining of Capital and Fixed Periods

  
	
   

  	
  SECTION
  2.08.

  	
  Increased
  Costs, Capital Adequacy

  
	
   

  	
  SECTION
  2.09.

  	
  Taxes

  
	
   

  	
  SECTION
  2.10.

  	
  Fees

  
	
   

  	
  SECTION
  2.11.

  	
  Grant of
  Security Interest in Equipment Collateral

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  CONDITIONS OF PURCHASES

  
	
   

  	
  SECTION
  3.01.

  	
  Conditions
  Precedent to Initial Receivables Purchase

  
	
   

  	
  SECTION
  3.02.

  	
  Conditions
  Precedent to Each Receivables Purchase

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  REPRESENTATIONS AND
  WARRANTIES

  
	
   

  	
  SECTION
  4.01.

  	
  Representations
  and Warranties of the Seller

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  GENERAL COVENANTS

  
	
   

  	
  SECTION
  5.01.

  	
  Affirmative
  Covenants of the Seller

  
	
   

  	
  SECTION
  5.02.

  	
  Reporting
  Requirements of the Seller

  
	
   

  	
  SECTION
  5.03.

  	
  Negative
  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 Collateral Agent

  
	
   

  	
  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

  
	
   

  	
  SECTION
  6.10.

  	
  Lock-Box
  Accounts; Collection Account

  
	
   

  	
  SECTION
  6.11.

  	
  Collection
  Account; Distribution of Collections

  
				

 

i

 

	
  ARTICLE VII

  	
  WIND-DOWN EVENTS;
  REMEDIES

  
	
   

  	
  SECTION
  7.01.

  	
  Wind-Down
  Events

  
	
   

  	
  SECTION
  7.02.

  	
   Remedies

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  INDEMNIFICATION;
  REPURCHASES

  
	
   

  	
  SECTION
  8.01.

  	
  Indemnities
  by the Seller

  
	
   

  	
  SECTION
  8.02.

  	
  Repurchases
  of Designated Receivables

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  AGENCY

  
	
   

  	
  SECTION
  9.01.

  	
  Authorization
  and Action

  
	
   

  	
  SECTION
  9.02.

  	
  Delegation
  of Duties

  
	
   

  	
  SECTION
  9.03.

  	
  Exculpatory
  Provisions

  
	
   

  	
  SECTION
  9.04.

  	
  Reliance by
  the Agent

  
	
   

  	
  SECTION
  9.05.

  	
  Non-Reliance

  
	
   

  	
  SECTION
  9.06.

  	
  Agents in
  their Individual Capacities

  
	
   

  	
  SECTION
  9.07.

  	
  Reimbursement
  and Indemnification

  
	
   

  	
  SECTION
  9.08.

  	
  Successor
  Collateral Agent

  
	
   

  	
  SECTION
  9.09.

  	
  Successor
  Managing Agent

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  ASSIGNMENTS BY TRIPLE-A AND
  CAPMAC

  
	
   

  	
  SECTION
  10.01.

  	
  Assignment
  by Triple-A to Merrill

  
	
   

  	
  SECTION
  10.02.

  	
  Assignment
  by CapMAC to MBIA

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  MISCELLANEOUS

  
	
   

  	
  SECTION
  11.01.

  	
  Amendments,
  Etc

  
	
   

  	
  SECTION
  11.02.

  	
  Notices,
  Etc

  
	
   

  	
  SECTION
  11.03.

  	
  No
  Waiver; Remedies

  
	
   

  	
  SECTION
  11.04.

  	
  Binding
  Effect; Assignability

  
	
   

  	
  SECTION
  11.05.

  	
  GOVERNING
  LAW; WAIVER OF JURY TRIAL

  
	
   

  	
  SECTION
  11.06.

  	
  Costs,
  Expenses and Taxes

  
	
   

  	
  SECTION
  11.07.

  	
  Execution
  in Counterparts; Severability

  
	
   

  	
  SECTION
  11.08.

  	
  No
  Bankruptcy Petition Against Conduit Purchasers

  
	
   

  	
  SECTION
  11.09.

  	
  Subordination

  
	
   

  	
  SECTION
  11.10.

  	
  Reference
  to and Effect on Second Amended and Restated LRPA

  
				

 

ii

 

LIST OF APPENDICES, EXHIBITS AND SCHEDULES

 

	
  Appendix A

  	
  Definitions List

  
	
   

  	
   

  
	
  Exhibit A

  	
  Form of Sale
  Notice

  
	
  Exhibit B

  	
  Form of
  Receivables Data File

  
	
  Exhibit C

  	
  Form of
  Manager’s Certificate

  
	
  Exhibit D

  	
  Locations of
  Chief Executive Office and Records

  
	
  Exhibit E

  	
  Form of
  Interest Rate Hedge Assignment

  
	
  Exhibit F

  	
  Historical
  Loss Data

  
	
   

  	
   

  
	
  Schedule I

  	
  Purchaser
  Limits

  

 

 

iii

 

THIRD AMENDED AND RESTATED

 

LEASE RECEIVABLES PURCHASE AGREEMENT

 

THIS THIRD AMENDED AND RESTATED LEASE RECEIVABLES
PURCHASE AGREEMENT, dated as of June 19, 2003 
(as the same may be amended, restated, supplemented or otherwise
modified from time to time, the “Receivables Purchase Agreement”),  is entered into by and among HPSC BRAVO
FUNDING, LLC, a Delaware limited liability company, as Seller (the “Seller”),
HPSC, INC., a Delaware corporation, as Servicer (the “Servicer”),
TRIPLE-A ONE FUNDING CORPORATION, a Delaware corporation (“Triple-A”),
as a Purchaser, Capital Markets Assurance Corporation, a New York stock
insurance corporation (“CapMAC”), MERRILL LYNCH COMMERCIAL FINANCE
CORP., a Delaware corporation (“Merrill”), as a Purchaser and as a
Managing Agent, MBIA INSURANCE CORPORATION, a New York insurance corporation (“MBIA”)
(successor in interest to CapMAC), as a Managing Agent (in such capacity,
successor to the “Administrative Agent” under the first Amended and Restated
LRPA (as defined below)) and as the Insurer and as the Collateral Agent (in
such capacities, the “Insurer” and the “Collateral Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the Seller, the Servicer, Triple-A and CapMAC
are parties to that certain Lease Receivables Purchase Agreement, dated as of
October 18, 1996 (as amended, the “Initial LRPA”); and

 

WHEREAS, the Seller, the Servicer, Triple-A and CapMAC
amended and restated the Initial LRPA in certain respects, as set forth in the
Amended and Restated Lease Receivables Purchase Agreement, dated as of March
31, 2000 (as amended, the “First Amended and Restated LRPA”); and

 

WHEREAS, the Seller, the Servicer, Triple-A and CapMAC
further amended and restated the First Amended and Restated LRPA in certain
respects, as set forth in the Second Amended and Restated Lease Receivables
Purchase Agreement, dated as of August 5, 2002 (as amended, the “Second
Amended and Restated LRPA”); and

 

WHEREAS, the Seller and HPSC, Inc. as the Originator,
will enter into a Second Amended and Restated Purchase and Contribution
Agreement dated as of the date hereof, pursuant to which the Seller will
purchase from the Originator certain Receivables, Related Security and other
property relating thereto; and

 

WHEREAS, the Seller, the Servicer, Triple-A, and
CapMAC desire to amend and restate the Second Amended and Restated LRPA in
certain respects; and

 

WHEREAS, CapMAC wishes to assign, and MBIA wishes to
assume, all of the rights and obligations of CapMAC, in its capacities as
Collateral Agent and Administrative

 

 

Agent, under the Second Amended
and Restated LRPA, to the extent modified under this Receivables Purchase
Agreement; and

 

WHEREAS, Merrill wishes to become a party to this
Receivables Purchase Agreement as a Purchaser and as a Managing Agent on the
terms and subject to the conditions set forth herein;

 

NOW, THEREFORE, the Seller, the Servicer, Triple-A,
CapMAC, MBIA and Merrill have agreed to amend and restate the Second Amended
and Restated LRPA in its entirety as follows:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.01.  Certain Definitions.  As used in this Receivables Purchase
Agreement or any certificate or other document made or delivered pursuant
hereto or thereto, the capitalized terms used herein and therein shall, unless
otherwise defined herein or therein, have the meanings assigned to them in the
Definitions List attached hereto as Appendix A, the terms of which are
incorporated herein by reference (the “Definitions List”).  Any reference in the Facility Documents to a
note, instrument, or other agreement substantially in the form of Exhibit K-1,
K-2, K-3, or K-4 to the 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.

 

SECTION 1.02.  Accounting Terms.  As used herein and in any certificate or
other document made or delivered pursuant hereto and thereto, accounting terms
not defined in the Definitions List and accounting terms partly defined in the
Definitions List to the extent not defined, shall have the respective meanings
given to them under GAAP.

 

SECTION 1.03.  Other Terms.  (a) 
All other undefined terms contained in this Receivables Purchase
Agreement shall, unless the context indicates otherwise, have the meanings
provided for by the UCC to the extent the same are used or defined therein.

 

(b)                                 The
words “hereof”, “herein” and “hereunder” and words of similar import when used
in this Receivables Purchase Agreement shall refer to this Receivables Purchase
Agreement as a whole and not to any particular provision of this Receivables
Purchase Agreement, and Section, subsection, Schedule and Exhibit references
are to this Receivables Purchase Agreement unless otherwise specified.

 

(c)                                  Capitalized
terms used herein shall be equally applicable to both the singular and plural
forms of such terms.

 

SECTION 1.04.  Computation of Time Periods.  In this Receivables Purchase Agreement, in
the computation of periods of time from a specified date to a later specified
date, except as the context may otherwise require, the word “from” shall mean
“from and including” and the words “to” and “until” shall each mean “to but
excluding.”

 

2

 

ARTICLE II

 

AMOUNT AND TERMS OF THE PURCHASES

 

SECTION 2.01.  Receivables Purchase Facility.  The Purchasers shall, subject to the terms
and conditions hereinafter set forth, make purchases of Receivables (“Receivables
Purchases”) from time to time on any Settlement Date (except that the
initial Receivables Purchase may be on a date other than a Settlement Date)
during the period from the date the conditions precedent in Section 3.01
are satisfied to the Termination Date. 
Notwithstanding the foregoing, if, at any time, two or more of the
individuals who held the positions of Chief Executive Officer, Chief Financial
Officer and President of the Servicer as of April 30, 1998 no longer remain
actively involved in the day-to-day management of the Servicer, then the
Purchasers are no longer required to, but each Purchaser may, in its sole discretion,
make Receivables Purchases.  Each
Receivables Purchase shall constitute an assignment and sale by the Seller, and
a purchase and acquisition by the Purchasers of Purchased Assets, including,
without limitation, Designated Receivables identified as Eligible Receivables
by the Seller, and Related Security and Collections with respect thereto.  Under no circumstances shall any Purchaser
make any Receivables Purchase if, after giving effect to such Receivables
Purchase, (x) the aggregate outstanding Capital hereunder would exceed the
lesser of (i) the Facility Limit and (ii) the Capital Limit or (y) the
aggregate outstanding Capital funded by such Purchaser’s Purchaser Group would
exceed its Purchaser Limit.  Under no
circumstances shall Triple-A make any Receivables Purchase, if after giving
effect to such Receivables Purchase, the portion of the aggregate outstanding
Capital allocable to Triple-A hereunder would exceed the sum, on such
Receivables Purchase Date, of (i) the net proceeds from the sale of Commercial
Paper plus (ii) the proceeds of Advances.  The Capital Limit in effect on any date shall be determined by
reference to the most recent Settlement Report delivered by the Seller to the
Purchasers in accordance with Section 5.02(f) hereof (i) as adjusted on
the most recent Settlement Date to reflect additional Eligible Receivables sold
on such Settlement Date since the delivery of such Settlement Report and (ii)
as adjusted on any other date of determination to eliminate from the Discounted
Eligible Receivables Balance any Receivables which were Eligible Receivables as
of the dates reflected in the Settlement Report but which no longer satisfy the
criteria for Eligible Receivables.  It
is the intention of the parties hereto that each Receivables Purchase to be
made hereunder shall constitute a sale of accounts, payment intangibles,
promissory notes or chattel paper, as such terms are used in Article 9 of the
UCC.  If at any time a court
characterizes the transactions hereunder as loans by the Purchasers (together
with their respective assignees, participants and successors) to the Seller,
then the Seller hereby pledges, grants a security interest in and assigns to
the Collateral Agent, for the benefit of the Purchasers and ING (to the extent
of ING’s rights set forth under the ING Purchase Agreement) and their
respective successors and assignees, all of its right and title to and interest
in the Purchased Assets, including the Purchased Receivables and the Related
Security, Collections and Equipment related thereto, as security for such loans
and for the payment and performance of all obligations of the Seller hereunder,
and the Collateral Agent acknowledges that it is holding on behalf of, and for
the benefit of, the Purchasers and their respective successors, participants
and assignees (including ING), all of such right and title to and interest in
the Purchased Assets, including the Purchased Receivables and the Related
Security, Collections and Equipment related thereto.

 

3

 

Notwithstanding any other provisions herein to the
contrary, the Purchasers shall have no obligation to purchase any interest,
right or title related to ING Receivables Interests if ING does not make the
corresponding purchase under the ING Purchase Agreement and the Seller shall
have no claim to any Purchaser for such Purchaser’s failure to purchase any ING
Receivables Interest.

 

SECTION 2.02.  Making Purchases from the Seller.

 

(a)                                  Sale
Notice. Whenever the Seller wishes to sell Receivables hereunder, it
shall deliver to each Managing Agent a notice (“Sale Notice”) in
substantially the form of Exhibit A hereto no later than 10:00 A.M. (New
York City time) at least one (1) Business Days prior to the proposed
Receivables Purchase Date.  Each Sale
Notice shall be by telephone, telex, telecopy, cable or other facsimile
transmission (in the case of any such Sale Notice by telephone, confirmed
immediately in writing) and shall specify therein (i) the aggregate Capital to
be funded in connection with such Receivables Purchase, (ii) the amount of such
Capital to be funded by each Purchaser in connection with such Receivables
Purchase; provided, that the aggregate Capital described in clause (i) for each Receivables Purchase shall be
allocated ratably among the Purchasers making such Receivables Purchase in
accordance with their respective Pro Rata Shares, (iii) the date of such
Receivables Purchase and (iv) for any Conduit Purchaser, the duration of the
initial Fixed Period(s) for the Capital to be funded by such Conduit
Purchaser.  In addition to the
foregoing, the Seller shall indicate which Receivables subject to such Sale
Notice are Designated Receivables and which Receivables subject to such Sale
Notice are Non-Designated Receivables.

 

(b)                                 Amount
of Purchased Assets; Deferred Purchase Price.  The consideration for each Receivables Purchase shall consist of
the Capital funded under this Receivables Purchase Agreement, the ING Capital,
if any, funded pursuant to the ING Purchase Agreement and the obligation of the
Collateral Agent on behalf of the Purchasers to remit to the Seller the
Deferred Purchase Price.  The amount of
the Deferred Purchase Price shall be initially computed as of the opening of
business of the Collateral Agent on the date of the initial Receivables
Purchase hereunder.  Thereafter, until
the Termination Date, the amount of the Deferred Purchase Price shall be
automatically recomputed as of the close of business of the Collateral Agent on
each day on which the aggregate Capital hereunder is increased or decreased, on
which the ING Capital is increased or decreased under the ING Purchase
Agreement or on which any funds are remitted to the Seller in satisfaction
thereof under clause (x) of Section 6.11(b) or remitted to ING in
satisfaction thereof under clause (ii) of Section 2.04 of the ING Purchase
Agreement.  From and after the
Termination Date until the Combined Collection Date, the Deferred Purchase
Price shall be automatically recomputed on each Business Day to reflect any
reductions in the amount hereof on account of accrued Yield, Carrying Costs, or
other amounts owed by (or paid on behalf of) the Seller under this Receivables
Purchase Agreement or any ING Obligations under the ING Purchase Agreement.  The Purchased Assets shall become zero at
such time as (i) the Purchasers shall have recovered the aggregate outstanding
Capital and shall have received all other amounts payable to the Purchasers and
the Managing Agents pursuant to this Receivables Purchase Agreement and the
applicable Fee Letters, (ii) ING shall have recovered the aggregate outstanding
ING Capital and shall have received all other amounts payable to ING pursuant
to the ING Purchase Agreement and the ING Fee Letter, and (iii) the Seller has
received payment of the Deferred Purchase Price.  The Purchased Assets and the

 

4

 

Deferred Purchase Price shall
each remain constant from the time as of which any such computation or
recomputation is made until the time as of which the next such recomputation,
if any, shall be made.  The Collateral
Agent on behalf of the Purchasers shall, in consideration of the sale of the
Purchased Assets, from and after the Combined Collection Date, reassign to the
Seller all of the Purchasers’ and ING’s right, title and interest in and to the
Purchased Assets in full satisfaction of the Deferred Purchase Price.  It is expressly understood and agreed that
the Deferred Purchase Price shall be payable solely through Collections and
other proceeds of the Purchased Assets and that none of the Purchasers, the
Managing Agents, ING, the Collateral Agent or any Liquidity Bank shall have any
personal liability for the payment of the Deferred Purchase Price.

 

(c)                                  Selection
of Fixed Periods.

 

(i)                                     All
Capital which is not allocated to a CP Tranche shall be allocated to a Fixed
Period of one month and Yield thereon shall be calculated by reference to the
Eurodollar Rate; provided, however, that (x) if it shall become unlawful
for any Purchaser or Liquidity Bank to obtain funds in the interbank eurodollar
market in order to make, fund or maintain any investment in Capital hereunder,
or (y) there shall not be time prior to the commencement of the applicable
Fixed Period to determine a Eurodollar Rate or (z) the Seller, with the consent
of the Collateral Agent and the applicable Managing Agent, requests a Fixed
Period of less than one month, then such Capital shall be allocated to a Fixed
Period of from one to thirty days and Yield thereon shall accrue at the Base
Rate.  In the event that a circumstance
described in clause (x) above makes it unlawful for any Purchaser or Liquidity
Bank to maintain any investment in Capital hereunder through the interbank
eurodollar market, upon five Business Days’ written notice to the Seller from
the Managing Agent for the affected Purchaser, the Managing Agent may terminate
the Fixed Periods for all Eurodollar Rate Tranches of such Purchaser then
outstanding and convert such Eurodollar Rate Tranches into Base Rate Tranches.  The term of any Fixed Period described in
this paragraph shall, except in the case of a Fixed Period requested by the
Seller pursuant to clause (z) above, be selected by the applicable Purchaser’s
Managing Agent with the consent of the Collateral Agent.

 

(ii)                                  With
respect to Capital to be allocated to a CP Tranche, each Managing Agent shall,
promptly upon receiving each Sale Notice, following its review of the Seller’s
proposal, to the extent that the Seller has not done so in such Sale Notice,
select Fixed Periods for all Capital to be funded by the Purchasers in such
Managing Agent’s Purchaser Group so that all outstanding Capital is at all
times allocated to a Fixed Period(s) with respect to such Capital (or any such
non-allocated portion thereof) (it being understood that if the Seller does not
propose a specific Fixed Period for all Capital to be funded on any Receivables
Purchase Date, the applicable Managing Agents, subject to the provisions of
this Section 2.02(c), shall select such Fixed Period(s) with respect to
such Capital (or any such non-allocated portion thereof) in their discretion).

 

(iii)                               The
initial Fixed Period for any Capital shall be specified in the Sale Notice
described in subsection (a) hereof. 
Not later than 10:00 A.M. (New York City time) on the Business Day prior
to the last day of each Fixed Period for any Capital allocated to such Fixed
Period, the Seller shall request new Fixed Periods for such

 

5

 

Capital. 
Subject to the foregoing provisions of this Section 2.02(c) and Section 2.07, each Managing Agent shall, so long
as any Capital related to any Receivables Purchase is outstanding, on the first
day of each successive Fixed Period for such Capital, notify the Collateral
Agent and the Seller of the duration of the relevant Fixed Period and the Yield
which will be applicable to the Capital during such Fixed Period.  Any Fixed Period for any CP Tranches or Base
Rate Tranches which Fixed Period commences before the Termination Date and
would otherwise end on a date occurring after the Termination Date shall end on
the Termination Date and the duration of any Fixed Period that commences on or
after the Termination Date shall be of such duration as shall be selected by
the applicable Managing Agent.  In
addition, if a CP Disruption shall have occurred and be continuing, any
affected Conduit Purchaser or the applicable Managing Agent on its behalf, may,
upon notice to the Originator and the Seller, terminate any Fixed Period then
in effect for any CP Tranche.  All
outstanding Capital shall be assigned a Fixed Period at all times, which Fixed
Periods will be limited as set forth above and in the definition thereof.

 

(d)                                 Funding.  Each Purchaser shall, before 3:00 P.M. (New
York City time) on the proposed Receivables Purchase Date of each Receivables
Purchase, subject to the applicable conditions set forth in Article IV,
make a wire transfer of funds in the amount of such Purchaser’s Pro Rata Share
of the purchase price for such Receivables Purchase to the Seller in accordance
with the Seller’s written wire transfer instructions.  ING shall, if applicable, fund the purchase of its interest in
any Receivables Purchase pursuant to the terms of the ING Purchase Agreement.

 

(e)                                  ING
Receivables Interests.  The parties
hereby acknowledge that any ING Receivables Interest shall be transferred to
ING pursuant to the terms of the ING Purchase Agreement without any
representation or warranty of any kind from any Purchaser.  Any ING Capital received pursuant to the ING
Purchase Agreement shall be paid to the Seller and applied in reduction of the
Deferred Purchase Price.  If ING fails
to make the payment of any ING Receivables Interest in accordance with the
terms of the ING Purchase Agreement, such ING Receivables Interest shall be
deemed never to have been sold to the Purchasers.

 

SECTION 2.03.  Reduction of Facility Limit.  The Seller shall have the right, at any time
upon at least three (3) Business Days’ notice to the Purchasers, to terminate
in whole or reduce in part the unused portion of the Facility Limit in a
minimum amount of $10,000,000 and increments of $1,000,000 in excess thereof; provided,
that in no event shall the Facility Limit be reduced to less than the amount of
Capital then outstanding.  Each such
termination shall ratably reduce the Purchaser Limit of the Purchasers in
accordance with their respective Pro Rata Shares.  In addition, any such termination shall be without premium or
penalty of any kind, except for any indemnification which may be owed in
connection with such termination pursuant to Section 2.06 and Section
8.01.

 

SECTION 2.04.  Settlement Procedures.

 

(a)                                  Any
Collections of Purchased Receivables received (or deemed to have been received,
including without limitation any Collections deemed to have been received
pursuant to Section 2.04(d)) by the Seller shall be remitted directly to
the Collateral Agent on

 

6

 

behalf of the Purchasers by
depositing such Collections in a Lock-Box Account within one Business Day of
Seller’s receipt (or deemed receipt) thereof. 
On each Payment Date, the Seller shall direct the Collateral Agent to
withdraw from the Collection Account, and pay on behalf of the Seller to each
Purchaser (i) Yield on all outstanding Capital the Fixed Period for which ends
on such date plus (ii) to each Conduit Purchaser, the CP Dealer Fees, if
any, on any Commercial Paper maturing on such date and raised to fund such
Capital.  On each Settlement Date, the
Seller shall pay to ING, the ING Yield, if any.

 

(b)                                 On
each Settlement Date to occur prior to the Designated Termination Date, the
Seller shall either:

 

(i)                                     if
each Managing Agent has consented thereto, sell additional Receivables
hereunder in accordance with the procedures and subject to the conditions set
forth in Section 2.01 such that, immediately following such Receivables
Purchase, the Capital Limit equals or exceeds outstanding Capital and the ING
Capital Limit equals or exceeds the outstanding ING Capital, in which event the
Collateral Agent shall, subject to the order of priority set forth in Section 6.11(b),
remit the Collections set aside to the Seller in consideration of the purchase
price for such Receivables Purchase; or

 

(ii)                                  if
each Managing Agent has not consented to such additional purchase, out of the
Collections set aside, subject to the order of priority set forth in Section
6.11(b), direct the Collateral Agent to apply an amount of such Collections
toward the reduction of outstanding Capital, or ING Capital, as applicable,
such that, following the application of such Collections to outstanding Capital
or ING Capital, the Capital Limit equals or exceeds the outstanding Capital and
the ING Capital Limit equals or exceeds the outstanding ING Capital.  Each reduction of Capital pursuant to this Section
2.04(b)(ii) shall be made ratably to the Purchasers in accordance with
their respective Pro Rata Shares, and each payment of the above-described
amount of Capital to any Purchaser shall be accompanied by payment of an amount
of such Collections equal to Yield accrued or to accrue in respect of such
amount of Capital through the end of the Fixed Period(s) to which such Capital
is allocated (without duplication, however, of any amounts paid to such Purchaser
pursuant to Section 6.11(b)(ii)).

 

(c)                                  [Reserved]

 

(d)                                 If
on any day the Outstanding Balance of any Purchased Receivable is either (i)
reduced or adjusted as a result of any defective, rejected, returned,
repossessed or foreclosed merchandise, any defective or rejected services, any
cash discount or any other adjustment made or performed by the Seller or any
other Person (including, without limitation, those described in the definition
of “Dilution Factors”), or (ii) reduced or canceled as a
result of a setoff in respect of any claim by the Obligor thereof against the
Seller or any other Person (whether such claim arises out of the same or a
related transaction or an unrelated transaction), the Seller shall be deemed to
have received on such day a Collection of such Purchased Receivable in the
amount of such reduction, cancellation or adjustment.  If on any day any of the representations or warranties in Section
4.01(g) is no longer true with respect to a Purchased Receivable or if the
Seller has breached its obligations under Section 5.01(j), then the
Seller shall be deemed to have received on such day a Collection of such
Purchased Receivable:  (x) if such

 

7

 

representation, warranty or
covenant relates to the non-existence of any Adverse Claims, the Seller shall
be deemed to have received a Collection of such Purchased Receivable in the
dollar amount of the Adverse Claims attaching thereto and (y) if such
representation or warranty relates to the validity or perfection of the
transfer of such Purchased Receivable under this Receivables Purchase Agreement
or the perfection of the Collateral Agent’s security interest in any Equipment
as against the Obligor thereunder, then the Seller shall be deemed to have received
a Collection of such Purchased Receivable in an amount equal to the Outstanding
Balance thereof.  To the extent that any
such deemed Collection reduces the Outstanding Balance of such Purchased
Receivable to zero, then, upon the Seller’s payment to the Collateral Agent of
such deemed Collection, the Collateral Agent shall re-assign to the Seller all
of its right, title and interest in and to the relevant Purchased Receivable,
the Contract under which such Purchased Receivable arose and the Related Security
relating thereto.

 

(e)                                  Although
the Originator, the Seller and the Purchasers agree that the Originator shall
have no right to terminate, reject or not assume a Contract, if the Originator
in its capacity as Servicer (or its successor in interest, including a trustee
appointed under the Bankruptcy Code) terminates, rejects or does not assume a
Contract, in whole or in part, prior to the expiration of the original term of
such Contract, whether such rejection, termination or non-assumption is made pursuant
to an equitable cause, statute, regulation, judicial proceeding or other
applicable law (including, without limitation, Section 365 of the Bankruptcy
Code), then (i) the Seller shall be deemed to have received Collections with
respect to Purchased Receivables arising under such Contract in an amount equal
to (A) in the event of a prepayment or termination consented to by the
Originator at the Obligor’s request, the excess, if any, of the Termination
Amount over all amounts paid by the Obligor on account of such termination or
(B) in the event of any other rejection or non-assumption the amount of the
Outstanding Balance thereof that has not been, or may not be paid as a result
of such rejection, termination or non-assumption.  Upon the Seller’s payment of any such deemed Collections
described in this Section 2.05(e), the Collateral Agent shall
re-assign to the Seller all of its right, title and interest in and to the
relevant Purchased Receivable or Purchased Receivables, the Contracts under
which such Purchased Receivable(s) arose and the Related Security relating
thereto.

 

SECTION 2.05.  Payments and Computations, Etc.  All amounts to be paid or deposited by the
Seller hereunder shall be paid or deposited by the Seller in immediately
available funds to the applicable Purchaser not later than 1:00 P.M. (New York
City time) on the date on which payable. 
Payments received after such time shall be deemed to have been received
on the next Business Day.  All payments
by the Seller under this Receivables Purchase Agreement shall be made without
setoff, deduction or counterclaim and the Seller agrees to pay on demand any
present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect to,
this Receivables Purchase Agreement. 
Whenever any payment to be made hereunder shall be stated to be due on a
day which is not a Business Day, the due date thereof shall be extended to the
next applicable Business Day and interest shall be payable at the applicable
rate during such extension; provided, that if such extension would be
inconsistent with one of the provisions set forth in the definition of “Fixed
Period”, then such provision shall control.

