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EXHIBIT 10.52
RECEIVABLES TRANSFER AGREEMENT
by and among
HPSC EQUIPMENT RECEIVABLES 2000-1 LLC I
and
HPSC EQUIPMENT RECEIVABLES 2000-1 LLC II
as Issuers,
HPSC, INC.
as Servicer,
HPSC, INC.
and
AMERICAN COMMERCIAL FINANCE CORPORATION
as Originators and Transferors,
HPSC Bravo Funding Corp.
and
HPSC Capital Funding, Inc.
as Transferors,
Dated as of December 1, 2000
HPSC EQUIPMENT RECEIVABLES 2000-1 LLC I
and
HPSC EQUIPMENT RECEIVABLES 2000-1 LLC II
Equipment Contract Backed Notes
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TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS............................................................... 1
Section 1.01. Definitions............................................................... 1
Section 1.02. General Interpretive Principles........................................... 1
ARTICLE II. TRANSFER OF CONVEYED ASSETS............................................... 2
Section 2.01. Conveyance of Initial Conveyed Assets..................................... 2
Section 2.02. Conveyance of Subsequent Conveyed Assets.................................. 4
Section 2.03. Subsequent Revolver Transfers............................................. 6
Section 2.04. Custody of Contract Files................................................. 6
ARTICLE III. REPRESENTATIONS AND WARRANTIES............................................ 6
Section 3.01. Representations and Warranties............................................ 6
Section 3.02. Representations and Warranties of the Originators with Respect to
the Contracts.......................................................... 12
Section 3.03. Substitution of Contracts and Equipment by each of the Originators
and the Servicer....................................................... 18
Section 3.04. Breach of Representations and Warranties; Repurchase of Contracts......... 19
ARTICLE IV. COVENANTS................................................................. 20
Section 4.01. Covenants of the Originators.............................................. 20
Section 4.02. Covenants of the Issuers.................................................. 24
Section 4.03. Transfer of Conveyed Assets............................................... 25
ARTICLE V. CONDITIONS PRECEDENT...................................................... 26
Section 5.01. Conditions to Issuers' Initial Obligations................................ 26
Section 5.02. Conditions to Issuers' Subsequent Obligations............................. 26
ARTICLE VI. TERMINATION............................................................... 27
Section 6.01. Termination............................................................... 27
ARTICLE VII. MISCELLANEOUS PROVISIONS.................................................. 28
Section 7.01. Amendment................................................................. 28
Section 7.02. GOVERNING LAW............................................................. 28
Section 7.03. Waiver of Jury Trial...................................................... 28
Section 7.04. Notices................................................................... 28
Section 7.05. Severability of Provisions................................................ 28
Section 7.06. Assignment................................................................ 29
Section 7.07. Further Assurances........................................................ 29
Section 7.08. No Waiver; Cumulative Remedies............................................ 29
Section 7.09. Counterparts.............................................................. 29
Section 7.10. Binding Effect; Third-Party Beneficiaries................................. 29
Section 7.11. Merger and Integration.................................................... 29
Section 7.12. Headings.................................................................. 29
Section 7.13. Schedules and Exhibits.................................................... 30
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Section 7.14. No Bankruptcy Petition Against the Transferors or the Issuers............. 30
Section 7.15. Limited Recourse to SPV Transferors....................................... 30
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RECEIVABLES TRANSFER AGREEMENT
THIS RECEIVABLES TRANSFER AGREEMENT (this "Agreement"), dated as of
December 1, 2000, is entered into among HPSC, INC. ("HPSC"), a Delaware
corporation, as servicer (the "Servicer") and as an originator (an
"Originator"), AMERICAN COMMERCIAL FINANCE CORPORATION ("ACFC"), a Delaware
corporation as an originator (an "Originator", and together with HPSC, the
"Originators"), HPSC BRAVO FUNDING CORP. ("Bravo"), a Delaware corporation, as a
"Transferor", HPSC CAPITAL FUNDING, INC. ("Capital" and together with HPSC, ACFC
and Bravo, the "Transferors"), a Delaware corporation, as a "Transferor" and
HPSC EQUIPMENT RECEIVABLES 2000-1 LLC I ("LLC I"), a Delaware limited liability
company and HPSC EQUIPMENT RECEIVABLES 2000-1 LLC II ("LLC II"), a Delaware
limited liability company as issuers (each of LLC I and LLC II, an "Issuer", and
collectively, the "Issuers").
WITNESSETH:
WHEREAS, each of Bravo and Capital has previously acquired their
respective rights in certain Contracts, Equipment and other Collateral from HPSC
and ACFC under certain existing purchase agreements; and
WHEREAS, each of the Transferors desires to convey, transfer, sell and
assign all of its right, title and interest in and to the Contracts and all of
its right, title and interest in and to the Equipment and all other Collateral
to LLC I or LLC II, as applicable, upon the terms and conditions hereinafter set
forth; and
WHEREAS, each of the Originators, the Servicer, each of the Transferors
and each of the Issuers agree that all representations, warranties, covenants
and agreements made by it herein shall be for the benefit of the Noteholders and
the Indenture Trustee.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01. Definitions. Whenever used in this Agreement, capitalized
terms used and not defined herein shall have the meanings set forth in Annex A
hereto.
Section 1.02. General Interpretive Principles.
For purposes of this Agreement except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
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(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP as in effect on the date hereof;
(c) references herein to "Articles", "Sections", "Subsections",
"Paragraphs" and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) a reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation by
reason of enumeration.
ARTICLE II.
TRANSFER OF CONVEYED ASSETS
Section 2.01. Conveyance of Initial Conveyed Assets.
(a) Each of Bravo and Capital hereby sells, transfers and otherwise
conveys to LLC I all of its right, title and interest in, to and under the
Initial Contracts owned by it on the date hereof and set forth on the List of
Initial Contracts attached hereto as Schedule 1A, and the Initial Conveyed
Assets related thereto, without recourse. Notwithstanding the foregoing, each of
Bravo and Capital retains all rights to monies due under the Contracts prior to
January 1, 2001.
(b) Each of ACFC, Bravo and Capital hereby sells, transfers and
otherwise conveys to LLC II all of its respective right, title and interest in,
to and under the Initial Contracts owned by it on the date hereof and set forth
on the List of Initial Contracts attached hereto as Schedule 1B and 1C,
respectively, and the Initial Conveyed Assets related thereto, without recourse
(except as set forth herein and, solely in the case of ACFC, in the Indenture).
Notwithstanding the foregoing, each of Bravo and Capital retains all rights to
monies due under the Contracts prior to January 1, 2001.
(c) The conveyances occurring on the Closing Date, each Subsequent
Transfer Date and each Substitute Transfer Date shall be consummated such that
only Conveyed Assets which constitute Financial Assets may be conveyed to LLC I.
The Conveyed Assets which are conveyed to LLC I and LLC II, respectively, on the
Closing Date, each Subsequent Transfer Date and each Substitute Transfer Date
will be indicated on a List of Contracts delivered to the Indenture Trustee on
such date.
(d) In connection with such sales and conveyances, each of the
Transferors agrees to record and file financing statements (and thereafter will
file continuation statements with respect to such financing statements) (such
recordation and filing to be at the expense of the
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Servicer) with respect to the related Initial Conveyed Assets sold and to be
transferred to LLC I or LLC II, as applicable, pursuant to this Agreement, the
Subsequent Conveyed Assets to be sold and transferred to LLC I or LLC II
pursuant to any Subsequent Transfer Agreement, and the Substitute Conveyed
Assets, meeting the requirements of applicable state law in such manner and in
such jurisdictions as are necessary to perfect and to maintain the perfection
of, the transfer, conveyance and sale of the related Initial Conveyed Assets,
the related Subsequent Conveyed Assets and the related Substitute Conveyed
Assets (subject to the Filing Requirements with respect to the Equipment) from
each of the Transferors to LLC I or LLC II, as applicable, and the transfer,
assignment and pledge of the Pledged Property from LLC I or LLC II, as
applicable, to the Indenture Trustee on behalf of the Noteholders, pursuant to
the Indenture, and to deliver a file-stamped copy of such financing statements
or other evidence of such filings to the Indenture Trustee within thirty (30)
days of each Conveyance Date. The Contract Files (including each original
executed Contract) will not be physically delivered to the Issuers but instead
will be held by the Custodian for the benefit of the Indenture Trustee.
(e) In accordance with the Servicing Agreement, including, without
limitation, Section 4.11(d) thereof, the Servicer shall, on or prior to the
related Conveyance Date, and with respect to Substitute Contracts, as soon as
possible, but in no event later than two (2) Business Days after the related
Conveyance Date, (i) cause the Contract Management System to be marked with a
specified code (the "Contract Management Code") to show that the Initial
Conveyed Assets, the Subsequent Conveyed Assets, or the Substitute Conveyed
Assets, as the case may be, have been assigned and transferred to LLC I or LLC
II, as applicable, in accordance with this Agreement, a Subsequent Transfer
Agreement or a Substitute Transfer Agreement, as applicable, and pledged to the
Indenture Trustee on behalf of the Noteholders pursuant to the Indenture and
(ii) prepare and hold in its capacity as Servicer on behalf of the Issuers and
the Indenture Trustee the List of Initial Contracts on or prior to the Closing
Date, a List of Subsequent Contracts on or prior to the related Subsequent
Transfer Date and a List of Substitute Contracts on or prior to the related
Substitute Transfer Date. Pursuant to Section 3.03, each of the Originators or
the Servicer may, from time to time, convey Substitute Contracts to LLC I or LLC
II, as applicable, by delivering a List of Substitute Contracts to the Issuers
and the Indenture Trustee on each Conveyance Date.
(f) Except for the obligations of each of the Originators and the
Servicer pursuant to the Servicing Agreement and the Indenture with respect to
any breach of a representation or warranty made therein with respect to the
Conveyed Assets, the conveyance of the Conveyed Assets will be without recourse
to the Transferors. Upon each Transferor's transfer of its interest in the
Conveyed Assets to LLC I or LLC II, as applicable, the Transferors will not bear
any further risk with respect to the ultimate collectibility of the Contracts or
the adequacy of the collateral securing the Contracts or the value or
sufficiency of the Equipment.
