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[Execution Version]
PURCHASE AND CONTRIBUTION AGREEMENT
Dated as of June 27, 1997
Between
HPSC CAPITAL FUNDING, INC.
as the Buyer
and
HPSC, INC.
as the Originator and as the Servicer
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TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms...................................1
SECTION 1.02. Other Terms.............................................1
SECTION 1.03. Computation of Time Periods.............................1
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. Agreement to Sell and Contribute........................2
SECTION 2.02. Purchases from the Originator...........................3
SECTION 2.03. Servicing of Contracts and Equipment....................4
SECTION 2.04. Transfer of Records.....................................4
SECTION 2.05. Collections; Deemed Collections.........................4
SECTION 2.06. Payments and Computations, Etc..........................6
SECTION 2.07. Perfection of Liens; Further Assurances.................6
ARTICLE III
CONDITIONS OF PURCHASES
SECTION 3.01. Conditions Precedent to Initial Purchase................7
SECTION 3.02. Conditions Precedent to All Purchases...................8
SECTION 3.03. Effect of Payment of Purchase Price.....................9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Originator .............................................9
ARTICLE V
GENERAL COVENANTS OF THE ORIGINATOR
SECTION 5.01. Affirmative Covenants of the Originator................16
SECTION 5.02. Reporting Requirements of the Originator...............19
SECTION 5.03. Negative Covenants of the Originator...................20
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ARTICLE VI
ADMINISTRATION AND COLLECTION
SECTION 6.01. Designation of Servicer................................23
SECTION 6.02. Duties of the Servicer.................................24
SECTION 6.03. Rights of the Buyer....................................26
SECTION 6.04. Further Action Evidencing Transfers....................27
SECTION 6.05. Responsibilities of the Originator.....................27
SECTION 6.06. Administration of Collections by Servicer..............28
SECTION 6.07. Application of Collections.............................28
SECTION 6.08. Servicing Fee..........................................28
SECTION 6.09. Resignation; Successor Servicer........................29
SECTION 6.10. Custodian..............................................29
ARTICLE VII
EVENTS OF TERMINATION
SECTION 7.01. Events of Termination..................................30
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. Indemnities by the Originator..........................32
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc........................................34
SECTION 9.02. Notices, Etc...........................................35
SECTION 9.03. No Waiver; Remedies....................................35
SECTION 9.04. Binding Effect; Assignability..........................35
SECTION 9.05. GOVERNING LAW; WAIVER OF JURY TRIAL....................36
SECTION 9.06. Costs, Expenses and Taxes..............................37
SECTION 9.07. Execution in Counterparts; Severability................37
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LIST OF EXHIBITS
EXHIBIT A List of Contracts
EXHIBIT B Form of Notice of Assignment
EXHIBIT C Form of Settlement Report
EXHIBIT D Description of Credit and Collection Policy
EXHIBIT E Form of Opinion(s) of Counsel for Originator
EXHIBIT F List of Offices of Originator 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 Equipment Finance Agreement
EXHIBIT K-3 Form of Non-Equipment Finance Agreement
EXHIBIT K-4 Form of Practice Finance Loan
EXHIBIT L Form of Certificate
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PURCHASE AND CONTRIBUTION AGREEMENT
Dated as of June 27, 1997
HPSC CAPITAL FUNDING, INC., a Delaware corporation (the "Buyer"),
and HPSC, INC., a Delaware corporation, (the "Originator") agree as follows:
PRELIMINARY STATEMENTS. (1) Certain terms which are capitalized and
used throughout this Originator Purchase Agreement (in addition to those defined
above) are defined in the "Definitions List" (as defined in Article I of this
Originator Purchase Agreement).
(2) The Originator wishes to sell, contribute and assign to the
Buyer all right, title and interest of the Originator in, to and under the
Transferred Assets, and the Buyer, subject to the terms and conditions of this
Originator Agreement wishes to purchase, accept and acquire from the Originator
such Transferred Assets.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. (a) As used in this Originator
Purchase Agreement, capitalized terms used herein shall, unless otherwise
defined herein, have the meanings assigned to them in the Definitions List dated
as of the date hereof that refers to this Originator Purchase Agreement (the
"Definitions List"), 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).
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Originator Purchase Agreement shall refer to
this Originator Purchase Agreement as a whole and not to any particular
provision of this Originator Purchase Agreement, and Section, subsection,
Schedule and Exhibit references are to Sections, subsections, Schedules and
Exhibits of this Originator Purchase 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.
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SECTION 1.03. Computation of Time Periods. Unless otherwise stated
in this Originator Purchase 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 Originator 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 Originator, all of the Originator'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 Originator Purchase
Agreement is intended to, nor shall it be deemed to, constitute a commitment on
the part of the Originator 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 Originator 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 Originator Purchase Agreement is intended to, nor shall it be
deemed to, constitute an assumption by the Buyer of any obligation under any
Contract, all of which obligations shall be retained by the Originator, and the
Originator hereby agrees to perform all such obligations.