 

8

 

SECTION 2.06.  Compensation.  The Seller shall compensate each Purchaser
and ING, upon written request, for all losses, expenses and liabilities,
including, without limitation, any indemnification payments owed by any
Purchaser pursuant to any Liquidity Agreement, on account of any liquidation or
reemployment of deposits or other funds acquired by such party to make, fund or
maintain Capital hereunder, (i) if for any reason a Receivables Purchase
does not occur on a date specified therefor in the Sale Notice; (ii) if for any
reason any payment, prepayment or conversion of any Capital occurs on a date
which is not the last day of the Fixed Period for such Capital or (iii) as
a consequence of any required conversion of any Eurodollar Rate Tranche prior
to the last day of the Fixed Period for the relevant Capital pursuant to Section
2.02(c).  Any request for
compensation under this Section 2.06 shall be accompanied by a copy of a
statement from the applicable Purchaser or ING, as applicable, setting forth in
reasonable detail the basis for requesting compensation and the determination
of the amount thereof in such statement shall be conclusive and binding for all
purposes, absent manifest error.

 

SECTION 2.07.  Dividing or Combining of Capital and
Fixed Periods.  Subject to the
provisions of Section 2.02(c), the Seller may, on notice to and with the
consent of the Managing Agent for any affected Purchaser received at least one
Business Day prior to the last day of any Fixed Period, either (a) divide such
Capital so as to allocate such Capital to two or more Fixed Periods, or (b)
combine such Capital with other Capital originating on such last day or having
Fixed Periods ending on such last day so as to allocate all such Capital to a
single Fixed Period.  On and after the
Termination Date, each Managing Agent, on behalf of the Purchaser(s) in its
Purchaser Group, shall have the right to divide and/or combine Capital
maintained by such Purchaser(s) for purposes of allocation to Fixed Periods in
any manner which it may select in its sole discretion.

 

SECTION 2.08.  Increased Costs, Capital Adequacy.

 

(a)                                  If,
after the date hereof due to either (i) the introduction of or any change
in or to the interpretation of any law or regulation by the governmental
authority that promulgated or administers compliance with such law or
regulation (other than laws or regulations with respect to income taxes or any
change by way of imposition or increase of reserve requirements included in the
Eurodollar Reserve Percentage) or (ii) the compliance with any guideline
or request from any central bank or other governmental authority or similar
agency (whether or not having the force of law), and taking into account the
obligations of the Liquidity Banks under the Liquidity Agreements and otherwise
in connection with any Purchaser’s or ING’s asset-supported financing
business, any reserve or deposit or similar requirement shall be imposed,
modified or deemed applicable or, any basis of taxation shall be changed or any
other condition shall be imposed, and there shall be any increase in the cost
to any Purchaser (either directly or indirectly through any increase in the
costs to the applicable Liquidity Banks) or ING of making, funding, or
maintaining Receivables Purchases or in the cost to any Purchaser or ING of
agreeing to make, fund, or maintain Receivables Purchases (including the
reduction of any sum received or Receivable hereunder), then the Seller shall
from time to time, upon demand by such Purchaser or ING (as applicable) by the
submission of the certificate described below, pay to such Purchaser or ING (as
applicable) additional amounts sufficient to compensate such Purchaser or ING
(as applicable) for such increased cost. 
A certificate setting forth in reasonable detail the amount of such
increased cost submitted to the Seller by such Purchaser or ING (as applicable)
shall be conclusive and binding for all purposes, absent manifest error.

 

9

 

(b)                                 If
any Purchaser, ING or any Liquidity Bank determines that compliance with any
law or regulation or any guideline or request or any written interpretation
from any central bank or other governmental authority or similar agency
(whether or not having the force of law) which is introduced, implemented or
received by such Purchaser, ING or such Liquidity Bank after the date hereof,
affects or would affect capital adequacy or the amount of capital required or
expected to be maintained by such Purchaser, ING or such Liquidity Bank or any
corporation or other entity controlling such Purchaser, ING or such Liquidity
Bank and that the amount of such capital is increased by or based upon the
Receivables Purchases made by such Purchaser hereunder or the existence of this
Receivables Purchase Agreement, the ING Purchase Agreement or upon any advances
or purchases to any such Purchaser by any such Liquidity Bank pursuant to the
applicable Liquidity Agreements or such Liquidity Bank’s commitment to lend
under the applicable Liquidity Agreements and other commitments of that type,
or has or would have the effect of reducing the rate of return on capital,
then, upon demand by such Purchaser or ING by the submission of the certificate
described below, the Seller shall pay to such Purchaser or ING (as applicable),
from time to time as specified by such Purchaser or ING (as applicable),
additional amounts sufficient to compensate such Purchaser or ING (as
applicable) or such corporation or other entity in the light of such
circumstances, to the extent that such Purchaser or ING (as applicable)
reasonably determines such increase in capital to be allocable to the
Receivables Purchases or the existence of this Receivables Purchase Agreement
or the ING Purchase Agreement or to the extent that Such Purchaser owes
compensation to a Liquidity Bank in respect of or on account of such
events.  A certificate setting forth in
reasonable detail such amounts submitted to the Seller by such Purchaser or ING
(as applicable) shall be conclusive and binding for all purposes, absent
manifest error.

 

(c)                                  In
the event that any Purchaser requests compensation for increased costs on
behalf of any Liquidity Bank under this Section 2.08 and such increased
costs are not being requested by such Purchaser’s other Liquidity Banks
generally or, if only one Liquidity Bank exists for such Purchaser, by such
Purchaser’s liquidity banks for similar transactions, then such Purchaser
shall, promptly following identification by the Seller of an “Eligible
Assignee” (or such similar term as defined in the applicable Liquidity
Agreement) willing to accept such commitment, cause the Liquidity Bank
requesting such increased costs to assign its outstanding advances, purchases
and other interests and commitments under the Liquidity Agreement to such
“Eligible Assignee,” subject to the terms and conditions of the applicable
Liquidity Agreement (including without limitation Section 8.06(g) of the
Liquidity Agreement, if applicable).

 

SECTION 2.09.  Taxes.  (a)  All payments made by
the Seller under this Receivables Purchase Agreement shall be made free and
clear of, and without deduction or withholding for or on account of, any
present or future taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any governmental authority having taxing authority, excluding net income
taxes and franchise taxes (imposed in lieu of income taxes) imposed on any
Purchaser or ING, as a result of any present or former connection between the
jurisdiction of the government or taxing authority imposing such tax or any
political subdivision or taxing authority thereof or therein and such Purchaser
or ING (excluding a connection arising solely from such Purchaser or ING having
executed, delivered or performed its obligations or received a payment under,
or enforced, this Receivables Purchase Agreement or the ING Purchase Agreement,
as applicable) (all such non-excluded taxes, levies, imposts, duties, charges,
fees, deductions and withholdings

 

10

 

being hereinafter called “Taxes”).  If any Taxes are required to be withheld
from any amounts payable by the Seller, (i) the sum payable shall be
increased as may be necessary so that, after making all required deductions
(including deductions applicable to additional sums payable under this Section 2.09),
the affected Purchaser or ING (as applicable) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the
Seller shall make such deductions, and (iii) the Seller shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.

 

(b)                                 In
addition, the Seller agrees to pay any present or future stamp or documentary
taxes or any other excise or property taxes, charges, or similar levies that
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Receivables Purchase
Agreement or ING Purchase Agreement (hereinafter “Other Taxes”).

 

(c)                                  The
Seller will indemnify each Purchaser and ING for the full amount of Taxes or
Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by
any jurisdiction on amounts payable under this Section 2.09) paid by
such Purchaser or ING and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto.  Whenever any Taxes are payable by the Seller, as promptly as
possible thereafter the Seller shall send to each Purchaser and ING, a
certified copy of an original official receipt received by the Seller showing
payment thereof.  If the Seller fails to
pay any Taxes when due to the appropriate taxing authority or fails to remit to
each Purchaser and ING the required receipts or other required documentary
evidence, the Seller shall indemnify each Purchaser and ING for any incremental
Taxes, interest or penalties that such Purchaser or ING is legally required to
pay as a result of any such failure. 
The agreements in this subsection shall survive the termination of this
Receivables Purchase Agreement.

 

SECTION 2.10.  Fees.  In further consideration of the Receivables Purchases to be made
hereunder, the Seller agrees to pay to each applicable Managing Agent, each
Purchaser and ING all fees specified in the applicable Fee Letter, which fees
will be due and payable at the times and in the manner set forth in such Fee
Letters.

 

SECTION 2.11.  Grant of Security Interest in Equipment
Collateral.  (a)  As security for the payment and performance
of all the Obligations and the ING Obligations and as additional enhancement to
enable the Purchasers, ING, the Liquidity Banks and the Insurer to fully recover
Capital and accrued and unpaid Yield and fees and the ING Obligations, the
Seller hereby grants to the Collateral Agent, for the benefit of the
Purchasers, ING, the Liquidity Banks and the Insurer, a security interest in
all of the Seller’s right, title and interest in and to the following, whether
now owned or hereafter acquired and whether now existing or hereafter arising
(the “Equipment Collateral”): 
all Equipment which is the subject of a Contract for any Purchased
Receivable and substitutions therefor and products and proceeds thereof,
including, without limitation, all payments under insurance (whether or not the
Collateral Agent is the loss payee thereof) or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing.  This Section
2.11 shall not be construed to limit the scope or applicability of the
security interested granted in Section 2.01.

 

11

 

(b)                                 The
Seller shall, at its expense, promptly execute and deliver all further
instruments and documents, and take all further action (including, without
limitation, the execution and filing of such financing or continuation
statements, or amendments thereto and assignments thereof), that may reasonably
be necessary or desirable, or that the Collateral Agent may request, in order
to perfect and protect any security interest granted or purported to be granted
to the Collateral Agent hereunder or to enable the Collateral Agent to exercise
and enforce its rights and remedies hereunder with respect to any Equipment
Collateral.  The Seller hereby
authorizes the Collateral Agent to file one or more financing or continuation
statements, and amendments thereto and assignments thereof, relative to all or
any part of the Equipment Collateral now existing or hereafter arising without
the signature of the Seller where permitted by law.  A carbon, photographic or other reproduction of this Receivables
Purchase Agreement or any financing statement covering the Equipment Collateral
or any part thereof shall be sufficient as a financing statement.

 

ARTICLE III

 

CONDITIONS OF PURCHASES

 

SECTION 3.01.  Conditions Precedent to Initial
Receivables Purchase.  The agreement
of the Purchasers to make a Receivables Purchase on the occasion of the first
Receivables Purchase after the date hereof is subject to satisfaction of the
following conditions precedent:

 

(a)                                  Each
Managing Agent shall have received, on or before the initial Receivables
Purchase Date, all of the following, each fully executed and in form and
substance satisfactory to such Managing Agent:

 

(i)                                     This
Receivables Purchase Agreement;

 

(ii)                                  each
of (i) the Sale Agreement and (ii) the Liquidity Agreement;

 

(iii)                               A
copy of the resolutions of the Board of Managers of the Seller approving this
Receivables Purchase Agreement and all other documents and instruments to be
delivered hereunder or thereunder by the Seller, certified by a Manager;

 

(iv)                              A
certificate of a Manager of the Seller certifying (A) the names and true
signatures of the officers of the Seller authorized to sign this Receivables
Purchase Agreement and the other documents and instruments to be delivered by
the Seller pursuant hereto or thereto (on which certificate the Managing Agents
may conclusively rely until such time as the Managing Agents shall receive from
the Seller a revised certificate meeting the requirements of this subsection
(iv)) and (B) a true and complete copy of the limited liability company
agreement of the Seller;

 

(v)                                 A
certificate executed by a Manager of the Seller certifying that as of the
initial Receivables Purchase Date, all of the representations and warranties
contained in Article IV hereof are true and accurate in all material
respects with the same force and effect as though such representations and
warranties had been made as of such time;

 

12

 

(vi)                              The
certificate of formation of the Seller, certified by the Secretary of State of
Delaware;

 

(vii)                           Good
standing certificates for the Seller issued by the Secretaries of the States of
Delaware and Massachusetts;

 

(viii)                        A
Manager’s Certificate in the form of Exhibit C, executed by a Manager of
the Seller;

 

(ix)                                Such
legal opinions as the Managing Agents may reasonably request, each in form and
substance satisfactory to each Managing Agent;

 

(x)                                   Notification
of Assignment of Custody Agreement executed by CapMAC, Triple-A and the Seller
and acknowledgement by the Custodian;

 

(xi)                                Lock-Box
Agreement executed by each Lock-Box Bank; and

 

(xii)                             A Fee
Letter for each Purchaser Group.

 

(b)                                 All
fees and expenses due and owing under each Fee Letter shall have been paid; and

 

(c)                                  The
Managing Agents shall have received such other approvals or documents as they
may reasonably request.

 

SECTION 3.02.  Conditions Precedent to Each Receivables
Purchase.  The agreement of the
Purchasers to make a Receivables Purchase on the occasion of each Receivables
Purchase Date (including the initial Receivables Purchase) shall be subject (i)
to receipt by each Managing Agent of (A) a Settlement Report for the most
recent calendar month then ended, (B) a notice from the Custodian in
substantially the form of Exhibit A to the Custodial Agreement confirming that
the Custodian has received the Contract Files required to be delivered to it
pursuant to Section 6.04(b) hereof and (C) such other approvals or
documents as any Managing Agent may reasonably request and (ii) to the
condition precedent that on the Receivables Purchase Date of such Receivables
Purchase, before and after giving effect to such Receivables Purchase and to
the application of the proceeds therefrom, the following statements shall be
true (and each of the giving of the applicable Sale Notice and the acceptance
by the Seller of the proceeds of such Receivables Purchase shall constitute a
representation and warranty by the Seller that on the Receivables Purchase Date
of such Receivables Purchase, before and after giving effect thereto and to the
application of the proceeds therefrom, such statements are true):

 

(i)                                     the
representations and warranties contained in Article IV hereof and all
representations and warranties of the Originator in the Sale Agreement are true
and accurate as of the Receivables Purchase Date in all material respects with the
same force and effect as though such representations and warranties had been
made as of such time;

 

13

 

(ii)                                  no
event has occurred and is continuing, or would result from such Receivables
Purchase, which constitutes an Event of Termination or an Unmatured Event of
Termination or a Wind-Down Event or Unmatured Wind-Down Event;

 

(iii)                               the
outstanding amount of all Capital after giving effect to such Receivables
Purchase shall be equal to or less than the Capital Limit;

 

(iv)                              the
outstanding amount of all Capital funded by any Purchaser Group after giving
effect to such Receivables Purchase shall be equal to or less than its Purchase
Limit; and

 

(v)                                 the
proceeds of such Receivables Purchase shall be used to fund a purchase of
Transferred Assets under the Sale Agreement to occur simultaneously with such
Receivables Purchase and all conditions to such Purchase under the Sale
Agreement on such date have been satisfied or waived.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

SECTION 4.01.  Representations and Warranties of the
Seller.  The Seller represents and
warrants to the Insurer, each Agent and each Purchaser as of the date hereof
and as of each Receivables Purchase Date hereafter (except to the extent that
any such representation or warranty expressly relates to another date), that:

 

(a)                                  Due
Organization and Good Standing.  The
Seller is a limited liability company duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization.  The Seller is duly qualified to do business
as a foreign entity and is in good standing in every jurisdiction in which the
nature of its business requires it to be so qualified or where the ownership of
its properties or the nature of its activities makes such qualification
necessary, except where the failure to be so qualified would not materially
adversely affect (i) the collectibility of the Purchased Assets, (ii) the
collectibility of any Receivable, (iii) the business, properties, operations,
prospects, profits or condition (financial or otherwise) of the Seller or (iv)
the ability of the Seller to perform its obligations hereunder and under the
other Facility Documents to which it is a party.

 

(b)                                 Due
Authorization and No Conflict.  The
execution, delivery and performance by the Seller of this Receivables Purchase
Agreement and all other Facility Documents and the transactions contemplated
hereby and thereby, including the acquisition of the Transferred Assets under
the Sale Agreement and the purchases contemplated hereunder, are within the
Seller’s organizational powers, have been duly authorized by all necessary
organizational action, do not contravene (i) the Seller’s certificate of
formation or limited liability company agreement, (ii) any law, rule or
regulation applicable to the Seller, (iii) any contractual restriction
contained in any indenture, loan or credit agreement, lease, mortgage, security
agreement, bond, note, or other agreement or instrument binding on or affecting
the Seller or its property or (iv) any order, writ, judgment, award,
injunction or decree binding on or affecting the Seller or its property, and do
not result in or require the creation of any Adverse

 

14

 

Claim upon or with respect to
any of its properties; and no transaction contemplated hereby requires
compliance with any bulk sales act or similar law.  This Receivables Purchase Agreement and the other Facility
Documents to which the Seller is a party have been duly executed and delivered
on behalf of the Seller.

 

(c)                                  Governmental
and Other Consents.  Except for
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 Receivables Purchase Agreement or any
other Facility Document to which the Seller is a party or any of the other
documents contemplated hereby or thereby, consummation of the transactions
herein or therein contemplated, or performance of or compliance with the terms
and conditions hereof or thereof, to ensure the legality, validity or
enforceability hereof or thereof.

 

(d)                                 Enforceability
of Facility Documents.  This
Receivables Purchase Agreement and each of the other Facility Documents to
which the Seller is a party have been duly and validly executed and delivered
by the Seller and constitute the legal, valid and binding obligation of the
Seller enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
relating to or affecting creditors’ rights generally and by equitable
principles.

 

(e)                                  No
Litigation.  There are no actions,
suits or proceedings at law or in equity or by or before any governmental
authority now pending or, to the knowledge of the Seller, threatened against or
affecting the Seller or any property or rights of the Seller which purport to
challenge the legality, validity or enforceability of this Receivables Purchase
Agreement or any other Facility Document or which may materially impair the
ability of the Seller to carry on business substantially as now being conducted
or which may materially adversely affect the condition (financial or
otherwise), operations or properties of the Seller.

 

(f)                                    Use
of Proceeds.  No proceeds of any
Receivables Purchase will be used by the Seller other than to fund a Purchase
of Transferred Assets from the Originator except that the Seller may net from
the Purchase Price paid to the Originator reasonable and necessary amounts for
the funding of its operating expenses.

 

(g)                                 Valid
Title and Perfected Interest.  Each
Receivable, together with the Contract related thereto, is owned by the Seller
free and clear of any Adverse Claim except as provided herein and, upon the
making of each Receivables Purchase, the Purchasers shall acquire a valid and
perfected first priority undivided percentage ownership interest, to the extent
of the Purchased Assets, in each Purchased Receivable then existing or
thereafter arising and in the Related Security and Collections with respect
thereto, in each case free and clear of any Adverse Claim except as provided
hereunder or under any Liquidity Agreement, and no effective financing
statement or other instrument similar in effect covering any Purchased
Receivable or the Related Security or Collections with respect thereto shall at
any time be filed except in favor of the Collateral Agent in accordance with
this Receivables Purchase Agreement.

 

15

 

(h)                                 Accuracy
of Information.  All certificates,
reports, financial statements and similar writings furnished by or on behalf of
the Seller to any Agent or any Purchaser at any time pursuant to any
requirement of, or in response to any written request of any such party under,
this Receivables Purchase Agreement or any other Facility Document or any transaction
contemplated hereby or thereby, have been, and all such certificates, reports,
financial statements and similar writings hereafter furnished by the Seller to
such parties will be, true and accurate in every respect material to the
transactions contemplated hereby on the date as of which any such certificate,
report, financial statement or similar writing was or will be delivered, and
shall not omit to state any material facts or any facts necessary to make the
statements contained therein not materially misleading.

 

(i)                                     Governmental
Regulations.  The Seller is not an
“investment company” or a company controlled by an “investment company”
registered or required to be registered under the Investment Company Act of
1940, as amended, or otherwise subject to any other federal or state statute or
regulation limiting its ability to incur indebtedness.

 

(j)                                     Margin
Regulations.  The Seller is not
engaged, principally or as one of its important activities, in the business of
extending credit for the purpose of “purchasing” or “carrying” any “margin
stock” (as each of the quoted terms is defined or used in Regulation T, U or X
promulgated by the Board of Governors of the Federal Reserve System).  No part of the proceeds of any Receivables
Purchase has been used for so purchasing or carrying margin stock or for any
purpose which violates, or which would be inconsistent with, the provisions of
any such Regulation T, U or X.

 

(k)                                  Location
of Chief Executive Office and Records. 
The chief place of business and chief executive office of the Seller are
located at the address referred to in Exhibit D hereof and the locations
of the offices where the Seller keeps all the Records are listed on Exhibit
D (or at such other locations, notified to the Collateral Agent in accordance
with Section 5.01(f), in jurisdictions where all action required by
Section 6.04 has been taken and completed).

 

(l)                                     Lock-Box
Accounts.   Each Obligor under a
Contract has 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 to the Sale Agreement.  From and after the initial Purchase Date,
the Originator will have no right, title and/or interest to any of the Lock-Box
Accounts and will maintain no lock-box accounts in its own name for the
collection of such Receivables.  The
Seller has caused the Originator to deliver to the Collateral Agent a duplicate
key to each Post Office Box and has filed a standing delivery order with the
United States Postal Service authorizing the Collateral Agent to receive mail
delivered to each such Post Office Box. 
The account numbers of all Lock-Box Accounts, together with the names
and addresses of all the Lock-Box Banks maintaining such Lock-Box Accounts and
the related Post Office Boxes, are specified in Exhibit H to the
Sale Agreement.  The Seller has no other
Lock-Box Accounts for the collection of the Transferred Assets except for the
Lock-Box Accounts.

 

(m)                               No
Trade Names.  The Seller has no
trade names, fictitious names, assumed names or “doing business as” names.

 

16

 

(n)                                 Separate
Identity.  The Seller is operated as
an entity separate from the Originator and each other Subsidiary of the
Originator and (i) has its own board of directors, (ii) has at least
one manager who is reasonably acceptable to the Collateral Agent and who is not
a direct, indirect or beneficial stockholder, officer, director, employee,
affiliate, associate, customer or supplier of the Originator nor a relative of
any thereof, nor a trustee in bankruptcy for any Affiliate of the Originator,
(iii) maintains its assets in a manner which facilitates their identification
and segregation from those of its Affiliates, and has a separate telephone
number from that of the Originator or any other Affiliate of the Originator,
(iv) has all office furniture, fixtures and equipment necessary to operate
its business and such furniture, fixtures and equipment are either owned by the
Seller or leased pursuant to written leases, (v) conducts all intercompany
transactions with the Originator and each other Affiliate of the Originator on
terms which the Seller reasonably believes to be on an arm’s-length basis,
(vi) has not guaranteed any obligation of the Originator or any other
Affiliate of the Originator, nor has it had any of its obligations guaranteed
by any such entities and has not held itself out as responsible for debts of
any such entity or for the decisions or actions with respect to the business
and affairs of any such entity, (vii) has not, except as otherwise
expressly acknowledged under the Facility Documents, permitted the commingling
or pooling of its funds or other assets with the assets of the Originator or
any other Affiliate, (viii) has separate deposit and other bank accounts to
which neither the Originator nor any other Affiliate has any access and does
not at any time pool any of its funds with those of the Originator or any such
Affiliate, (ix) maintains financial records which are separate from those
of the Originator and each other Affiliate of the Originator,
(x) compensates all employees, consultants and agents, or reimburses the
Originator, from the Seller’s own funds, for services provided to the Seller by
such employees, consultants and agents, (xi) has agreed with the
Originator to allocate among themselves shared corporate operating services and
expenses which are not reflected in the Servicing Fee (including, without
limitation, the services of shared employees, consultants and agents and
reasonable legal and auditing expenses) on the basis of actual use or the value
of services rendered, and otherwise on a basis reasonably related to actual use
or the value of services rendered, (xii) pays directly for its own account
for accounting and payroll services, rent, lease and other expenses and does
not have such operating expenses paid by the Originator or any other Affiliate
of the Originator, (xiii) conducts all of its business (whether in writing or
orally) solely in its own name, (xiv) is not, directly or indirectly,
named as a direct or contingent beneficiary or loss payee on any insurance
policy covering the property of the Originator or any other Affiliate of the
Originator and has entered into no agreement to be named as such a beneficiary
or payee, (xv) acknowledges that the Purchasers, the Managing Agents, the
Collateral Agent, the Insurer and the Liquidity Banks are entering into the
transactions contemplated by this Receivables Purchase Agreement and the other
Facility Documents in reliance on the Seller’s identity as a separate legal
entity from the Originator and each other Affiliate of the Originator, and
(xvi) practices and adheres to organizational formalities such as complying
with its limited liability company agreement, including the holding of meetings
of members and/or managers to the extent provided therein.

 

(o)                                 Subsidiaries.  The Seller has no Subsidiaries and does not
own or hold, directly or indirectly, any capital stock, membership interest or
equity security of, or any equity interest in, any Person.

 

17

 

(p)                                 Facility
Documents.  The Sale Agreement is
the only agreement pursuant to which the Seller purchases Receivables or other
Transferred Assets.  The Seller has
furnished to each Managing Agent and ING true, correct and complete copies of
each Facility Document to which the Seller is a party, each of which is in full
force and effect.  Neither the Seller
nor any Affiliate thereof is in default of any of its obligations thereunder in
any material respect.  Upon the Purchase
of each Receivable pursuant to the Sale Agreement, the Seller shall be the
lawful owner of, and have good title to, such Receivable and all Transferred
Assets relating thereto, free and clear of any Adverse Claims.  All such Transferred Assets are purchased
without recourse to the Originator except as described in the 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)                                   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 the
Purchasers or the Insurer have been employed in such selections.  In addition, (i) the designation of a
Purchased Receivable as a Designated Receivable or a Non-Designated Receivable
and (ii) the repurchase of any Designated Receivable pursuant to Section 8.02 shall be done on a basis which is
not adverse to the Purchasers or the Insurer.

 

(y)                                 Historic
Loss Data.  Attached hereto as Exhibit
F is a summary of historical static loss data suffered by the Originator as
a result of charge-offs of the Originator’s receivables, which summary is true
and accurate with respect to the periods described therein and does not omit
any information necessary to make such summary not misleading.

 

ARTICLE V

 

GENERAL COVENANTS

 

SECTION 5.01.  Affirmative Covenants of the Seller.  From the initial Receivables Purchase Date
until the Combined Collection Date, the Seller will, unless the Collateral
Agent 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 Existence.  Preserve and maintain its existence, rights,
franchises and privileges as a limited liability company in the jurisdiction of
its organization, and qualify and remain qualified in good standing as a
foreign entity in each jurisdiction except where the failure to preserve and
maintain such existence, rights, franchises, privileges and qualifications
would not materially adversely affect (i) the collectibility of the
Purchased Assets, (ii) the collectibility of any Receivable, (iii) the
business, properties, operations, prospects, profits or condition (financial or
otherwise) of the Seller or (iv) the ability of the Seller to perform its
obligations hereunder and under the other Facility Documents to which it is a
party.

 

(c)                                  Audits.  At any time and from time to time upon prior
written notice to the Seller during regular business hours and on a quarterly
basis if requested, permit the Collateral Agent, any Managing 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 (subject to the Seller’s right under the Sale Agreement to
recover such expenses from the Originator); provided, that, so long as
no Wind-Down Event has occurred during any calendar

 

19

 

year, the annual audit expenses
of any Purchaser during such year for which the Seller is responsible hereunder
shall not exceed $75,000 in the aggregate.

 

(d)                                 Keeping of Records and Books of Account.  Maintain and implement administrative and
operating procedures (including, without limitation, an ability to recreate
records evidencing the Receivables in the event of the destruction of the
originals thereof) and keep and maintain, all documents, books, records and other
information reasonably necessary or advisable for the collection of all
Receivables (including, without limitation, records adequate to permit the
daily identification of all collections of and adjustments to each Purchased
Receivable).

 

(e)                                  Performance and Compliance with Receivables
and Contracts.  At its expense
timely and fully perform and comply, and cause the Originator to comply, in all
material respects, with all material provisions, covenants and other promises
required to be observed by it or the Originator under the Contracts.

 

(f)                                    Location of Records.  Keep its chief place of business and chief
executive office, and the offices where it keeps the Records, at the address of
the Seller referred to in Section 4.01(k), or, in any such case,
upon 30 days’ prior written notice to the Managing Agents, at such other
locations within the United States where all action required by Section 6.04
shall have been taken and completed.

 

(g)                                 Credit and Collection Policies.  Comply in all material respects with the
Credit and Collection Policy in regard to each Purchased Receivable and the
related Contract.