(g) It is the intention of the parties hereto that each transfer of the
Conveyed Assets to be made pursuant to the terms hereof shall constitute a sale
and an absolute assignment of such Conveyed Assets by the Transferors to LLC I
or LLC II, as applicable, and not a loan. In the event, however, that a court of
competent jurisdiction were to hold that any such transfer constitutes a loan
and not a sale and an absolute assignment, each of the Transferors hereby grants
to LLC I or LLC II, as applicable, a first priority perfected security interest
in all of each Transferor's respective right, title and interest in, to and
under such Conveyed Assets and all
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income and proceeds thereof, to secure all of such Transferor's obligations
hereunder, and this Agreement shall constitute a security agreement under
applicable law, and in such event, the parties hereto acknowledge that the
Indenture Trustee, in addition to holding the Conveyed Assets for the benefit of
the Noteholders, holds the Conveyed Assets as assignee of LLC I or LLC II, as
applicable, as secured party.
Section 2.02. Conveyance of Subsequent Conveyed Assets. (a) Subject to the
conditions set forth in paragraph (c) below, on any Subsequent Transfer Date
HPSC shall sell, assign, set over and convey, without recourse, to LLC I and/or
LLC II, and ACFC shall sell, assign, set over and convey, without recourse, to
LLC II, but subject to the other terms and provisions of this Agreement, all of
the right, title and interest of each of HPSC and ACFC, as applicable, in and to
the Subsequent Contracts and the Subsequent Conveyed Assets identified on the
related List of Subsequent Contracts. The transfer by each of HPSC and ACFC, as
applicable, to LLC I and/or LLC II of the Subsequent Contracts and the
Subsequent Conveyed Assets identified on each List of Subsequent Contracts shall
be absolute and is intended by each of HPSC and ACFC and LLC I and/or LLC II to
constitute and to be treated as a sale and an absolute assignment of the
Subsequent Contracts and the Subsequent Conveyed Assets by each of HPSC and
ACFC, as applicable, to LLC I and/or LLC II. Subsequent Transfer Dates shall
occur not more frequently than once during each calendar month.
In the event such transactions shall be deemed not to be a sale and an
absolute assignment, each of HPSC and ACFC hereby grants to LLC I and/or LLC II
as of each Subsequent Transfer Date a first priority perfected security interest
in all of each of HPSC's and ACFC's right, title and interest in, to and under
each Subsequent Contract and each related Subsequent Conveyed Asset, and all
income and proceeds thereof, to secure all of HPSC's and ACFC's obligations
hereunder, and this Agreement shall constitute a security agreement under
applicable law, and in such event, the parties hereto acknowledge that the
Indenture Trustee, in addition to holding the Subsequent Contracts and the
Subsequent Conveyed Assets for the benefit of the Noteholders, holds the
Subsequent Contracts and the Subsequent Conveyed Assets as assignee of LLC I
and/or LLC II as secured party.
The ratio of the Outstanding Contract Balance of the Practice Finance
Contracts to the Aggregate Outstanding Contract Balance as of the end of the
Pre-Funding Period shall not exceed such ratio as of the Closing Date.
The related Contract File for each Subsequent Contract shall be delivered
to the Custodian two Business Days prior to the related Subsequent Transfer
Date.
(b) The Indenture Trustee, on the related Subsequent Transfer Date, at the
direction of LLC I and/or LLC II, subject to the satisfaction of the conditions
set forth in clause (c) below, shall release to LLC I and/or LLC II from the
Pre-Funding Account an amount equal to the aggregate Discounted Contract Balance
of the Subsequent Contracts (other than Revolving Loans) and the current
Outstanding Revolver Balance of Subsequent Contracts which are Revolving Loans,
so transferred as of the close of the third Business Day prior to the applicable
Subsequent Transfer Date.
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(c) The Subsequent Transferors shall transfer to LLC I and/or LLC II the
Subsequent Conveyed Assets and LLC I and/or LLC II shall cause to be released
funds from the Pre-Funding Account, only upon satisfaction of each of the
following conditions on or prior to the related Subsequent Transfer Date:
(i) The Subsequent Transferors shall have delivered to the Indenture
Trustee a duly executed Subsequent Transfer Agreement, substantially in the form
of Exhibit A attached hereto, including a List of Subsequent Contracts attached
thereto, and confirming the satisfaction of each condition precedent specified
in this paragraph (c);
(ii) As of each Subsequent Transfer Date, as evidenced by delivery of
the Subsequent Transfer Agreement in the form of Exhibit A, none of the
Subsequent Transferors (a) shall be insolvent or have been made insolvent by
such transfers, nor shall they be aware of any pending insolvency, (b) shall
intend to incur or believe that it shall incur debts that would be beyond its
ability to pay as such debts mature, (c) shall make such transfer with actual
intent to hinder, delay or defraud any Person, and (d) shall have assets that
constitute unreasonably small capital to carry out its business as then
conducted;
(iii) Each such Subsequent Contract must satisfy the representations
and warranties made in Section 3.02 of this Agreement and each Transferor shall
have performed all obligations to be performed by it hereunder on or prior to
such Subsequent Transfer Date;
(iv) The Subsequent Transferors shall not have selected such Subsequent
Contracts in a manner that they reasonably believe is adverse to the interests
of the Noteholders;
(v) Such transfer shall not result in a material adverse tax
consequence to either of the Issuers or the Noteholders;
(vi) The Pre-Funding Period shall not have terminated;
(vii) The Subsequent Transferors shall have provided the Indenture
Trustee and the Rating Agencies with an Addition Notice not later than three
Business Days prior to such Subsequent Transfer Date and shall have provided any
information reasonably requested by any of them with respect to the related
Subsequent Contracts;
(viii) The Subsequent Transferors shall have deposited in the
Collection Account all Collections in respect of the related Subsequent
Contracts since the related Subsequent Cut-Off Date;
(ix) All Financing Statements prepared in accordance with the Filing
Requirements and executed on behalf of each of the Subsequent Transferors, as
appropriate, shall have been delivered to the Indenture Trustee;
(x) LLC I and/or LLC II shall have received a Custody Receipt with
respect to the Contract Files for the Subsequent Contracts listed on the related
List of Subsequent Contracts; and
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(xi) Each of the Subsequent Transferors shall have delivered to the
Rating Agencies and the Indenture Trustee "bringdown opinions" to the Opinions
of Counsel regarding bankruptcy, delivered on the Closing Date with respect to
the transfer of such Subsequent Contracts, in form and substance substantially
similar to Exhibit B hereto.
(xii) In respect of Revolving Loans transferred to LLC II during the
Pre-Funding Period, the Aggregate Outstanding Revolver Balance of such Revolving
Loans, as of the respective Subsequent Transfer Dates on which such Revolving
Loans were transferred to LLC II, shall not exceed $2,000,000.
(xiii) All necessary consents, including, without limitation, consents
of Triple-A One Funding Corporation and Capital Markets Assurance Corporation.
Section 2.03. Subsequent Revolver Transfers. (a) In the event that after
the Closing Date ACFC originates Receivables in respect of Revolving Loans then
owned by LLC II, ACFC shall have the right to offer to sell, transfer and convey
such Receivables to LLC II upon one Business Day's prior written notice to LLC
II and the Indenture Trustee, which notice shall set forth the date of such
sale, transfer and conveyance (the "Subsequent Revolver Transfer Date"). On any
Subsequent Revolver Transfer Date, LLC II may, subject to Section 3.09 of the
Indenture, purchase such Receivables from ACFC for a purchase price equal to the
Outstanding Revolver Balance in respect of such Receivables.
(b) After the termination of the Pre-Funding Period, the Outstanding
Contract Balance of the Revolving Loans shall not exceed 6% of the sum of (i)
the Aggregate Outstanding Contract Balance as of the Initial Cut-Off Date and
(ii) the Original Pre-Funded Amount.
Section 2.04. Custody of Contract Files. In connection with the sale,
transfer and conveyance of the Contracts (including the Subsequent Contracts) to
LLC I or LLC II, as applicable, pursuant to this Agreement and each Subsequent
Transfer Agreement, the Servicer shall deliver the related Contract Files to the
Custodian; provided, however, that the Servicer may retain copies of the
Contract Files in connection with the performance of its obligations under the
Servicing Agreement.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties. (a) Each of the Originators
hereby makes the following representations and warranties for the benefit of the
Indenture Trustee, the Noteholders and the Issuers. Such representations and
warranties are made as of each Conveyance Date and shall survive each
assignment, transfer and conveyance by the Transferors of the Conveyed Assets to
LLC I or LLC II, as applicable, and their successors and assigns.