(b) It is the intent of the Originator and the Buyer that the
transfer by the Originator 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 Originator Purchase Agreement, and will provide the Buyer with
full ownership of the Transferred Assets. Each of Originator 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 so recognized due to the reporting of taxes on a consolidated basis where
applicable and the application of consolidated financial reporting principles
under GAAP). The Originator agrees to
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respond to any inquiries with respect to the transfer hereunder by confirming
the sale and contribution of the Receivables, 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.
SECTION 2.02. Purchases from the Originator.
(a) On the initial Purchase Date, the Originator shall sell to the
Buyer, and the Buyer shall purchase from the Originator, all of the Transferred
Assets arising under or in connection with the Contracts described on Exhibit A
hereto in consideration of which the Buyer will pay to the Originator an amount
in cash equal to 88.0% of the aggregate Discounted Value of all Receivables
included in such Transferred Assets. The remaining portion of such Transferred
Assets shall be a contribution to the capital of the Buyer in return for 999
shares of the capital stock of the Buyer.
(b) Each Purchase subsequent to the initial Purchase Date shall be
made on a Settlement Date upon not less than three Business Days' 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
Originator 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 Originator on or
before the applicable Settlement Date and shall be an amount not less than 95%
nor more than 100% times the aggregate Discounted Value of all 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 Originator under this
Originator Purchase 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 Originator 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 Originator 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
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day, then the Buyer shall so notify the Originator prior to consummating such
Purchase and the Originator shall, by accepting 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 Originator 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 Originator 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 Originator 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.
SECTION 2.04. Transfer of Records. (a) The transfer of Transferred
Assets hereunder shall include the transfer to the Buyer of all of the
Originator'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 Originator hereby grants to the Buyer an
irrevocable, non-exclusive license to use, without royalty or payment of any
kind, all software used by the Originator to account for the Receivables and the
Contracts, to the extent necessary to administer the Transferred Assets, whether
such software is owned by the Originator or is owned by others and used by the
Originator 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 Originator 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
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to which the Originator has the right to use the applicable computer software.
SECTION 2.05. Collections; Deemed Collections. (a) Any Collections
of Purchased Receivables subject to a Purchase hereunder received (or deemed to
have been received) by the Originator shall be remitted directly to the Buyer by
depositing such Collections in the Lock-box Account within one Business Day of
Originator'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 Originator 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 Originator or any other
Person (whether such claim arises out of the same or a related transaction or an
unrelated transaction), the Originator 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 Originator has breached its obligations under
Section 5.01(j), then the Originator 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 Originator
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 Originator Purchase Agreement or the perfection of the
Buyer's security interest in any Equipment as against the Obligor thereunder,
then the Originator shall 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 Originator's payment to the Buyer of such
deemed Collection, the Buyer shall re-assign to the Originator 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), or at such more frequent intervals as may
be required in writing by the Buyer to the Originator from time to time, the
Originator shall prepare and forward to the Buyer, a Settlement Report as of
the close of business of the Originator on the last day of the immediately
preceding month (or the last
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day of such shorter interval, as the case may be), in substantially the form
set forth in Exhibit C.
(c) Although the Originator and the Buyer agree that the Originator
(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 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 Originator 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 of a
Contract 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,
termination 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 Originator's payment of any such deemed
Collections described in this Section 2.05(c), the Buyer shall re-assign to the
Originator 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. Payment and Computations, Etc. Except as otherwise
provided herein, all amounts to be paid or deposited by the Originator
hereunder shall be paid or deposited in accordance with the terms hereof no
later than 11:00 A.M. (Boston, Massachusetts 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 Buyer and maintained at Bank of Boston. The
Originator 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
Originator 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 Originator shall, at its expense, promptly execute and
deliver all further instruments and
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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 any ownership or security interest 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 Originator shall not be required to file financing
statements or to maintain the effectiveness of previously filed financing
statements 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 Outstanding Balance of Receivables subject to a Purchase hereunder for
which no such financing statements are in effect at any time remains less than
10% of the Discounted Receivables Balance. The Originator hereby authorizes the
Buyer to file one or more financing or continuation statements, and amendments
thereto and assignments thereof, relative to all or any part of the Transferred
Assets now existing or hereafter arising without the signature of the Originator
where permitted by law. A carbon, photographic or other reproduction of this
Originator Purchase Agreement or any financing statement covering the
Transferred Assets or any part thereof shall be sufficient as a financing
statement. The Originator will furnish to the Buyer from time to time statements
and schedules further identifying and describing the Transferred Assets and such
other reports in connection with the Transferred Assets as the Buyer may
reasonably request, all in reasonable detail.