 

(h)                                 Collections.  Instruct all Obligors to cause all
Collections to be deposited directly to a Post Office Box or Lock-Box Account
and if the Seller shall receive any Collections, the Seller shall hold such
Collections in trust for the benefit of the Collateral Agent and deposit such
Collections into a Lock-Box Account or the Collection Account within one
Business Day following Seller’s receipt thereof.

 

(i)                                     Compliance
with ERISA.  Comply in all material
respects with the provisions of ERISA, the IRC, and all other applicable laws,
and the regulations and interpretations thereunder.

 

(j)                                     Perfected
Security Interest under Contracts. 
Take such action with respect to each Purchased Receivable as is
necessary to ensure that the Seller maintains, as against the Obligor
thereunder, a perfected security interest in any Equipment relating thereto
free and clear of Adverse Claims or, in the case of any Lease, to ensure that
the Seller would maintain such a perfected priority security interest in the
event that a court or other Person were to determine that such Lease purported
to transfer to the Obligor an ownership (rather than a leasehold) interest in
the Equipment subject thereto; provided, that the Seller shall not be
required to file financing statements or to maintain the effectiveness of
previously filed financing statements with respect to any Eligible Receivable
the Outstanding Balance of which originally is or has thereafter been reduced
below $5,000, so long as the aggregate Outstanding Balance of Receivables
hereunder for which no such financing statements are in effect at any time
remains less than 7.5% of the Discounted Eligible Receivables Balance hereunder;
provided that such seven and one-half

 

20

 

percent limitation shall not
apply from and after the Termination Date unless and to the extent that the
Collateral Agent specifically requests otherwise.

 

(k)                                  Maintenance
of Insurance.  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 Originator or the Seller as loss payee and additional insured, and
the Originator shall have assigned any such interest to the Seller; provided,
that if an Obligor fails to maintain such insurance, the Seller shall, or shall
cause the Originator to,  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 Seller’s status as a separate legal entity.  Without limiting the foregoing, the Seller
shall:

 

(i)                                     conduct
all of its business, and make all communications to third parties (including
all invoices (if any), letters, checks and other instruments) solely in its own
name (and not as a division of any other Person), and require that its
employees, if any, when conducting its business identify themselves as such and
not as employees of any other Affiliate of the Seller (including, without
limitation, by means of providing appropriate employees with business or
identification cards identifying such employees as the Seller’s employees);

 

(ii)                                  compensate
all employees, consultants and agents directly or indirectly through
reimbursement of the Originator each calendar quarter, from the Seller’s bank
accounts, for services provided to the Seller by such employees, consultants
and agents and, to the extent any employee, consultant or agent of the Seller
is also an employee, consultant or agent of any Affiliate of the Seller,
allocate the compensation of such employee, consultant or agent between the
Seller and such Affiliate on a basis which reflects the services rendered to
the Seller and such Affiliate;

 

(iii)                               pay
its own operating expenses and liabilities from its own funds, allocate all overhead
expenses (including, without limitation, telephone and other utility charges
and rent for office space) for items shared between the Seller and any
Affiliate on the basis of actual use to the extent practicable and, to the
extent such allocation is not practicable, on a basis reasonably related to
actual use and allocate taxes on the basis of their respective incomes in
accordance with applicable federal regulations;

 

21

 

(iv)                              at
all times have at least one “Independent Manager”, as defined in and as
required under the Seller’s limited liability company agreement and have at
least one officer responsible for managing its day-to-day business and manage
such business by or under the direction of its board of managers;

 

(v)                                 maintain
its books and records separate from those of any Affiliate;

 

(vi)                              prepare
its financial statements separately from those of its other Affiliates and
insure that any consolidated financial statements of the Originator have notes
to the effect that the Seller is a separate entity whose creditors have a claim
on its assets prior to those assets becoming available to its equity holders
and therefore to any creditors of the Originator;

 

(vii)                           use its
best efforts not to commingle its funds or other assets with those of any other
Affiliate, and not to hold its assets in any manner that would create an
appearance that such assets belong to any other Affiliate, and not maintain
bank accounts or other depository accounts to which any Affiliate is an account
party, into which any Affiliate makes deposits or from which any Affiliate has
the power to make withdrawals;

 

(viii)                        not permit
any Affiliate to pay its operating expenses (except pursuant to allocation
arrangements that comply with the requirements of subsection  (ii)
or (iii) of this Section 5.01(l) or pursuant to the terms of the
Sale Agreement);

 

(ix)                                not
guarantee any obligation of any Affiliate nor (to the extent that the Seller
has the legal power to prevent such) have any of its obligations guaranteed by
any such Affiliate, (either directly or by seeking credit based on the assets
of such Affiliate) or otherwise hold itself out as responsible for the debts of
any Affiliate;

 

(x)                                   maintain
at all times stationery and a telephone number separate from that of any
Affiliate and which telephone number will be answered in its own name, and have
all its officers and employees conduct all of its business solely in its own
name;

 

(xi)                                hold
meetings of its members and/or board of managers in accordance with the
provisions of its limited liability company agreement and otherwise take such
actions as are necessary on its part to ensure that all organizational
procedures required by its certificate of formation and limited liability
company agreement are duly and validly taken;

 

(xii)                             maintain
a separate office from the offices of any of its Affiliates and identify such
office by a sign in its own name;

 

(xiii)                          pay
dividends or other distributions to its members only if (A) no other dividend
or distribution has been paid during the calendar month in which such amount is
paid, (B) such dividend or distribution has been duly authorized by its board
of managers in accordance with applicable law and (C) its net worth, determined
immediately after giving effect to such dividend or distribution is at least
$2,000,000; and

 

22

 

(xiv)                         take such
other actions as are necessary on its part to ensure that the facts and
assumptions set forth in the opinion concerning certain bankruptcy matters to
be delivered by counsel for the Seller pursuant to Section 3.01(a)(ix)
remain true and correct at all times.

 

(m)                               Taxes.  File or cause to be filed, and (to the
extent it has legal power to cause such) cause each of its Affiliates with whom
it shares consolidated tax liability to file, all federal, state and local tax
returns which are required to be filed by it, except where the failure to file
such returns could not reasonably be expected to have a material adverse effect
on the collectibility of the Transferred Assets or the ability of the Seller to
perform its obligations hereunder or under any other Facility Document to which
it is a party or which could otherwise be reasonably expected to expose the
Seller to a material liability.  The
Seller shall pay or cause to be paid all taxes shown to be due and payable on
such returns or on any assessments received by it, other than any taxes or
assessments, the validity of which are being contested in good faith by
appropriate proceedings and with respect to which the Seller or the applicable
subsidiary shall have set aside adequate reserves on its books in accordance
with GAAP and which proceedings could not reasonably be expected to have a
material adverse effect on the collectibility of the Transferred Assets or the
ability of the Seller to perform its obligations hereunder or under any other
Facility Document to which it is a party or which could otherwise be reasonably
expected to expose the Seller to a material liability.

 

(n)                                 Interest
Rate Hedges.  Concurrently with each
Receivables Purchase, enter into an Interest Rate Hedge with the Swap Provider
as contemplated in the definition of “Discount Rate”, and transfer, assign and
otherwise convey to the Collateral Agent all of the Seller’s rights in, to and
under such Interest Rate Hedge pursuant to an Interest Rate Hedge Assignment in
substantially in the form of Exhibit E hereto, together with a
certificate executed by the Swap Provider in substantially the form of Exhibit
A to such Interest Rate Hedge Assignment. 
The Seller shall thereafter maintain such Interest Rate Hedges in full
force and effect at all times until the Capital associated with such
Receivables Purchase has been recovered in full by the Purchasers, in a notional
amount equal to no less than 96% and no more than 105% of the sum of the
outstanding Capital related thereto and based on an amortization schedule which
matches the amortization of the aggregate Receivables then outstanding and the
terms of which are otherwise reasonably satisfactory to the Collateral
Agent.  The Seller acknowledges that the
Purchasers and/or the Insurer on behalf of the Purchasers have guaranteed the
Seller’s performance of its obligations under the Interest Rate Hedges.  The Seller shall perform all of its
obligations under the Interest Rate Hedges to the same extent as if its rights
under the Interest Rate Hedges have not been assigned hereunder and under the
Interest Rate Hedge Assignments and shall indemnify each of the Purchasers and
the Insurer against any payments by either such party on account of the
Seller’s failure to perform its obligations under the Interest Rate Hedges,
including, without limitation, any payments by the Insurer (including on behalf
of CapMAC) under the Swap Policies, which indemnity shall survive any
termination of this Receivables Purchase Agreement.  The exercise by the Collateral Agent of any of its rights
hereunder or under the Interest Rate Hedge Assignment shall not relieve the
Seller from such obligations.

 

(o)                                 Facility
Documents.  Comply in all material
respects with the terms of and employ the procedures outlined in and enforce
the obligations of the Originator under the Sale Agreement, and all of the
other Facility Documents to which it is a party, take all such action to

 

23

 

such end as may be from time to
time reasonably requested by the Collateral Agent, maintain all such Facility
Documents in full force and effect and make to the Originator such reasonable
demands and requests for information and reports or for action as the Seller is
entitled to make thereunder and as may be from time to time reasonably
requested by the Collateral Agent.

 

(p)                                 Segregation
of Collections.  Prevent the deposit
into the Collection Account and 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 is party 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 such accounts, promptly identify any such funds to the Servicer (and, in
the case of the Collection Account, to the Collection Agent and the Collection
Account Bank) for segregation and remittance to the owner thereof.

 

(q)                                 Back-Up
Servicing Agreement.  Within ninety
(90) days of the Effective Date, enter into an agreement (the “Back-Up
Servicing Agreement”) with the Back-Up Servicer in form and substance
reasonably satisfactory to the Managing Agents whereby the Back-Up Servicer
will have, in substitution for or in addition to its duties under the ING
Purchase Agreement, commenced performing such additional back-up servicing
duties and obligations as it currently has agreed to provide on behalf of HPSC
Gloucester Funding 2003-1 LLC I and HPSC Gloucester Funding 2003-1 LLC II.

 

SECTION 5.02.  Reporting Requirements of the Seller.  From the initial Receivables Purchase Date
until the Combined Collection Date, the Seller will, unless the Collateral
Agent shall otherwise consent in writing, furnish to the Insurer, the
Collateral Agent, each Managing Agent, and, (so long as the ING Purchase
Agreement is in effect) to ING:

 

(a)                                  as
soon as available and in any event within 45 days after the end of each of the
first three quarters of each fiscal year of the Seller, balance sheets of the
Seller as of the end of such quarter, and (to the extent available) statements
of income and retained earnings of the Seller for the period commencing at the
end of the previous fiscal year and ending with the end of such quarter,
certified by the chief financial officer, chief accounting officer or treasurer
of the Seller;

 

(b)                                 as
soon as available and in any event within 105 days after the end of each fiscal
year of the Seller, a copy of the balance sheet of the Seller as of the end of
such year and the related statements of income and retained earnings of the
Seller for such year each reported on by Deloitte & Touche LLP or other
nationally recognized independent public accountants acceptable to each
Managing Agent;

 

(c)                                  promptly
upon receipt thereof, copies of (i) all annual and quarterly financial
statements delivered to the Seller by the Originator pursuant to the Sale Agreement
and (ii) all other reports and other written information not specified above
which are required to be delivered by the Originator (individually, or as
Servicer) to the Seller pursuant to the terms of the Sale Agreement;

 

24

 

(d)                                 as
soon as possible and in any event within five Business Days after the
occurrence of each Event of Termination or Wind-Down Event or each Unmatured
Event of Termination or Unmatured Wind-Down Event, the statement of the chief
financial officer, chief accounting officer or treasurer of the Seller setting
forth details of such Event of Termination, Wind-Down Event, Unmatured Event of
Termination or Unmatured Wind-Down Event and the action which the Seller
proposes to take with respect thereto;

 

(e)                                  promptly
after the filing or receiving thereof, copies of all reports and notices with
respect to any Reportable Event defined in Article IV of ERISA which the Seller
or any Affiliate files under ERISA with the IRS or the PBGC or the DOL or which
the Seller receives from the PBGC;

 

(f)                                    on
or before the 19th day of each month (or if such day is not a Business Day, the
immediately preceding Business Day), (i) a copy of the Settlement Report for
the most recent calendar month, which shall include a summary of the portfolio
of Interest Rate Hedges as of such day and (ii) a data file (to be delivered
electronically) in form and substance substantially similar to Exhibit B;
and

 

(g)                                 promptly,
from time to time, such other information, documents, records or reports
respecting the Purchased Receivables or the conditions or operations, financial
or otherwise, of the Seller as any Managing Agent may from time to time
reasonably request in order to protect the interests of such Managing Agent or of
any related Purchaser under or as contemplated by this Receivables Purchase
Agreement.

 

SECTION 5.03.  Negative Covenants of the Seller.  From the initial Receivables Purchase Date
until the Combined Collection Date, the Seller will not, without the written
consent of the Collateral Agent:

 

(a)                                  Sales,
Liens, Etc. Against Receivables and Related Security.  Except as otherwise provided herein, sell,
assign (by operation of law or otherwise) or otherwise dispose of, or create or
suffer to exist, any Adverse Claim upon or with respect to, any Purchased
Receivable, Related Security, Collections, or any related Contract, or upon or
with respect to the Collection Account or any Lock-Box Account to which any
Collections of any Purchased Receivable are sent, or assign any right to
receive income in respect thereof, or upon any other Transferred Asset, except
that the Seller shall have no responsibility for any Adverse Claim created by
an Obligor upon or with respect to any Equipment owned by such Obligor so long
as such Adverse Claim is subordinate to the security interest of the Seller in
such Equipment.

 

(b)                                 Extension
or Amendment of Receivables.  Except
for actions of the Servicer otherwise permitted hereunder and in the Sale
Agreement, extend, amend or otherwise modify, the terms of any Receivable, or
amend, modify or waive, any term or condition of any Contract related thereto,
whether for any reason relating to a negative change in the related Obligor’s
creditworthiness or inability to make any payment under the related Contract or
otherwise.

 

25

 

(c)                                  Change in Business or Credit and Collection
Policy.  Make or permit the
Originator to make any change in the character of its business or in the Credit
and Collection Policy, which change would, in either case, impair the
collectibility of any Transferred Asset.

 

(d)                                 Change in Payment Instructions to Obligors.  Add or terminate any bank as a Lock-Box Bank
from those listed in Exhibit H to the Sale Agreement or make any change
in its instructions to Obligors regarding payments to be made to the Seller or
payments to be made to any Lock-Box Bank, unless the Collateral Agent shall
have received (i) ten Business Days’ prior notice of such addition,
termination or change and (ii) prior to the effective date of such
addition, termination or change, (x) executed copies of Lock-Box
Agreements executed by each new Lock-Box Bank, the Collateral Agent and the
Seller and (y) copies of all agreements and documents signed by either the
Seller or the respective Lock-Box Bank with respect to any new Lock-Box
Account.

 

(e)                                  Stock,
Merger, Consolidation, Etc.  Sell
any membership interest to any Person (other than the Originator) or
consolidate with or merge into or with any other entity, or purchase or
otherwise acquire all or substantially all of the assets or capital stock, or
other ownership interest of, any Person or sell, transfer, lease or otherwise
dispose of all or substantially all of its assets to any Person, except for the
conveyances of a security interest in favor of the Collateral Agent as
expressly permitted under the terms of this Receivables Purchase Agreement.

 

(f)                                    Change
in Name or Jurisdiction.  Make any
change to its (i) name or use any trade names, fictitious names, assumed names
or “doing business as” names, or (ii) jurisdiction of organization (including
by becoming an organized entity under the laws of more than one state).

 

(g)                                 ERISA Matters.  (i) Engage or permit any ERISA
Affiliate to engage in any prohibited transaction for which an exemption is not
available or has not previously been obtained from the DOL; (ii) permit to
exist any accumulated funding deficiency, as defined in Section 302(a) of ERISA
and Section 412(a) of the IRC, or funding deficiency with respect to any
Benefit Plan other than a Multiemployer Plan; (iii) fail to make any payments
to any Multiemployer Plan that the Seller or any ERISA Affiliate may be
required to make under the agreement relating to such Multiemployer Plan or any
law pertaining thereto; (iv) terminate any Benefit Plan so as to result in
any liability; or (v) permit to exist any occurrence of any reportable
event described in Title IV of ERISA which represents a material risk of a
liability of the Seller or any ERISA Affiliate under ERISA or the IRC; provided,
however, the Seller’s ERISA Affiliates may take or allow such prohibited
transactions, accumulated funding deficiencies, payments, terminations and
reportable events described in clauses (i) through (iv) above so long as such
events occurring within any fiscal year of the Seller, in the aggregate,
involve a payment of money by or an incurrence of liability of any such ERISA
Affiliate in an amount which does not exceed $500,000.

 

(h)                                 Terminate
or Reject Contracts.  Without
limiting Section 5.03(b), terminate or
reject any Contract prior to the term of such Contract, whether such rejection
or early termination is made pursuant to an equitable cause, statute,
regulation, judicial proceeding or other applicable law (including, without
limitation, Section 365 of the Bankruptcy Code),

 

26

 

unless prior to such
termination or rejection, the Seller pays the Collateral Agent, for the benefit
of the Purchasers, an amount equal to the Termination Amount owed with respect
thereto.

 

(i)                                     Indebtedness.  Create, incur, assume or suffer to exist any
Indebtedness except for (i) Indebtedness to the Purchasers, the Collateral
Agent or any Liquidity Bank expressly contemplated hereunder, (ii) ordinary course
expenses (to the extent, if any, that such ordinary course expenses constitute
Indebtedness) in an aggregate amount outstanding at any time not to exceed
$10,000 (exclusive of taxes) and (iii) Indebtedness to the Originator pursuant
to the Sale Agreement.

 

(j)                                     Guarantees.  Guarantee, endorse or otherwise be or become
contingently liable (including by agreement to maintain balance sheet tests) in
connection with the obligations of any other Person, except endorsements of
negotiable instruments for collection in the ordinary course of business and
reimbursement or indemnification obligations in favor of the Purchasers, the
Agents, or any Liquidity Bank as provided for under this Receivables Purchase
Agreement.

 

(k)                                  Limitation
on Transactions with Affiliates. 
Enter into, or be a party to any transaction with any Affiliate, except
for:

 

(i)                                     the
transactions contemplated by this Receivables Purchase Agreement and the Sale
Agreement;

 

(ii)                                  transactions
related to the allocation of shared overhead expenses or taxes as described in
clause (iii) of Section 5.01(l); and

 

(iii)                               to
the extent not otherwise prohibited under this Receivables Purchase Agreement,
other transactions in the nature of employment contracts and directors’ fees,
upon fair and reasonable terms materially no less favorable to the Seller than
would be obtained in a comparable arm’s-length transaction with a Person not an
Affiliate.

 

(l)                                     Facility
Documents.  Except as otherwise
permitted under Section 11.01, (a)
terminate, amend or otherwise modify any Facility Document to which it is a
party, or grant any waiver or consent thereunder, (b) without the prior consent
of each Managing Agent, exercise any discretionary rights granted to the Seller
under the Sale Agreement pursuant to provisions thereof providing for certain
actions to be taken “with the consent of the Buyer”, “acceptable to the Buyer”
as “specified by the Buyer”, “in the reasonable judgment of the Buyer” or
similar provisions (it being understood that inaction by the Seller shall not be
considered to be an exercise of such discretionary rights) or (c) without the
prior written consent of each Managing Agent, consent to any amendment or
modification of the Credit and Collection Policy.

 

(m)                               Limited
Liability Company Agreement.  Amend
or otherwise modify its certificate of formation or limited liability company
agreement in any manner which requires the consent of the “Independent Manager”
(as defined in the Seller’s limited liability company agreement) without the
prior written consent of each Managing Agent and delivery of an opinion of
counsel that such amendment shall not alter the conclusions set forth in the
legal opinions delivered pursuant to Section 3.01(ix).

 

27

 

(n)                                 Lines
of Business.  Conduct any business
other than that described in Section 4.01(q), or enter into any
transaction with any Person which is not contemplated by or incidental to the
performance of its obligations under the Facility Documents.

 

(o)                                 Accounting
Treatment.  Prepare any financial
statements or other statements (including any tax filings which are not
consolidated with those of the Originator) which shall account for the
transactions contemplated by the Sale Agreement in any manner other than as the
sale of, or a capital contribution of, the Transferred Assets by the Originator
to the Seller (it being understood that non-recognition of such transaction due
to the application of consolidated financial reporting principles under GAAP or
the filing of tax returns on a consolidated basis shall not constitute a
violation of this covenant).

 

(p)                                 Limitation
on Investments.  Make or suffer to
exist any loans or advances to, or extend any credit to, or make any
investments (by way of transfer of property, contributions to capital, purchase
of stock or securities or evidences of indebtedness, acquisition of the
business or assets, or otherwise) in, any Affiliate or any other Person except
for (i) Permitted Investments, (ii) the purchase of Receivables and other
Transferred Assets pursuant to the terms of the Sale Agreement and (iii) so
long as the aggregate outstanding Capital hereunder is less than the Capital
Limit then in effect, the acceptance of investments in exchange for Defaulted
Receivables in an effort to maximize the recoveries thereon.

 

(q)                                 ING
Purchase Agreement.  Request or
permit ING to make any ING Receivables Interest Purchase pursuant to the ING
Purchase Agreement.

 

ARTICLE VI

 

ADMINISTRATION AND COLLECTION

 

SECTION 6.01.  Designation of Servicer.  The servicing, administering and collection
of the Purchased Receivables and the other Purchased Assets shall be conducted
by the Person (the “Servicer”) designated by the Collateral Agent from
time to time in accordance with this Section 6.01.  Until the Collateral Agent gives notice to
the Originator of the designation of a new Servicer, the Originator is hereby
designated as, and hereby agrees to perform the duties and obligations of, the
Servicer pursuant to the terms hereof. 
The Collateral Agent may at any time from and after a Servicing
Termination Event, or earlier upon the written request of the Seller, designate
the Back-up Servicer or any other Person to succeed the Originator or any
Successor Servicer, on the condition in each case that any such Person so designated
shall agree to perform the duties and obligations of the Servicer pursuant to
the terms hereof.  The Servicer may,
with the prior written consent of the Majority Managing Agents and the
Collateral Agent, subcontract with any other Person for servicing,
administering or collecting the Purchased Assets, provided that the Servicer
shall remain liable for the performance of the duties and obligations of the
Servicer pursuant to the terms hereof. 
The Servicer shall use reasonable care in performing its duties as
Servicer hereunder and, without limiting the foregoing, shall service the
Purchased Receivables in accordance with the Credit and Collection Policy.

 

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SECTION 6.02.  Duties of the Servicer.  (a)  The Servicer shall take or
cause to be taken all such actions as may be necessary or advisable to collect
each Purchased Receivable from time to time, all in accordance with applicable
laws, rules and regulations, with reasonable care and diligence, and in
accordance with the Credit and Collection Policy.  Each of the Seller, ING, each Purchaser and each Agent hereby
appoints as its agent the Servicer, from time to time designated pursuant to Section 6.01,
to enforce its respective rights and interests in and under the Purchased
Receivables, the Related Security related thereto and the related
Collections.  The Servicer will at all
times apply the same standards and follow the same procedures with respect to
the decision to commence, and in prosecuting and litigating with respect to
Purchased Receivables as it applies and follows with respect to accounts,
chattel paper and instruments which are not Purchased Receivables.   In no event shall the Servicer be entitled
to make ING, any Purchaser or any Agent a party to any litigation without the
express prior written consent of each such Person to be so made a party to such
litigation, and in any such case, the Collateral Agent.  The Servicer shall segregate and set aside
for the account of the Purchasers and ING all Collections of the Purchased
Receivables and Related Security in accordance with Section 2.05 of
the Sale Agreement and Section 6.06 hereof and shall cause all such
Collections to be remitted to a Lock-Box Account and/or deposited directly into
the Collection Account within one Business Day after identification thereof by
the Servicer and in any event within four Business Days after the Servicer’s
receipt thereof.  The Servicer shall
promptly review all checks and other instruments returned to it by the Lock-Box
Bank on account of restrictive endorsements, improper payees, incorrect amounts
or for any other reason and shall not deposit any such checks or instruments in
its own accounts unless it is determined to the Collateral Agent’s satisfaction
that such amounts do not constitute Collections; any such checks or instruments
which are determined to be Collections of the Purchased Receivables or Related
Security related thereto shall be promptly remitted to the Lock-Box Account or
the Collection Account as provided above. 
Provided that the Termination Date shall not have occurred, the
Originator, while it is Servicer, may, in accordance with the Credit and
Collection Policy, (i) amend, modify or waive any term or condition of any
Contract to reflect any Permitted Extension, (ii) adjust the Outstanding
Balance of any Purchased Receivable to reflect the reductions, adjustments or
cancellations described in the first sentence of Section 2.04(d) of
this Receivables Purchase Agreement, (iii) so long as such prepayment would not
cause a Wind-Down Event under this Receivables Purchase Agreement, and subject
to the payment of the Termination Amount, consent to the prepayment or early
termination of a Contract, and (iv) amend, modify or waive any provision of a
Delinquent Receivable or Defaulted Receivable so as to maximize the
collectibility thereof.  The Servicer
shall hold in trust for the Seller, the Purchasers and ING, in accordance with
their respective interests, all Records. 
Notwithstanding anything to the contrary contained herein, following the
occurrence of an Event of Termination, the Collateral Agent (at the direction
of the Majority Managing Agents) shall have the absolute and unlimited right to
direct the Servicer (whether the Servicer is the Originator or otherwise) to
commence or settle any legal action to enforce collection of any Receivable or
other Transferred Asset or to foreclose upon or repossess any Related Security.

 

(b)                                 The
Servicer shall, as soon as practicable following receipt, turn over to the
Originator the collections of any receivable which is not a Purchased Asset, in
either case less, in the event the Originator is not the Servicer, all
reasonable and appropriate out-of-pocket costs and expenses of such Servicer of
servicing, collecting and administering such receivable.

 

29

 

(c)                                  Notwithstanding
anything to the contrary contained in this Receivables Purchase Agreement, the
Servicer, if the Collateral Agent or its designee, shall have no obligation to
collect, enforce or take any other action described in this Article VI
with respect to any receivable that is not a Purchased Receivable other than to
deliver to the Originator the collections with respect to any such receivable
as described in Section 6.02(b) and to exercise the same degree of
care with respect to such collections in its possession as it would exercise
with respect to its own property.

 

(d)                                 In
the event the Servicer, in satisfaction of all or part of any Purchased Receivable,
repossesses or otherwise takes possession of the Equipment the sale or lease of
which gave rise to such Purchased Receivable, the Servicer agrees to use its
reasonable efforts to resell or re-lease such Equipment for the account of the
Purchasers (including their respective assignees, participants and successors)
and shall remit to the Collateral Agent the gross sale proceeds thereof or, to
the extent such Equipment is re-leased, shall deliver to the Collateral Agent
the chattel paper or other documents evidencing the rights to payment arising
from such re-lease, all of which documents shall constitute Contracts and which
rights to payment shall constitute Purchased Receivables, and all of which
Contracts and Purchased Receivables shall constitute part of the Purchased
Assets.  None of the Purchasers, ING or
any Agent shall have any obligation to take any action or commence any
proceedings to realize upon any Purchased Receivable or to enforce any of its
rights or remedies with respect thereto. 
Any moneys collected by the Servicer pursuant to this subsection
6.02(d) shall be segregated by the Servicer, held in trust by the Servicer
for the Purchasers and ING and shall be remitted to a Lock-Box Account or to
the Collection Account within one Business Day after identification thereof by
the Servicer and in any event within four Business Days after the Servicer’s
receipt thereof.

 

(e)                                  The
Servicer shall maintain all books of account and other records pertaining to
the Purchased Receivables and the other Purchased Assets in such form as will
enable the Purchasers, ING or their respective designees to determine at any
time the status thereof.  The Servicer
will permit ING, any Purchaser, any Agent and any Person designated by any such
Person, during regular business hours, to inspect, audit, check and make
abstracts from all books, accounts, records, or other papers pertaining to such
Purchased Assets.  From time to time, at
the request of ING, any Purchaser, any Agent, the Servicer, at its own expense,
will (i) deliver to such Person and any Person designated by such Person any
records and invoices pertaining to the Purchased Assets and evidence thereof as
such Person or such designee may deem necessary to enable it to enforce its
rights thereunder or under any related Contract and (ii) mark each computer
record relating to, and each invoice or other evidence of, the Purchased Assets
(whether or not such computer record or other item is the property of any
Purchaser or ING) as ING, such Purchaser or any Agent on such Purchaser’s
behalf may direct to reflect the interests of ING, such Person and the
Collateral Agent in such Purchased Assets. 
The Servicer will either (i) segregate, from all the documents relating
to other receivables then owned or being serviced by the Servicer, all
documents relating to the Purchased Assets or (ii) mark all such documents
relating to the Purchased Assets so as to make such documents readily
identifiable as property of the Purchasers and ING and with such legend as
shall be specified by the Collateral Agent, and will, in either such event,
hold all such documents in trust for the Purchasers and ING and safely keep
such documents in filing cabinets or other suitable containers marked to show
the Purchasers’ and ING’s interests.