(i) Organization and Good Standing. Each of the Originators is a
corporation duly organized, validly existing and in good standing, under the
laws of the State of Delaware, with corporate power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is currently conducted;
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(ii) Due Qualification. Each of the Originators is qualified as a
foreign corporation in any state where it is required to be so qualified to
conduct its business and has obtained all necessary licenses, consents and
approvals as required under federal and state law, in each case, where the
failure to be so qualified, licensed, consented to or approved could reasonably
be expected materially and adversely to affect the ability of each of the
Originators to comply with the terms of this Agreement, any Subsequent Transfer
Agreement or any other Transaction Document to which it is a party;
(iii) Legal Name. The legal name of HPSC and ACFC, as applicable, is as
set forth in their respective signature lines of this Agreement and neither HPSC
nor ACFC, as applicable, has changed its name since its formation and since such
formation neither HPSC nor ACFC, as applicable, used, or now uses, any trade
names, fictitious names, assumed name or "doing business as" names;
(iv) Power and Authority. Each of the Originators has the corporate
power and authority to execute and deliver this Agreement, any Subsequent
Transfer Agreement and any other Transaction Document to which it is a party,
and to carry out its obligations set forth herein and therein; and the
execution, delivery, and performance of this Agreement, any Subsequent Transfer
Agreement and any other Transaction Document to which it is a party, has been
duly authorized by each of the Originators by all necessary corporate action;
(v) Due Execution and Delivery. This Agreement and each of the other
Transaction Documents to which it is a party have been duly executed and
delivered on behalf of each of HPSC and ACFC;
(vi) Title. Immediately prior to the transfers herein contemplated,
each of HPSC and ACFC, as applicable, had good and marketable title to the
Contracts and Conveyed Assets to be conveyed by HPSC and ACFC, respectively, to
LLC I or LLC II, as applicable, hereunder, free and clear of all Adverse Claims;
(vii) Valid Assignment; Binding Obligations. This Agreement constitutes
a valid sale, assignment, transfer and conveyance to LLC I or LLC II, as
applicable, of all right, title, and interest of HPSC and ACFC, as applicable,
in, to and under the Contracts and the Conveyed Assets, and such Contracts and
Conveyed Assets will be held by LLC I or LLC II, as applicable, free and clear
of any Adverse Claim of any Person claiming through or under HPSC and ACFC, as
applicable, except the lien on the Contracts and the Conveyed Assets in favor of
the Indenture Trustee granted pursuant to the Indenture; and this Agreement and
every other Transaction Document to which it is a party when duly executed and
delivered, will constitute the legal, valid, and binding obligation of HPSC and
ACFC, as applicable, enforceable against HPSC and ACFC, as applicable, in
accordance with their respective terms, except that (A) such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or other similar
laws (whether statutory, regulatory or decisional) now or hereafter in effect
relating to creditors' rights generally and (B) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
certain equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought, whether in a proceeding at law or in equity;
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(viii) Insolvency. Neither Bravo nor Capital, as applicable, is
insolvent nor will be rendered insolvent by the transactions contemplated by
this Agreement or any other Transaction Document to which it is a party and each
of Bravo and Capital, as applicable, has an adequate amount of capital to
conduct its business in the ordinary course and to carry out its obligations
hereunder and under each other Transaction Document to which it is a party;
(ix) No Violation. The consummation of the transactions contemplated by
and the fulfillment of the terms of this Agreement, any Subsequent Transfer
Agreement and the other Transaction Documents to which HPSC or ACFC, as
applicable, is a party will not conflict with, result in any breach of any of
the terms and provisions of, or constitute (with or without notice or lapse of
time or both) a default under, the articles of incorporation or bylaws of either
of HPSC or ACFC, as applicable, or any material indenture, agreement, mortgage,
deed of trust, or other instrument to which HPSC or ACFC, as applicable, is a
party or by which it is bound, or result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust, or other instrument, other than this
Agreement, any Subsequent Transfer Agreement or the other Transaction Documents
to which HPSC or ACFC, as applicable, is a party, or violate any law or any
order, injunction, writ, rule, or regulation applicable to HPSC or ACFC, as
applicable, of any Governmental Authority having jurisdiction over HPSC or ACFC,
as applicable, or any of its properties which is reasonably likely to have a
material adverse effect on (A) the transactions contemplated under this
Agreement, any Subsequent Transfer Agreement or the other Transaction Documents
to which HPSC or ACFC, as applicable, is a party or (B) the validity,
enforceability or collectability of the Conveyed Assets;
(x) No Proceedings. There are no Proceedings or investigations pending,
or, to the knowledge of HPSC or ACFC, as applicable, threatened, before any
Governmental Authority (A) asserting the invalidity of the Transaction Documents
to which it is a party, (B) seeking to prevent the consummation of any of the
transactions contemplated by the Transaction Documents to which it is a party,
or (C) seeking any determination or ruling that is reasonably likely to
materially and adversely affect the performance by HPSC or ACFC, as applicable,
of its obligations under, or the validity or enforceability of, the Transaction
Documents to which it is a party; and
(xi) No Consent Required. None of HPSC or ACFC is required to obtain
the consent of any other Person, or any consent, license, approval or
authorization or registration or declaration with, any Governmental Authority in
connection with the execution, delivery or performance of this Agreement and the
Transaction Documents to which it is a party, except for such as have been
obtained, effected or made.
(xii) Fair Consideration. The consideration received by each of HPSC
and ACFC hereunder is fair consideration having value reasonably equivalent to
or in excess of the value of the Contracts and the Conveyed Assets conveyed by
it and the performance of HPSC's and ACFC's respective obligations hereunder;
(xiii) Principal Place of Business of HPSC. The principal place of
business and chief executive office of HPSC is located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ and, there are not now, and during the past four
months there have not been, any
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other locations where HPSC is located (as that term is used in the UCC in the
state of such location) except that, with respect to such changes occurring
after the date of this Agreement, as shall have been specifically disclosed to
the Servicer and the Indenture Trustee in writing;
(xiv) Principal Place of Business of ACFC. The principal place of
business and chief executive office of ACFC is located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and, there are not now, and during the past
four months there have not been, any other locations where ACFC is located (as
that term is used in the UCC in the state of such location) except that, with
respect to such changes occurring after the date of this, as shall have been
specifically disclosed to the Servicer and the Indenture Trustee in writing;
(xv) Valid Business Reasons. Each of HPSC and ACFC has valid business
reasons for selling its interest in the Contracts and the Conveyed Assets rather
than obtaining a loan with the Contracts and the Conveyed Assets as collateral;
(xvi) Absence of Event. No event has occurred which materially and
adversely affects either of HPSC's or ACFC's operations or its ability to
perform its obligations under the Transaction Documents to which it is a party;
and
(xvii) Accounting Treatment. Each of HPSC and ACFC will treat the sale
of the Contracts and the Conveyed Assets to LLC I or LLC II, as applicable,
pursuant to Article II as a sale of the Contracts and the Conveyed Assets to LLC
I or LLC II, as applicable, for financial reporting and accounting purposes.
(b) Each of Bravo and Capital hereby makes the following representations
and warranties, in each case solely as to itself, for the benefit of the
Indenture Trustee, the Noteholders and the Issuers. Such representations and
warranties are made as of each Conveyance Date on which Bravo or Capital, as
applicable transfers Conveyed Assets and shall survive each sale, assignment,
transfer and conveyance by the Transferors of the respective Conveyed Assets to
LLC I or LLC II, as applicable, and their successors and assigns.
(i) Organization and Good Standing. Each of Bravo and Capital is a
corporation, duly organized, validly existing and in good standing, under the
laws of the State of Delaware, with power and authority to own its properties
and to conduct its business as such properties are currently owned and such
business is currently conducted, and had at all relevant times, and now has,
power, authority, and legal right to acquire and own the Conveyed Assets
transferred by it;
(ii) Due Qualification. Each of Bravo and Capital is qualified as a
foreign corporation in any state where it is required to be so qualified to
conduct its business and has obtained all necessary licenses, consents and
approvals as required under federal and state law, in each case, where the
failure to be so qualified, licensed, consented to or approved could reasonably
be expected materially and adversely to affect the ability of Bravo or Capital,
as applicable, to comply with the terms of this Agreement and the secretary's
certificate and Officer's Certificate to be delivered by each of Bravo and
Capital;
(iii) Legal Name. The legal name of Bravo and Capital, as applicable,
is as set forth in their respective signature lines of this Agreement and
neither Bravo nor Capital,
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as applicable, has changed its name since its formation and since such formation
neither Bravo nor Capital, as applicable, used, or now uses, any trade names,
fictitious names, assumed name or "doing business as" names;
(iv) Power and Authority. Each of Bravo and Capital has the power and
authority to execute and deliver this Agreement and any other Transaction
Document to which it is a party, and to carry out its respective obligations set
forth herein and therein; each of Bravo and Capital has duly authorized the
conveyance to LLC I or LLC II, as applicable, of all of its right, title and
interest, if any, in the Conveyed Assets transferred by it by all necessary
action; and the execution, delivery, and performance of this Agreement, and any
other Transaction Document to which it is a party, has been duly authorized by
Bravo or Capital, as applicable, by all necessary action;
(v) Due Execution and Delivery. This Agreement has been duly executed
and delivered on behalf of each of Bravo and Capital;
(vi) Title. Immediately prior to the transfers herein contemplated,
each of Bravo and Capital, as applicable, had good and marketable title to the
Contracts and Conveyed Assets to be conveyed by Bravo or Capital, respectively,
to LLC I or LLC II, as applicable, hereunder, free and clear of all Adverse
Claims created by or through Bravo or Capital as applicable;
(vii) Valid Assignment; Binding Obligations. This Agreement constitutes
a valid sale, assignment, transfer and conveyance to LLC I or LLC II, as
applicable, of all right, title, and interest of Bravo and Capital, as
applicable, in, to and under the Contracts and the Conveyed Assets to be
conveyed by Bravo or Capital, respectively, and such Contracts and Conveyed
Assets will be held by LLC I or LLC II, as applicable, free and clear of any
Adverse Claim of any Person claiming through or under Bravo or Capital, as
applicable, except the lien on the Contracts and the Conveyed Assets in favor of
the Indenture Trustee granted pursuant to the Indenture; and this Agreement when
duly executed and delivered, will constitute the legal, valid, and binding
obligation of Bravo and Capital, as applicable, enforceable against Bravo and
Capital, as applicable, in accordance with its terms, except that (A) such
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws (whether statutory, regulatory or decisional) now or
hereafter in effect relating to creditors' rights generally and (B) the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to certain equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought, whether in a proceeding at
law or in equity;
(viii) Insolvency. Neither Bravo nor Capital, as applicable, is
insolvent nor will be rendered insolvent by the transactions contemplated by
this Agreement and each of Bravo and Capital, as applicable, has an adequate
amount of capital to conduct its business in the ordinary course and to carry
out its obligations hereunder;
(ix) No Violation. The consummation of the transactions contemplated by
and the fulfillment of the terms of this Agreement and the other Transaction
Documents to which Bravo or Capital, as applicable, is a party will not conflict
with, result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time or both)
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a default under, the certificate of incorporation or by-laws of either of Bravo
or Capital, as applicable, or any material indenture, agreement, mortgage, deed
of trust, or other instrument to which Bravo or Capital, as applicable, is a
party or by which it is bound, or result in the creation or imposition of any
Lien upon any of its respective properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust, or other instrument, other than
this Agreement or violate any law or any order, injunction, writ, rule, or
regulation applicable to Bravo or Capital, as applicable, of any court or of any
Governmental Authority having jurisdiction over Bravo or Capital, as applicable,
or any of its properties which is reasonably likely to have a material adverse
effect on (A) the transactions contemplated under this Agreement, any Subsequent
Transfer Agreement or the other Transaction Documents to which Bravo or Capital,
as applicable, is a party or (B) the validity, enforceability or collectability
of the Contracts or the Conveyed Assets to be conveyed by Bravo or Capital,
respectively;
(x) No Proceedings. There are no Proceedings or investigations pending,
or, to the knowledge of Bravo or Capital, as applicable, threatened against
Bravo or Capital, as applicable, before any Governmental Authority (A) asserting
the invalidity of this Agreement or any other Transaction Document to which it
is a party, (B) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or any Subsequent Transfer Agreement, or (C)
seeking any determination or ruling that is reasonably likely to materially and
adversely affect the performance by Bravo or Capital, as applicable, of its
obligations under, or the validity or enforceability of, this Agreement or any
other Transaction Document to which it is a party;
(xi) No Consent Required. None of Bravo or Capital is required to
obtain the consent of any other Person, or any consent, license, approval or
authorization or registration or declaration with, any Governmental Authority in
connection with the execution, delivery or performance of this Agreement and the
other Transaction Documents to which it is a party, except for such as have been
obtained, effected or made;
(xii) Fair Consideration. The consideration received by each of Bravo
and Capital hereunder is fair consideration having value reasonably equivalent
to or in excess of the value of the Contracts and the Conveyed Assets conveyed
by it and the performance of Bravo's and Capital's respective obligations
hereunder;
(xiii) Principal Place of Business. The principal place of business and
chief executive office of Bravo is located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ and, there are not now, and during the past four months
there have not been, any other locations where Bravo is located (as that term is
used in the UCC in the state of such location) except that, with respect to such
changes occurring after the date of this Agreement, as shall have been
specifically disclosed to the Servicer and the Indenture Trustee in writing; and
(xiv) Principal Place of Business. The principal place of business and
chief executive office of Capital is located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ and, there are not now, and during the past four months
there have not been, any other locations where Capital is located (as that term
is used in the UCC in the state of such location) except that, with respect to
such changes occurring after the date of this, as shall have been specifically
disclosed to the Servicer and the Indenture Trustee in writing.