ARTICLE III
CONDITIONS OF PURCHASES
SECTION 3.01. Conditions Precedent to Initial Purchase. The initial
Purchase shall be subject to the condition precedent that the Buyer shall have
received the following, each in form and substance satisfactory to the Buyer:
(a) The Certificate for the Buyer;
(b) This Originator Purchase Agreement executed by the
Buyer and the Originator;
(c) Acknowledgment copies of proper UCC-1 Financing Statements
executed by the Originator, as may be necessary or, in the opinion of the Buyer,
desirable under the UCC of all appropriate jurisdictions or any comparable law
to perfect the
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Buyer's interests in all Receivables, Contracts and Related Security in which an
interest may be assigned to it hereunder;
(d) Certified copies of Requests for Information or Copies (Form
UCC-11) (or a similar search report certified by a party acceptable to the
Buyer), dated a date reasonably near to the date hereof, listing all effective
financing statements which name the Originator (under its present name and any
previous names) as debtor and which are filed in the jurisdictions in which
filings were made pursuant to subsection (c) of this Section 3.01, together with
copies of such financing statements;
(e) Acknowledgment copies of proper financing statements (Form
UCC-3), if any, necessary to release all security interests and other rights of
any Person in the Receivables, Related Security and other Transferred Assets
previously granted by the Originator;
(f) A copy of the resolutions of the Board of Direc tors of the
Originator approving this Originator Purchase Agreement and the other Facility
Documents to be delivered by it hereunder and the transactions contemplated
hereby, certified by its Secretary or Assistant Secretary;
(g) The Certificate of Incorporation of the Originator certified
by the Secretary of State of Delaware;
(h) Good Standing Certificates for the Originator issued by the
Secretaries of State of the State of Delaware and The Commonwealth of
Massachusetts;
(i) A certificate of the Secretary or Assistant Secre tary of the
Originator certifying (i) the names and true signa tures of the officers
authorized on its behalf to sign this Originator Purchase Agreement and the
other Facility Documents to be delivered by it hereunder (on which certificate
the Buyer (and the Deal Agent) may conclusively rely until such time as the
Buyer (and the Deal Agent) shall receive from the Originator a revised
certificate meeting the requirements of this subsection (h)) and (ii) a copy of
the Originator's by-laws;
(j) The Lock-Box Agreements with the Lock-Box Banks in each case,
executed by the Originator and the Buyer and acknowledged and agreed to by the
applicable Lock-Box Bank together with an acknowledgment and authorization
executed by the Deal Agent, and acknowledged and agreed to by the applicable
Lock-Box Bank;
(k) Copies of all written agreements, if any, between each Lock-Box
Bank and Originator with respect to the opening or operation of the Lock-Box
Accounts;
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(l) An opinion of Hill & Barlow, counsel to the Originator, in
substantially the form of Exhibit E and as to such other matters as the Buyer
may reasonably request; and
(m) An opinion of Hill & Barlow, counsel to the Originator, in form
and substance reasonably satisfactory to the Deal Agent, to the effect that, in
the event of any Insolvency Proceeding filed by or against the Originator, the
Transferred Assets would not be treated as property of the Originator's estate
and that the Buyer's assets and liabilities would not be substantively
consolidated with those of the Originator.
SECTION 3.02. Conditions Precedent to All Purchases. Each Purchase
(including the initial Purchase) by the Buyer from the Originator 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 Originator shall have
delivered to the Buyer (i) in form and substance satisfactory to the Buyer, a
completed Settlement Report as of the end of the immediately preceding calendar
month and containing such 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), (iii) a completed Certificate with
respect to such Contracts and (iv) a notice from the Custodian confirming that
the Custodian has received the Contract Files for each Contract to be included
in such Purchase; (b) on the date of such Purchase the following statements
shall be true and the Originator 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
and
(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;
and (c) the Buyer shall have received such other approvals or documents as the
Buyer may reasonably request.
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 Originator Purchase Agreement for the failure by the
Originator in fact to satisfy any such condition precedent.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Originator.
The Originator represents and warrants as follows:
(a) Due Incorporation and Good Standing. The Originator 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 Originator or (iv) the ability of the Originator (individually or as
Servicer) to perform its obligations hereunder.
(b) Due Authorization and No Conflict. The execution, delivery and
performance by the Originator of this Originator Purchase Agreement, the
Certificate, 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 Originator's corporate powers, have been duly
authorized by all necessary corporate action, do not contravene (i) the
Originator's charter or by-laws, (ii) any law, rule or regulation applicable to
the Originator, (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 Originator or
its property or (iv) any order, writ, judgment, award, injunction or decree
binding on or affecting the Originator 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 con templated hereby requires compliance with any bulk sales act or
similar law. This Originator Purchase Agreement and the Certi ficate have been
duly executed and delivered on behalf of the Originator.