 

30

 

SECTION 6.03.  Rights of the Collateral Agent.  At any time:

 

(a)                                  The
Collateral Agent may notify the Obligors of the Purchased Receivables, or any
of them, of the Purchasers’ and ING’s ownership interests in the Purchased
Assets and direct such Obligors, or any of them, that payment of all amounts
payable under any Purchased Receivable be made directly to the Collateral Agent
or any other designee of the Purchasers (including, without limitation, ING).

 

(b)                                 The
Seller shall, at the Collateral Agent’s request and at the Seller’s expense,
give notice of the Purchasers’ and ING’s interests in the Purchased Assets to
each Obligor (in substantially the form of the Notice of Assignment) and direct
that payments be made directly to the Collateral Agent or any other designee of
the Purchasers (including, without limitation, ING).

 

(c)                                  The
Seller shall, at the Collateral Agent’s request, assemble all Records which the
Collateral Agent reasonably believes are necessary or appropriate for the
administration and enforcement of the Purchased Assets, and shall make the same
available to the Collateral Agent at a place selected by the Collateral Agent
or its designee.

 

(d)                                 Each
of the Servicer, the Seller, each Purchaser, each other Agent and ING hereby
authorize the Collateral Agent to take any and all steps in the Seller’s name
and on behalf of the Seller necessary or desirable, in the determination of the
Collateral Agent, to collect all amounts due under any and all Purchased
Receivables or Related Security related thereto, including, without limitation,
endorsing the Seller’s name on checks and other instruments representing
Collections and enforcing such Purchased Receivables and the related Contracts.

 

SECTION 6.04.  Further Action Evidencing Transfers.  (a)  The
Seller agrees that from time to time, at its expense, it will promptly execute
and deliver all further instruments and documents, and take all further action
that the Collateral Agent may reasonably request in order to protect or more
fully evidence the Purchasers’ and ING’s ownership interests in the Purchased
Receivables, the Related Security and the Collections related thereto, or to
enable any Purchaser or the Collateral Agent 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 Purchased Receivables,
Related Security and Collections related thereto with a legend, acceptable to
the Collateral Agent and ING, evidencing that the Purchasers and ING have
acquired an ownership interest therein as provided in this Receivables Purchase
Agreement and the ING Purchase Agreement and, upon the request of the
Collateral Agent, 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 Collateral
Agent may reasonably request.  The
Seller hereby authorizes the Collateral Agent to file one or more financing or
continuation statements, and amendments thereto and assignments thereof,
relative to all or any of the Purchased Receivables, Related Security and
Collections related thereto now existing or hereafter arising without the
signature of the Seller where permitted by law.  A carbon, photographic or other reproduction of this Receivables
Purchase Agreement or any financing statement covering the Purchased Receivables,
Related

 

31

 

Security and Collections
related thereto, or any part thereof, shall be sufficient as a financing
statement.  If the Seller fails to
perform any of its agreements or obligations under this Receivables Purchase
Agreement, the Collateral Agent may (but shall not be required to) itself
perform, or cause performance of, such agreement or obligation, and the
expenses of the Collateral Agent incurred in connection therewith shall be
payable by the Seller upon the Collateral Agent’s demand therefor; provided,
however, prior to taking any such action, the Collateral Agent shall
give notice of such intention to the Seller and provide the Seller with a
reasonable opportunity to take such action itself.

 

(b)                                 The
Seller shall, on or prior to the date of each Receivables Purchase hereunder,
deliver or cause to be delivered the related Contract File to the Custodian, in
suitable form for transfer by delivery, or accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Collateral Agent. 
In the event that the Seller or the Servicer receives any other
instrument or any writing constituting chattel paper which, in either event,
evidences a Purchased Receivable or other Purchased Assets, the Seller or the
Servicer as applicable shall deliver such instrument or chattel paper to the
Custodian on behalf of the Purchasers and ING within three (3) Business Days
after receipt, in suitable form for transfer by delivery, or accompanied by
duly executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Collateral Agent.

 

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 Purchasers or ING hereunder and the exercise by the Purchasers or ING or
their respective assigns of their respective rights hereunder shall not relieve
the Seller from such obligations and (ii) pay when due any taxes,
including without limitation, sales, excise and personal property taxes payable
in connection with the Purchased Assets, unless the Seller is contesting the
payment of such taxes in good faith and by appropriate proceedings and with
respect to which no Adverse Claim has been asserted or filed.

 

SECTION 6.06.  Administration of Collections by Servicer.  The Servicer shall identify on a timely
basis all Collections which are on account of the Purchased Assets, including
all deposits to Lock-Box Accounts.  On
each Business Day, all Collections received in the Lock-Box Accounts for the
prior Business Day (and such Business Day, if practicable) shall be transferred
to the Collection Account.  If the
Servicer receives any cash or checks, drafts, wire transfers or other
instruments for the payment of money on account or otherwise in respect of the
Purchased Assets, the Servicer shall segregate such cash and other items, hold
such cash and other items in trust for the benefit of the Purchasers, ING, and
the Collateral Agent and shall cause such cash and other items (properly
endorsed, where required, so that such items may be collected by the Collateral
Agent or the Purchasers) to be deposited in a Lock-Box Account or directly in
the Collection Account immediately after the date any such cash or other item
shall have been identified as being on account of a Purchased Assets 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 Purchased
Receivables of each Obligor shall be applied in the order of maturity thereof
unless specifically identified otherwise in writing by such Obligor or directed
by a court of competent jurisdiction. 
Any payment by an Obligor in respect of any indebtedness or other
obligations

 

32

 

owed by such Obligor to the
Seller or the Servicer shall, except as otherwise specified by such Obligor or
otherwise required by law, be applied as a Collection of a Receivable of such
Obligor (in the order of the age by invoice date of such Receivables, starting
with the oldest such Receivable) to the extent of any amounts then due and
payable thereunder before being applied to any other indebtedness of such
Obligor to the Seller or the Servicer. 
The Servicer shall not influence or instruct any Obligor who is indebted
to the Seller in respect of any indebtedness not included in the Purchased
Assets to direct that its remittances be applied to any such indebtedness prior
to being applied to the Purchased Assets.

 

SECTION 6.08.  Servicing Fee.  On each Settlement Date, as full
compensation for its servicing activities hereunder, the Servicer shall be
entitled to receive a fee (the “Servicing Fee”) in an amount equal to
the Servicing Fee Rate times the Outstanding Balance of the Purchased
Receivables as of the last day of the prior calendar month times a
fraction, the numerator of which is the number of actual days elapsed in such
calendar month and the denominator of which equals 360, provided, that,
if the Servicer hereunder is also the Servicer under the Sale Agreement, the
Servicing Fee hereunder shall be deemed paid to the extent of any payment by
the Seller of the “Servicing Fee” specified and defined in the Sale
Agreement.  In the event that 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
Collateral Agent.

 

SECTION 6.09.  Resignation; Successor Servicer.  (a) 
The obligation of the Servicer to service the Purchased Receivables is
personal to the Servicer and the parties recognize that another Person may not
be qualified to perform such obligations. 
Accordingly, the Servicer’s obligation to service the Purchased Assets
hereunder shall be specifically enforceable and shall be absolute and
unconditional in all circumstances, including, without limitation, after the
occurrence and during the continuation of any Event of Termination or Servicing
Termination Event hereunder; provided, however, that a Successor
Servicer may be appointed pursuant to 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 each
Managing Agent, ING and the Collateral Agent. 
Except to the extent inconsistent with any such applicable law, no such
resignation shall become effective until a Successor Servicer shall have
assumed the responsibilities and obligations of the Servicer in accordance with
the remaining provisions of this Section 6.09.

 

(c)                                  The
Collateral Agent shall, as promptly as possible after the Servicer has given
notice pursuant to Section 6.09(b) above or at any time after the
Collateral Agent’s designation of a successor Servicer pursuant to Section
6.01, appoint the Back-up Servicer or other successor servicer (the “Successor
Servicer”) and such Successor Servicer shall accept its appointment by a
written assumption in a form acceptable to the Collateral Agent.  Upon its appointment, the Successor Servicer
shall be the successor in all respects to the Servicer with respect to
servicing functions under this Receivables Purchase Agreement and shall be
subject to

 

33

 

all the responsibilities,
duties and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof, and all references in this Receivables Purchase Agreement or
any other Facility Documents to the Servicer shall be deemed to refer to the
Successor Servicer.  The Servicer agrees
to cooperate with the Successor Servicer in effecting the transfer of its
responsibilities, duties, liabilities and rights hereunder, including, without
limitation, the execution and delivery of assignments of financing statements,
the transfer to the Successor Servicer of all cash amounts held by the Servicer
or thereafter received with respect to the Purchased Assets, the transfer of
electronic records relating to the Purchased Assets in such form as the
Successor Servicer may reasonably request and the transfer of all related
Records, correspondence and other documents relating to the Purchased Assets.

 

SECTION 6.10.  Lock-Box Accounts; Collection Account.  The Seller has established and will maintain
a system of operations, accounts and instructions to the Lock-Box Banks and
will establish and maintain the Collection Account as provided in Section
6.11.  Pursuant to a Lock-Box
Agreement, each Lock-Box Bank shall be irrevocably instructed to wire all funds
from time to time on deposit in any related Lock-Box Account to the Collection
Account.  Neither the Seller, nor any
Person claiming by, through or under the Seller shall have any control over the
use of, or any right to withdraw any item or amount from, any Lock-Box Account
or the Collection Account except as expressly provided in the Lock-Box
Agreements.  The Collateral Agent on
behalf of the Purchasers and ING is hereby irrevocably authorized and
empowered, as the Seller’s attorney-in-fact, to endorse any item deposited in a
Post Office Box or lock-box or presented for deposit in any Lock-Box Account or
the Collection Account requiring the endorsement of the Seller, which
authorization is coupled with an interest.

 

SECTION 6.11.  Collection Account; Distribution of Collections.  (a) 
The Seller has established for the sole and exclusive benefit of the
Collateral Agent for the benefit of the Purchasers, ING, the Insurer and their
respective assigns, a cash collateral account (the “Collection Account”).  The Collection Account shall be a special
purpose segregated trust account maintained with Fleet National Bank or another
bank satisfactory to Collateral Agent but shall be under the sole dominion and
control of, and in the name of, the Collateral Agent.  All funds held in the Collection Account, including investment
earnings thereon, shall be invested in Permitted Investments at the direction
of the Seller; provided, however, that from and after the
Termination Date or otherwise upon the occurrence and during the continuance of
any Event of Termination, the Collateral Agent shall have the sole right to
restrict the maturities of any investments held in the Collection Account and
to direct the withdrawal of any such investments for the purposes of paying
Capital, Yield, any Obligations and any ING Obligations owed hereunder.  The Collateral Agent shall have the sole and
exclusive right to withdraw or order a transfer of funds from the Collection
Account in accordance with the terms and provisions of Section 2.04 and
of this Section 6.11; provided, however, that the
Collateral Agent hereby authorizes the Seller (or the Servicer on its behalf),
prior to the occurrence of any Event of Termination (or upon the express waiver
thereof by the Collateral Agent in accordance with Section 11.01), to
withdraw and apply amounts on deposit in the Collection Account in accordance
with Sections 6.11(b) and (c) below; provided, further,
however, that the Collateral Agent agrees to turn over to the Originator
any funds which are deposited in the Collection Account and which do not
constitute Collections or other proceeds of Purchased Assets, less all
reasonable and appropriate out-of-pocket costs and expenses incurred by the
Collateral Agent in connection with such misdirected funds.

 

34

 

(b)                                 All
Collections and other proceeds of the Purchased Assets in the Collection
Account shall be held in trust for the benefit of the Purchasers, ING and the
Insurer and, on each Settlement Date, except as otherwise provided in Section
6.11(d) below with respect to any Settlement Date from and after the
Designated Termination Date, such Collections and other proceeds shall be used
solely for the following purposes and in the following order of priority:

 

(i)                                     To
remit to the Seller any Collections representing sales or other taxes or
insurance payments for the purpose of satisfying the Seller’s obligations in
respect of such taxes or insurance;

 

(ii)                                  To
pay Yield and other Carrying Costs which are then due and payable;

 

(iii)                               To
pay Priority ING Yield to the extent then due and payable;

 

(iv)                              To
repay Capital, as provided in Section 2.04(b)(ii);

 

(v)                                 To
pay any other Obligations (including Default Premium), and any other amounts
(including Swap Breakage Amounts) owing to any Swap Provider, which Obligations
and/or amounts may be due and owing at such time;

 

(vi)                              To
pay any ING Yield to the extent then due and payable and not paid pursuant to clause
(iii) above;

 

(vii)                           To
repay ING Capital, as provided in Section 2.04 and the ING Purchase
Agreement;

 

(viii)                        To pay any
other ING Obligations which may be due and owing at such time, pursuant to the
ING Purchase Agreement;

 

(ix)                                (A)
If the Termination Date has not occurred, to be remitted to the Seller in
payment of the purchase price in respect of any Receivables Purchase to be made
on such Settlement Date, as provided in Section 2.04(b)(i) and (B) if
the Termination Date has occurred, to repay Capital; and

 

(x)                                   To
be remitted to the Seller in consideration of the Deferred Purchase Price, provided,
that such funds shall only be remitted to the Seller to the extent that,
after giving effect to such transfer of funds and any Receivables Purchases
being made on such Settlement Date, the amount of Capital then outstanding does
not exceed the Capital Limit then in effect, and the amount of Combined Capital
then outstanding does not exceed the Combined Capital Limit then in effect.

 

The Seller, in making any request for funds
to be withdrawn from the Collection Account, shall certify to each of the
Collateral Agent and the Collection Account Bank that the funds will be used
for one of the purposes described above in this Section 6.11(b).

 

If, on any Settlement Date prior to the Designated
Termination Date, the Collections of Purchased Assets on deposit in the
Collection Account and available for

 

35

 

withdrawal under clause  (ii)
above are less than the amount of the obligations described in such clause,
such available funds shall be allocated in the priority set forth in Section
6.11(c) below, and within each such priority, such available funds shall be
allocated to the Persons to whom such obligations are owed ratably according to
the respective amounts owed.

 

(c)                                  On
each Settlement Date prior to the Designated Termination Date, to the extent
that the Collections of Purchased Assets on deposit in the Collection Account
and available under clause  (ii) of Section 6.11(b) are
insufficient to pay all Carrying Costs which are then due and payable, such
funds shall be applied to the Carrying Costs in the following order of
priority:

 

(i)                                     To
pay to any Swap Provider, regularly scheduled amounts owed under the Interest
Rate Hedges (but excluding any Swap Breakage Amounts, taxes, indemnities, or other
similar amounts);

 

(ii)                                  To
pay any accrued and unpaid Servicing Fee and fees due and payable to the
Back-Up Servicer;

 

(iii)                               To
pay any accrued and unpaid Yield;

 

(iv)                              To
pay any accrued and unpaid fees (excluding Default Premium) owing under the Fee
Letters which are allocable to this Receivables Purchase Agreement;

 

(v)                                 To
pay any accrued and unpaid expenses of the Collateral Agent which are allocable
to this Receivables Purchase Agreement;

 

(vi)                              To
pay any other Carrying Costs due and payable but not paid above; and

 

(vii)                           To pay
ordinary course expenses of the Seller to the extent the same are due or past
due.

 

(d)                                 On
each Settlement Date from and after the Designated Termination Date,
Collections and other proceeds of Purchased Assets shall be withdrawn from the
Collection Account solely upon direction of the Collateral Agent to be applied
against the Obligations in the following order of priority;

 

(i)                                     To
remit to the Seller any Collections representing sales or other taxes or
insurance payments for the purpose of satisfying the Seller’s obligations in
respect of such taxes or insurance;

 

(ii)                                  To
pay any accrued and unpaid Servicing Fee (if the Servicer is a party other than
the Originator or an Affiliate thereof);

 

(iii)                               To
pay to any Swap Provider, regularly scheduled amounts owed under the Interest
Rate Hedges (but excluding any Swap Breakage Amounts, taxes, indemnities, or
other similar amounts);

 

(iv)                              To
pay accrued and unpaid Yield;

 

36

 

(v)                                 To
pay any accrued and unpaid fees (excluding Default Premium) owing under the Fee
Letters which are allocable to this Receivables Purchase Agreement;

 

(vi)                              To
pay Priority ING Yield;

 

(vii)                           To
repay outstanding Capital to the Purchasers, ratably in accordance with their
respective Pro Rata Shares, in an aggregate amount such that, after giving
effect to the distributions made pursuant to this clause (vii),
aggregate outstanding Capital shall be less than or equal to the Capital Limit;

 

(viii)                        To pay the
accrued and unpaid expenses of the Collateral Agent which are allocable to this
Receivables Purchase Agreement;

 

(ix)                                To
pay any other accrued and unpaid Obligations (including Default Premium), and
any other amounts owing to the Swap Provider (including Swap Breakage Amounts),
which Obligations and/or amounts have not been paid pursuant to clauses (i)
through (viii) above;

 

(x)                                   To
pay any other Carrying Costs which are due and owing but have not been paid
pursuant to clauses (i) through (ix) above;

 

(xi)                                To
repay all outstanding Capital to the Purchasers, ratably in accordance with
their respective Pro Rata Shares;

 

(xii)                             To
pay any ING Obligations pursuant to the ING Purchase Agreement; and

 

(xiii)                          To pay
any accrued and unpaid Servicing Fee owed to the Originator or an Affiliate
thereof.

 

If, on any such Settlement Date, the funds on
deposit in the Collection Account and available for withdrawal under either clause
(iii), (iv), (vi), (viii)
or (ix) above are less than the amount of the obligations described in such
clause, such available funds shall be allocated to the Persons to whom
such obligations are owed ratably according to the respective amounts
owed.  Any funds remaining in the
Collection Account after payment of the foregoing Obligations and the ING Obligations
and other fees and expenses shall be remitted to the Seller in consideration of
the Deferred Purchase Price.

 

(e)                                  Payments
Under Interest Rate Hedges as Collections. 
Until the Collection Date, pursuant to each Interest Rate Hedge
Assignment, the Collateral Agent shall receive and hold all payments received
from the Swap Providers under the Interest Rate Hedges and apply such payments
in the order of priority set forth above in Sections 6.11(b)-(d) to the
same extent as if such payments constituted Collections on deposit in the
Collection Account.  After the
Collection Date, any payments received by the Collateral Agent under the
Interest Rate Hedges shall be held in trust by the Collateral Agent and forthwith
delivered to the Seller.

 

(f)                                    Subrogation
Rights of Insurer.  Each party
hereto acknowledges that, on behalf of the Seller, the Insurer has issued (or,
in the case of the Swap Policies, has either issued

 

37

 

or is obligated to assume
CapMAC’s payment obligations under) (i) the Swap Policies in favor of the Swap
Providers, to guarantee the payment of certain amounts owed under the Interest
Rate Hedges and (ii) the Policies in favor of the Purchasers and the Liquidity
Banks, to guarantee the payment of Yield and Capital in accordance with the
terms thereof.  Anything in this
Receivables Purchase Agreement or any Facility Document to the contrary
notwithstanding, any payment with respect to any Capital or Obligations owed by
the Seller that is made with monies received pursuant to the terms of any Swap
Policy or Policy shall not be considered payment by the Seller, shall not
discharge any obligations of the Seller to make such payment and, to the extent
any such Capital or Obligation has been paid with the proceeds of any Swap
Policy or Policy, such Capital or Obligations shall continue to remain
outstanding for all purposes of the Facility Documents until the Insurer has
been paid as subrogee hereunder.  In furtherance
of and not in limitation of the Insurer’s equitable right of subrogation, each
party hereto acknowledges and agrees that, to the extent of any payment made by
the Insurer (including with respect to the Swap Policies, on behalf of CapMAC)
to the applicable beneficiary under any of the Policies or the Swap Policies or
under the Insurance Agreement, in any case with respect to any Obligations of
the Seller, subject to the priorities of payment set forth in the preceding
sections of this Section 6.11, the Insurer is to be fully subrogated to
the rights of such beneficiary to receive such payment, and the Insurer shall
be reimbursed for any such payment, together with interest due thereon as
provided under the Insurance Agreement, at the same level of priority which
would have been afforded the beneficiary in the absence of such payment by the
Insurer.  Each party hereto further
acknowledges and agrees that, to the extent CapMAC makes any payment to the
applicable Swap Provider under any Swap Policy and such payment is not
reimbursed by the Insurer or otherwise paid by the Insurer on CapMAC’s behalf,
then CapMAC shall be fully subrogated to the rights of such Swap Provider to
receive such payment, and shall be reimbursed for any such payment, together
with interest thereon at the rate provided under the Insurance Agreement, at
the same level of priority which would have been afforded the Swap Provider in
the absence of such payment by CapMAC.

 

ARTICLE VII

 

WIND-DOWN EVENTS; REMEDIES

 

SECTION 7.01.  Wind-Down Events.  Each of the following events shall
constitute a “Wind-Down Event” within the meaning of this Receivables
Purchase Agreement:

 

(a)                                  The
occurrence of any Event of Termination under the Sale Agreement or any ING
Wind-Down Event; or

 

(b)                                 The
Servicer (if the Seller or any Affiliate of the Seller) shall fail to perform
or observe any term, covenant or agreement hereunder (other than as referred to
in clause (ii) of this Section 7.01(b))
and such failure shall remain unremedied for three Business Days after written
notice from the Collateral Agent or (ii) either the Servicer (if the Seller or
any Affiliate of the Seller) or the Seller shall fail to make any payment or
deposit to be made by it hereunder when due and, solely in the case of any such
payments which do not constitute payments of Capital or Yield, such failure
shall remain unremedied for three (3) Business Days after written notice from
the Collateral Agent; or

 

38

 

(c)                                  The
Seller shall fail to perform or observe any term, covenant or agreement
contained in Section 5.03 and any such failure shall remain unremedied
for five (5) Business Days after written notice from the Collateral Agent; or

 

(d)                                 Any
representation or warranty made or deemed to be made by the Seller (or any of
its officers) under or in connection with this Receivables Purchase Agreement,
any Settlement Report or other information or report delivered pursuant hereto
shall prove to have been false or incorrect in any material respect when made; provided,
however, that (i) to the extent any breach of any such representation or
warranty may be cured within ten (10) Business Days, the Seller shall have ten
(10) Business Days after learning of such breach to make such representation
and warranty true and correct and (ii) if any such false or incorrect
representation or warranty has given rise to a deemed Collection as provided
under Section 2.04 of this Receivables Purchase Agreement, then, upon
the Seller’s payment of such deemed Collection at the time and in the manner
required under this Receivables Purchase Agreement, the breach of such
representation or warranty shall not give rise to a Wind-Down Event under this subsection (d); or

 

(e)                                  The
Seller shall fail to perform or observe any other term, covenant or agreement
contained in this Receivables Purchase Agreement on its part to be performed or
observed and any such failure shall remain unremedied for ten (10) Business
Days after written notice from the Collateral Agent (it being understood that
if any such failure gives rise to a deemed Collection under Section 2.04
of this Receivables Purchase Agreement, then, the payment of such deemed
Collection at the time and in the manner required under this Receivables
Purchase Agreement shall be deemed a remedy of such failure); or

 

(f)                                    The
interest of the Collateral Agent in the Purchased Assets shall for any reason,
except to the extent permitted by the terms hereof, cease to create a valid and
perfected first priority interest in such Purchased Assets; provided, however,
if any such failure results in a deemed Collection under Section 2.04 of
this Receivables Purchase Agreement and the Seller satisfies in full its
payment obligations under such section with respect to such deemed Collection,
then such failure shall not give rise to a Wind-Down Event under this subsection (f) and such payment by the Seller
shall be deemed a remedy of such failure; or

 

(g)                                 (i)  An Insolvency Event shall occur with respect
to the Seller or the Originator or (ii) the Seller or the Originator shall take
any corporate action to authorize the filing of any Insolvency Proceeding; or

 

(h)                                 As
of the close of business on any Settlement Date, the Capital Limit shall be
less than the aggregate outstanding Capital; or

 

(i)                                     The
Originator shall cease to own 100% of the issued and outstanding membership
interests in the Seller; or

 

(j)                                     There
shall have occurred, since the initial Receivables Purchase Date, a material
adverse change in the financial condition of the Seller or there shall have
occurred any event which materially and adversely affects the collectibility or
the Receivables generally or the ability of the Seller to perform hereunder; or

 

39

 

(k)                                  Any
Purchaser or the Insurer shall determine that continuation of this Receivables
Purchase Agreement without exercise of remedies under Section 7.02 will impose
a material adverse regulatory impact on such Purchaser or the Insurer, as the
case may be; or

 

(l)                                     The
occurrence of any Insurer Default; or

 

(m)                               The
Insurer shall have received written notification from either Rating Agency that
the transactions evidenced hereby (without giving effect to the Policies) are
rated less than BBB or Baa2, as the case may be, and the Seller and Servicer
have not, within 30 days of such notification, executed such amendments and/or
taken all other steps requested by the Insurer or otherwise required by the
Rating Agencies to ensure that the transactions will be rated not less than BBB
and Baa2 (it being understood, however, that, in the event the Insurer receives
notification from a Rating Agency that the transactions evidenced hereby are
rated BBB or Baa2 or better, this clause (m) shall not be applicable
with respect to any subsequent notification of a downgrade the Insurer may
receive from such Rating Agency.

 

SECTION 7.02.  Remedies.  During the existence of a Wind-Down Event, the Collateral Agent
on behalf of the Purchasers may, by written notice to the Seller, take any or
all of the following actions, at the same or different times:  (i) with the consent of the Insurer and
each Managing Agent, (a) declare the Termination Date to have occurred;
(b) declare the Obligations to be immediately due and payable; and (c)
exercise any rights and remedies of a secured party under Article 9 of the UCC,
which rights and remedies shall be cumulative to those provided for under this
Receivables Purchase Agreement and the other Facility Documents; and (ii)
pursue any other remedy under this Receivables Purchase Agreement and the other
Facility Documents provided, however, that in the case of any
event described in clause (i) of subsection 7.01(g) above,
then, automatically upon the occurrence of such event without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Seller, anything contained herein to the contrary
notwithstanding, the Termination Date shall be deemed to have occurred
automatically and any Obligations owed hereunder shall be immediately due and
payable.  The rights and remedies of a
secured party which may be exercised by the Collateral Agent pursuant to clause
(i)(c) of this Section 7.02 shall include, without limitation, the
right to (y) identify and engage a Successor Servicer to act as servicer for
the Receivables in the event of a Servicing Termination Event, and (z) without
notice except as specified below solicit and accept bids for and sell the
Purchased Assets or any part thereof in one or more parcels at a public or
private sale, at any exchange, broker’s board or at any of the Collateral
Agent’s offices or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Collateral Agent may deem commercially
reasonable.  The Seller agrees that, to
the extent notice of sale shall be required by law, 10 Business Days’ notice to
the Seller of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification and that it
shall be commercially reasonable for the Collateral Agent to sell the Purchased
Assets on an as-is basis, without representation or warranty of any kind.  The Collateral Agent shall not be obligated
to make any sale of Purchased Assets regardless of notice of sale having been
given and may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.