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Section 3.02. Representations and Warranties of the Originators with
Respect to the Contracts. With respect to each Contract, each of the Originators
hereby makes the following representations and warranties to the Indenture
Trustee, the Issuers and the Noteholders, on which the Indenture Trustee relies
in accepting the Pledged Property in trust and authenticating the Notes, and on
which the Noteholders have relied and will rely in purchasing the Notes. Such
representations, warranties and covenants are made as of the Initial Cut-Off
Date with respect to the Initial Contracts, as of the Subsequent Cut-Off Date
with respect to the Subsequent Contracts and as of the Substitute Cut-Off Date
with respect to the Substitute Contracts and shall survive the pledge, transfer,
and assignment of any Pledged Property to the Indenture Trustee for the benefit
of the Noteholders.
(a) HPSC represents and warrants as follows with respect to each Contract
that is not a Revolving Loan:
(i) The Obligor under each Contract (A) is not an affiliate of HPSC and
(B) is not a government or a governmental subdivision or agency.
(ii) The Obligor under each Contract has made at least one Scheduled
Payment as of the Closing Date with respect to the Contracts included in the
Asset Pool as of the Closing Date, as of the applicable Subsequent Transfer Date
with respect to a Subsequent Contract, and with respect to a Substitute
Contract, as of the related Substitute Transfer Date.
(iii) The Obligor under each Contract is not an Obligor in respect of
Contracts with an Aggregate Outstanding Contract Balance in excess of 1.5% of
the Aggregate Outstanding Contract Balance of all Contracts.
(iv) Each Contract is not a Defaulted Contract or a Delinquent
Contract.
(v) The Obligor under each Contract has been directed to make all
payments to the Lock-Box Account.
(vi) Each Contract has an outstanding term of 85 months or less.
(vii) The Contract Files for each Contract are in the custody of the
Custodian on behalf of the Indenture Trustee.
(viii) HPSC has performed all material obligations required to be
performed by it under each Contract.
(ix) Each Contract is "chattel paper" within the meaning of Article 9
of the UCC of all applicable jurisdictions. Each such Contract is secured by a
first priority perfected security interest in the related Equipment and all
other Collateral.
(x) Each Contract is an "eligible asset" as defined in Rule 3a-7 under
the Investment Company Act of 1940, as amended.
(xi) There is not more than one original counterpart of each Contract.
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(xii) Each Contract is denominated and payable only in United States
dollars in the United States by an Obligor with a billing address in the United
States and for which the related Equipment is located in the United States.
(xiii) Each Contract is in full force and effect and is and at all
times will be the legal, valid and binding obligation of the related Obligor
enforceable against such Obligor in accordance with its terms and is not subject
to, nor has there been asserted, any litigation, right of rescission, setoff,
counterclaim or other defense thereunder.
(xiv) No Contract contravenes, in any material respect, any laws, rules
or regulations applicable thereto (including, without limitation, laws, rules
and regulations relating to truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and privacy)
and no part of such Contract is in violation of any such law, rule or regulation
in any material respect.
(xv) Each Contract is assignable without the prior written consent of
the Obligor thereunder except for such consents as have been previously
obtained.
(xvi) Each Contract was generated in the ordinary course of business of
HPSC.
(xvii) The Obligor under each Contract is responsible for the payment
of all expenses in connection with maintenance, repair, insurance and taxes with
respect to the related Equipment and such Obligor is required to make Scheduled
Payments thereunder without condition notwithstanding damage to or destruction
of the Equipment, or any other event, including Equipment obsolescence.
(xviii) No Contract is a lease on a Vehicle or other type of equipment
which requires titling in the name of the related Issuer in order to perfect the
Issuer's interest therein.
(xix) Each Contract contains customary and enforceable provisions
adequate for realization of the benefits of the related Collateral.
(xx) No Contract is a "consumer lease" as defined in Section
2A-103(l)(e) of the UCC.
(xxi) No Contract is subject to any guaranty of the payment obligation
thereunder by HPSC or any of its Affiliates.
(xxii) With respect to each Contract, HPSC has not established any
specific credit reserve with respect to the related Obligor.
(xxiii) Each Contract provides that HPSC and its assignees may
accelerate all remaining Scheduled Payments due thereunder if the Obligor is in
default under any of its obligations under such Contract.
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(xxiv) No Contract has been terminated as a result of the loss, theft,
damage beyond repair or governmental seizure of any item of Equipment and/or
Loan Agreement Collateral or for any other reason.
(xxv) Each Contract provides that in the event of the loss, theft,
damage beyond repair or governmental seizure of the related Equipment and/or
Loan Agreement Collateral, the Obligor is required to repair or replace the
related Equipment and/or Loan Agreement Collateral.
(xxvi) The Obligor under each Contract has represented to HPSC that
such Obligor has accepted the related Equipment and/or Loan Agreement Collateral
or is contractually bound to accept such Equipment and/or Loan Agreement
Collateral upon shipment or delivery thereof.
(xxvii) Each Contract has been originated in all material respects in
accordance with the then effective Credit and Collection Policies and
Procedures.
(xxviii) The information set forth on the List of Initial Contracts is
complete, true and correct as of the Initial Cut-Off Date.
(xxix) Each Contract and the Equipment and/or Loan Agreement Collateral
have not been assigned or pledged, and HPSC has good and marketable title
thereto, and HPSC is the sole owner and holder of each Contract, Equipment
and/or Installment Sales Collateral free and clear of any and all liens, claims,
encumbrances, participation or contingent interests, shares appreciation
features, equities, pledges, charges or security interests of any nature and has
full right and authority, subject to no interest or participation of, or
agreement with, any other party, to sell and assign the same pursuant to this
Agreement.
(xxx) Each Loan Agreement is a valid, subsisting and enforceable first
or lien on the related Loan Agreement Collateral.
(xxxi) The terms of each Contract have not been impaired, waived,
altered or modified in any respect, except by a written instrument which has
been filed and/or recorded, in all places necessary to perfect, maintain and
continue the validity and priority lien of each Contract. The substance of any
such alteration or modification is reflected on the List of Initial Contracts.
(xxxii) No instruments of release or waiver have been executed in
connection with any Contract, and no Obligor has been released from liability
under any Contract, in whole or in part.
(xxxiii) The Contract File is complete and contains each of the
documents and instruments specified to be included therein duly executed and in
due and proper form.
(xxxiv) Each Contract obligates the relevant Obligor thereunder to
maintain insurance on the related Equipment at such Obligor's cost and expense,
and upon such Obligor's failure to do so, authorizes the holder of the Contract
to call an event of default or, at holder's option, to obtain and maintain such
insurance at such Obligor's cost and expense and to
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seek reimbursement therefor from the Obligor. All Collateral securing each
Contract is covered by such insurance.
(xxxv) No Contract is subject to any right of rescission, set-off,
abatement, diminution, counterclaim or defense, including the defense of usury,
nor will the operation of any of the terms of any Contract, or the exercise of
any right thereunder, render any Contract unenforceable, in whole or in part, or
subject to any right of rescission, set off, abatement, diminution, counterclaim
or defense, including the defense of usury, or the violation of any applicable
disclosure or consumer credit laws, and no such right of rescission, set-off,
abatement, diminution, counterclaim or defense has been asserted with respect
thereto.
(xxxvi) Each Loan Agreement contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Loan
Agreement in the event the related Loan Agreement Collateral is sold without the
prior consent of HPSC thereunder.
(xxxvii) Each Contract contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for the
realization against the Equipment and/or Loan Agreement Collateral of the
benefits of the security, including by judicial foreclosure.
(xxxviii) The origination, servicing and collection practices used by
HPSC with respect to each Contract have been in all respects legal, proper,
prudent and have met customary standards utilized by lenders for commercial loan
origination and servicing business.
(xxxix) Each Contract provides for the Obligor to pay a base monthly
payment, and contains other provisions customarily included in such commercial
loans.
(xl) There is no claim, litigation or other judicial or administrative
proceeding pending or, to the knowledge of HPSC, threatened against the
Equipment and/or Loan Agreement Collateral or any Obligor which could materially
and adversely affect the value of the Equipment and/or Loan Agreement Collateral
or the validity or priority of any Contract or the ability of any Obligor to
perform its obligations in connection with any Contract.
(xli) The Contracts have not been selected from HPSC's portfolio of
commercial loans in a manner which would be adverse to the interests of the
Noteholders.
(b) ACFC represents and warrants as follows with respect to each Contract
which is a Revolving Loan:
(i) The Obligor under each Revolving Loan: (A) is not an affiliate of
ACFC and (B) is not a government or a governmental subdivision or agency.
(ii) The Obligor under each Revolving Loan has made at least one
Scheduled Payment as of the Closing Date with respect to the Revolving Loans
included in the Asset Pool as of the Closing Date, as of the applicable
Subsequent Transfer Date with respect to a Subsequent Contract which is a
Revolving Loan, and with respect to a Substitute Contract which is a Revolving
Loan, as of the related Substitute Transfer Date.
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(iii) The Obligor under each Revolving Loan is not an Obligor in
respect of Contracts with an Aggregate Outstanding Contract Balance in excess of
1.5% of the Aggregate Outstanding Contract Balance of all Contracts.
(iv) Each Revolving Loan is not a Defaulted Contract.
(v) ACFC has performed all material obligations required to be
performed by it under the Revolving Loan.
(vi) There is not more than one original counterpart of each Revolving
Loan.