(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 Originator Purchase Agreement and the
security interests granted 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
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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 Originator Purchase Agreement, the
Certificate or any other Facility Document to which the Originator 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 Originator Purchase
Agreement, the Certificate and each of the other Facility Documents to be
delivered by the Originator in connection herewith constitute the legal, valid
and binding obligations of the Originator enforceable against the Originator 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
Originator and its consolidated Subsidiaries as at December 31, 1996, and the
related statements of income, retained earnings and cash flows of the Originator
and its consolidated Subsidiaries for the fiscal year then ended, certified by
its independent public accountants, and the unaudited interim consolidated
balance sheets of the Originator and its subsidiaries as of March 31, 1997 and
the related consolidated statements of income, retained earnings and cash flows
for the three months ending on such date (the "Interim Financials"), in each
case fairly present the consolidated financial condition of the Originator and
its consolidated Subsidiaries as at such dates and the consolidated results of
the operations of the Originator and its consolidated Subsidiaries for the
period ended on such dates, all in accordance with GAAP, and since December 31,
1996, there has been no material adverse change in any such condition or
operations, except as reflected in the Interim Financials. Neither the
Originator nor any of its subsidiaries has any material 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 Originator threatened, against or affecting
the Originator or any of its Subsidiaries, or the property of the Originator 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)
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financial condition of the Originator or (ii) the ability of the
Originator to perform its obligations under this Originator Purchase Agreement
or the Certificate or (iii) the collectibility of the Receivables. Neither the
Originator 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 Originator or any of its Subsidiaries or the
Originator's ability to perform its obligations hereunder.
(g) Use of Proceeds. No proceeds of any Purchase will be used by the
Originator 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
Originator 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 Originator'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 Originator and no such
Transferred Assets shall constitute property of the Originator; 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 Originator
Purchase Agreement.
(i) Accuracy of Information. No Settlement Report (if prepared by
the Originator, or to the extent that information contained therein is supplied
by the Originator), information, exhibit, financial statement, document, book,
record or report (other than forecasts required to be delivered by the
Originator hereunder) furnished or to be furnished by the Originator to the
Buyer in connection with this Originator Purchase 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
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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.
(j) Location of Chief Executive Office and Records. The chief place
of business and chief executive office of the Originator are located at the
address of the Originator referred to in Section 9.02 hereof and the locations
of the offices where the Originator 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, within one
month of the date of Purchase of such Contract, been instructed to remit payment
on all Receivables subject to a Purchase hereunder to a Post Office Box for
remittance to a Lock-Box Account or directly to a Lock-Box Account substantially
in the form of Exhibit G. From and after the effective date hereof, 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 Originator has delivered to the Deal Agent a
duplicate key to each Post Office Box and has filed a standing delivery order
with the United States Postal Service authorizing the Deal 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
Originator has no trade names, fictitious names, assumed names or "doing
business as" names.
(m) Separate Corporate Existence. The Originator is entering into
the transactions contemplated by this Originator Purchase Agreement in reliance
on the Buyer's identity as a separate legal entity from the Originator 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 Originator and each such
other Affiliate.
(n) Taxes. The Originator 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
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proceedings and with respect to which the Originator 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 Originator (i) is not "insolvent" (as such term is
defined in Section 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
Originator Purchase Agreement and by each of the Facility Documents are being
consummated by the Originator in furtherance of the Originator's ordinary
business, with no contemplation of insolvency and with no 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 capital stock of the Buyer,
the Originator shall have received reasonably equivalent value for the
Transferred Assets sold or otherwise conveyed to the Buyer under this Originator
Purchase Agreement.
(q) Software. Attached as Exhibit J is a list of all computer
software used by the Originator to administer the Receivables and other
Transferred Assets. Each of the Buyer and the Deal 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 Originator 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 Equipment Finance Agreement, is in substantially
the form of Exhibit K-2 hereto; (c) if it constitutes a Non-Equipment
Finance Agreement, is in substantially the form of Exhibit K-3 hereto; and
(d) if it constitutes a Practice Finance Loan, is in substantially the
form of 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
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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) [Reserved].
(iv) Each Lease requires the Obligor to assume all risk of loss or
malfunction of the related Equipment. Each Lease and Equipment Finance
Agreement 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 Originator without the consent of
any Person. No Contract permits early termination or prepayment, unless,
in the case of a Practice Finance Loan, the amount required to be paid by
or on behalf of the 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. Each Lease and Equipment
Finance Agreement 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 Deal Agent is named as loss payee under all physical
damage insurance on the Equipment that is carried by the Originator or the
Buyer. To the best of Originator'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 Originator's knowledge, the
related Equipment was accepted by the Obligor after reasonable opportunity
to
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inspect and test the same and no Obligor has informed the Originator of
any defects therein.
(vi) [Reserved].
(vii) [Reserved].
(viii) [Reserved].
(ix) As of the Purchase Date thereof, the Originator 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) [Reserved].
(s) Other Indebtedness. The Originator 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 Originator 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 Originator 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 Originator to perform its obligations under
this Originator Purchase 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 Originator has not failed to satisfy the minimum funding
requirements under ERISA or the Internal Revenue Code with respect to any
Benefit Plan. Neither the Originator nor any of its ERISA Affiliates has
incurred any liability to or on account of a Benefit Plan or Multiemployer Plan
pursuant to Section 515, 4062, 4063, 4064, 4201 or 4204 of ERISA or expects to
incur any liability under any of the foregoing sections on account of the
termination of participation in or contributions to any such Plan or
Multiemployer Plan.