 

40

 

ARTICLE VIII

 

INDEMNIFICATION; REPURCHASES

 

SECTION 8.01.  Indemnities by the Seller.  (a) 
Without limiting any other rights which any Purchaser, any Agent or ING
may have hereunder or under applicable law, the Seller hereby agrees to
indemnify each Purchaser, each Agent and ING and their respective permitted
successors and assigns (including, without limitation, the Insurer) 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 such Indemnified Party or (ii) recourse (except with respect
to payment and performance obligations provided for in this Receivables
Purchase Agreement) for uncollectible Receivables):

 

(i)                                     the
transfer of any Receivable which was not, as of the Receivables Purchase Date,
an Eligible Receivable;

 

(ii)                                  any
representation or warranty made or deemed made by the Seller or the Originator
(or any of their respective officers) under or in connection with the Sale
Agreement or this Receivables Purchase Agreement, any Settlement Report or any
other information or report delivered by the Seller or the Originator pursuant
hereto, which shall have been false or incorrect in any material respect when
made or deemed made or delivered;

 

(iii)                               the
failure by the Seller or the Originator (individually or as Servicer) to comply
with any term, provision or covenant contained in this Receivables Purchase
Agreement or the Sale Agreement (other than any covenant contained in Section
5.04 of the Sale Agreement, a breach of which shall constitute an Event of
Termination but shall not give rise to indemnification under this Section
8.01), or any agreement executed in connection with this Receivables
Purchase Agreement or the Sale Agreement or with any applicable law, rule or
regulation with respect to any Purchased Receivable, the related Contract, the
Related Security or the other Purchased Assets, or the nonconformity of any
Purchased Receivable, the related Contract, the Related Security or the other
Purchased Assets with any such applicable law, rule or regulation;

 

(iv)                              the
failure to vest and maintain vested in the Purchasers (including its assignees,
participants and successors) or to transfer to the Purchasers a first priority
perfected interest in the Purchased Assets, free and clear of any Adverse Claim
(including, without limitation, free and clear of any Permitted Lien except in
favor of the Collateral Agent) whether existing on the Receivables Purchase
Date or at any time thereafter;

 

(v)                                 the
failure to file, or any delay in filing (other than solely as a result of the
action or inaction of the Collateral Agent), financing statements or other
similar

 

41

 

instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws against the Obligor with
respect to any Contract or Receivables which are, or are purported to be,
Purchased Assets, whether at the time of any Purchase or at any subsequent
time;

 

(vi)                              any
dispute, claim, offset or defense (other than discharge in bankruptcy of the
Obligor) of the Obligor to the payment of any Purchased Receivable (including,
without limitation, a defense based on such Purchased Receivable or the related
Contract not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any other claim
resulting from the sale or lease of the Equipment and/or services related
thereto or the furnishing or failure to furnish such Equipment and/or services;

 

(vii)                           any
failure of the Seller or the Originator, as Servicer or otherwise, to perform
its duties or obligations in accordance with the provisions of Article VI hereof or Article VI of the Sale
Agreement;

 

(viii)                        any
products liability claim or personal injury or property damage suit or other
similar or related claim or action of whatever sort arising out of or in
connection with the Equipment or any other goods, merchandise and/or services
which are the subject of any Receivable or Contract;

 

(ix)                                the
failure of the Seller or the Originator to pay when due any taxes, including,
without limitation, sales, excise or personal property taxes payable in
connection with the Purchased Assets;

 

(x)                                   the
termination, rejection or non-assumption by the Seller of any Contract prior to
the original term of such Contract, whether such rejection, early termination
or non-assumption is made pursuant to an equitable cause, statute, regulation,
judicial proceeding or other applicable laws (including, without limitation,
Section 365 of the Bankruptcy Code);

 

(xi)                                the
failure of the Seller, the Originator and the Obligors under the Contracts to
maintain casualty and liability insurance for the Equipment related to the
Purchased Receivables in an amount at least equal to the Discounted Receivables
Balance for such Purchased Receivables;

 

(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 or the Originator (whether in its capacity as Servicer or
otherwise), other than, for as long as the Seller is a party 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.

 

42

 

SECTION 8.02.  Repurchases of Designated Receivables.  The following rights are in addition to and
not in limitation of any other rights or remedies that any Purchaser, ING or
any Agent may have hereunder.

 

(a)                                  The
Seller may, at any time upon not less than five Business Days’ prior written
notice to the Collateral Agent, elect to repurchase any Designated Receivable
and the Purchased Assets relating thereto, which purchase shall take place on
the first Settlement Date to occur after the Collateral Agent’s receipt of such
notice, for the repurchase price specified in subsection (b) of this Section
8.02.

 

(b)                                 In
the case of a repurchase from the Purchasers and ING by the Seller of a
Purchased Asset pursuant to this Section 8.02, the Seller shall, on the
Settlement Date coinciding with such repurchase pay to the Collateral Agent as
a reduction of Capital and ING Capital an amount equal to the Outstanding
Balance of the related Designated Receivable. 
The proceeds of any such repurchase shall be deemed to be Collections of
such Purchased Asset received by the Seller, and the amount of each such
Collection shall be applied as provided in Section 2.04.  The repurchase of any Purchased Asset shall
not relieve the Seller of its obligation under Section 2.04(a) to pay
Yield on the Capital outstanding or ING Yield on the ING Capital with respect
to such Purchased Asset through the Payment Date relating to such Capital or
ING Capital.  Any such repurchase shall
be made without recourse or warranty, express or implied (other than a
representation and warranty that such Purchased Asset is free and clear of any
Adverse Claim created by or through the Purchasers and ING).

 

ARTICLE IX

 

AGENCY

 

SECTION 9.01.  Authorization and Action.  (a) Each Purchaser and each Managing Agent
hereby designates and appoints MBIA to act as the Collateral Agent hereunder
and under each other Facility Document, and authorizes the Collateral Agent to
take such actions as agent on its behalf and to exercise such powers as are
delegated thereto by the terms of this Receivables Purchase Agreement and the
other Facility Documents together with such powers as are reasonably incidental
thereto.  The Collateral Agent shall not
have any duties or responsibilities, except those expressly set forth herein or
in any other Facility Document, or any fiduciary relationship with any
Purchaser, any Managing Agent, ING or any Liquidity Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities on
the part of the Collateral Agent shall be read into any Facility Document or
otherwise exist for the Collateral Agent.

 

(b)                                 Each
Purchaser hereby designates and appoints the Managing Agent in its Purchaser
Group to act on such Purchaser’s behalf as Managing Agent hereunder and under
each other Facility Document, and authorizes such Managing Agent to take such
actions as agent on its behalf and to exercise such powers as are delegated to
the Managing Agents by the terms of this Receivables Purchase Agreement and the
other Facility Documents together with such powers as are reasonably incidental
thereto.  No Managing Agent shall have
any duties or responsibilities, except those expressly set forth herein or in
any other Facility Document, or any fiduciary relationship with any Purchaser
or any Liquidity Bank, and no implied covenants,

 

43

 

functions, responsibilities,
duties, obligations or liabilities on the part of any Managing Agent shall be
read into any Facility Document or otherwise exist for such Managing Agent.

 

(c)                                  In
performing its functions and duties hereunder and under the other Facility
Documents, each Agent shall act solely as agent does not assume nor shall be
deemed to have assumed any obligation or relationship of trust or agency with
or for the Seller or the Servicer.  No
Agent shall be required to take any action that exposes such Agent to personal
liability or that is contrary to any Facility Document or applicable law.  The appointment and authority of each Agent
hereunder shall terminate upon the indefeasible payment in full of all
Obligations.

 

SECTION 9.02.  Delegation of Duties.  Each Agent may execute any of its duties under
any Facility Document by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such
duties.  No Agent shall be responsible
for the negligence or misconduct of any agents or attorneys-in-fact selected by
it with reasonable care.

 

SECTION 9.03.  Exculpatory Provisions.  Neither any Agent nor any of its directors,
officers, agents or employees shall be (i) liable to any Person for any action
lawfully taken or omitted to be taken by it or them under or in connection with
any Facility Document (except for its, their or such person’s own gross
negligence or willful misconduct), (ii) responsible in any manner for any
recitals, statements, representations or warranties made by the Seller or the
Servicer contained in any Facility Document or any certificate, report,
statement or other document referred to or provided for in, or received under
or in connection with, any Facility Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any Facility
Document or any other document furnished in connection herewith or therewith,
or for any failure of the Seller or the Servicer to perform its obligations
under any Facility Document, or for the satisfaction of any condition specified
in any Facility Document, or for the perfection, priority, condition, value or
sufficiency of any collateral pledged in connection herewith, or (iii) the
receipt by ING of any communication, information or notice received by such
Agent.  No Agent shall be under any
obligation to ascertain or to inquire as to the observance or performance of
any of the agreements or covenants contained in, or conditions of, any Facility
Document, or to inspect the properties, books or records of the Seller or the
Servicer.  No Agent shall be deemed to
have knowledge of any Event of Termination, any Unmatured Event of Termination
or any ING Wind-down Event unless that Agent has received notice from Seller.

 

SECTION 9.04.  Reliance by the Agent.  Each Agent shall in all cases be entitled to
rely, and shall be fully protected in relying, upon any document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to Seller), independent
accountants and other experts selected by that Agent.  Each Agent shall in all cases be fully justified in failing or
refusing to take any action under any Facility Document unless it shall first
receive such advice or concurrence of the applicable Purchasers in its
Purchaser Group (in the case of a Managing Agent) or the Purchasers, the
Managing Agents, or ING, or any of them, as applicable (in the case of the
Collateral Agent), as such Agent deems appropriate and it shall first be
indemnified to its satisfaction by such applicable Person(s),

 

44

 

provided that unless and until
an Agent shall have received such advice, such Agent may take or refrain from
taking any action, as such Agent shall deem advisable.  Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, in accordance with a request
of the applicable Purchasers in its Purchaser Group (in the case of a Managing
Agent) or the Purchasers, the Managing Agents, or ING, or any of them, as
applicable (in the case of the Collateral Agent), and such request and any
action taken or failure to act pursuant thereto shall be binding upon such
requesting Person(s).

 

SECTION 9.05.  Non-Reliance .  Each Purchaser expressly acknowledges that
neither its Managing Agent, nor any of such Managing Agent’s officers,
directors, employees, agents, attorneys-in-fact or affiliates, has made any
representations or warranties to it and that no act by such Managing Agent
hereafter taken, including, without limitation, any review of the affairs of
the Seller or the Servicer, shall be deemed to constitute any representation or
warranty by that Managing Agent.  Each
Purchaser, each Managing Agent  and ING
each expressly acknowledges that neither the Collateral Agent, nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates, has
made any representations or warranties to it and that no act by the Collateral
Agent hereafter taken, including, without limitation, any review of the affairs
of the Seller or the Servicer, shall be deemed to constitute any representation
or warranty by the Collateral Agent. 
Each Purchaser and ING represents and warrants to the Managing Agent in
its Purchaser Group (as applicable) and to the Collateral Agent that it has and
will, independently and without reliance upon any such Agent or other Purchaser
or ING and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, operations,
property, prospects, financial and other conditions and creditworthiness of
Seller and made its own decision to enter into the Facility Documents.

 

SECTION 9.06.  Agents in their Individual Capacities.  Each Agent and its Affiliates may make loans
to, accept deposits from, issue bonds and generally engage in any kind of
business with Seller or any Affiliate of Seller as though such Agent were not
an Agent hereunder.  With respect to the Receivables Purchasers
hereunder, the Collateral Agent and each Managing Agent shall have the
same rights and powers under this Receivables Purchase Agreement in its
individual capacity as any Purchaser and may exercise the same as though it were
not the Collateral Agent or a Managing Agent, and the term “Purchaser”, where
applicable, shall include the Collateral Agent and each Managing Agent in its
individual capacity.

 

SECTION 9.07.  Reimbursement and
Indemnification.  The
Purchasers agree to reimburse and indemnify the Collateral Agent, their
respective Managing Agents and their respective officers, directors, employees,
representatives and agents, to the extent not paid or reimbursed by the Seller
(i) for any amounts for which the Collateral Agent or such Managing Agent,
acting in its capacity as Collateral Agent or a Managing Agent, is entitled to
reimbursement by the Seller hereunder and (ii) for any other expenses incurred
by the Collateral Agent or such Managing Agent, in its capacity as Collateral
Agent or a Managing Agent and acting on behalf of the relevant Purchasers, in
connection with the administration and enforcement of this Receivables Purchase
Agreement and the other Facility Documents.

 

SECTION 9.08.  Successor
Collateral Agent.  The
Collateral Agent may, upon five Business Days’ notice to the Seller, each
Managing Agent and each Purchaser, and the Collateral Agent will, upon the
direction of all of the Managing Agents, resign as Collateral

 

45

 

Agent.  If the Collateral Agent shall resign, then
the Majority Managing Agents during such five Business Day period shall appoint
from among the Purchasers and (other) Managing Agents a successor agent, provided that, unless an Event of Termination or
Wind-Down Event has occurred and is continuing, such successor agent shall have
been approved by the Seller (such approval not be to unreasonably
withheld).  If for any reason no
successor Collateral Agent is appointed by the Majority Managing Agents during
such five-day period, then the Collateral Agent shall not resign and shall
continue to act as Collateral Agent. 
After the effectiveness of any retiring Collateral Agent’s resignation
hereunder as Collateral Agent, the retiring Collateral Agent shall be
discharged from its duties and obligations hereunder and under the other
Facility Documents and the provisions of this Article
IX, and Article VIII shall
continue in effect for its benefit with respect to any actions taken or omitted
to be taken by it while it was Collateral Agent under this Receivables Purchase
Agreement and under the other Facility Documents.

 

SECTION 9.09.  Successor Managing
Agent.  A Managing Agent may,
upon five Business Days’ notice to the Seller, the Collateral Agent and the
Purchasers in such Managing Agent’s Purchaser Group, and a Managing Agent will,
upon the direction of all of the Purchasers in such Purchaser Group (other than
such Managing Agent, in its individual capacity) resign as Managing Agent.  If a Managing Agent shall resign, then such
Purchasers during such five Business Day period shall appoint a successor
agent, provided that, unless an Event of Termination or Wind-Down Event has
occurred and is continuing, such successor agent shall have been approved by the
Seller (such approval not be to unreasonably withheld).  If for any reason no successor Managing
Agent is appointed by the such Purchasers during such five Business Day period,
then effective upon the termination of such period, Purchasers shall perform
all of the duties of the resigning Managing Agent hereunder and under the other
Facility Documents.  After the
effectiveness of any retiring Managing Agent’s resignation hereunder, the
retiring Managing Agent shall be discharged from its duties and obligations
hereunder and under the other Transaction Documents and the provisions of this Article
IX and Article VIII shall continue in effect for its benefit with
respect to any actions taken or omitted to be taken by it while it was a
Managing Agent under this Receivables Purchase Agreement and under the other
Facility Documents.

 

ARTICLE X

 

ASSIGNMENTS BY TRIPLE-A AND CAPMAC

 

SECTION 10.01.  Assignment by Triple-A to Merrill.  (a) Triple-A hereby sells, transfers, sets
over, grants, assigns and otherwise conveys to Merrill, and Merrill hereby
accepts and assumes, in each case, without recourse or representation or
warranty of any kind (except as set forth below in this Section 10.01)
from Triple-A, effective as of the date hereof, a 331/3%
undivided interest (the “Assigned Portion”) in all of Triple-A’s
outstanding Capital, the Purchased Assets, Triple-A’s rights, title, interests
and obligations under the Second Amended and Restated LRPA (as defined in the
recitals to this Receivables Purchase Agreement), the Sale Agreement, the
Insurance Agreement, the Policies, the Custodial Agreement and the ING Purchase
Agreement, in each case as such rights, title, interests and obligations exist
immediately prior to the effectiveness of this Third Amended and Restated Lease
Receivables Purchase Agreement.

 

46

 

(b)                                 Concurrently
with the execution of this Receivables Purchase Agreement, Triple-A hereby
represents and warrants that the Assigned Portion to be sold hereby is owned by
Triple-A free and clear of any liens, claims or encumbrances created by or
through Triple-A (other than any liens created under that certain Amended and
Restated Liquidity Security Agreement dated as of June 19, 2003, as amended
from time to time, by and among Triple-A, CapMAC, MBIA, Banco Santander Central
Hispano, S.A., and NAB, which liens shall be released concurrently herewith as
set forth therein) and that Triple-A has the corporate power and authority to
transfer the Assigned Portion to Merrill hereunder.  Except as otherwise set forth in the foregoing sentence, or as
otherwise agreed in writing by Triple-A, Triple-A makes no representation or
warranty and assumes no responsibility with respect to, including, without
limitation, (i) any statements, representations or warranties made in or in
connection with this Receivables Purchase Agreement or any other Facility
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Receivables Purchase Agreement or any other
Facility Document or the condition or value of the Purchased Assets or the
creation, perfection or priority of any interest therein created under the
Facility Documents, or (ii) the business condition (financial or
otherwise), operations, properties or prospects of the Originator, the Seller,
the Servicer or any Affiliate of any thereof or the performance or observance
by any party of any of its obligations under any Facility Document.

 

(c)                                  Merrill
hereby (i) confirms that it has, independently and without reliance upon
the Collateral Agent or Triple-A, and based on such documentation and
information as it has deemed appropriate, made its own decision to enter into
this Receivables Purchase Agreement and (ii) agrees that it shall, independently
and without reliance upon the Collateral Agent or Triple-A and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under any of the
Facility Documents.

 

(d)                                 On
the Effective Date, in consideration for the Assigned Portion, Merrill shall
pay to Triple-A $82,458,825.00, in fully available funds, by wire transfer to
Deutsche Bank Trust Company, ABA# 021-001-033, Corporate Trust Account #
0141-9647, no later than 11:00 a.m. New York time.

 

(e)                                  Except
as otherwise provided in this Section 10.01(e), as of the Effective
Date, Merrill shall be Triple-A’s successor-in-interest with respect to, and
Triple-A shall be released from, and have no further interest in, the Assigned
Portion described above in Section 10.01(a).  Notwithstanding the foregoing, to the extent that any payments or
proceeds heretofore received by Triple-A related to the Facility Documents or
any part thereof shall be subsequently invalidated, declared to be fraudulent
or preferential, set aside and/or required to be repaid to a trustee, receiver
or any other party under any bankruptcy law, state or federal law, common law
or equitable cause then, to the extent of such payment or proceeds received,
Triple-A’s rights, title and interests in any payments or proceeds so returned
or repaid shall be revived and continue in full force and effect, as if such
payment or proceeds had never been received.

 

SECTION 10.02.  Assignment by CapMAC to MBIA.  Concurrently
with the effectiveness of this Receivables Purchase Agreement, (i) CapMAC, by
its signature hereto, hereby resigns as Collateral Agent and as “Administrative
Agent” for Triple-A under the Second Amended and Restated LRPA (as defined in
the recitals to this Receivables Purchase

 

47

 

Agreement)
and (ii) MBIA, by its signature hereto, hereby accepts appointment as, and
agrees to perform the duties of, the Collateral Agent and the Managing Agent
for Triple-A, and MBIA hereby is and shall be vested with the duties and powers
of the Collateral Agent and the Managing Agent for Triple-A as more fully
described in Article IX.  The
other parties hereto acknowledge and agree that, pursuant to the foregoing
resignation by CapMAC and acceptance by MBIA, CapMAC shall be discharged from
any further duties and obligations as Collateral Agent or as “Administrative
Agent” under the Second Amended and Restated LRPA; provided, that the foregoing
shall not impair any rights of CapMAC in respect of any surety bonds issued to
or for the benefit of Triple-A or its Liquidity Agent or any Swap Provider nor
otherwise impair any obligations of the Seller or the Servicer in respect
thereof, and the provisions of Articles VIII and IX hereunder
shall continue in effect for CapMAC’s benefit with respect to all actions taken
or omitted to be taken by it while it was acting as Collateral Agent under the
Second Amended and Restated LRPA.

 

ARTICLE XI

 

MISCELLANEOUS

 

SECTION 11.01.  Amendments, Etc.  No amendment to or waiver of any provision
of this Receivables Purchase Agreement or any other Facility Document nor
consent to any departure therefrom by the Seller, shall in any event be
effective unless the same shall be in writing and signed by (i) the Collateral
Agent, on behalf of itself and the Purchasers, and the Seller (with respect to
an amendment) or (ii) the Collateral Agent and each Managing Agent, in
each case on behalf of itself and the applicable Purchasers (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.  So long as no Insurer Default has occurred
and is continuing, (i) the Insurer shall be the controlling party on behalf of
the Managing Agents and the Purchasers for the purpose of giving any consents,
waivers, approvals, instructions, directions, declarations, and/or taking any
other action pursuant to this Section 11.01 and for purposes of giving
any instructions to the Collateral Agent with respect to any such matters or
the exercise of any rights and remedies hereunder), and (ii) the Collateral
Agent (if different from the Insurer) shall not agree to give any such
consents, waivers, approvals, instructions directions or declarations or take
such other actions without the prior written consent of the Insurer; provided,
however, that the Insurer and the Collateral Agent shall not, without the
consent of each affected Managing Agent, agree to modify or amend the
Receivables Purchase Agreement in any way which would:  (i) change the priorities of payments to be
made to such party under Section 6.11; (ii) reduce the amount of, or
delay the timing of, repayments of Capital, Yield or fees required to be made
hereunder; (iii) extend the Scheduled Termination Date; (iv) modify the
eligibility criteria herein in such a manner as would extend the maximum
maturity of any Eligible Receivable; or (iv) alter the rights of any such
Managing Agent to consent to any amendment or waiver.   In the event that an Insurer Default has occurred and is
continuing, then all rights vested in the Insurer under this Section 11.01
shall be vested in the Majority Managing Agents.  This Receivables Purchase Agreement contains a final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire agreement (together with
the exhibits hereto) among the parties hereto with respect to the subject
matter hereof, superseding all prior oral or written understandings.

 

48

 

SECTION 11.02.  Notices, Etc.   All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including telex communication and communication by facsimile copy) and mailed,
telexed, transmitted or delivered, as to each party hereto, at its address set
forth under its name on the signature pages hereof or at such other address as
shall be designated by such party in a written notice to the other parties
hereto.  All such notices and
communications shall be effective, upon receipt, or in the case of delivery by
mail, five days after being deposited in the mails, or, in the case of notice
by telex, when telexed against receipt of answer back, or in the case of notice
by facsimile copy, when verbal communication of receipt is obtained, in each
case addressed as aforesaid, except that notices and communications pursuant to
Article II shall not be effective until received.

 

SECTION 11.03.  No Waiver; Remedies.  No failure on the part of any Agent or any
Purchaser 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 11.04.  Binding Effect; Assignability.  This Receivables Purchase Agreement shall be
binding upon and inure to the benefit of the Seller, each Purchaser, each
Managing Agent, the Collateral Agent and their respective successors and
permitted assigns (which successors of the Seller shall include a trustee in
bankruptcy).  The Seller may not assign
any of its rights and obligations hereunder or any interest herein without the
prior written consent of each Managing Agent. 
Each Purchaser and the Collateral Agent may assign at any time its
rights and obligations hereunder and interests herein to any other Person
without the consent of the Seller. 
Without limiting the foregoing, the Seller hereby acknowledges that any
Purchaser may from time to time agree pursuant to any applicable Liquidity
Agreements that the applicable Liquidity Banks shall be entitled to exercise
such Purchaser’s rights under this Receivables Purchase Agreement and, in
addition, shall constitute third-party beneficiaries of this Receivables
Purchase Agreement.  In addition, the
Seller hereby acknowledges that the Purchasers have agreed pursuant to the ING
Purchase Agreement to sell an interest in the Purchased Assets to ING, subject
to the terms set forth therein and that upon the occurrence of the Collection
Date, ING shall be entitled to exercise all the rights and remedies of the
Purchasers contained herein and in the other ING Facility Documents.  The Seller hereby consents to the foregoing
and agrees to cooperate with any such Person electing to exercise any
Purchaser’s rights under this Receivables Purchase Agreement.  This Receivables Purchase Agreement shall
create and constitute the continuing obligations of the parties hereto in accordance
with its terms, and shall remain in full force and effect until such time,
after the Termination Date, as the Combined Collection Date shall occur; provided,
however, that the rights and remedies with respect to any breach of any
representation and warranty made by the Seller pursuant to Article IV and
Article VIII shall be continuing and shall survive any termination of this
Receivables Purchase Agreement.

 

SECTION 11.05.  GOVERNING LAW; WAIVER OF JURY TRIAL.  THIS RECEIVABLES PURCHASE AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE INTERESTS OF
THE COLLATERAL AGENT IN THE COLLATERAL OR REMEDIES

 

49

 

HEREUNDER OR THEREUNDER, IN RESPECT
THEREOF, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW
YORK.  THE SELLER HEREBY AGREES TO THE
JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK, AND
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL
SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO THE SELLER AT
THE ADDRESS SET FORTH ON THE SIGNATURE PAGE HEREOF AND SERVICE SO MADE SHALL BE
DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED
IN THE U.S. MAILS, POSTAGE PREPAID, OR, AT THE OPTION OF THE COLLATERAL AGENT,
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 ANY PURCHASER OR ANY AGENT ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS RECEIVABLES
PURCHASE AGREEMENT.  INSTEAD, ANY
DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A
JURY.  WITH RESPECT TO THE FOREGOING
CONSENT TO JURISDICTION, THE SELLER HEREBY WAIVES ANY OBJECTION BASED ON FORUM
NON  CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION
INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. 
NOTHING IN THIS SECTION 11.05 SHALL AFFECT THE RIGHT OF THE
COLLATERAL AGENT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
AFFECT THE RIGHT OF ANY PURCHASER OR ANY AGENT TO BRING ANY ACTION OR
PROCEEDING AGAINST THE SELLER OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION.

 

SECTION 11.06.  Costs, Expenses and Taxes.  (a)  The Seller agrees to pay on
demand all reasonable costs and expenses in connection with the preparation,
execution, delivery and administration (including periodic auditing fees as
provided for in Section 5.01(c) and any requested amendments, waivers or
consents) of this Receivables Purchase Agreement, the ING Purchase Agreement
and the other documents to be delivered hereunder, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Purchasers, the Agents and ING with respect thereto and with respect to
advising the Purchasers, the Agents and ING as to their respective rights and
remedies under this Receivables Purchase Agreement or the ING Purchase
Agreement, and the other agreements executed pursuant hereto and all costs and
expenses, if any (including reasonable counsel fees and expenses), in
connection with the enforcement of this Receivables Purchase Agreement, the ING
Purchase Agreement and the other agreements and documents to be delivered
hereunder.

 

(b)                                 In
addition, the Seller shall pay any and all stamp, sales, excise and other taxes
and fees payable or determined to be payable in connection with the execution,
delivery, filing and recording of this Receivables Purchase Agreement, the ING
Purchase Agreement or the other Facility Documents, and agrees to indemnify
each Purchaser, each Agent, ING and

 

50

 

their respective assignees
against any liabilities with respect to or resulting from any delay in paying
or omission to pay such taxes and fees.

 

SECTION 11.07.  Execution in Counterparts; Severability.  This Receivables Purchase Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement.  In case any provision in or
obligation under this Receivables Purchase Agreement shall be invalid, illegal
or unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations, or of such provision or obligation
in any other jurisdiction, shall not in any way be affected or impaired
thereby.

 

SECTION 11.08.  No Bankruptcy Petition Against Conduit
Purchasers.  Each of ING and each
party hereto covenants and agrees that it will not institute against any
Conduit Purchaser, or join any other Person in instituting against any Conduit
Purchaser, any Insolvency Proceeding under bankruptcy law or under any similar
federal or state law.

 

SECTION 11.09.  Subordination.  Notwithstanding any other provisions, all
payments made to ING hereunder or under any other ING Facility Documents shall
be subject to Section 5.01 of the ING Purchase Agreement, and ING’s
rights to take any Enforcement Action shall be limited to as set forth in Section
5.02 of the ING Purchase Agreement.

 

SECTION 11.10.  Reference to and Effect on Second Amended
and Restated LRPA.  Each of the
parties hereto ratifies the sales, conveyances, payments, representations,
warranties, covenants and indemnities made in the Second Amended and Restated
LRPA and agrees that such agreement is, as of the date hereof, in full force
and effect.  From and after the
Effective Date, (i) the terms and provisions of this Receivables Purchase
Agreement shall amend and supersede the terms and provisions of the Second
Amended and Restated LRPA in their entirety, (ii) the continuing rights,
remedies and obligations of the parties with respect to any Receivables and
other Purchased Assets acquired under the Second Amended and Restated LRPA
shall be governed by the terms and provisions of this Receivables Purchase
Agreement to the same extent as if such Purchased Assets had been conveyed
under this Receivables Purchase Agreement, and (iii) all references in any
other Facility Documents to the Second Amended and Restated LRPA or Appendix A
thereto shall mean and be a reference to this Receivables Purchase Agreement
and Appendix A hereto.  It is expressly
understood and agreed that the execution and delivery of this Receivables
Purchase Agreement is not intended to be, and shall not be construed as, a
novation of the Second Amended and Restated LRPA nor of any liens granted or
indebtedness incurred thereunder.

 

51

 

IN WITNESS WHEREOF, 
the parties below have caused this Receivables Purchase Agreement to be
duly executed by their duly authorized officers and delivered as of the day and
year first above written.