(vii) Each Revolving Loan is denominated and payable only in United
States dollars in the United States by an Obligor with a billing address in the
United States and for which the related Revolving Loan Collateral is located in
the United States.
(viii) Each Revolving Loan does not contravene, in any material
respect, any laws, rules or regulations applicable thereto (including, without
limitation, laws, rules and regulations relating to truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy) and no part of such Revolving Loan is in
violation of any such law, rule or regulation in any material respect.
(ix) Each Revolving Loan is assignable without the prior written
consent of the Obligor thereunder except for such consents as have been
previously obtained.
(x) Each Revolving Loan is non-cancelable and in full force and effect
and is and at all times will be the legal, valid and binding obligation of the
related Obligor enforceable against such Obligor in accordance with its terms
and is not subject to, nor has there been asserted, any litigation, right of
rescission, setoff, counterclaim or other defense thereunder.
(xi) Each Revolving Loan was generated in the ordinary course of
business of the ACFC.
(xii) The Obligor under each Revolving Loan has been directed to make
all payments to a segregated account in the name of the Indenture Trustee.
(xiii) Each Revolving Loan has an outstanding term of 33 months or
less.
(xiv) Each Revolving Loan contains customary and enforceable provisions
adequate for realization of the benefits of the related collateral.
(xv) Each Revolving Loan is not subject to any guaranty of the payment
obligation thereunder by ACFC or any of its Affiliates nor has ACFC established
any specific credit reserve with respect to the related Obligor.
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(xvi) Each Revolving Loan provides that ACFC and its assignees may
accelerate all remaining Scheduled Payments due thereunder if the Obligor is in
default under any of its obligations under such Contract.
(xvii) Each Revolving Loan has been originated in all material respects
in accordance with ACFC's underwriting policies and procedures.
(xviii) The Contract Files for each Revolving Loan are in the custody
of the Custodian on behalf of the Indenture Trustee.
(xix) The information set forth on the List of Initial Contracts is
complete, true and correct as of the Initial Cut-Off Date.
(xx) Each Revolving Loan and the Revolving Loan Collateral have not
been assigned or pledged, and ACFC has good and marketable title thereto, and
ACFC is the sole owner and holder of each Revolving Loan and any Revolving Loan
Collateral free and clear of any and all liens, claims, encumbrances,
participation or contingent interests, shares appreciation features, equities,
pledges, charges or security interests of any nature and has full right and
authority, subject to no interest or participation of, or agreement with, any
other party, to sell and assign the same pursuant to this Agreement.
(xxi) Each Revolving Loan is a valid, subsisting and enforceable first
or lien on the related Revolving Loan Collateral.
(xxii) The terms of each Revolving Loan have not been impaired, waived,
altered or modified in any respect, except by a written instrument which has
been filed and/or recorded, in all places necessary to perfect, maintain and
continue the validity and priority lien of each Revolving Loan. The substance of
any such alteration or modification is reflected on the List of Initial
Contracts.
(xxiii) No instruments of release or waiver have been executed in
connection with any Revolving Loan, and no Obligor has been released from
liability under any Revolving Loan, in whole or in part.
(xxiv) The Contract File is complete and contains each of the documents
and instruments specified to be included therein duly executed and in due and
proper form.
(xxv) Each Revolving Loan obligates the relevant Obligor thereunder to
maintain insurance on the related Revolving Loan Collateral at such Obligor's
cost and expense, and upon such Obligor's failure to do so, authorizes the
holder of the Revolving Loan to call an event of default or, at holder's option,
to obtain and maintain such insurance at such Obligor's cost and expense and to
seek reimbursement therefor from the Obligor. All Revolving Loan Collateral is
covered by such insurance.
(xxvi) No Revolving Loan is subject to any right of rescission,
set-off, abatement, diminution, counterclaim or defense, including the defense
of usury, nor will the operation of any of the terms of any Revolving Loan, or
the exercise of any right thereunder, render any Revolving Loan unenforceable,
in whole or in part, or subject to any right of
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rescission, set off, abatement, diminution, counterclaim or defense, including
the defense of usury, or the violation of any applicable disclosure or consumer
credit laws, and no such right of rescission, set-off, abatement, diminution,
counterclaim or defense has been asserted with respect thereto.
(xxvii) Each Revolving Loan contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Revolving
Loan in the event the related Revolving Loan Collateral is sold without the
prior consent of ACFC thereunder.
(xxviii) Each Revolving Loan contains customary and enforceable
provisions which render the rights and remedies of the holder thereof adequate
for the realization against the Revolving Loan Collateral of the benefits of the
security, including by judicial foreclosure.
(xxix) The origination, servicing and collection practices used by ACFC
with respect to each Revolving Loan have been in all respects legal, proper,
prudent and have met customary standards utilized by lenders for commercial loan
origination and servicing business.
(xxx) Each Revolving Loan provides for the Obligor to pay a monthly
interest payment, and contains other provisions customarily included in such
commercial loans.
(xxxi) There is no claim, litigation or other judicial or
administrative proceeding pending or, to the knowledge of ACFC, threatened
against the Revolving Loan Collateral or any Obligor which could materially and
adversely affect the value of the Revolving Loan Collateral or the validity or
priority of any Revolving Loan or the ability of any Obligor to perform its
obligations in connection with any Revolving Loan.
(xxxii) The Revolving Loans have not been selected from ACFC's
portfolio of commercial loans in a manner which would be adverse to the
interests of the Noteholders.
Section 3.03. Substitution of Contracts and Equipment by each of the
Originators and the Servicer.
(a) With respect to a substitution of Contracts in accordance with the
provisions of this Section 3.03 and Section 4.02 of the Indenture, each proposed
Substitute Contract must (i) satisfy all of the representations and warranties
set forth in Section 3.02 of this Agreement, (ii) for Contracts which are not
Revolving Loans, have a Discounted Contract Balance of not less than the
Discounted Contract Balance of the Contract being replaced, and for Contracts
which are Revolving Loans, have an Outstanding Revolver Balance of not less than
the Outstanding Revolver Balance of the Contract being replaced, (iii) be
eligible to be substituted by each of the Originators, as applicable, in
accordance with the provisions of the Indenture, (iv) with respect to each
Substitute Contract which is replacing a Lease, such Substitute Contract must be
a Lease, (v) with respect to each Substitute Contract which is replacing a Loan
Agreement, such Substitute Contract must be a Loan Agreement, (vi) with respect
to each Substitute Contract which is replacing a Revolving Loan, such Substitute
Contract must be a Revolving Loan, (vii) with respect to each Substitute
Contract which is replacing a Contract with Residuals, such
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Substitute Contract must have Residuals equal to or greater than the Residuals
of the Contract which is being replaced, (viii) with respect to each Substitute
Contract which is replacing a Step Lease for which the Step-up Date has not
passed, such Substitute Contract must be a Step Lease with increased Scheduled
Payments at least equal to the increased Scheduled Payments of the Contract
being replaced, (ix) have a maturity date which is not later than the date which
is six months prior to the latest Stated Maturity Date, (x) not be originated by
ACFC and (xi) not be a Revolving Loan. For purposes of determining compliance
with clause (ii) of the preceding sentence, if more than one Substitute Contract
is being provided on any date, the Discounted Contract Balance or the
Outstanding Revolver Balance, as applicable, of the Substitute Contracts and the
Contracts being replaced shall be determined on an aggregate basis.
(b) As of each Substitute Transfer Date, the Aggregate Outstanding Contract
Balance of Substituted Contracts being substituted as a result of a Warranty
Event, shall not exceed 5% of the sum of (i) the Initial Aggregate Contract
Balance and (ii) the Original Pre-Funded Amount.
(c) Any substitution of a Contract pursuant to this Agreement will be
effected by (i) delivery to the Custodian of the Contract File for each such
Substitute Contract at least two Business Days prior to such conveyance, (ii)
filing of any Financing Statements necessary to perfect the interest of the
Indenture Trustee in the Substitute Contracts and delivery to the Indenture
Trustee of all such Financing Statements prepared in accordance with the Filing
Requirements and (iii) delivery to the Indenture Trustee of a List of Substitute
Contracts reflecting such substitution.
(d) Except as may be set forth in the Transaction Documents, it is
understood and agreed that the obligations of each of the Originators and the
Servicer with respect to a breach as provided in this Section 3.03 and Section
4.02 of the Indenture constitute the sole remedy against each of the Originators
and the Servicer for such breach available to the Issuers, the Indenture Trustee
and the Noteholders.
Section 3.04. Breach of Representations and Warranties; Repurchase of
Contracts.
(a) If HPSC or ACFC during the term of this Agreement discovers, or
receives notice from the Indenture Trustee, the Servicer or the Noteholders,
that any of its representations or warranties contained in Section 3.01 or 3.02
are, in any material respect, false, incorrect or misleading, or if HPSC or ACFC
obtains knowledge of any event or circumstance that would reasonably cause HPSC
or ACFC to believe that any of its respective representations or warranties are,
in any material respect, false, incorrect or misleading, HPSC or ACFC, as
applicable, shall repurchase the relevant Contracts in accordance with Section
4.01 of the Indenture. If ACFC fails to repurchase any Contract or Contracts
which it is obligated to repurchase pursuant to this Section 3.04 and Section
4.01 of the Indenture, HPSC shall repurchase the relevant Contracts in
accordance with Section 4.01 of the Indenture.
(b) Subject to the provisions of Sections 4.02(b) through (d) of the
Indenture and only with respect to Contracts held by LLC II, (i) the Servicer or
an Originator may substitute one or more Contracts, transfer all of its right,
title and interest in the related Substitute
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Conveyed Assets and terminate the security interest in the related Equipment
with respect to any Contract that becomes a 90-Day Delinquent Contract or a
Defaulted Contract or is the subject of a Casualty Loss, (ii) the Servicer may
substitute one or more Substitute Contracts, transfer all of its right, title
and interest in the related Substitute Conveyed Assets and terminate the
security interest in the related Equipment with respect to any Contract that is
subject to a Full Prepayment, and (iii) the Servicer or the Originators, as the
case may be, may substitute one or more Substitute Contracts, transfer all of
its right, title and interest in the related Substitute Conveyed Assets and
terminate the security interest in the related Equipment with respect to any
Contract that is the subject of a Warranty Event and in respect of which such
Substitute Contracts are substituted.
ARTICLE IV.