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ARTICLE V
GENERAL COVENANTS OF THE ORIGINATOR
SECTION 5.01. Affirmative Covenants of the Originator. From the
effective date hereof until the later of the Termination Date or the Collection
Date, the Originator 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 Originator or (iv) the ability of the Originator (individually or as
Servicer) to perform its obligations here under 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 Originator and during regular business hours, permit the Buyer and
its designees (including the Deal 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 Originator for the
purpose of examining such Records, and to discuss matters relating to the
Receivables or the Originator's performance hereunder with any of the officers
or employees of the Originator having knowledge of such matters. Each such audit
shall be at the sole expense of the Originator.
(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
Receivable).
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(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 Originator 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
Originator shall receive any Collections (including, without limitation, any
Collections deemed to have been received pursuant to Section 2.05), the
Originator 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 Originator's identification
thereof and in any event within four Business Days following Originator'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 first priority
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 first 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 (in each such case, including, without limitation, the filing of a
continuation statement with respect to a financing statement originally filed
under the UCC of any appropriate jurisdiction prior to the date on which the
effectiveness of such financing statement would lapse under the UCC of such
jurisdiction); provided, that the Originator shall not be required to file
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financing statements or to maintain the effectiveness of previously filed
financing statements with respect to any Eligible 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
10.0% of the Discounted Receivables Balance.
(k) Maintenance of Insurance. Maintain, or 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. Such insurance policies (and
self-insurance where permitted) shall be maintained in an amount which is not
less than the Discounted Value for the Receivables arising under the relevant
Contracts. Each such casualty and liability policy if maintained by an Obligor,
shall name the Originator or the Buyer as loss payee and additional insured and
the Originator shall have assigned any such interest to the Buyer. The
Originator 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 Originator and the Originator's other
Subsidiaries; (ii) not holding itself out to be responsible for the debts of the
Buyer or, other than by reason of owning capital stock 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 Deal 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 corporate procedures required by its
and the Buyer's respective certificates of incorporation and by-laws are duly
and validly taken; (v) keeping correct and complete records and books of account
and corporate minutes; (vi) not acting in any other manner 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 EagleFunding
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
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returns could not reasonably be expected to have a material adverse effect on
the collectibility of the Transferred Assets or the ability of the Originator 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 Originator 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
Originator 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 Originator 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.
(n) Segregation of Collections. Prevent the deposit into any of the
Lock-Box Accounts of any funds other than Collections in respect of the
Transferred Assets and, to the extent that any such funds 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.
(o) Independent Director. Take all actions, in its capacity as the
sole shareholder of the Buyer, necessary or appropriate to maintain at all times
at least one independent director on the Buyer's Board of Directors (an
"Independent Director") whom (i) is not a stockholder (whether direct, indirect
or beneficial, other than a holder of indirect stock ownership of the Originator
or of any affiliate through a mutual fund or similar diversified investment
pool), customer, advisor or supplier of the Originator or any of its
affiliates); (ii) is not a director, officer, employee or affiliate of the
Originator or any of its affiliates, other than the Buyer (the Originator and
its affiliates other than the Buyer being hereinafter referred to as the "Parent
Group"); (iii) is not a person related to any person referred to in clauses (i)
and (ii); (iv) is not a trustee, conservator or receiver for any member of the
Parent Group; and (v) has prior experience as an independent director for a
corporation whose charter documents require the unanimous written consent of all
independent directors thereof before such corporation could consent to the
institution of bankruptcy or insolvency proceedings against it or could file a
petition seeking relief under any applicable federal or state law relating to
bankruptcy.
SECTION 5.02. Reporting Requirements of the Originator. From the
effective date hereof until the later of
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the Termination Date or the Collection Date, the Originator 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 Originator,
consolidated balance sheets of the Originator and its consolidated Subsidiaries
as of the end of such quarter, and consolidated statements of income and
retained earnings of the Originator and its consolidated Subsidiaries each 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 Originator;
(b) as soon as available and in any event within 105 days after the
end of each fiscal year of the Originator, a copy of the consolidated balance
sheets of the Originator and its consolidated Subsidiaries as of the end of such
year and the related consolidated statements of income and retained earnings of
the Originator and its consolidated Subsidiaries for such year each reported on
by nationally recognized independent public accountants acceptable to the Buyer
(the Buyer acknowledges that any of the "Big 6" accounting firms will be
acceptable to the Buyer);
(c) promptly after the sending or filing thereof, copies of all
reports which the Originator sends to any of its security holders and copies of
all reports and registration statements which the Originator 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 Originator setting forth details of such Event of
Termination or event and the action which the Originator 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 Originator or any Subsidiary of the Originator files under
ERISA with the IRS or the PBGC or the DOL or which the Originator or any
Subsidiary of the Originator receives from the PBGC;
(f) promptly upon the effectiveness thereof, any change in the
Credit and Collection Policy; and
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(g) 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 Originator or any Subsidiary of the Originator 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 Originator Purchase
Agreement.