 

 

	
   

  	
  HPSC BRAVO FUNDING,
  LLC, as Seller

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen
  K Ballou

  	
   

  
	
   

  	
   

  	
  Title:  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  Sixty State Street

  
	
   

  	
   

  	
  35th Floor

  
	
   

  	
   

  	
  Boston, MA  02109-1803

  
	
   

  	
   

  	
  Attn:  President

  
	
   

  	
  Telephone:

  	
  (617) 720-7251

  
	
   

  	
  Telecopy:

  	
  (617) 720-7272

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HPSC, INC., as Servicer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John W.
  Everets

  	
   

  
	
   

  	
   

  	
  Title:  Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  Sixty State Street

  
	
   

  	
   

  	
  35th Floor

  
	
   

  	
   

  	
  Boston, MA  02109-1803

  
	
   

  	
   

  	
  Attn:  Vice President, Finance

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Telecopy:

  	
   

  
							

 

 

Signature Page to Third Amended and Restated

Lease Receivables Purchase Agreement

 

 

	
   

  	
  TRIPLE-A ONE FUNDING
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  MBIA Insurance
  Corporation, its Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Glenn H. Roder

  	
   

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  113 King Street

  
	
   

  	
   

  	
  Armonk, New York  10504

  
	
   

  	
   

  	
  Attn:  Head of Exposure Management

  
	
   

  	
  Telephone:

  	
  (914) 273-4545

  
	
   

  	
  Telecopy:

  	
  (914) 765-3810

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MBIA INSURANCE
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Glenn H. Roder

  	
   

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  113 King Street

  
	
   

  	
   

  	
  Armonk, New York  10504

  
	
   

  	
   

  	
  Attn:  Head of Exposure Management

  
	
   

  	
  Telephone:

  	
  (914) 273-4545

  
	
   

  	
  Telecopy:

  	
  (914) 765-3810

  
	
   

  	
   

  	
   

  
	
   

  	
  CAPITAL MARKETS
  ASSURANCE CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Glenn H. Roder

  	
   

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  113 King Street

  
	
   

  	
   

  	
  Armonk, New York  10504

  
	
   

  	
   

  	
  Attn:  Head of Exposure Management

  
	
   

  	
  Telephone:

  	
  (914) 273-4545

  
	
   

  	
  Telecopy:

  	
  (914) 765-3810

  
							

 

 

	
   

  	
  MERRILL LYNCH
  COMMERCIAL FINANCE CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joshua A. Green

  	
   

  
	
   

  	
   

  	
  Title:  Director

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  Merrill Lynch & Co,

  4WFCN, 10th Floor

  New York, NY 10080

  
	
   

  	
   

  	
  Attn:  Grant Jones

  
	
   

  	
   

  	
   

  
	
   

  	
  Telephone:

  	
  (212) 449-2695

  
	
   

  	
  Telecopy:

  	
  (212) 449-9015

  
							

 

 

APPENDIX A

to

RECEIVABLES PURCHASE AGREEMENT

and 

ING PURCHASE AGREEMENT

 

 

DEFINITIONS LIST

 

 

DEFINITIONS LIST

TO

RECEIVABLES PURCHASE AGREEMENT

AND

ING PURCHASE AGREEMENT

 

“180 Day Delinquent Receivable” means an HPSC
Portfolio Receivable (i) as to which any Scheduled Contract Payment or
part thereof, is unpaid more than 180 days from its original due date or (ii) which,
consistent with the Credit and Collection Policy, has been or should be
classified as delinquent by the Originator.

 

 “Advance”
means an “Advance” funded to Triple-A under the Liquidity Agreement.

 

“Adverse Claim” means a lien, security interest,
charge, encumbrance or other right or claim of any Person other than Permitted
Encumbrances.

 

“Affiliate” means, with respect to any Person,
a Person:  (i) that directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with, such Person; (ii) that beneficially owns or holds
5% or more of any class of the voting stock (or, in the case of a Person that
is not a corporation, 5% or more of the equity interest) of such Person; or
(iii) 5% or more of the voting stock (or, in the case of a Person that is not a
corporation, 5% or more of the equity interest) of which is beneficially owned
or held, directly or indirectly, by such Person.  The term “control” means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting stock or an equity interest,
by contract, or otherwise.

 

“Affiliated Obligor” means any Obligor which is
an Affiliate of another Obligor.

 

“Agent” means the Collateral Agent and each
Managing Agent.

 

“Aggregate Reserves” means, on any day, an
amount equal to the Discounted Eligible Receivables Balance times the greatest
of (i) 11%, (ii) the Default Reserve Ratio as computed in the most recent
Settlement Report and (iii) the Excess Concentration Reserve Ratio as computed
on the most recent Settlement Date; provided, that the Aggregate
Reserves shall not be less than the greatest of (a) $1,000,000, (b) the sum of
the Outstanding Balances of all Receivables owed by the five (5) Obligors who
owe the largest Outstanding Balances of Receivables owed by any single Obligor,
and (c) twenty-five percent (25%) of the highest dollar amount of Aggregate
Reserves as of any previous time.

 

“Back-up Servicer” means BNY Asset Solutions
LLC, a Delaware limited liability company, its successors and assigns, and any
successor Back-up Servicer.

 

“Back-Up Servicing Agreement” has the meaning
set forth in Section 5.01(q) of the Receivables Purchase Agreement.

 

 

“Back-up Servicing Fee” means the fee payable
to the Back-Up Servicer under the ING Purchase Agreement or Back-Up Servicing
Agreement, as applicable.

 

“Bankruptcy Code” means Title 11 of the United
States Code (11 U.S.C. Section 101 et  seq.), as amended from time
to time, or any successor statute.

 

“Base Rate” means a fluctuating interest rate
per annum equal to the higher of (i) the rate of interest published in the Wall
Street Journal as the prime rate, or, in the event that no such rate is
published, the rate of interest announced publicly by Triple-A’s Liquidity
Agent in New York, New York, as its prime or reference rate, whether or not
such rate is the lowest rate offered by such institution to its corporate
borrowers and (ii) 1/2 of one percent per annum above the Federal Funds Rate.

 

“Base Rate Tranche” means any portion of
Capital which is not a CP Tranche or a Eurodollar Rate Tranche.

 

“Benefit Plan” means a defined benefit plan as
defined in Section 3(35) of ERISA (other than a Multiemployer Plan) in
respect of which the Originator or any ERISA Affiliate is, or at any time
within the immediately preceding six (6) years was, an “employer” as defined in
Section 3(5) of ERISA.

 

“Business Day” means any day other than a
Saturday, Sunday or public holiday or the equivalent for banks in New York City
or Boston, Massachusetts; provided that, when used in connection with
any Eurodollar Rate Tranche or other matters concerning the Eurodollar Rate,
the term “Business Day” means any such day on which dealings are carried on in
the London interbank market and on which banks are open for business in London,
England.

 

“Buyer”, when used in the Sale Agreement or in
these definitions, means HPSC Bravo Funding, LLC, a Delaware limited liability
company.

 

“Capital” means the original amount paid to the
Seller for each Receivables Purchase under the Receivables Purchase Agreement
pursuant to Sections 2.01 and 2.02, reduced from time to time by
Collections received and distributed on account of such Capital pursuant to Section
2.04 hereof.  If any Purchaser or
any Agent is required (or believes in good faith that it is required) by law to
repay (as a preference or otherwise) to any Obligor, the Originator, the
Seller, a Lock-Box Bank, a trustee for any Obligor, the Originator or the
Seller, a court or any other Person, any amount that previously caused a
reduction in Capital, then Capital shall be reinstated by the amount of such
repayment and the Seller will indemnify and hold such Purchaser or such Agent
harmless for the amount of such repayment, interest thereon required (or
believed in good faith by such Purchaser or such Agent to be required) to be
paid in connection therewith and all losses, liabilities, costs and expenses
related thereto (including but not limited to reasonable attorneys’ fees and
expenses).

 

“Capital Limit” means, on any day, (A) the
Discounted Eligible Receivables Balance on such day minus (B) the
Aggregate Reserves then in effect.

 

“CapMAC” means Capital Markets Assurance
Corporation, a New York stock insurance company.

 

2

 

“Carrying Costs” means, at any time, the
aggregate amount of (i) all accrued and unpaid Yield, Premium, fees and other
expenses owing by the Seller to the Purchasers, the Managing Agents, the
Collateral Agent, the Dealers, the Insurer, the Swap Providers, the Servicer
and the Back-up Servicer (including, without limitation, all fees owed under
the Fee Letters, collateral audit fees and expenses, the Servicing Fee, the CP
Dealer Fees and the premiums with respect to the Policies) plus (ii) all
ordinary course operating expenses incurred by the Seller during such calendar
month (including rent, salaries, professional fees and expenses incurred in
connection therewith); provided, that the term Carrying Costs shall not
include any Swap Breakage Amounts or Default Premium.

 

“Carrying Costs Percentage” means a percentage,
calculated as of the last day of each month, equal to the sum of (x) the
Servicing Fee Rate then in effect plus (y) the sum of the per annum rates used
to calculate the Premium, Back-Up Servicing Fee (assuming a fee of not less
than 0.07%) and the “Administration Fee” payable under the MBIA Fee Letter.

 

“Change of Control” means the occurrence of a
“Change of Control” under and as defined in the Indenture or the FootHill
Credit Agreement.

 

“Collateral Agent” means MBIA, in its capacity
as Collateral Agent pursuant to the Receivables Purchase Agreement, and any
successor Collateral Agent.

 

“Collection Account” means that account defined
as such in Section 6.11 of the Receivables Purchase Agreement.

 

“Collection Account Bank” means the bank
maintaining the Collection Account in accordance with Section 6.11 of
the Receivables Purchase Agreement.

 

“Collection Date” means the date following the
Termination Date on which (i) the aggregate outstanding Capital has been
reduced to zero, (ii) each Purchaser, each Managing Agent, the Insurer and the
Collateral Agent has received all accrued Yield, fees and other amounts payable
under the Receivables Purchase Agreement and the other Facility Documents and
(iii) the Policies and the Swap Policies have been discharged (other than
through payment thereunder).

 

“Collections” means, with respect to any
Purchased Asset or other Receivable, as applicable, all cash collections and
other cash proceeds of such Purchased Asset or Receivable, including, without
limitation, all cash proceeds of Related Security related thereto, and in the
case of any Purchased Assets, all cash collections of any Purchased Receivables
included therein, and, in either such case, any Collection of such Purchased
Asset or Receivable deemed to have been received pursuant to Section 2.04
of the Receivables Purchase Agreement (it being understood that the Seller
shall pay, or shall cause the Originator to pay, all such deemed Collection
amounts to the Collateral Agent on behalf of the Purchasers by depositing the
amount thereof into a Lock-Box Account).

 

“Combined Capital” means, on any given date,
the aggregate of Capital and ING Capital.

 

3

 

“Combined Capital Limit” means, on any given
date, the sum of the Capital Limit and the ING Capital Limit.

 

“Combined Collection Date” means the date
following the Termination Date on which (i) the aggregate outstanding Combined
Capital has been reduced to zero, (ii) each of the Purchasers, the Managing
Agents, the Insurer and the Collateral Agent has received all accrued Yield,
fees and other amounts payable under the Receivables Purchase Agreement and the
other Facility Documents, (iii) the Policies and the Swap Policies have been
discharged (other than through payment thereunder), and (iv) ING has received
all accrued ING Yield, fees and other amounts payable under the ING Purchase Agreement
and the ING Fee Letter.

 

 “Combined
Facility Limit” means, as of any date of determination, the sum of the
Facility Limit and the ING Facility Limit.

 

 “Commercial
Paper” means the short-term promissory notes of any Conduit Purchaser
denominated in dollars, issued by such Conduit Purchaser in connection with the
transactions contemplated by the Facility Documents, including any portion of
such short-term promissory notes that are identified on the books and records
of such Conduit Purchaser as issued in respect of the transactions contemplated
by the Facility Documents.

 

“Conduit Purchaser”
shall mean each of Triple-A and any other Purchaser from time to time that is a
special-purpose receivables investment company which obtains funding from the
issuance of asset-backed commercial paper or similar promissory notes.

 

“Contract” means each Lease, Finance Agreement,
Leasehold Improvement Note, Practice Finance Loan, Non-Medical Contract,
Working Capital Loan or other agreement or instrument which is purported to be
transferred to the Buyer under the Sale Agreement, whether by purchase or
contribution to the Buyer’s capital, as identified on Exhibit A of the
Sale Agreement as such exhibit may be supplemented from time to time in
connection with any subsequent Purchase as described in Section 2.02(b)
of the Sale Agreement, and including, without limitation, each such Lease,
Finance Agreement, Leasehold Improvement Note, Practice Finance Loan,
Non-Medical Contract, Working Capital Loan or other agreement or instrument
which was purported to be transferred to the Buyer under a predecessor version
of the Sale Agreement to the extent not previously sold or otherwise
transferred by Buyer.

 

“Contract File” means, with respect to each
Contract, the following documents:

 

(i)                                     The executed original counterpart of each
Contract that constitutes either “chattel paper” or an “instrument” under 9-102
of the UCC;

 

(ii)                                  Any evidence of insurance and any other
documents evidencing or related to any insurance policy maintained by the
related Obligor pursuant to the Contract that covers physical damage to the
Equipment;

 

(iii)                               If the related Contract is a Lease, copies of such
documents, if any, indicating that the Equipment was, as of the date such
Contract arose, owned by the Originator and kept on file by the Originator in
accordance with its customary procedures relating to such type of Contract,
such Obligor and such item of Equipment; and

 

4

 

(iv)                               Copies (if available) of UCC financing
statements filed by the Originator with respect to the related Equipment or, if
no such copies are available, other documentary evidence confirming the filing
thereof.

 

“Contract Payment” means each periodic
installment payable by an Obligor under a Contract for rent, principal and/or
interest, excluding all supplemental or additional payments required by the
terms of such Contract with respect to sales or other taxes, insurance,
maintenance, ancillary products and services and other specific charges.

 

“CP Dealer Fee” means, on any day, the fees
payable to the Dealers in respect of any Commercial Paper.

 

“CP Disruption” means the inability of any
Conduit Purchaser, at any time, whether as a result of a prohibition or any
other event or circumstance whatsoever, to raise funds through the issuance of
its commercial paper notes (whether or not constituting Commercial Paper as
defined above) in the United States commercial paper market.

 

“CP Tranche” means a portion of Capital which
is funded by a Conduit Purchaser and which bears interest at a Yield Rate
described in clause (a) of the definition thereof.

 

“Credit and Collection Policy” means those
credit and collection policies and practices relating to the Contracts and the
Receivables described in Exhibit D of the Sale Agreement, as modified in
compliance with Section 5.03(c).

 

“Custodial Agreement” means that certain
Custodial Agreement, dated as of June 25, 2002, as the same has been amended
and as the same may be amended, restated, supplemented, or otherwise modified
from time to time, among Triple-A, the Originator, the Seller, the Custodian
and the Collateral Agent.

 

“Custodian” means Iron Mountain Information
Management, Inc., in its capacity as “Custodian” under the Custodial Agreement,
or any successor thereto under the Custodial Agreement as approved by the
Collateral Agent.

 

“Dealer” means any dealer or placement agent in
respect of Commercial Paper.

 

“Default Premium” means the incremental premium
owed to MBIA under the MBIA Fee Letter solely as a result of an Event of
Termination or Wind-Down Event.

 

“Default Ratio” means the ratio (expressed as a
percentage), computed as of the last day of each month by dividing (i) two times
the aggregate Outstanding Balance of all Purchased Receivables that became
Defaulted Receivables during the six-month period then ending by (ii) the
average aggregate Outstanding Balances of all Purchased Receivables during such
six-month period.

 

“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

  	
   

  	
  =

  	
   

  	
  3 X ADR X WRT, where

  

 

5

 

	
  DRR

  	
   

  	
  =

  	
   

  	
  the Default Reserve Ratio;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ADR

  	
   

  	
  =

  	
   

  	
  the six-month rolling average of the
  Default Ratios for the six most recent calendar months (including the month
  then ending); and

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  WRT

  	
   

  	
  =

  	
   

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

  

 

“Defaulted Receivable” means a Purchased
Receivable or HPSC Portfolio Receivable at any time:  (i) as to which any Scheduled Contract Payment or part
thereof is unpaid more than 180 days from its original due date, (ii) as
to which the Obligor thereof has taken any action, or suffered any event to
occur, of the type described in the definition of Insolvency Event or
(iii) which, consistent with the Credit and Collection Policy, has been or
should be written off the Seller’s books as uncollectible.

 

“Deferred Purchase Price” means, on any date,
the excess if any of (i) the aggregate Outstanding Balance of all Purchased
Receivables over (ii) the sum of aggregate outstanding Capital, accrued and
unpaid Yield thereon, the ING Obligations, and any other Carrying Costs or
other amounts owed hereunder or paid under the Receivables Purchase Agreement
on behalf of the Seller including the pro-rata portion of any fees payable
under any Fee Letter and allocable to the Receivables Purchase Agreement, the
Collateral Agent or any Liquidity Bank.

 

“Delinquency Ratio” means the ratio (expressed
as a percentage), computed as of the last day of each month, by dividing (i)
the aggregate Outstanding Balance of all Purchased Receivables which became
Delinquent Receivables during the three-month period then ending, by (ii) the sum
of the aggregate Outstanding Balances of all Purchased Receivables as of each
of the last days of the fifth, fourth and third preceding calendar months (so
that, for example, the Delinquency Ratio calculated as of June 30th would have
a denominator equal to the sum of the Outstanding Balances of all Purchased
Receivables as of January 31st, February 28th, and March 31st).

 

“Delinquent Receivable” means a Purchased
Receivable or HPSC Portfolio Receivable that is not a Defaulted Receivable and
(i) as to which any Scheduled Contract Payment or part thereof, is unpaid
more than 90 days from its original due date or (ii) which, consistent
with the Credit and Collection Policy, has been or should be classified as
delinquent by the Originator.

 

“Designated Obligor” means, at any time,
any Obligor of the Originator whom the Collateral Agent has, following three
Business Days’ notice, advised the Originator that such Obligor shall be
considered a Designated Obligor.

 

“Designated Receivable” means a Purchased
Receivable identified by the Seller to the Managing Agents as a “Designated
Receivable” pursuant to Section 2.02 of the Receivables Purchase Agreement.

 

6

 

“Designated Termination Date” means the date of
the declaration or automatic occurrence of the Termination Date pursuant to Section
7.01 of the Sale Agreement or Section 7.02 of the Receivables
Purchase Agreement.

 

“Dilution Factors” means with respect to
the Purchased Receivables, any credits, rebates, freight charges, cash
discounts, volume discounts, cooperative advertising expenses, royalty
payments, warranties, cost of parts required to be maintained by agreement
(whether express or implied), allowances, disputes, chargebacks, returned or
repossessed goods, inventory transfers, allowances for early payments and other
allowances that are made or coordinated with the Originator’s usual practices.

 

“Discount Rate” means (i) with respect to any
Lease or any Finance Agreement, the discount rate used to calculate the
aggregate Discounted Value of the Scheduled Contract Payments payable under the
related Contract as of the last day of the month immediately preceding the
month in which such Receivable was acquired from the Originator and (ii) with
respect to any other Contract, subject to the following sentence, the interest
rate set forth in such Contract.  The
Discount Rate for such Leases or Finance Agreements transferred on any date
shall be a rate equal to the sum of (i) the interest rate per annum quoted to
the Seller by the applicable Swap Provider as the rate at which such Swap
Provider is willing to enter into an Interest Rate Hedge pursuant to which the
Seller will pay an interest rate calculated in conjunction with an Interest
Rate Hedge amortization schedule prepared by the Seller and which complies with
Section 5.01(n) of the Receivables Purchase Agreement, and in return
shall receive a floating interest rate (calculated against the same principal
amount) approximately equal to the Eurodollar Rate, plus (ii) 0.75% per
annum plus (iii) the Carrying Costs Percentage at such time; provided,
that the Seller may, at its option, with respect to the Receivables transferred
on any Settlement Date, designate a rate which is higher than the rates
calculated above to be the “Discount Rate” for such Receivables.

 

“Discounted Eligible Receivables Balance”
means, as of any date of determination, the aggregate of the Outstanding
Balances for all Eligible Receivables; provided, that (i) from the
Effective Date until the July 2003 Settlement Date, the Discounted Eligible
Receivables Balance shall be calculated using a Discount Rate which is 0.54%
less than the Discount Rate as calculated in the definition thereof; (ii) from
the July 2003 Settlement Date until the August 2003 Settlement Date, the
Discounted Eligible Receivables Balance shall be calculated using a Discount
Rate which is 0.36% less than the Discount Rate as calculated in the definition
thereof and (iii) from the August 2003 Settlement Date until the September 2003
Settlement Date, the Discounted Eligible Receivables Balance shall be
calculated using a Discount Rate which is 0.18% less than the Discount Rate as
calculated in the definition thereof. 
Commencing on the September 2003 Settlement Date and at all times hereafter,
the Discounted Eligible Receivables Balance shall be calculated using a
Discount Rate as calculated in the definition thereof without giving any
further effect to the proviso contained in the immediately preceding sentence.

 

“Discounted Receivables Balance” means, as of
any date of determination, the aggregate of the Outstanding Balances for all
Purchased Receivables.

 

7

 

“Discounted Value” means, (i) with respect to
any Lease or any Finance Agreement pursuant to which the Originator finances an
Obligor’s purchase of Equipment, the present value of the aggregate amount of
the remaining Scheduled Contract Payments under the Contract relating thereto,
with such aggregate amount discounted to present value using the Discount Rate
for such Scheduled Contract Payments and a payment schedule commencing with the
first day of the month in which the Discounted Value is calculated and assuming
that each Scheduled Contract Payment is paid on the last Business Day of the
month in which such Scheduled Contract Payment is due; it being understood that
the Discounted Value for that portion of any Receivable which consists of the
right to receive payments or charges excluded from the definition of Contract
Payment or from the definition of Scheduled Payment Contract or which
constitute the price for a purchase option shall be zero; and (ii) with respect
to any other Contract, as of any date of determination, the outstanding
principal amount thereof.

 

“DOL” means the United States Department of
Labor and any successor department or agency.

 

“Effective Date” means June 20, 2003.

 

“Eligible Obligor” means, at any time, an
Obligor who is a licensed professional dental, veterinary or medical
practitioner and who (i) is not an Affiliate of the Originator; (ii) is not the
subject of any Insolvency Proceeding; (iii) is not a Designated Obligor; (iv)
is a United States resident; (v) is not the United States of America nor any
state, or other local governmental agency, or any department, agency or
instrumentality thereof; and (vi) is not an Obligor of any Defaulted
Receivable; provided, however, that an Obligor of a Non-Medical
Contract that otherwise constitutes an Eligible Receivable shall not be
required to be a licensed professional dental, veterinary or medical
practitioner.

 

“Eligible Receivable” means, at any time,
a Purchased Receivable:

 

(i)                                     the Obligor of which is an Eligible
Obligor;

 

(ii)                                  which is not a Delinquent Receivable or a
Defaulted Receivable;

 

(iii)                               which (a) if evidenced by a Practice
Finance Loan, is required pursuant to the terms thereof to be paid in full
within 84 months of the original commencement date of such Loan (or such longer
period as may be consented to by the Collateral Agent and the Majority Managing
Agents), and (b) if evidenced by a Contract other than a Practice Finance Loan,
is required pursuant to the terms thereof to be paid in full within 72 months
of the original commencement date thereof (or such longer period as may be
consented to by the Collateral Agent and the Majority Managing Agents); provided,
however, that an aggregate amount of 30% of such Contracts that are not
Practice Finance Loans and are underlying Purchased Receivables (based upon the
Outstanding Balances of the Receivables related to such Contracts as a
percentage of the Discounted Eligible Receivables Balance) may be allowed
pursuant to the terms thereof to be paid in full within 84 months of the
original commencement date thereof so long as each such Contract satisfies each
other requirement for an Eligible Receivable as set forth herein;

 

8

 

(iv)                              which, if arising under a Lease, or a
Finance Agreement pursuant to which the Originator finances an Obligor’s
purchase of Equipment, arises under such terms and conditions that the
Equipment related thereto has been installed and accepted by the related
Obligor;

 

(v)                                 the original Outstanding Balance of
which, when added to the Outstanding Balance of all other Eligible Receivables
owing by the same Obligor at such time, does not exceed the lesser of (i)
$1,000,000 and (ii) 1.5% of the Discounted Eligible Receivables Balance at such
time;

 

(vi)                              the original Outstanding Balance of
which, if the related Obligor is one of the five largest Obligors (as
determined by the aggregate Outstanding Balance of all Receivables owing by
each Obligor at the date of determination), when added to the Outstanding
Balance of all other Eligible Receivables owing by such Obligor and each of the
four other largest Obligors at such time, does not exceed the lesser of (i)
$5,000,000 and (ii) 2.5% of the Discounted Eligible Receivables Balance at such
time;

 

(vii)                           which is either an “account” or “chattel
paper” or an “instrument” (in each case as defined in Section 9-102 of the UCC)
as in effect in any jurisdiction which has adopted Article 9 of the UCC and, if
the Contract is chattel paper, then there is only one counterpart of the
Contract that constitutes “chattel paper” for purposes of Section 9-330 of the
UCC which counterpart is included in the related Contract File, and, if the
Contract constitutes an “instrument”, the sole original thereof is included in
the related Contract File;

 

(viii)                        which is denominated and payable only in
United States dollars in the United States;

 

(ix)                                which arises under a Contract which has
been duly authorized and which is in full force and effect and constitutes the
legal, valid and binding obligation of the Obligor enforceable against such
Obligor in accordance with its terms and is not subject (at the time each
determination of eligibility is made hereunder) to any dispute, offset or
counterclaim whatsoever;

 

(x)                                   which, together with the Contract related
thereto, does not contravene in any material respect any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and regulations
relating to truth in lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy) and with
respect to which no party to the Contract related thereto is in violation of
any such law, rule or regulation applicable to such Contract in any material
respect;

 

(xi)                                which, has not been compromised,
adjusted, rewritten or otherwise modified (including by extension of time for
payment or the granting of any discounts, allowances or credits) for any reason
unless such modification constitutes a Permitted Extension;

 

9

 

(xii)                             which (A) satisfies all applicable
requirements of the Credit and Collection Policy and (B) which is freely
assignable and arises under a Contract which is also freely assignable;

 

(xiii)                          with respect to which, from and after the
Receivables Purchase thereof, either the Collateral Agent has or the Purchasers
have a first priority interest therein, free and clear of any Adverse Claim;

 

(xiv)                         which arises under a Contract, none of
the parties to which have done or failed to do anything which would or might
permit any other party thereto to terminate such Contract or to suspend or
reduce any payments or obligations due or to become due thereunder;

 

(xv)                            which does not constitute a “consumer
lease” under the UCC;

 

(xvi)                         which, if it arises under a Lease, such
Lease (a) contains a “hell or high water” provision and (b) requires the
Obligor to (1) maintain the Equipment subject to such lease in good working
order, (2) bear the costs of operating such Equipment, including all taxes and
maintenance and (3) maintain or make payments to the Originator to maintain insurance
against loss or damage to such Equipment under an insurance policy which names
the Buyer or the Originator as loss payee and which interest as loss payee has
been transferred to the Buyer pursuant to the Sale Agreement and to the
Purchasers or the Collateral Agent on behalf of the Purchasers pursuant to the
Receivables Purchase Agreement;

 

(xvii)                      which arises under a Contract, no portion
of which has been rejected or terminated, or is subject to rejection, early
termination or non-assumption, prior to the original term of such Contract
except, in the case of a Practice Finance Loan, pursuant to a provision therein
requiring payment of a Termination Amount upon any such rejection, early
termination or non-assumption;

 

(xviii)                   which arises under a Contract that requires payments
to be made on a regular monthly basis and which payments, in the case of any
Lease, do not represent the payment of interim rents;

 

(xix)                           which arises under a Contract that
requires the Obligor to be in possession of any Equipment subject thereto and
does not permit the subleasing of such Equipment to any other Person;

 

(xx)                              no portion of which is payable on account
of sales taxes;

 

(xxi)                           as to which the Collateral Agent has not
notified the Originator that the Collateral Agent has determined, in its
reasonable discretion, that such Receivable (or class of Receivables) is not
acceptable for eligibility hereunder (which notice shall state the reason(s)
the Collateral Agent has elected to make such determination);

 

(xxii)                        which was originated or acquired by the
Originator in the ordinary course of its business;

 

10

 

(xxiii)                     the Outstanding Balance of which, (A) if arising under
a Leasehold Improvement Note, when added to the Outstanding Balance of all
Eligible Receivables arising under Leasehold Improvement Notes, does not exceed
15% of the Discounted Eligible Receivables Balance, (B) if arising under a
Working Capital Loan, when added to the Outstanding Balance of all Eligible
Receivables arising under Working Capital Loans, does not exceed 15% of the
Discounted Eligible Receivables Balance, (C) if arising under either a
Leasehold Improvement Note or a Working Capital Loan, when added to the
Outstanding Balance of all Eligible Receivables arising under both Leasehold
Improvement Notes and Working Capital Loans, does not exceed 25% of the
Discounted Eligible Receivables Balance, (D) if arising under a Practice
Finance Loan, when added to the Outstanding Balance of all Eligible Receivables
arising under Practice Finance Loans, does not exceed 25% of the Discounted
Eligible Receivables Balance, and (E) if arising under a Non-Medical Contract,
when added to the Outstanding Balance of all Eligible Receivables arising under
Non-Medical Contracts, does not exceed 5% of the Discounted Eligible
Receivables Balance;

 

(xxiv)                    the Contract for which is either (A) a Lease in
substantially the same form of Exhibit K-1 to the Sale Agreement, (B) a
Finance Agreement in substantially the same form of Exhibit K-2 thereto,
(C) a Leasehold Improvement Note in substantially the same form of Exhibit
K-3 thereto, (D) a Practice Finance Loan in substantially the same form of Exhibit
K-4 thereto, underwritten in accordance with Practice Finance Loan
underwriting criteria, as attached to Exhibit K-4, (E) a Non-Medical
Contract in substantially the form of Exhibit K-1, Exhibit K-2, Exhibit
K-3 or Exhibit K-4 to the Sale Agreement, or (F) a Working Capital
Loan, the Outstanding Balance of which, when added to the Outstanding Balance
of all Working Capital Loans owed by such Obligor, does not exceed $150,000;

 

(xxv)                       except in the case of any Working Capital
Loan, the Contract for which provides for the lease of, or creation of a first
priority perfected security interest in, the Equipment financed thereby, and
with respect to which the Originator has filed and maintained the effectiveness
of UCC financing statements against the Obligor in order to perfect any
security interest granted under such Contract in the related Equipment, provided
that the Originator shall not be required to file financing statements or to
maintain the effectiveness of previously filed financing statements with
respect to any Eligible Receivables the Outstanding Balance of which is less
than $5,000, 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; provided that such seven
and one-half percent limitation shall not apply from and after the Termination
Date unless and to the extent that the Collateral Agent specifically requests
otherwise;

 

(xxvi)                    the Contract for which was originated no later than
the date which is one month prior to the Purchase thereof by the Buyer and for
which the Obligor has made at least one Scheduled Contract Payment in full and
in a timely manner;

 

(xxvii)                 the Obligor of which has been notified of the Buyer’s
interest as required under the Sale Agreement;

 

11

 

(xxviii)              with respect to which the Contract File has been
delivered to the Custodian as contemplated under the Custodial Agreement;

 

(xxix)                      the Obligors of which are either (A)
licensed dental, medical or veterinary professionals or (B) corporations or
similar entities engaged in a dental, medical or veterinary practice, and which
are licensed and/or qualified, as appropriate, in each jurisdiction in which
the nature of their practices would require such license or qualification; provided,
however, that an Obligor of a Receivable constituting a Non-Medical
Contract shall not be required to satisfy the conditions set forth in the
preceding clauses (A) and (B);

 

(xxx)                         with respect to which the other
representations and warranties contained in clauses (i) (ii) (iv) and (v) of Section
4.01(r) of the Sale Agreement are true and correct in all material respects
and with respect to which all other representations and warranties contained in
such Section 4.01(r) are true and correct in all material respects as of
the date or dates therein made, in each such case (except for the
representations and warranties which specifically relate to the Cut-Off Date),
as if such representations and warranties were made with respect to the
Purchased Receivables only; provided, however, that an Obligor of
a Non-Medical Contract which otherwise constitutes an Eligible Receivable shall
not be required to be a licensed professional dental or medical practitioner;

 

(xxxi)                      the Equipment relating to which is
located in the United States and is not a motor vehicle or similar type of
equipment which requires titling in the name of the owner or a secured party in
order to perfect the interest of any such party;

 

(xxxii)                   the Contract for which was not executed or marketed by
American Commercial Finance Corporation;

 

(xxxiii)                 which arises under a Contract pursuant to the terms
of which, in the event of a default by the Obligor, the Originator or its
assigns shall have the right to demand payment in full of the Termination Amount
from such Obligor;

 

(xxxiv)                the Contract for which contains customary and
enforceable provisions adequate for realization on the Equipment subject
thereto in the event of default by the Obligor;

 

(xxxv)                  the Contract for which is neither subject to guaranty
by the Originator or any of its Affiliates nor a Contract for which the
Originator has established a specific credit reserve at the time of transfer
under the Sale Agreement;

 

(xxxvi)               the Equipment related to which is not the subject of
loss, theft, damage beyond repair or governmental seizure at time of sale under
the Sale Agreement;

 

(xxxvii)            the Contract for which requires the Obligor to repair
or replace damaged Equipment and provides for a default if the Obligor fails to
maintain required insurance;  and

 

12

 

(xxxviii)         with respect to which no litigation is pending or, to
Originator’s knowledge, threatened which could materially and adversely affect
the value of the underlying Equipment or related Contract.