COVENANTS
Section 4.01. Covenants of the Originators. Each of the Originators hereby
covenants and agrees with the Issuers, the Noteholders and the Indenture Trustee
with respect to itself as follows:
(a) Preservation of Security Interest. The Originators shall execute and
file or cause to be executed and filed such financing statements and cause to be
executed and filed such continuation statements, all in such manner and in such
places as may be required by law fully to preserve, maintain, and protect the
respective right, title and interest of the Issuers, as owners, and the
Indenture Trustee, as secured party, in the Contracts and the Conveyed Assets
(subject to the Filing Requirements with respect to the Equipment). The
Originators shall deliver (or cause to be delivered) to the Indenture Trustee
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.
(b) Obligations with Respect to Contracts and Conveyed Assets. Each of the
Originators will duly fulfill all obligations on its part to be fulfilled under
or in connection with each Contract, and will do nothing to impair the rights of
the Issuers or the Indenture Trustee in any of the Contracts or the Conveyed
Assets.
(c) Compliance with Law. Each of the Originators will comply, in all
material respects, with all acts, rules, regulations, orders, decrees and
directions of any Governmental Authority applicable to its business and to the
Contracts and the Conveyed Assets or any part thereof; provided, however, that
any of the Originators may contest any act, rule, regulation, order, decree or
direction in any reasonable manner which shall not materially and adversely
affect the rights of the Issuers or the Indenture Trustee in the Contracts or
the Conveyed Assets.
(d) Conveyance of Contracts and Conveyed Assets; Security Interests. Except
for the transfers and conveyances hereunder, under any Subsequent Transfer
Agreement or under any other Transaction Document, the Originators will not, and
will not permit other Transferors to, sell, pledge, assign or transfer to any
other Person, or grant, create, incur, assume or suffer to exist any Adverse
Claim, on any Contract, any Conveyed Asset, or any interest therein and the
Originators shall defend the right, title, and interest of the Issuers, the
Indenture Trustee and their
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respective successors and assigns in, to, and under the Contracts and the
Conveyed Assets, against all claims of third parties claiming through or under
the Transferors.
(e) Notification of Breach. The Originators will advise the Issuers, the
Indenture Trustee and the Noteholders promptly, in reasonable detail, upon
discovery of the occurrence of a breach, in any material respect, by either of
the Originators, the Servicer or any of the Transferors of any of its respective
representations, warranties and covenants contained herein.
(f) Further Assurances. Each of the Originators will make, execute or
endorse, acknowledge and file or deliver (or will cause to be made, executed or
endorsed, acknowledged and filed or delivered) to the Issuers and the Indenture
Trustee from time to time such schedules, confirmatory assignments, conveyances,
transfer endorsements, powers of attorney, certificates, reports and other
assurances or instruments and take such further steps relating to the Contracts
and the Conveyed Assets and other rights covered by this Agreement, as the
Issuers, a Noteholder or the Indenture Trustee may request and reasonably
require, provided that no UCC filing will be required with respect to the
Equipment, except as required by the Filing Requirements.
(g) Indemnification. Each of the Originators agrees to indemnify, defend
and hold the Issuers, the Noteholders and the Indenture Trustee harmless from
and against any and all loss, liability, damage, judgment, claim, deficiency, or
expense (including interest, penalties, reasonable attorneys' fees and amounts
paid in settlement) to which any of them may become subject insofar as such
loss, liability, damage, judgment, claim, deficiency, or expense arises out of
or is based upon a breach of representations and warranties contained in Section
3.01 or 3.02 or covenants contained in this Section 4.01, or any information
certified or set forth in this Agreement or in any schedule delivered by it
hereunder, being untrue in any material respect at any time. The obligations of
the Originators under this Section 4.01(g) shall be considered to have been
relied upon by the Issuers, the Noteholders and the Indenture Trustee and shall
survive the execution, delivery, and performance of this Agreement regardless of
any investigation made by or on behalf of the Issuers, the Noteholders or the
Indenture Trustee.
(h) Notice of Adverse Claims. The Originators shall notify the Issuers, the
Noteholders and the Indenture Trustee, promptly after becoming aware of any
Adverse Claim on any Contract or Conveyed Asset.
(i) Taxes. Each of the Originators shall promptly pay or cause to be paid
all applicable taxes required to be paid in connection with the transfer of the
Contracts and the Conveyed Assets by the Transferors to LLC I or LLC II, as
applicable, and acknowledges that none of the Issuers, Bravo or Capital shall
have any responsibility with respect thereto. Each of the Originators shall
promptly pay and discharge, or cause the payment and discharge of, all federal
income taxes (and all other material taxes) when due and payable by each
Transferor, except such as may be contested in good faith by appropriate
proceedings and for which an adequate reserve has been established and is
maintained in accordance with GAAP. The Originators shall promptly notify the
Issuers, the Indenture Trustee and the Noteholders of any material challenge,
contest or proceeding pending by or against any of the Transferors before any
taxing authority.
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(j) Operation of each of Bravo and Capital. The Originators shall ensure
that each of Bravo and Capital shall:
(i) be a limited purpose, corporation whose primary activities are
restricted in its certificate of incorporation;
(ii) not engage in any action that would cause the separate legal
identity of Bravo or Capital not to be respected, including, without limitation,
(a) holding itself out as being liable for the debts of any other party or (b)
acting other than through its duly authorized agents;
(iii) not be involved in the day-to-day management of HPSC, ACFC or the
Issuers;
(iv) not incur, assume or guarantee any indebtedness except for such
indebtedness as may be incurred by Bravo or Capital in accordance with its
certificate of incorporation;
(v) not commingle its funds, assets and records relating thereto with
those of HPSC, ACFC or any other entity except in the Lock-Box Account, as
provided for in the Escrow Agreement;
(vi) act solely in its own name in the conduct of its business,
including business correspondence and other communications, and shall conduct
its business so as not to mislead others as to the identity of the entity with
which they are concerned;
(vii) maintain separate corporate records and books of account and
shall not commingle its corporate records and books of account with the records
and books of account of any entity;
(viii) not engage in any business or activity other than as permitted
in its certificate of incorporation;
(ix) comply with all restrictions and covenants in, and shall not fail
to comply with the formalities established in, its certificate of incorporation
and by-laws;
(x) manage its day-to-day business without the involvement of HPSC,
ACFC or any other entity, except for HPSC's role as a Servicer of receivables
for Bravo or Capital, as applicable, or as otherwise contemplated under the SPV
Transferor Documents;
(xi) maintain a separate office from that of HPSC, ACFC and any other
entity;
(xii) not act as an agent of HPSC, ACFC or any other entity, except to
the limited extent provided in the Transaction Documents and the SPV Transferor
Documents; and
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(xiii) maintain at all times at least one director who is an
independent director as required by its certificate of incorporation.
(k) Financial Statements. The financial statements and books and records of
each of the Originators will reflect the separate existence of the Transferors
and the Issuers; the annual consolidated financial statements of each of the
Originators after the date hereof will contain disclosures to the effect that
each of the Originators has or will have one or more direct and indirect
subsidiaries that were or may be established as bankruptcy remote entities to
facilitate asset securitization; that in connection therewith, assets have been
or will be transferred directly or indirectly by each of the Originators to such
subsidiaries; and that these bankruptcy remote entities are separate legal
entities the assets of which are not available to satisfy the claims of
creditors of any of the Originators, any subsidiary or any other affiliate.
(l) Merger or Consolidation. (i) Each of the Originators will keep in full
effect its existence, rights and franchises as a corporation and will obtain and
preserve its qualification to do business as a foreign corporation in each
jurisdiction which permits such qualification and in which it is necessary to
protect the validity and enforceability of this Agreement, any other Transaction
Document to which it is a party and to perform its duties under this Agreement
and each other Transaction Document to which it is a party.
(ii) Any partnership, corporation or limited liability company (i) into
which any Originator may be merged or consolidated, (ii) resulting from any
merger, conversion, or consolidation to which any Originator shall be party, or
(iii) succeeding to any Originator's business substantially as a whole, shall
execute an agreement of assumption to perform all of such Originator's
obligations under this Agreement and any other Transaction Document to which it
is a party, and upon such execution will be such Originator's successor under
this Agreement and any other Transaction Document, without the execution or
filing of any document or any further act on the part of any of the parties to
this Agreement and any other Transaction Document to which it is a party,
anything in this Agreement and any other Transaction Document to which it is a
party to the contrary notwithstanding; provided, however, that (a) the
Originators shall have delivered to the Rating Agencies, the Issuers, the
Noteholders and the Indenture Trustee an Officer's Certificate and an opinion of
counsel, satisfactory to each of them, each stating that such consolidation,
conversion, merger, or succession and such agreement of assumption comply with
this Section 4.01(l) and that all conditions precedent, if any, provided for in
this Agreement relating to such transaction have been complied with, (b) the
Originators shall have delivered to the Issuers, the Rating Agencies, the
Noteholders and the Indenture Trustee an opinion of counsel, satisfactory to
each of them, stating that, in the opinion of such counsel, (1) either (A) all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect the
interest of the Issuers, the Indenture Trustee and the Noteholders in the
Contracts and the Conveyed Assets and reciting the details of such filings, or
(B) no such action shall be necessary to preserve and protect such interest, and
(2) after giving effect to such merger or consolidation, such Transferor (or its
successor) would not be substantively consolidated with HPSC or ACFC in the
event of a bankruptcy of HPSC or ACFC and (c) such partnership, corporation or
limited liability company shall have organizational documents with similar
restrictions as those of the Transferor which is the object of such merger or
consolidation.
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(m) Name Change or Relocation. If any change is to occur in a Transferor's
name, identity or structure, or in the location of its principal place of
business or chief executive office, then the Originators shall deliver at least
thirty (30) days' prior written notice of such change or relocation to the
Servicer, the Noteholders and the Indenture Trustee. No later than three days
after the effective date of such change, the Originators shall file such
amendments or statements as may be required to preserve and protect the
Indenture Trustee's interest in the Pledged Property, and shall deliver copies
thereof to the Indenture Trustee.
(n) Chief Executive Offices. During the term of this Agreement and the
Indenture, each of the Originators will maintain and will cause each other
Transferor to maintain, its chief executive office and principal place of
business in one of the States of the United States.