SECTION 5.03. Negative Covenants of the Originator. From the
effective date hereof until the later of the Termination Date or the Collection
Date, the Originator 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 Receivables are sent, or assign any right to
receive income in respect thereof, or upon any other Transferred Asset, except
that the Originator 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
Originator 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 Originator, 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 Deal Agent, make any material change in the
character of its business 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 or 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, (B) prior to the effective date of such addition,
termination or change,
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(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 Originator or the
respective Lock-Box Bank with respect to any new Lock-Box Account, and (C) the
prior written consent of the Buyer to such addition, termination or change
(which consent shall not be unreasonably withheld).
(e) Merger Etc. (i) Merge with or into or consolidate with or into
a 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 the Originator to do so, except that (A) any Subsidiary of the
Originator (other than the Buyer) may merge or consolidate with or transfer
assets to or acquire assets from any other Subsidiary of the Originator, (B) any
Subsidiary of the Originator (other than the Buyer) may merge into or transfer
assets to the Originator or any other Person and (C) the Originator or any
Subsidiary of the Originator 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 Originator is a
party, the Originator is the surviving corporation.
(f) Change in Corporate Name. Make any change to its corporate name
or use any trade names, fictitious names, assumed names or "doing business as"
names other than those described in Exhibit I, unless the Originator has given
to the Buyer at least thirty (30) days' prior written notice thereof and, prior
to the effective date of any such name change or use, the Originator delivers to
the Buyer such Financing Statements (Form UCC-1 and UCC-3) executed by the
Originator which the Buyer may reasonably request to reflect such name 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 Originator 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
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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 Originator or any ERISA Affiliate under ERISA or the IRC; provided,
however, the Originator and its 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 Originator, in
the aggregate, involve a payment of money by or an incurrence of liability of
the Originator 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 in the case of a
Practice Finance Loan prior to such termination or rejection, the Originator
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
Originator Purchase Agreement in any manner other than as the sale of, or a
capital contribution of, the Transferred Assets by the Originator 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) Certificate of Incorporation. Cause the Buyer to amend its
Certificate of Incorporation or By-laws in any manner which would require the
consent of the Buyer's independent director or directors, without the Deal
Agent's prior written consent.
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
Originator the sole right to service, administer and collect the Receivables, to
assign such right and
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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 Deal 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 Buyer may, at any time upon ten Business Days prior
written notice, designate as Servicer any Person to succeed the Originator on
the condition any such Person so designated shall agree to perform, and shall
have assumed, the duties and obligations of the Servicer pursuant to the terms
hereof (including, without limitation Section 6.09(c)), and shall be acceptable
to the Deal 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 Deal Agent). The Deal Agent may at any time from and
after a Servicing Termination Event designate as Servicer 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 Buyer and the Deal 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 may,
from time to time, pursuant to the EagleFunding Purchase Agreement, grant to the
Deal Agent, for the benefit of EagleFunding, all of its right, title and
interest in and to all or any portion of the Transferred Assets, and has
assigned to the Deal Agent all of its rights under this Originator Purchase
Agreement, including its rights with respect to the Servicer under this Article
VI, as more fully described in Section 9.04 hereunder.
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 accord
- -ance 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, and in
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prosecuting and litigating with respect to Receivables as it applies and follows
with respect to accounts, chattel paper and instruments which are not
Transferred Assets. In no event shall the Servicer be entitled to make the Deal
Agent or the Buyer a party to any litigation without the Buyer's and the Deal
Agent'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 6.11 of the EagleFunding
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 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 Transferred Asset to
reflect the reductions, adjustments or cancellations described in the first
sentence of Section 2.05(b) hereof, (iii) in the case of a Practice Finance
Loan, so long as such prepayment would not cause an Event of Termination under
Section 7.01(m) hereof and subject to the payment of any Termination Amount
payable under such Contract, consent to the prepayment or early termination of
such Contract, and (iv) amend, modify or waive any provision of a Delinquent
Receivable or Defaulted Receivable so as to maximize the collectibility thereof
(it being understood that neither the Originator nor the Buyer may take any of
the actions referred to in clauses (i) through (iv) above at any time (x) after
the occurrence of the Termination Date, or (y) during which the Originator is
not the Servicer, absent the prior consent of the Deal Agent). The Originator
shall deliver to the Servicer, and the Servicer shall hold in trust for the
Originator 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 Deal Agent 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.
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(b) The Servicer shall as soon as practicable following receipt turn
over to the Originator the collections of any receivable which is not a
Transferred Asset 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.