 

“Enforcement Action” shall mean the
commencement of the exercise of any remedies against the Originator, the Seller
and/or the Purchased Assets including, without limitation, the commencement of
any litigation or proceeding (including any foreclosure proceeding), the
exercise of any power of sale, the sale by advertisement, the taking of a deed
or assignment in lieu of foreclosure, the obtaining of a receiver or the taking
of any other enforcement action against, or the taking of possession or control
of, any of the Purchased Assets, but specifically excluding (a) requests and
demands made upon the Originator or the Seller by delivery of notices to the
Originator or the Seller, (b) assertion or enforcement of any right of ING to
receive payment from proceeds of a foreclosure sale of any Purchased Assets
which may remain after payment of costs and expenses of such foreclosure and
payment and satisfaction in full of the Obligations, (c) the filing of claims
in any Insolvency Proceeding concerning the Originator or the Seller as may be
required to protect and preserve the right of ING to participate in such
Insolvency Proceeding as creditor and to participate in distributions of assets
of the Originator or the Seller in said Insolvency Proceeding with respect to
the ING Obligations after payment and satisfaction in full of the Obligations,
(d) declaration of an ING Wind-Down Event under the ING Purchase Agreement, (e)
acceleration of the ING Obligations, (f) accepting any payment from the
Originator or the Seller of ING Capital or ING Yield not relating to any
Collections, but subject in all respects to the rights of the Purchasers and
the Liquidity Banks under and as provided in the Receivables Purchase
Agreement.

 

“Equipment” means each item of equipment that
is the subject of a Contract, including all parts, accessions and modifications
thereto and all replacements thereof.

 

“Equipment Collateral” has the meaning assigned
to that term in Section 2.11 of the Receivables Purchase Agreement.

 

“ERISA” means the U.S. Employee Retirement
Income Security Act of 1974, as amended from time to time, and any successor
statute.

 

“ERISA Affiliate” means any
(i) corporation which is a member of the same controlled group of
corporations (within the meaning of Section 414(b) of the IRC) as the
Originator; (ii) partnership or other trade or business (whether or not
incorporated) under common control (within the meaning of Section 414(c)
of the IRC) with the Originator or (iii) member of the same affiliated
service group (within the meaning of Section 414(m) of the IRC) as the
Originator, any corporation described in clause (i) above or any partnership or
other trade or business described in clause (ii) above.

 

“Escrow Agreement” means that certain HPSC
Securitization Escrow Agreement, dated as of December 10, 1998, by and among
HPSC, Inc., the Seller, HPSC Capital Funding, Inc., the “SPVs” and
“Participants” from time to time party thereto and Fleet National Bank (f/k/a
BankBoston, N.A.), as escrow agent, as amended, restated, supplemented and
otherwise modified from time to time.

 

13

 

“Eurocurrency Liabilities” has the meaning
assigned to that term in Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.

 

“Eurodollar Rate” means for a Eurodollar Rate
Tranche and the relevant Fixed Period, an interest rate per annum equal to an
interest rate per annum determined by the Managing Agent for the applicable
Purchaser equal to the quotient of (i) the rate at which it would offer
deposits in United States dollars to prime banks in the London interbank market
for a period equal to such Fixed Period and in a principal amount of not less
than $1,000,000 at or about 11:00 A.M. (London time) on the Business Day before
(and for value on) the first day of such Fixed Period, divided by,
(ii) one minus the Eurodollar Reserve Percentage (expressed as a decimal)
applicable to such Purchaser (or, in the case of any Conduit Purchaser,
applicable to its Liquidity Agent) for that Fixed Period.

 

“Eurodollar Rate Tranche” means a portion of
Capital which (i) is funded by a Purchaser (or a related Liquidity Bank), (ii)
is allocated to a specific Fixed Period and (iii) bears interest at a rate per
annum calculated by reference to the Eurodollar Rate.

 

“Eurodollar Reserve Percentage” for any
Purchaser for the Fixed Period for any Eurodollar Rate Tranche means the
reserve percentage applicable during such Fixed Period (or, if more than one
such percentage shall be so applicable, the daily average of such percentages
for those days in such Fixed Period during which any such percentage shall be
so applicable) under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for such Purchaser (or, in
the case of any Conduit Purchaser, its Liquidity Agent) with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities
having a term equal to such Fixed Period.

 

“Event of Termination” has the
meaning assigned to that term in Section 7.01 of the Sale
Agreement.

 

“Excess Concentration Reserve Ratio” means, on
any day, a ratio (expressed as a percentage) calculated as of the most recent
Settlement Date in accordance with the following formula:

 

	
  ECRR

  	
  =

  	
   

  	
  (MOB/DRB * 3) + 0.11(1-[MOB/DRB * 3]);
  where

  
	
   

  	
   

  	
   

  	
   

  
	
  ECRR

  	
  =

  	
   

  	
  the Excess Concentration Reserve Ratio;

  
	
   

  	
   

  	
   

  	
   

  
	
  MOB

  	
  =

  	
   

  	
  the largest Outstanding Balance of Eligible
  Receivables owed by a single Obligor; and

  
	
   

  	
   

  	
   

  	
   

  
	
  DRB

  	
  =

  	
   

  	
  the Discounted Eligible Receivables
  Balance;

  

 

provided, however,
that if MOB/DRB < 1.5%, the Excess Concentration Reserve Ratio shall
be zero.

 

14

 

“Facility Documents” means, collectively, the
Sale Agreement, the Receivables Purchase Agreement, the Custodial Agreement,
the Fee Letters, the Lock-Box Agreements, the Insurance Agreement, the ING Purchase
Agreement, the Back-Up Servicing Agreement and all other agreements, documents
and instruments delivered pursuant thereto or in connection therewith.

 

“Facility Limit” means, as of any date of
determination, $600,000,000, as such amount may be reduced pursuant to Section
2.03 of the Receivables Purchase Agreement.

 

“Federal Funds Rate” means, for any day, a
fluctuating interest rate per annum equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day for
such transactions received by Triple-A’s Liquidity Agent from three Federal
funds brokers of recognized standing selected by it.

 

“Fee Letter” means each of the MBIA Fee Letter,
the Merrill Fee Letter, the ING Fee Letter and each additional letter agreement
designated as a “Fee Letter” for the purposes of the Receivables Purchase
Agreement that may be executed from time to time by the Seller and any new
Managing Agent (individually and on behalf of the Purchasers in its Purchaser
Group) that may become a party hereto.

 

“Finance Agreement” means a written finance
agreement substantially in the form of Exhibit K-2 to the Sale
Agreement, together with any Related Contract Documents that may be entered into
in connection with such written finance agreement, pursuant to which the
Originator finances an Obligor’s purchase of Equipment, leasehold improvements
and/or working capital needs.

 

“Financial Covenants
Compliance Certificate” means the certificate substantially similar in form
and substance to Exhibit L to the Sale Agreement.

 

“Fixed Period” means, with respect to any
outstanding Capital, a period selected in accordance with Section 2.02
and Section 2.07 of the Receivables Purchase Agreement.  Such Fixed Period shall be:

 

(i)                                     if such Capital is funded through the
issuance of Commercial Paper, a period of from 1 to 90 days;

 

(ii)                                  if such Capital is funded through a Base
Rate Tranche, a period of from 1 to 30 days;

 

(iii)                               if such Capital is funded through a Eurodollar Rate
Tranche, a period of one month;

 

provided, however, that

 

15

 

(x)                                   whenever the last day of a Fixed Period
would otherwise occur on a day other than a Business Day, the last day of such
Fixed period shall be extended to occur on the next succeeding Business Day,
unless such extension would cause the last day of a Fixed Period described in
clause (iii) above to occur in the next following calendar month, in which
event the last day of such Fixed Period shall be deemed to occur on the
immediately preceding Business Day; and

 

(y)                                 whenever a Fixed Period described in clause
(iii) above commences on the last Business Day in a month or on a date for
which there is no numerically corresponding day in the month in which such
Fixed Period would otherwise end, the last day of such Fixed Period shall occur
on the last Business Day of the month in which such Fixed Period ends.

 

“FootHill Credit Agreement”
means that Fifth Amended and Restated Credit Agreement, dated as of August 5,
2002 (as the same may be amended, supplemented, restated or otherwise modified
from time to time) among the Originator, FootHill Capital Corporation and
certain financial institutions as lenders thereunder.

 

“GAAP” means generally accepted accounting
principles as in effect from time to time and applied on a basis consistent
with the audited financial statements described in Section 4.01(e) of
the Sale Agreement.

 

“HPSC Portfolio Receivables” means all
Purchased Receivables and all other Receivables serviced by the Originator,
regardless of ownership of such Receivables.

 

“Indebtedness” of any Person means
(i) indebtedness of such Person for borrowed money, (ii) obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) obligations of such Person to pay the deferred purchase
price of property or services, (iv) obligations of such Person as lessee
under leases which shall have been or should be, in accordance with GAAP,
recorded as capital leases, (v) obligations secured by any lien or other
charge upon property or assets owned by such Person, even though such Person
has not assumed or become liable for the payment of such obligations, (vi)
obligations of such Person in connection with any letter of credit issued for
the account of such Person and (vii) obligations of such Person under
direct or indirect guaranties in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, indebtedness or obligations of others of the kinds
referred to in clauses (i) through (vi) above.

 

“Indemnified Party” has the meaning assigned to
such term in Section 8.01 of the Receivables Purchase Agreement.

 

“Indenture” means the Indenture, dated as of March 20, 1997 among the Originator and State Street Bank
& Trust Company, as trustee.

 

“ING” means ING Capital LLC, a Delaware limited
liability company, its successors and assigns.

 

16

 

“ING 90 Day Delinquency Ratio” means the ratio
(expressed as a percentage), computed as of the last day of each month, by
dividing (i) the aggregate balance of all HPSC Portfolio Receivables which
became Delinquent Receivables during the three-month period then ending, by
(ii) the sum of the aggregate balances of all HPSC Portfolio Receivables as of
each of the last days of the fifth, fourth and third preceding calendar months
(so that, for example, the ING 90 Day Delinquency Ratio calculated as of June
30th would have a denominator equal to the sum of the balances of all HPSC
Portfolio Receivables as of January 31st, February 28th, and March 31st).

 

“ING 180 Day Delinquency Ratio” means the ratio
(expressed as a percentage), computed as of the last day of each month, by
dividing (i) the aggregate balance of all HPSC Portfolio Receivables which
became 180 Day Delinquent Receivables during the three-month period then
ending, by (ii) the sum of the aggregate balances of all HPSC Portfolio
Receivables as of each of the last days of the fifth, fourth and third
preceding calendar months (so that, for example, the ING 180 Day Delinquency
Ratio calculated as of June 30th would have a denominator equal to the sum of
the balances of all HPSC Portfolio Receivables as of January 31st, February
28th, and March 31st).

 

“ING Amortization Date”  means the earlier of the date upon which an
ING Wind-Down Event occurs or August 5, 2003, unless such date has been
extended by ING in its sole discretion (ING hereby acknowledges that such
extension would trigger the change of application of Collections and other
proceeds as per Section 6.11 of the Receivables Purchase Agreement) .

 

“ING Base Rate” means, on any date, a
fluctuating rate of interest per annum equal to One-Month LIBOR plus
3.0%.

 

“ING Capital” means the original amount paid to
the Seller for each Receivables Purchase under the ING Purchase Agreement,
reduced from time to time by Collections received and distributed on account of
such Capital pursuant to Section 2.04 thereof.  If ING is required (or believes in good faith that it is
required) by law to repay (as a preference or otherwise) to any Obligor, the
Originator, the Seller, any Purchaser, a Liquidity Bank, a Lock-Box Bank, a
trustee for any Obligor, the Originator or the Seller, a court or any other
Person, any amount that previously caused a reduction in ING Capital, then ING
Capital shall be reinstated by the amount of such repayment and the Seller will
indemnify and hold ING harmless for the amount of such repayment, interest
thereon required (or believed in good faith to be required) to be paid in
connection therewith and all losses, liabilities, costs and expenses related
thereto (including but not limited to reasonable attorneys’ fees and expenses).

 

“ING Capital Limit” means (i) on any day,
except as set forth below in clauses (ii) and (iii), 10% of the
Discounted Eligible Receivables Balance on such day minus the ING
Reserves then in effect; (ii) on the ING Amortization Date, an amount equal to
the outstanding ING Capital on such date, and reduced on each Payment Date
thereafter by an amount equal to 1/12 multiplied by the outstanding ING Capital
on the ING Amortization Date; and (iii) if (a) an ING Trigger Event has
occurred and is continuing or (b) ING Wind-Down Event has occurred, the ING
Capital Limit shall be zero.  To the
extent that an ING Trigger Event has been cured pursuant to Section 2.06
of the ING Purchase Agreement and neither the ING Amortization Date

 

17

 

nor an ING Wind-Down Event has
occurred, then the ING Capital Limit shall be computed as set forth in clause
(i) above.

 

“ING 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:

 

	
  IDRR

  	
  =

  	
   

  	
  2.25 X ADR X WAL where

  
	
   

  	
   

  	
   

  	
   

  
	
  IDRR

  	
  =

  	
   

  	
  the ING Default Reserve Ratio;

  
	
   

  	
   

  	
   

  	
   

  
	
  ADR

  	
  =

  	
   

  	
  the six-month rolling average of the
  Default Ratios for the six most recent calendar months (including the month
  then ending); and

  

 

WAL                  the Weighted Average Life as
expressed in years of the Purchased Receivables as of such day.

 

“ING Facility Document” means any of the
Facility Documents other than the Policies and the Insurance Agreement.

 

“ING Facility Limit” means, as of any date of
determination, $20,000,000, as such amount may be reduced pursuant to Section
2.03 of the ING Purchase Agreement.

 

“ING Fee Letter” means that certain Fee Letter
Agreement, dated August 5, 2002, among the Seller and ING, as the same may
be amended, supplemented or otherwise modified from time to time.

 

 “ING
Obligations” means all present and future indebtedness and other
liabilities and obligations (howsoever created, arising or evidenced, whether
direct or indirect, absolute or contingent, or due or to become due) of the
Seller to ING, arising under or in connection with the ING Purchase Agreement
or any other ING Facility Document or the transactions contemplated hereby and
shall include, without limitation, all liability for ING Yield, closing fees,
unused line fees, audit fees, expense reimbursements, indemnifications, and
other amounts due or to become due under the Facility Documents, including,
without limitation, interest, fees and other obligations that accrue after the
commencement of an Insolvency Proceeding (in each case whether or not allowed
as a claim in such Insolvency Proceeding).

 

“ING Purchase Agreement” means the Receivables
Interest Sale Agreement, dated as of August 5, 2002, by and among Triple-A, ING
Capital LLC, a Delaware limited liability company,  BNY Asset Solutions LLC, a Delaware limited liability company,
HPSC Bravo Funding, LLC, a Delaware limited liability company and HPSC, Inc., a
Delaware corporation, as the same may be amended, restated, supplemented or
otherwise modified from time to time.

 

“ING Receivables Interest Purchase” means each
purchase by ING of an ING Receivables Interest pursuant to the ING Purchase
Agreement.

 

 “ING
Receivables Interest”  means each
interest in a Purchased Asset purchased by ING pursuant to the terms of the ING
Purchase Agreement.

 

18

 

“ING Receivables Interest Purchase Date” means,
with respect to any ING Receivables Interest Purchase, the date on which such
ING Receivables Interest Purchase is funded.

 

“ING Reserve Rate”  initially shall be 6.25%, provided, if on any Settlement
Date, or ING Receivables Interest Purchase Date either the ING 90 Day
Delinquency Ratio or ING 180 Day Delinquency Ratio are within the following
ranges set forth below, the ING Reserve Rate shall increase to the
corresponding rate:

 

	
  ING 90 Day Delinquency Ratio

  	
   

  	
  ING 180
  Day Delinquency Ratio

  	
   

  	
  ING
  Reserve Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.000% or less

  	
   

  	
  3.250% or less

  	
   

  	
  6.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.001% to 4.250%

  	
   

  	
  3.251% to 3.500%

  	
   

  	
  6.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.251% to 4.500%

  	
   

  	
  3.501% or more

  	
   

  	
  7.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.501% to 4.750%

  	
   

  	
  —

  	
   

  	
  7.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.751% or more

  	
   

  	
  —

  	
   

  	
  8.25

  	
  %

  

 

provided, however;
if the ING Reserve Rate has increased, it shall be decreased to the appropriate
rate set forth above if both the ING 90 Day Delinquent Ratio and the ING 180
Day Delinquency Ratio have been reduced to the corresponding range (or a lower
range) as calculated on three consecutive Settlement Dates.

 

“ING Reserves” means, on any day, an amount
equal to the Discounted Eligible Receivables Balance times the greater
of (i) the ING Reserve Rate, and (ii) the ING Default Reserve Ratio as computed
in the most recent Settlement Report; provided, that the ING Reserves
shall not be less than the greatest of (a) $625,000, (b) the sum of the Outstanding
Balances of all Receivables owed by the three (3) Obligors who owe the largest
Outstanding Balances of Receivables owed by any single Obligor, and (c)
twenty-five percent (25%) of the highest dollar amount of ING Reserves as of
any previous time.

 

“ING Trigger Event” means the events described
in Section 2.06 of the ING Purchase Agreement.

 

“ING Wind-Down Event” means the event described
in Section 7.01 of the ING Purchase Agreement.

 

“ING Yield” means, with respect to all ING
Capital outstanding during any Payment Period, the product of

 

IYR x C x ED

360

 

where:

 

	
  C

  	
   

  	
  =

  	
   

  	
  the ING Capital outstanding.

  

 

19

 

	
  IYR

  	
   

  	
  =

  	
   

  	
  the ING Yield Rate for the Capital
  outstanding.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ED

  	
   

  	
  =

  	
   

  	
  the actual number of days elapsed during
  such Payment Period.

  

 

provided, however
that (i) no provision of the ING Purchase Agreement shall require the
payment or permit the collection of ING Yield in excess of the maximum
permitted by applicable law and (ii) ING Yield shall not be considered
paid by any distribution if at any time such distribution is rescinded or must
otherwise be returned for any reason.

 

“ING Yield Rate” for any ING Capital
outstanding means the ING Base Rate; provided, however, that on and after
the ING Amortization Date or upon the occurrence of an ING Wind-Down Event or
an ING Trigger Event, the ING Yield Rate shall be the ING Base Rate plus 3.0%.

 

“Insolvency Event” means with respect to any
Person, any of the following events: such Person shall generally not pay its
debts as such debts become due or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or any case or proceeding shall be instituted by or against such
Person seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, dissolution, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its property.

 

“Insolvency Proceeding” means any proceeding of
the sort described in the definition of Insolvency Event.

 

“Insurance Agreement” means that certain
Amended and Restated Insurance and Indemnity Agreement, dated as of June 19,
2003, as the same may be amended, restated, supplemented or otherwise modified
from time to time, among Triple-A, Merrill, the Seller, NAB and MBIA, successor
in interest to CapMAC, as the Collateral Agent.

 

“Insurer” means MBIA.

 

“Insurer Default” means the occurrence and
continuance of any of the following events:

 

(a)                                  the Insurer shall have failed to make any
required payment under any Policy in accordance with the terms thereof (and
such failure shall have continued unremedied for two Business Days);

 

(b)                                 the Insurer shall have (i) filed a
petition or commenced any case or proceeding under any provision or chapter of
the United States Bankruptcy Code or any other similar federal or state law
relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization, (ii) made a general assignment for the benefit of its
creditors, or (iii) had an order for relief entered against it under the United
States Bankruptcy Code or any other similar federal or state law relating to
insolvency, bankruptcy, rehabilitation, liquidation or reorganization which is
final and nonappealable; or

 

20

 

(c)                                  a court of competent jurisdiction, the
New York Department of Insurance or other competent regulatory authority shall
have entered a final and nonappealable order, judgment or decree (i) appointing
a custodian, trustee, agent or receiver for the Insurer or for all or any
material portion of its property or (ii) authorizing the taking of possession
by a custodian, trustee, agent or receiver of the Insurer (or the taking of
possession of all or any material portion of the property of the Insurer).

 

“Interest Rate Hedge Assignment” means an
assignment in substantially the form of Exhibit E to the Receivables
Purchase Agreement pursuant to which the Seller assigns to the Collateral Agent
all of its rights to payment under the Interest Rate Hedges.

 

“Interest Rate Hedges” means, with respect to a
Swap Provider, interest rate swap or similar agreements entered into by the
Seller and the Collateral Agent, on behalf of the Purchasers, with such Swap
Provider to provide protection to, or minimize the impact upon, the Seller and
the Purchasers of increasing interest rate under the Receivables Purchase
Agreement.

 

“IRC” means the Internal Revenue Code of 1986,
as amended from time to time, and any successor statute.

 

“IRS” means the Internal Revenue Service of the
United States of America.

 

“Lease” means a lease agreement between the
Originator and an Obligor substantially in the form of Exhibit K-1 to
the Sale Agreement, together with any Related Contract Documents that may be
entered into in connection with such lease agreement, pursuant to which the
Originator originally leased Equipment to such Obligor.

 

“Leasehold Improvement Note” means a note or
instrument substantially in the form of Exhibit K-3 to the Sale
Agreement, together with any Related Contract Documents that may be entered
into in connection with such note or instrument, evidencing an Obligor’s
indebtedness to the Originator on account of a loan made to finance
improvements to, or other costs incurred in connection with the installation or
maintenance of, Equipment.

 

“Liquidity Agent” means (i) with respect to
Triple-A, NAB in its capacity as the agent for the Liquidity Banks under
Triple-A’s Liquidity Agreement, or any successor thereto and (ii) with respect
to any other Conduit Purchaser, the Financial Institutions named as such in its
Liquidity Agreement.

 

“Liquidity Agreement” means (i) with respect to
Triple-A, that certain Third Amended and Restated Liquidity Agreement, dated as
of June 19, 2003, as has been amended and as the same may be amended,
supplemented, restated, supplemented or otherwise modified from time to time,
by and among Triple-A, the Liquidity Banks party thereto, Banco Santander
Central Hispano, S.A., as assignor to NAB, and NAB, as Liquidity Agent, and (ii)
with respect to any other Conduit Purchaser, any similar loan agreement or
purchase agreement pursuant to which such Conduit Purchaser may fund Capital
hereunder.

 

“Liquidity Banks” means the financial
institutions party to any Liquidity Agreement as “Liquidity Banks” or
“Liquidity Providers” or “Purchasers” thereunder.

 

21

 

“Lock-Box Account” means an account
maintained at a Lock-Box Bank for the purpose of receiving Collections.

 

“Lock-Box Agreement” means an agreement,
in substantially the form of Exhibit G to the Sale Agreement, among the
Originator, the Buyer, the Collateral Agent and a Lock-Box Bank which agreement
sets forth the rights of the Collateral Agent, the Originator, the Buyer and
the Lock-Box Bank with respect to the disposition and application of the
Collections received into the applicable Lock-Box Account, including, without
limitation, the right of the Collateral Agent to direct the Lock-Box Bank to
remit all Collections of Transferred Assets directly to the Collateral Agent.

 

“Lock-Box Bank” means any of the banks
holding one or more lock-box accounts for receiving Collections from the
Receivables.

 

“Majority Managing Agents” shall mean any
Managing Agent or group of Managing Agents acting as Managing Agent(s) for one
or more Purchasers the aggregate Pro Rata Shares of which equals or exceeds
51%.

 

“Manager” shall mean each “Manager” of the
Seller under and as defined in that certain Limited Liability Company
Agreement, dated as of October 2, 2000, as amended from time to time, among the
Seller, the “Initial Member” thereunder and the “Independent Manager”
thereunder.

 

“Managing Agent” means (i) with respect to the
Purchaser Group of which Merrill is a member, Merrill, (ii) with respect to the
Purchaser Group of which Triple-A is a member, MBIA, or its successor as
“administrative agent” with respect to Triple-A’s commercial paper program and
(iii) each other Person that shall become a “Managing Agent” under the
Receivables Purchase Agreement from time to time.

 

“MBIA” means MBIA Insurance Corporation, a New
York insurance corporation.

 

“MBIA Fee Letter” means that certain Sixth
Amended and Restated Fee Letter, dated as of June 19, 2003, among the Seller
and MBIA (successor in interest to CapMAC), individually, as the Insurer, as
the Managing Agent for the Purchaser Group of which Triple-A is  a member and as the Collateral Agent, as the
same may be amended, supplemented or otherwise modified from time to time.

 

“Merrill” means Merrill Lynch Commercial
Finance Corp., a Delaware corporation.