Section 4.02. Covenants of the Issuers. Each of the Issuers hereby
covenants and agrees with the Indenture Trustee and the Noteholders as follows:
(a) Issuer's Certificate. Prior to each date as of which Contracts and the
interest of LLC I or LLC II, as applicable, in the Equipment subject to such
Contracts are to be purchased by the Originators or the Servicer, as applicable,
pursuant to the Indenture, LLC I or LLC II, as applicable, shall submit to the
Originators or the Servicer, as applicable, a certificate signed by a manager of
LLC I or LLC II, as applicable (an "Issuer's Certificate"). Each Issuer's
Certificate shall operate as an assignment, without recourse, representation, or
warranty, to the Originators or the Servicer, as applicable, of all of LLC I's
or LLC II's, as applicable, right, title, and interest in and to such purchased
Contract, the related Equipment and all security and documents relating thereto,
such assignment being an assignment outright and not for security; and upon
payment of the Purchase Amount, each of the Originators or the Servicer, as
applicable, will thereupon own such Contract, such interest in the related
Equipment and all such security and documents, free of any further obligation to
LLC I or LLC II, as applicable, with respect thereto.
(b) Obligor's Quiet Enjoyment. Each of the Issuers hereby acknowledges and
agrees that its rights in the Equipment are expressly subject to the rights of
the related Obligors in such Equipment pursuant to the applicable Contracts.
Each of the Issuers covenants and agrees that, so long as an Obligor shall not
be in default of any of the provisions of the applicable Contract, none of the
Issuers nor any assignee of the Issuers will disturb the Obligor's quiet and
peaceful possession of the related Equipment and the Obligor's use thereof for
its intended purpose.
(c) Operation of each of the Issuers. Each of the Issuers shall:
(i) be a limited purpose, limited liability company whose primary
activities are restricted in its articles of organization and operating
agreement;
(ii) not engage in any action that would cause the separate legal
identity of such Issuer not to be respected, including, without limitation, (a)
holding itself out as being liable for the debts of any other party (other than
the other Issuer) or (b) acting other than through its duly authorized agents;
(iii) not be involved in the day-to-day management of HPSC or ACFC;
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(iv) not incur, assume or guarantee any indebtedness except for such
indebtedness as may be incurred by such Issuer in connection with the issuance
of the Notes;
(v) not commingle its funds (other than amounts temporarily deposited
in the Lockbox Account), assets and records relating thereto with those of HPSC
or ACFC or any other entity (other than the other Issuer) except in the Lock-Box
Account as provided for in the Escrow Agreement;
(vi) act solely in its own name in the conduct of its business,
including business correspondence and other communications, and shall conduct
its business so as not to mislead others as to the identity of the entity with
which they are concerned;
(vii) maintain company records and books of account and shall not
commingle its company records and books of account with the records and books of
account of any entity;
(viii) not engage in any business or activity other than in connection
with or relating to its articles of organization and operating agreement;
(ix) not form, or cause to be formed, any subsidiaries;
(x) comply with all restrictions and covenants in, and shall not fail
to comply with the limited liability company formalities established in, its
articles of organization and operating agreement;
(xi) manage its day-to-day business without the involvement of HPSC or
ACFC;
(xii) maintain a separate office from that of HPSC and ACFC;
(xiii) not act as an agent of HPSC or ACFC, except to the limited
extent provided in the Transaction Documents;
(xiv) maintain at all times two independent managers as required by its
limited liability company agreement; and
(xv) not amend its articles of organization or operating agreement
without the prior written consent of the Noteholders and a written confirmation
from each of the Rating Agencies that the ratings on the Notes will not be
downgraded or withdrawn.
Section 4.03. Transfer of Conveyed Assets. Each of the Transferors, each of
the Originators and the Servicer understands that the Issuers intend to pledge
the Pledged Property to the Indenture Trustee for the benefit of the Noteholders
pursuant to the Indenture. Each of the Transferors, each of the Originators and
the Servicer agrees that the Indenture Trustee may exercise the rights of the
Issuers hereunder and shall be entitled to all of the benefits to which the
Issuers are entitled to hereunder to the extent provided for herein.
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ARTICLE V.
CONDITIONS PRECEDENT
Section 5.01. Conditions to Issuers' Initial Obligations. The obligations
of LLC I or LLC II, respectively, to accept the transfer of the Initial
Contracts and the Initial Conveyed Assets on the Closing Date as set forth
herein shall be subject to the satisfaction of the following conditions:
(a) All representations and warranties of each of the Transferors, each of
the Originators and the Servicer contained in this Agreement shall be true and
correct on the Closing Date with the same effect as though such representations
and warranties had been made on such date;
(b) All information concerning the Initial Contracts and the Initial
Conveyed Assets provided to the Issuers and the Noteholders shall be true and
correct as of the Initial Cut-Off Date in all material respects; (c) Each of the
Transferors shall have delivered to LLC I or LLC II, as applicable, a List of
Initial Contracts as of the Initial Cut-Off Date and shall have substantially
performed all other obligations required to be performed by the provisions of
this Agreement;
(d) Each of the Transferors shall have recorded and filed, at the expense
of the Servicer or the Originators, any financing statement with respect to the
Initial Contracts and the Initial Conveyed Assets to be sold on the Closing Date
to LLC I or LLC II, as applicable, by each Transferor, as applicable, pursuant
to this Agreement meeting the requirements of applicable state law in such
manner in such jurisdictions as are necessary to perfect the transfer of the
Initial Contracts and the Initial Conveyed Assets from each such Transferor to
LLC I or LLC II, as applicable (subject to the Filing Requirements with respect
to the Equipment), and shall deliver a file-stamped copy of such financing
statements or other evidence of such filings to the Indenture Trustee;
(e) All corporate and legal proceedings and all instruments in connection
with the transactions contemplated by this Agreement shall be satisfactory in
form and substance to the Issuers and the Noteholders, and the Issuers and the
Noteholders shall have received from each of the Transferors copies of all
documents (including, without limitation, records of corporate or partnership
proceedings, as applicable) relevant to the transactions herein contemplated as
the Issuers or any Noteholder may reasonably have requested; and
(f) All conditions necessary to vest in each of the Transferors and
subsequently in LLC I, LLC II and the Noteholders, good title, free and clear of
all Adverse Claims, to its respective Initial Contracts, Initial Conveyed Assets
and interests in Original Equipment and any other Collateral securing the
contracts shall have been satisfied.
Section 5.02. Conditions to Issuers' Subsequent Obligations. The
obligations of LLC I or LLC II, respectively, to accept the transfer of any
Subsequent Contracts and any Subsequent Conveyed Assets as set forth herein
shall be subject to the satisfaction of the following conditions:
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(a) All representations and warranties of each of the Subsequent
Transferors, each of the Originators and the Servicer contained in this
Agreement and every other Transaction Document to which it is a party, shall be
true and correct on the Subsequent Transfer Date with the same effect as though
such representations and warranties had been made on such date;
(b) All information concerning the Subsequent Contracts and the related
Subsequent Conveyed Assets provided to the Issuers shall be true and correct as
of the applicable Subsequent Cut-Off Date in all material respects;
(c) Each of the Subsequent Transferors shall have delivered to LLC I or LLC
II, as applicable, a List of Subsequent Contracts as of the applicable
Subsequent Cut-Off Date and shall have substantially performed all other
obligations required to be performed by the provisions of this Agreement;
(d) Each of the Subsequent Transferors shall have recorded and filed, at
the expense of the Servicer, any financing statement with respect to the
Subsequent Contracts and the related Conveyed Assets to be sold on such
Subsequent Closing Date to LLC I or LLC II, as applicable, by each Transferor,
as applicable, pursuant to this Agreement meeting the requirements of applicable
state law in such manner in such jurisdictions as are necessary to perfect the
transfer of the Subsequent Contracts and the related Subsequent Conveyed Assets
from each such Subsequent Transferor to LLC I or LLC II, as applicable (subject
to the Filing Requirements with respect to the Equipment), and shall deliver a
file-stamped copy of such financing statements or other evidence of such filings
to the Indenture Trustee;
(e) All corporate and legal proceedings and all instruments in connection
with the transactions contemplated by this Agreement shall be satisfactory in
form and substance to the Issuers, and the Issuers shall have received from each
of the Subsequent Transferors copies of all documents (including, without
limitation, records of corporate or partnership proceedings, as applicable)
relevant to the transactions herein contemplated as the Issuers may reasonably
have requested; and
(f) All conditions necessary to vest in each of the Subsequent Transferors
good title, free and clear of all Adverse Claims, to its respective Subsequent
Contracts and the related Subsequent Conveyed Assets and interests in the
related Equipment and other Collateral securing the Contracts shall have been
satisfied.
ARTICLE VI.
TERMINATION
Section 6.01. Termination. The obligations and responsibilities of each of
the Transferors, each of the Originators, the Servicer and the Issuers created
by this Agreement shall terminate upon the latest of (i) the maturity or other
liquidation of the last remaining Contract and the disposition of any amounts
received upon disposition of any Defaulted Contracts and any Equipment leased
thereunder; and (ii) the termination of the Indenture in accordance with the
terms thereof; provided, however, that the indemnifications contained in Section
4.01(g) herein shall survive the termination of this Agreement and the other
Transaction Documents.
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ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01. Amendment. This Agreement may be amended from time to time by
the parties hereto only with the prior written consent of the Indenture Trustee
and the Noteholders and written confirmation from the Rating Agencies that
amendment will not result in the reduction or withdrawal of any rating on any
Class of Notes.
Section 7.02. GOVERNING LAW. THIS AGREEMENT AND ANY AMENDMENT HEREOF
PURSUANT TO SECTION 7.01 SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CHOICE OF LAW
PRINCIPLES) APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN AND THE
OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 7.03. Waiver of Jury Trial. The Issuers, the Servicer, the
Originators and the Transferors each hereby waive any right to have a jury
participate in resolving any dispute, sounding in contract, tort, or otherwise
arising out of, connected with, related to, or in connection with this
agreement. Instead, any dispute resolved in court will be resolved in a bench
trial without a jury.
Section 7.04. Notices. All demands, notices, and communications under this
Agreement shall be in writing and shall be deemed to have been duly given, made
and received (i) when delivered against receipt of registered or certified mail
or upon actual receipt of registered or certified mail, postage prepaid, return
receipt requested; (ii) when delivered by courier with appropriate evidence of
receipt; or (iii) upon transmission via facsimile or telex with appropriate
evidence of receipt (a) in the case of the Servicer, at the following address:
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, (b) in the case of Bravo, at
the following address: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, with a
copy to the Originators as set forth in clause (e) below and to MBIA Insurance
Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Exposure
Management, (c) in the case of Capital, at the following address: ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, with a copy to the Originators as set
forth in clause (e) below, (d) in the case of LLC I, at the following address:
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and in the case of
LLC II, at the following address: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, in each case with a copy to the Originators as set
forth in clause (e) below, with a copy to Fleet Securities, Inc. at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and (e) in the case of the Originators, at
their respective addresses set forth in Section 11.05 of the Indenture. Any
party may alter the address to which communications are to be sent by giving
notice of such change of address in conformity with the provisions of this
Section 7.04 for giving notice and by otherwise complying with any applicable
terms of this Agreement.