(c) Notwithstanding anything to the contrary contained in this
Originator Purchase Agreement, the Servicer, if the Deal 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 Originator 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
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 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 Deal Agent
shall 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
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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 Deal Agent and any
Person designated by the Buyer or the Deal 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 Deal Agent, the Servicer, at its own expense, will
(i) deliver to the Buyer and the Deal Agent and any Person designated by the
Buyer or the Deal Agent any records and invoices pertaining to the Transferred
Assets and evidence thereof as the Buyer, the Deal 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 Deal Agent may direct to reflect the
interests of the Buyer and the Deal Agent in such Transferred Assets. The
Servicer will either (x) 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 (y) 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 Deal 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 Deal Agent).
(b) The Originator shall, at the Deal Agent's or Buyer's request and
at the Originator'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 Deal Agent).
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(c) The Originator 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.
(d) The Originator hereby authorizes the Buyer and the Deal Agent to
take any and all steps in the Originator's name and on behalf of the
Originator necessary or desirable, in the determination of the Buyer
and/or the Deal Agent, to collect all amounts due under any and all
Transferred Assets or related Receivables, including, without limitation,
endorsing the Originator'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 Originator
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 Originator 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 Originator Purchase 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 Originator 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 Originator where
permitted by law. A carbon, photographic or other reproduction of this
Originator Purchase Agreement or any financing statement covering the
Transferred Assets, or any part thereof, shall be sufficient as a financing
statement. If the Originator fails to perform any of its agreements or
obligations under this Originator Purchase 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 Originator upon the Buyer's demand therefor; provided,
however, prior to taking any such action, the Buyer shall give notice of such
intention to the Originator and provide the Originator with a reasonable
opportunity to take such action itself.
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SECTION 6.05. Responsibilities of the Originator. Anything herein to
the contrary notwithstanding, the Originator 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 this Originator Purchase Agreement and the
exercise by the Buyer or its assigns of their respective rights hereunder shall
not relieve Originator 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 Originator 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. (a) 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 other items in trust for the benefit of the
Buyer and the Deal 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.
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
Originator 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 Originator or the Servicer. The Servicer shall not influence or
instruct any Obligor who is indebted to the Originator 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.
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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 1.00%
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 Deal 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 Deal 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 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 and the Deal 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 Deal 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 Deal 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 Deal Agent. Upon its appointment, the Successor Servicer
shall be the successor in all respects to the Servicer with respect to servicing
functions under this Originator Purchase Agreement and 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 Originator Purchase Agreement or any
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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.
SECTION 6.10. Custodian. All original counterpart copies of the
Contracts, and all other components of the Contract Files in respect of the
Purchased Interests shall at all times prior to the Collection Date be held on
behalf of the Buyer by the Person (the "Custodian") so designated from time to
time in accordance with Section 6.12 of the EagleFunding Purchase Agreement.
Promptly upon the Originator's possession of an original Contract File or any of
the contents thereof, the Originator hereby agrees to deliver such Contract File
(or such contents) directly to the Custodian pursuant to the terms of Section
6.12 of the EagleFunding Purchase Agreement.
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 Originator or any Affiliate of the
Originator) 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 Originator or any
Affiliate of the Originator) or the Originator 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 Originator 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
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(c) Any representation or warranty made or deemed to be made by the
Originator (or any of its officers) under or in connection with this Originator
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 Business Days,
the Originator shall have ten 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 2.05, then, upon the Originator's payment
of such deemed Collection at the time and in the manner required under this
Originator Purchase Agreement, the breach of such representation or warranty
shall not give rise to an Event of Termination under this subsection (c); or
(d) The Originator shall fail to perform or observe any other term,
covenant or agreement contained in this Originator Purchase 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 Originator Purchase Agreement shall be deemed a
remedy of such failure); or
(e) The Originator 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, speci-
fied 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 Originator 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 Originator satisfies
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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
Originator or the Buyer or (ii) the Originator 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 Originator since December 31, 1996
(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 Originator to
collect Receivables generally or the ability of the Originator to perform
hereunder; or
(i) The Originator shall fail to observe any covenant
contained in Section 5.04; or
(j) [reserved]; or
(k) [reserved]; or
(l) [reserved]; or
(m) The Originator shall fail to pay any principal or premium or
interest on any Indebtedness having a principal amount of $1,000,000 or greater,
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 Originator 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
(n) The PBGC or the IRS shall have filed notice of one or more
Adverse Claims against the Originator (unless such Adverse Claim does not
purport to cover the Purchased Interests), and such notice shall have remained
in effect for more than thirty (30) days unless, prior to the expiration of such
period, such liens shall have been adequately bonded by the Originator; or
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(o) A Servicer Termination Event shall have occurred;
then, and in any such event, the Buyer may by notice to the Originator 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 Originator Purchase 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 Originator. (a) Without limiting
any other rights which the Buyer may have hereunder or under applicable law, the
Originator hereby agrees to indemnify the Buyer and its permitted successors and
assigns (including, without limitation, EagleFunding, and the Deal Agent) 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 Originator
Purchase 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
Originator (or any of its officers) under or in connection with this
Originator Purchase Agreement, any Settlement Report or any other infor-
mation or report delivered by 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 Originator (individually or as Servicer) to
comply with any term, provision or covenant contained in this Originator
Purchase
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Agreement or the EagleFunding Purchase Agreement or any agreement executed
in connection with this Originator Purchase Agreement or the EagleFunding
Purchase 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 an interest in 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 Originator 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 Originator, 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;
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(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 Originator
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 Originator 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;
(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 Originator.