 

“Merrill Fee Letter” means that certain Fee
Letter Agreement, dated as of June 19, 2003, among the Seller and Merrill,
individually and as the Managing Agent for the Purchaser Group of which Merrill
is a member, as the same may be amended, supplemented or otherwise modified
from time to time.

 

“Multiemployer Plan” means a
“multiemployer plan” as defined in Section 4001(a)(3) of ERISA which is,
or within the immediately preceding six (6) years was, contributed to by either
the Originator or any ERISA Affiliate.

 

22

 

“NAB” means National Australia Bank Limited.

 

“Non-Designated Receivable” means a Purchased
Receivable identified by the Seller to the Managing Agents as a “Non-Designated
Receivable” pursuant to Section 2.02 of the Receivables Purchase Agreement.

 

“Non-Medical Contract” means a Contract
substantially in the form of Exhibit K-1, Exhibit K-2, Exhibit
K-3 or Exhibit K-4 to the Sale Agreement and the Obligor of which is
not required to be a licensed professional dental, medical or veterinary
practitioner.

 

“Notice of Assignment” means a Notice of
Assignment in substantially the form of Exhibit B to the Sale Agreement.

 

“Obligations” means all present and future
indebtedness and other liabilities and obligations (howsoever created, arising
or evidenced, whether direct or indirect, absolute or contingent, or due or to
become due) of the Seller to any Purchaser, any Managing Agent, the Collateral
Agent, the Insurer and/or the Indemnified Parties, arising under or in
connection with the Receivables Purchase Agreement or the transactions
contemplated thereby and shall include, without limitation, all liability for
Yield, closing fees, unused line fees, audit fees, expense reimbursements,
indemnifications, and other amounts due or to become due under the Facility
Documents, including, without limitation, interest, fees and other obligations
that accrue after the commencement of an Insolvency Proceeding (in each case
whether or not allowed as a claim in such Insolvency Proceeding).

 

“Obligor” means each Person obligated to make
payments under a Contract.

 

“One-Month LIBOR”: means, with respect to any
Settlement Date, the rate determined on the second business day prior to the
commencement of the related Payment Period (each such date, an “Interest
Determination Date”).  ING will
determine One-Month LIBOR for such Payment Period on the basis of offered rates
of the reference banks for one-month U.S. dollar deposits, as such rates
appears on the Telerate Page 3750, as of 11:00 a.m. (London time) on such
Interest Determination Date, as more specifically set forth below.

 

As used in this definition of One-Month LIBOR, “business
day” means a day on which banks are open for dealing in foreign currency
and exchange in London and New York City; “Telerate Page 3750” means the
display page currently so designated on the Dow Jones Telerate Service (or such
other page as may replace the Telerate Page 3750 page on that service for the
purpose of displaying London interbank offered rates of major bank(s)), and “reference
banks” means leading banks selected by ING and engaged in transactions in
Eurodollar deposits in international Eurocurrency market (i) with an
established place of business in London, (ii) whose quotations appear on the
Telerate Page 3750 on the Interest Determination Date in question and (iii)
which have been designated as such by ING.

 

On each Interest Determination Date, the One-Month
LIBOR for the applicable Payment Period will be established by ING as follows:

 

(a)                                  If on such Interest Determination Date
two or more reference banks provide such offered quotations, the One-Month
LIBOR for the related Payment Period

 

23

 

shall be the arithmetic mean of such offered
quotations (rounded upwards if necessary to the nearest whole multiple of
0.0001%).

 

(b)                                 If on such Interest Determination Date
fewer than two reference banks provide such offered quotations, One-Month LIBOR
for the related Payment Period shall be the higher of (x) One-Month LIBOR as
determined on the previous Interest Determination Date and (y) the arithmetic
mean (rounded upwards if necessary to the nearest whole multiple of 0.0001%) of
the one-month U.S. dollar lending rates that three New York City banks selected
by ING are quoting at approximately 11:00 a.m. (New York City time) on the
relevant Interest Determination Date to leading European banks.

 

If ING has determined that the use of One-Month LIBOR
(as determined above) would violate any applicable law, rule, regulation, or
directive of any governmental or regulatory authority, whether or not having
the force of law, then One-Month LIBOR will be the
rate at which U.S. dollar deposits, approximately equal to the outstanding
Capital having a 30-day term, are offered by the principal London office of a
leading “money center” bank active in the London interbank market for U.S.
dollar deposits, as determined by ING in its sole discretion, in immediately
available funds in the London interbank market on such Interest Determination
Date.

 

The establishment of One-Month LIBOR on each Interest
Determination Date by ING shall (in the absence of manifest error) be final and
binding.

 

 “Originator”
means HPSC, Inc., a Delaware corporation.

 

“Other Taxes” has the meaning assigned to such
term in Section 2.09(b) of the Receivables Purchase Agreement.

 

“Outstanding Balance” means, with respect
to any Purchased Receivable at any time, the Discounted Value of the remaining
Scheduled Contract Payments under the related Contract, as such amounts are
adjusted as a result of any of the events described in Section 2.05 of
the Sale Agreement.

 

“Payment Date” means, with respect to any
Capital, the last day of the Fixed Period then applicable to such Capital.

 

“Payment Period” means, with respect to any ING
Capital and any Settlement Date, the period from and including the prior
Settlement Date (or with respect to the Settlement Date immediately following
the initial ING Receivables Interest Purchase, the date of such initial  ING Receivables Interest Purchase) to the
day immediately preceding such Settlement Date.

 

“PBGC” means the Pension Benefit Guaranty
Corporation and any Person succeeding to the functions thereof.

 

“Permitted Encumbrance” means any of the
following:

 

(a)                                  liens, charges or other encumbrances for
taxes and other governmental assessments which are not yet due and payable;

 

24

 

(b)                                 workers’, mechanics’, suppliers’, carriers’,
warehousemen’s, landlords’ liens and deposits, pledges or liens to secure
statutory obligations, surety or appeal bonds or other liens of like general
nature incurred in the ordinary course of business and not in connection with
the borrowing of money, provided in each case, the obligation secured is
not overdue or, if overdue, is being contested in good faith by appropriate
actions or proceedings, and provided, further, that such liens do
not, in the reasonable opinion of the Buyer, materially detract from the value
of the Contract or the Equipment subject thereto;

 

(c)                                  liens, charges or encumbrances created in
favor of the Buyer pursuant to the Sale Agreement or in favor of the Collateral
Agent or otherwise granted to the Purchasers, ING or to the Liquidity Banks in
the Facility Documents;

 

(d)                                 with respect to Equipment, liens thereon
created in favor of the Originator pursuant to a Contract and assigned to the
Buyer pursuant to the Sale Agreement; or

 

(e)                                  for so long as the Servicer and the Seller
are parties to the Escrow Agreement, any liens, charges or other encumbrances
arising under or subject to the Escrow Agreement on any Lock-Box, the
Collection Account or any Collections on deposit in any Lock-Box or the
Collection Account.

 

“Permitted Extension” means an extension of a
Scheduled Contract Payment in the ordinary course of business for reasons
unrelated to an Obligor’s creditworthiness for a period not to exceed 2 months.

 

“Permitted Investments” means
(i) securities issued or directly and fully guaranteed or insured by the
United States government or any agency or instrumentality thereof having
maturities on or before the first Settlement Date after the date of
acquisition; (ii) time deposits and certificates of deposit having maturities
on or before the first Settlement Date after the date of acquisition,
maintained with or issued by any commercial bank having capital and surplus in
excess of $500,000,000 and having the highest commercial paper rating available
by both Rating Agencies; (iii) money market funds which have the highest
applicable rating available by both Rating Agencies; (iv) repurchase agreements
having maturities on or before the first Settlement Date after the date of
acquisition for underlying securities of the types described in clauses (i) and
(ii) above or clause (v) below with any institution with the highest long term
debt rating and commercial paper rating available by both Rating Agencies; and
(v) commercial paper maturing on or before the first Settlement Date after the
date of acquisition and having the highest commercial paper rating available by
both Rating Agencies.

 

“Permitted Take-Out” means a securitization or
sale of a material portion of the Contracts hereunder by a trust or any other
entity established by or on behalf of the Originator or one of its Affiliates
(including any trust or other entity formed by another Person in connection
with the securitization of such Contracts), including, without limitation, (i)
the issuance of notes, trust certificates or other instruments or securities to
be paid from Collections with respect to the Contracts, (ii) the sale of
undivided interests or participations in the Contracts and (iii) an outright
sale of Contracts and Receivables arising thereunder to a third-party; provided,
that such transfer is non-recourse to the Seller on terms consistent with past
securitizations in which the Seller has been a transferor and the net sale
proceeds of such transaction payable to the Seller are

 

25

 

sufficient to pay in full all
reductions in the Capital Limit caused by such transaction, together with all
accrued Yield on the Capital so reduced and all other Obligations (including
Swap Breakage Amounts, if any) which are payable under the Receivables Purchase
Agreement as a result thereof.

 

“Person” means an individual, partnership,
corporation (including a business trust), joint stock company, trust,
unincorporated association, joint venture, government (or any agency or
political subdivision thereof) or other entity.

 

“Plan” means an employee benefit plan defined
in Section 3(3) of ERISA in respect of which the Originator or any ERISA
Affiliate is, or within the immediately preceding six years was, an “employer”
as defined in Section 3(5) of ERISA.

 

“Policies” means the insurance policies for the
benefit of the Purchasers and the Liquidity Banks to be issued by the Insurer
under the Insurance Agreement.

 

“Post Office Box” means each post office box to
which Obligors are directed to mail payments in respect of the Receivables.

 

“Practice Finance Loan” means a note or
instrument substantially in the form of Exhibit K-4 to the Sale
Agreement, together with any Related Contract Documents that may be entered
into in connection with such note or instrument, evidencing an Obligor’s
indebtedness on account of a loan made to finance working capital needs of such
Obligor, in connection with such Obligor’s professional dental, medical or
veterinary practice.

 

“Premium” means the insurance premium owed to
MBIA under the MBIA Fee Letter.

 

“Priority ING Yield” means, with respect to any
Payment Period, the lesser of (i) the ING Yield accrued during such Payment
Period and (ii) the yield on ING Capital that would have accrued during such
Payment Period if the ING Yield Rate were 8% per annum.

 

“Pro Rata Shares” means, with respect to any
Purchaser, a fraction, the numerator of which is such Purchaser’s Purchaser
Limit and the denominator of which is the Facility Limit; provided,
that, in the event that one or more Purchasers makes a Receivables Purchase in
accordance with Sections 2.01 and 2.02(d) of the Receivables Purchase
Agreement, and, on the related Receivables Purchase Date, one or more
Purchasers fails to make a Receivables Purchase in accordance with such
Sections (each such Purchaser, a “Non-Funding Purchaser”), then, for the
purposes of Sections 2.04(b)(ii) and 6.11(d) of the Receivables Purchase
Agreement, such Non-Funding Purchaser’s
“Pro Rata Share” shall be zero and shall be allocated to each other Purchaser
ratably in accordance with the outstanding Capital of such other Purchasers
until such time as the ratio of each Purchaser’s outstanding Capital to all
outstanding Capital shall equal the ratio of such Purchaser’s Purchaser Limit
to the Facility Limit.

 

“Purchase” means a purchase (whether by means
of cash payment or by capital contribution) of Transferred Assets by the Buyer
from the Originator pursuant to Sections 2.01 and 2.02 of
the Sale Agreement.

 

26

 

“Purchase Date” means, with respect to any
Purchase, the date on which such purchase occurs.

 

“Purchased Assets” means (i) at all times prior
to the Termination Date, (a) all then outstanding Purchased Receivables, (b)
all Related Security relating to such Purchased Receivables and (c) all
Collections with respect to, and other proceeds of, such Receivables and (ii)
at all times on and after the Termination Date, (a) all Purchased Receivables
outstanding as of the close of business on the day preceding the Termination
Date (including any interest or finance charges accruing after the Termination
Date which relate to any Purchased Receivables outstanding as of the close of
business on the day preceding the Termination Date), (b) all Related Security
relating to such Purchased Receivables and (c) all Collections with respect to,
and other proceeds of, such Receivables.

 

“Purchased Receivables” means all Receivables
purchased by the Purchasers pursuant to Section 2.01 of the Receivables
Purchase Agreement, including, without limitation, all Receivables purchased
from the Seller or in which the Seller otherwise conveyed an interest under a
predecessor version of the Receivables Purchase Agreement to the extent not
previously released by CapMAC, as predecessor Collateral Agent.

 

“Purchaser” means each of Triple-A, Merrill and
each other Person that shall become a “Purchaser” under the Receivables
Purchase Agreement from time to time.

 

“Purchaser Group” means each group of Persons
from time to time parties to the Receivables Purchase Agreement consisting of
one or more Purchasers and the Managing Agent identified as the Managing Agent
for such Purchaser(s) on the applicable signature page thereof or of any
amendment thereto, together with the Liquidity Banks related to any Purchaser
that is a Conduit Purchaser.

 

“Purchaser Limit” means, with respect to any
Purchaser or Purchaser Group, the dollar amount set forth on Schedule I to the
Receivables Purchase Agreement, as such amount may be increased or reduced from
time to time in accordance with Article II thereof.

 

“Rating Agencies” means, collectively, Standard
& Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc., and
Moody’s Investors Service, Inc., or their respective successors.

 

“Receivable” means all rights to payment
arising under a Contract, including, without limitation, (i) Contract Payments,
(ii) Termination Payments and (iii) Residual Realizations, together with all
supplemental or additional payments required by the terms of such Contract with
respect to insurance, maintenance, taxes, ancillary products and services and
other specific charges.

 

“Receivables Purchase” means a purchase of
Receivables by the Purchasers from the Seller pursuant to Sections 2.01
and 2.02 of the Receivables Purchase Agreement.

 

“Receivables Purchase Agreement” means the
Third Amended and Restated Lease Receivables Purchase Agreement, dated as of
June 19, 2003, by and among HPSC Bravo Funding, LLC, a Delaware limited
liability company, HPSC, Inc., a Delaware corporation,

 

27

 

Triple-A One Funding
Corporation, a Delaware corporation, Merrill Lynch Commercial Finance Corp., a
Delaware corporation, MBIA Insurance Corporation, a New York insurance
corporation, and Capital Markets Assurance Corporation, a New York Stock
insurance company, as the same may be amended, restated, supplemented or
otherwise modified from time to time.

 

“Receivables Purchase Date” means, with respect
to any Receivables Purchase, the date on which such Receivables Purchase is
funded, which date, other than in the case of the initial Receivables Purchase,
shall be a Settlement Date.

 

“Records” means all Contracts and other
documents, books, records and other information (including without limitation,
computer programs, tapes, discs, punch cards, data processing software and
related property and rights) maintained with respect to Contracts and the
related Obligors.

 

“Related Contract Document” means any agreement
or document substantially in the form of Exhibit K-5 to the Sale
Agreement which may be entered into contemporaneously with a Contract.

 

“Related Security” means with respect to
any Contract:

 

(i)                                     all security interests or liens and
property subject thereto from time to time purporting to secure payment of the
Receivables arising under such Contract, whether pursuant to such Contract or
otherwise;

 

(ii)                                  all UCC financing statements covering any
Equipment or covering any other collateral securing payment of the Receivable
arising under such Contract;

 

(iii)                               all guarantees, indemnities, warranties, letters of
credit, insurance policies and proceeds and premium refunds thereof and other
agreements or arrangements of whatever character from time to time supporting
or securing payment of the Receivables arising under such Contract whether
pursuant to the Contract related to such Receivable or otherwise;

 

(iv)                              all of the Originator’s right, title and
interest in, to and under the Equipment related to such Contract, whether as an
ownership interest, as collateral security, or which was repossessed from an
Obligor of a Receivable to the extent that the Outstanding Balance of such
Receivable remains unpaid;

 

(v)                                 all Records; and

 

(vi)                              all Collections and other proceeds of the
foregoing, including, without limitation, all insurance and condemnation
proceeds and all security deposits related to the Equipment.

 

“Reportable Event” means any of the events
described in Section 4043 of ERISA.

 

“Residual Realization” means, with respect to
any Equipment, the amount received or receivable by the Buyer or the Servicer
upon the sale or other disposition of the

 

28

 

Equipment, whether from the
Obligor upon the exercise of any purchase option or from a sale or from
insurance proceeds or otherwise.

 

“Sale Agreement” means that certain Second
Amended and Restated Purchase and Contribution Agreement, dated as of June 19,
2003, as the same may be amended, restated, supplemented or otherwise modified
from time to time, between the Originator and the Buyer.

 

“Sale Notice” has the meaning set forth in Section
2.02(a) of the Receivables Purchase Agreement.

 

“Scheduled Contract Payments” means the
Contract Payments due under each Contract, as set forth in the appendix to Exhibit
A of the Sale Agreement (including any supplement to such exhibit delivered
under Section 2.02(b) thereof and also including any modification
to such appendix as the result of any modification, waiver or amendment to any
Contract undertaken in conformity with the Sale Agreement), excluding, however,
(i) in the case of any Contract which is not a Lease, starting with the final
Contract Payment owed thereunder and proceeding in reverse order of maturity,
the Contract Payments (or portions thereof) equal to any security deposit
related to such Contract and (ii) any Contract Payment that is due more than 72
months (unless such Contract is a Contract that is permitted to come due in 84
months under the definition of Eligible Receivables, in which case 84 months)
after the original commencement date of such Contract.  The term “Scheduled Contract Payment” does
not include any Contract Payment which is payable in respect of any Residual
Realization or which otherwise reflects the residual value of the related
Equipment.

 

“Scheduled Liquidity Commitment Termination Date”
means June 19, 2004; provided, that, in the event that (i) the Liquidity
Banks parties to Triple-A’s Liquidity Agreement agree to extend the “Scheduled
Liquidity Commitment Termination Date” under and as defined in such Liquidity
Agreement, to a later date, and (ii) Merrill agrees in writing to extend the
“Scheduled Liquidity Commitment Termination Date” hereunder, to a later date,
then the “Scheduled Liquidity Commitment Termination Date” hereunder shall mean
the earlier of such later dates.

 

“Scheduled Termination Date” means June 19,
2005.

 

“Seller” means HPSC Bravo Funding, LLC, a
Delaware limited liability company; provided, however, that when used in
the Sale Agreement, the term “Seller” means the Originator in its capacity as
the “Seller” thereunder.

 

“Servicer” has the meaning assigned to that
term in Section 6.01 of the Receivables Purchase Agreement.

 

“Servicing Fee” has the meaning assigned to
that term in Section 6.08 of the Receivables Purchase Agreement.

 

“Servicing Fee Rate” means 0.70%; provided,
however, that if a Servicing Fee Trigger Event has occurred and is not deemed
cured, the Servicing Fee Rate thereafter shall be equal to 1.00%.

 

29

 

“Servicing Fee Trigger Event” means the
occurrence of any of the following events:

 

(i) as of the last day of any month, the Default Ratio
shall be greater than 3.0% provided, that any such Servicing Fee Trigger
Event shall be deemed cured if the Default Ratios as of the last day of any
three consecutive months are each less than or equal to 3.0%; or

 

(ii) as of the last day of any month, the Delinquency
Ratio shall be greater than 1.5%; provided, that any such Servicing Fee
Trigger Event shall be deemed cured if the Delinquency Ratios as of the last
day of any three consecutive months are each less than or equal to 1.5%; or

 

(iii) as of the end of any calendar quarter, the
Servicer’s “Tangible Net Worth” (as defined in Section 5.04 of the Sale Agreement)
shall not be equal to or greater than the sum of (x) $3,000,000 plus (y) the
then required amount set forth in Section 5.04(a)(i) of the Sale Agreement, provided,
that any such Servicing Fee Trigger Event shall be deemed cured if the
Servicer’s Tangible Net Worth as of the end of any subsequent calendar quarter
is equal to or greater than the sum described above; or

 

(iv)  as of the
end of any fiscal quarter,  the
Servicer’s “Net Income” (as defined in Section 5.04 of the Sale Agreement) for
such fiscal quarter shall not be equal to or greater than the sum of (x)
$150,000 plus (y) the then required amount set forth in Section 5.04(a)(iii) of
the Sale Agreement; provided, that any such Servicing Fee Trigger Event
shall be deemed cured if the Servicer’s Net Income as of the end of any
subsequent fiscal quarter is equal to or greater than the sum described above.

 

“Servicing Termination Event” means (i) so long
as HPSC, Inc. is the Servicer, any Event of Termination and (ii) whether or not
HPSC, Inc. is the Servicer, a failure on the part of the Servicer to observe or
perform any of its duties or obligations as Servicer under the Receivables
Purchase Agreement or as “Servicer” under the Sale Agreement, as determined by
the Collateral Agent in its reasonable judgment.

 

“Settlement Date” means the 20th day of each
month; provided, that if in any month such day is not a Business Day,
the “Settlement Date” for such month shall be the first Business Day to
occur after such 20th day.

 

“Settlement Report” means a report, in
substantially the form of Exhibit C to the Sale Agreement, furnished by
the Originator to the Buyer pursuant to Section 2.05(b) thereof and by
the Buyer to the Collateral Agent pursuant to Section 5.02(f) of the
Receivables Purchase Agreement.

 

“Subsidiary” means, as to any Person, any
corporation or other entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the Board of Directors or
other Persons performing similar functions are at the time directly or
indirectly owned by such Person.

 

30

 

“Successor Servicer” means any Person which
succeeds to the Originator (or any successor thereto) as the Servicer in
accordance with the terms and provisions of the Receivables Purchase Agreement.

 

“Swap Breakage Amounts” means, with respect to
any Interest Rate Hedge, any early termination payments, mark-to-market
payments or similar payments owing thereunder due to a reduction in the
notional amount thereof or to a “termination event”, “event of termination” or
similar event thereunder.

 

“Swap Policy” means, with respect to each Swap
Provider, the surety bond or insurance policy in favor of such Swap Provider
whereby CapMAC or MBIA guarantees the payments to be made by the Seller to such
Swap Provider under the relevant Interest Rate Hedges.

 

“Swap Provider” means Merrill Lynch Capital
Services, Inc., Fleet National Bank, Credit Suisse First Boston International
or such other financial institution reasonably acceptable to CapMAC or MBIA
which enters into an Interest Rate Hedge with the Seller, provided, that
a Swap Provider must, unless otherwise approved by CapMAC or MBIA in writing,
at all times be a nationally recognized financial institution rated AA or better
by Standard & Poor’s Ratings Group or the equivalent by Moody’s Investors
Service, Inc.

 

“Taxes” has the meaning assigned to such term
in Section 2.09(a) of the Receivables Purchase Agreement.

 

“Termination Amount” means, with respect to any
Contract which has been prepaid or otherwise terminated prior to its stated
maturity or termination date, an amount equal to the present value of the
remaining Scheduled Contract Payments, discounted to the date of prepayment or
termination at the Discount Rate, plus, any billed and uncollected
amounts related to and amounts owing under such Contract, including late
charges and overdue interest charges, plus, if such Contract is a Lease
or is a Finance Agreement pursuant to which the Originator finances an
Obligor’s purchase of Equipment, the booked residual value of the related
Equipment, plus any processing fees charged to cover expenses.

 

“Termination Date” means the earliest of
(i) that Business Day which the Originator designates as the Termination
Date by notice to the Buyer and the Collateral Agent at least thirty calendar
days prior to such Business Day, (ii) that Business Day which the Buyer
designates as the Termination Date by notice to the Originator and the
Collateral Agent at least thirty calendar days prior to such Business Day,
(iii) the date of the declaration or automatic occurrence of the Termination
Date pursuant to Section 7.01 of the Sale Agreement or Section
7.02 of the Receivables Purchase Agreement, (iv) the Scheduled Liquidity
Commitment Termination Date and (v) the Scheduled Termination Date.

 

“Termination Payment” means any amount or
amounts payable by an Obligor upon termination or prepayment of a Contract
prior to the payment of all Contract Payments.

 

“Transferred Assets” means, at any time, the
Receivables, the Contracts, the Equipment, all Related Security with respect to
the foregoing and all Collections with respect to, and other proceeds of, the
foregoing.

 

31

 

“Triple-A” means Triple-A One Funding
Corporation, a Delaware corporation.

 

“UCC” means the Uniform Commercial Code as from
time to time in effect in the State of New York, except that, with respect to
the perfection or priority of any security interest created under the UCC, the
term “UCC” means the Uniform Commercial Code as in effect in the
jurisdiction whose law governs the perfection and effect of perfection or
non-perfection of such security interest.

 

“Unmatured Event of Termination” means any
event which, with the giving of notice or the passage of time or both, would
constitute an Event of Termination.

 

“Unmatured Wind-Down Event” means any event
which, with the giving of notice or the passage of time or both, would
constitute a Wind-Down Event.

 

“Weighted Average Life” means the weighted
average amount of time from the respective dates of origination of each of the
Purchased Assets until each of the related 
Scheduled Contract Payments are to be repaid pursuant to each of the
related Contracts, calculated equal to the weighted average for each of the
Purchased Assets of (i) the sum (for each of the subsequent Scheduled Contract
Payments under the related Contract) of the product of (a) the amount of
such  Scheduled Contract Payment multiplied
by (b) the number of years from such Settlement Date to the date of such
Scheduled Contract Payment, divided by (ii) the total amount of all subsequent
Scheduled Contract Payments for such Contract (each such calculation to
include, for purposed of calculating the Weighted Average Life on any
Settlement Date, any Purchased Receivables to be purchased on such date).

 

“Weighted Average Remaining Term” means the
weighted average remaining maturities of the Purchased Assets calculated to
equal (i) the sum, for all Purchased Receivables, of (x) the remaining
Scheduled Contract Payments of each Purchased Receivable times (y) the
remaining term of such Purchased Receivable, divided by (ii) the
aggregate amount of the remaining Scheduled Contract Payments of all the
Purchased Receivables (each such calculation to include, for purposes of
calculating the Weighted Average Remaining Term on any Settlement Date, any
Purchased Receivables to be purchased on such date).

 

“Wind-Down Event” has the meaning assigned to
such term in Section 7.01 of the Receivables Purchase Agreement.

 

“Working Capital Loan” means an unsecured loan
made by the Originator to any Person that, at the time such loan is made, is an
Obligor in respect of another Contract that is a Lease, Finance Agreement,
Leasehold Improvement Note, Practice Finance Loan or Non-Medical Contract, the
proceeds of which loan are to be used by such Obligor for general corporate
purposes.

 

“Yield” means, with respect to the Capital
related to any Receivables Purchase, during any Fixed Period, the product of

 

YR x C x ED

AD

 

where:

 

32

 

	
  C

  	
   

  	
  =

  	
   

  	
  the amount of such Capital.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  YR

  	
   

  	
  =

  	
   

  	
  the Yield Rate for such Capital.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ED

  	
   

  	
  =

  	
   

  	
  the actual number of days elapsed during
  such Fixed Period.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AD

  	
   

  	
  =

  	
   

  	
  360; provided, however, that if the
  applicable Yield Rate is the Base Rate, then AD = 365 or 366 days, as
  applicable, for the current year.

  

 

provided, however
that (i) no provision of the Receivables Purchase Agreement shall require
the payment or permit the collection of Yield in excess of the maximum
permitted by applicable law and (ii) Yield shall not be considered paid by
any distribution if at any time such distribution is rescinded or must
otherwise be returned for any reason.

 

“Yield Rate” for any Capital of any Purchaser
allocated to any Fixed Period means:

 

(a)                                  to the extent that as of the first day of
such Fixed Period, any Conduit Purchaser funds such Capital for such Fixed
Period by issuing Commercial Paper, the rate (or if more than one rate, the weighted
average of the rates) at which Commercial Paper of such Conduit Purchaser
having a term equal to such Fixed Period and to be issued to fund the purchase
or maintenance of such Capital by such Conduit Purchaser may be sold by any
Dealer selected by such Conduit Purchaser, as agreed between each such Dealer
and such Conduit Purchaser and notified by such Conduit Purchaser to the
applicable Managing Agent and the Collateral Agent; provided, however,
if the rate (or rates) as agreed between any such Dealer and such Conduit
Purchaser with regard to any Fixed Period for any Capital is a discount rate
(or rates), the “Yield Rate” for such Fixed Period shall be the rate (or
if more than one rate, the weighted average of the rates) resulting from
converting such discount rate (or rates) to an interest-bearing
equivalent rate (or rates) per annum; or

 

(b)                                 to the extent that clause (a) does not
apply, a per annum rate equal to the Eurodollar Rate for such Fixed Period plus
seventy-five basis points (0.75%); provided, however, that if (x)
Eurodollar Rate Tranches are unavailable for any reason as set forth in Section
2.02(c) of the Receivables Purchase Agreement, or (y) the Seller and/or the
applicable Managing Agent, in either case with the consent of the Collateral
Agent, selects a Fixed Period of less than one month, then the Yield Rate for
such Fixed Period shall be equal to the Base Rate for such Fixed Period.

 

33

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