Any amounts subject to the indemnification provisions of this Section 8.01 shall
be paid by the Originator 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 Originator Purchase Agreement nor consent to any departure by
the Originator, shall in any event be effective unless the same shall be in
writing and signed by (i) the Originator and the Buyer (with respect to an
amendment) or (ii) the Buyer (with respect to a waiver or consent by it) or the
Originator (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. The Buyer shall send, or shall
cause to be sent, copies of all amendments, modifications or supplements to this
Originator Purchase Agreement to each rating agency then rating the Commercial
Paper, prior to the execution thereof by all parties thereto. This Originator
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
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hereto) among the parties hereto with respect to the subject matter hereof,
superseding all prior oral or written under standings.
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.
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 Originator
Purchase Agreement shall be binding upon and inure to the benefit of the
Originator, the Buyer and their respective successors and permitted assigns
(which successors of the Originator shall include a trustee in bankruptcy). The
Originator may not assign any of its rights and obligations hereunder or any
interest herein without the prior written consent of the Buyer and the Deal
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 Originator.
Without limiting the foregoing, the Originator acknowledges that pursuant to the
terms of the EagleFunding Purchase Agreement, the Buyer is assigning to
EagleFunding, all of its rights, remedies, powers and privileges hereunder and
that EagleFunding may further assign such rights, remedies, powers and
privileges to the extent permitted in the EagleFunding Purchase Agreement. The
Originator agrees that each of EagleFunding, and the Deal Agent acting on behalf
of EagleFunding, as the assignee of the Buyer, shall, subject to the terms of
the EagleFunding Purchase Agreement, have the right to enforce this Originator
Purchase Agreement and to exercise directly all of the Buyer's rights and
remedies under this Originator Purchase Agreement (including, without
limitation, the rights and remedies under Sections 6.01, 6.02, 6.03, 6.04, and
8.01, and the Originator hereby consents to the
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foregoing and agrees to cooperate fully with EagleFunding and/or the Deal Agent
in the exercise of such rights and remedies. Without limiting the foregoing, the
Originator hereby acknowledges that each of the Buyer, EagleFunding and the Deal
Agent have agreed pursuant to the EagleFunding Purchase Agreement and certain
related agreements that, subject to the restrictions set forth therein, each of
the Deal Agent and certain parties providing credit enhancement and/or liquidity
for EagleFunding in connection with the EagleFunding Purchase Agreement shall be
entitled to exercise the Buyer's rights under this Originator Purchase
Agreement. The Originator hereby consents to the foregoing and agrees to
cooperate with any such Person electing to exercise the Buyer's rights under
this Originator Purchase Agreement. This Originator 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 Collection Date shall occur; provided,
however, that the rights and remedies with respect to any breach of any
representation and warranty made by the Originator pursuant to Article IV and
the indemnification and payment provisions of Article VIII and Article IX shall
be continuing and shall survive any termination of this Originator Purchase
Agreement.
SECTION 9.05. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS ORIGINATOR
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 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 ORIGINATOR 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 ORIGINATOR 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
ORIGINATOR HEREBY IRREVOCABLY APPOINTS AS ITS AGENT FOR THE PURPOSE OF ACCEPTING
SERVICE OF PROCESS. THE ORIGINATOR HEREBY WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE BETWEEN THE ORIGINATOR AND THE BUYER ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH
THIS ORIGINATOR 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 ORIGINATOR HEREBY WAIVES ANY OBJECTION BASED ON
FORUM NON CONVENES, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED
HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL
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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 ORIGINATOR 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 Originator 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 Originator 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
Buyer (and the Deal Agent) with respect thereto and with respect to advising the
Buyer (and the Deal Agent) as to its rights and remedies under this Originator
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 Originator Purchase Agreement and the
other agreements and documents to be delivered hereunder.
(b) In addition, the Originator 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 Originator
Purchase 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
Originator 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 Originator Purchase Agreement or the Certificate 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.
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IN WITNESS WHEREOF, the parties have caused this Originator Purchase
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
ORIGINATOR/SERVICER: HPSC, INC.
By:/s/Rene Lefebvre
-----------------------------------
Name: Rene Lefebvre
Title: VP, CEO
By:/s/
-----------------------------------
Name:
Title:
Address: Sixty State Street
35th Floor
Boston, MA 02109-1803
Attn:
Telephone: (617) 720-7251
Telecopy: (617) 720-7272
BUYER: HPSC CAPITAL FUNDING, INC.
By:
-----------------------------------
Name:
Title: PRESIDENT
Address: Sixty State Street
35th Floor
Boston, MA 02109-1803
Attn:
Telephone: (617) 720-7250
Telecopy: (617) 720-7299