Section 7.05. Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from
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the remaining covenants, agreements, provisions, or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement.
Section 7.06. Assignment. Notwithstanding anything to the contrary
contained in this Agreement, this Agreement may not be assigned by any of the
Transferors, without the prior written consent of the Issuers and the
Noteholders and, except as provided in Section 4.03, this Agreement may not be
assigned by the Issuers without the prior written consent of the Noteholders.
Whether or not expressly stated, all representations, warranties, covenants and
agreements of the Originators, the Servicer, the Transferors and the Issuers in
this Agreement, or in any document delivered by any of them in connection with
this Agreement, shall be for the benefit of, and shall be exercisable by the
Indenture Trustee for the benefit of the Noteholders.
Section 7.07. Further Assurances. Each of the parties hereto agrees to do
such further acts and things and to execute and deliver to the Indenture Trustee
or any Noteholders such additional assignments, agreements, powers and
instruments as are required by the Indenture Trustee or any Noteholders to carry
into effect the purposes of this Agreement or to better assure and confirm unto
the Indenture Trustee its rights, powers and remedies hereunder, provided that
each of Bravo and Capital shall only be required to take any such actions if and
to the extent reimbursement from another Person for any costs, expenses or
liabilities incurred in taking such actions is reasonably assured.
Section 7.08. No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise hereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exhaustive of any rights, remedies, powers and privilege provided by law.
Section 7.09. Counterparts. This Agreement may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which shall constitute one and the same
instrument.
Section 7.10. Binding Effect; Third-Party Beneficiaries. This Agreement
will inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. The Indenture Trustee and the
Noteholders are intended third party beneficiaries of this Agreement.
Section 7.11. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
Section 7.12. Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
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Section 7.13.Schedules and Exhibits. The schedules and exhibits attached
hereto and referred to herein shall constitute a part of this Agreement and are
incorporated into this Agreement for all purposes.
Section 7.14. No Bankruptcy Petition Against the Transferors or the
Issuers. Each of the parties hereto agrees that, prior to the date that is one
year and one day after the payment in full of the latest maturing Notes issued
by the Issuers, it will not institute against any of Bravo, Capital or the
Issuers, or join any other Person in instituting against any of the Transferors
or the Issuers, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other proceedings under the laws of the United States
or any state of the United States. This Section 7.14 shall survive the
termination of this Agreement.
Section 7.15. Limited Recourse to SPV Transferors. (a) Each of the parties
hereto acknowledges that each of Bravo and Capital (each, an "SPV Transferor")
is intended to be operated as a bankruptcy-remote entity which will enter into
other securitization transactions and each other party hereto acknowledges and
agrees that it shall have no right, title or interest in or to any assets or
interests of either such SPV Transferor (other than the Contracts and Conveyed
Assets conveyed or purported to be conveyed hereunder) which are conveyed or
purported to be conveyed by such SPV Transferor to any other Person (whether by
way of a sale, assignment, capital contribution or by virtue of the granting of
a lien) ("Other Securitized Assets"). To the extent that, notwithstanding the
agreements and provisions contained in the immediately preceding sentence, any
Issuer or assignee thereof either (i) asserts an interest or claim to, or
benefit from, Other Securitized Assets, whether asserted against or through an
SPV Transferor or any other Person owned by an SPV Transferor, or (ii) is deemed
to have any such interest, claim or benefit in or from Other Securitized Assets,
whether by operation of law, legal process, pursuant to applicable provisions of
insolvency laws or otherwise (including by virtue of Section 1111(b) of the
Federal Bankruptcy Code or any successor provision having similar effect under
the Bankruptcy Code), and whether deemed asserted against or through an SPV
Transferor or any other Person owned by an SPV Transferor, then each Issuer, by
accepting the transfer of Conveyed Assets from an SPV Transferor, further
acknowledges and agrees that any such interest, claim or benefit in or from
Other Securitized Assets is and shall be expressly subordinated to the
indefeasible payment in full of all obligations and liabilities of the SPV
Transferor which, under the terms of the relevant documents relating to the
securitization of such Other Securitized Assets, are entitled to be paid from,
entitled to the benefits of, or otherwise secured by such Other Securitized
Assets (whether or not any such entitlement or security interest is legally
perfected or otherwise entitled to priority of distribution or application under
applicable law, including insolvency laws, and whether asserted against the
applicable SPV Transferor or any other Person owned by such SPV Transferor),
including the payment of post-petition interest on such other obligations and
liabilities. This subordination agreement shall be deemed a subordination
agreement within the meaning of Section 510(a) of the Bankruptcy Code. Each
Issuer, by accepting the transfer of Conveyed Assets from an SPV Transferor,
further acknowledges and agrees that no adequate remedy at law exists for a
breach of this Section 7.15 and the terms of this Section 7.15 may be enforced
by an action for specific performance. The provisions of this Section 7.15 shall
be for the third party benefit of those entitled to rely thereon and shall
survive the termination of this Agreement.
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(b) Notwithstanding the foregoing, nothing in this Section 7.15 shall
affect the rights of the Issuers to enforce any claims which the SPV Transferors
may have against HPSC in respect of any representations, warranties, covenants
and indemnities made by HPSC under the SPV Transferor Documents pursuant to
which HPSC transfers certain assets to Bravo or Capital, as applicable, with
respect to the Initial Conveyed Assets conveyed or purported to be conveyed by
Bravo or Capital hereunder, all of which representations, warranties, covenants
and indemnities are hereby assigned to the Issuers by each SPV Transferor as
part of the Initial Conveyed Assets.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Receivables
Transfer Agreement to be duly executed by their respective officers as of the
day and year first above written.
HPSC, INC.
By: ________________________________
Name:
Title:
AMERICAN COMMERCIAL FINANCE CORPORATION
By: ________________________________
Name:
Title:
HSPC BRAVO FUNDING CORP.
By: ________________________________
Name:
Title:
36
HPSC CAPITAL FUNDING, INC.
By: ________________________________
Name:
Title:
HPSC EQUIPMENT RECEIVABLES 2000-1 LLC I
By: ________________________________
Name:
Title:
HPSC EQUIPMENT RECEIVABLES 2000-1 LLC II
By: ________________________________
Name:
Title:
37
EXHIBIT A
SUBSEQUENT TRANSFER AGREEMENT
This Subsequent Transfer Agreement (this "Agreement"), dated as of
______________, is entered into among HPSC, Inc. ("HPSC"), a Delaware
corporation, as an originator (an "Originator"), AMERICAN COMMERCIAL FINANCE
CORPORATION ("ACFC"), a Delaware corporation as an originator (an "Originator",
and together with HPSC, the "Originators"), in its individual capacity, HPSC
BRAVO FUNDING CORP. ("Bravo" as a "Transferor" and together with HPSC and ACFC,
the "Subsequent Transferors"), a Delaware corporation, as a "Transferor", and
HPSC EQUIPMENT RECEIVABLES LLC I ("LLC I"), a Delaware limited liability company
and HPSC EQUIPMENT RECEIVABLES 2000-1 LLC II ("LLC II"), a Delaware limited
liability company as issuers (each of LLC I and LLC II, an "Issuer", and
collectively, the "Issuers").
Pursuant to this Agreement and the Receivables Transfer Agreement, dated as
of December 1, 2000 (the "Receivables Transfer Agreement"), among the
Originators, the Servicer, the Subsequent Transferors and the Issuers, the
parties hereto agree to the sale by [HPSC/ACFC] to [LLC I/LLC II] of the
Subsequent Contracts listed on the attached List of Subsequent Contracts
(hereinafter in this Agreement, the "Subsequent Contracts") and the Subsequent
Conveyed Assets related thereto, and the pledge of the Subsequent Contracts and
the Subsequent Conveyed Assets by [LLC I/LLC II] to the Indenture Trustee.
Capitalized terms used and not defined herein have their respective
meanings as set forth in the definitions contained in Annex A to the Receivables
Transfer Agreement, which definitions are incorporated by reference herein. All
other capitalized terms used herein shall have the meanings specified herein.
Section 1. Conveyance of Subsequent Contracts and Subsequent Conveyed
Assets.
(a) Each of the Subsequent Transferors does hereby sell, assign, set
over and convey to LLC I and/or LLC II [specify applicable entity at time of
conveyance], without recourse, the Subsequent Contracts listed on the attached
Schedule 1A and Schedule 1B, respectively, and the Subsequent Conveyed Assets
related thereto, whether now existing or hereinafter arising, without recourse
(except as may be set forth in the Servicing Agreement).
(b) The parties hereto intend that the transactions set forth herein
constitute a sale and an absolute assignment by HPSC and ACFC, as applicable, to
LLC I and/or LLC II on the Subsequent Transfer Date of all of HPSC's and ACFC's,
as applicable, respective right, title and interest in and to such Subsequent
Contracts and Subsequent Conveyed Assets. In the event the transactions set
forth herein shall be deemed not to be a sale and an absolute assignment, each
of the Subsequent Transferors hereby grants to LLC I and/or LLC II as of the
Subsequent Transfer Date a first priority perfected security interest in all of
each Subsequent Transferor's respective right, title and interest in, to and
under such Subsequent Contracts and Subsequent Conveyed Assets and all income
and proceeds thereof, to secure all of
38
such Subsequent Transferor's obligations hereunder, and this Agreement shall
constitute a security agreement under applicable law, and in such event, the
parties hereto acknowledge that the Indenture Trustee, in addition to holding
the Subsequent Contracts and Subsequent Conveyed Assets for the benefit of the
Noteholders, holds the Subsequent Contracts and Subsequent Conveyed Assets as
assignee of LLC I and/or LLC II as secured party.
(c) Annexed hereto is a List of Subsequent Contracts listing the
Contracts that constitute the Subsequent Contracts sold by HPSC and ACFC,
respectively, to LLC I and/or LLC II pursuant to this Agreement on the date
hereof.
Section 2. Representations and Warranties; Conditions Precedent.
(a) Each of the Subsequent Transferors hereby affirm the
representations and warranties set forth in Section 3.01(a), Section 3.01(b) and
Section 3.02 of the Receivables Transfer Agreement that relate to such
Transferor as of the date hereof.
(b) Each of the Originators and the Servicer, as applicable, hereby
affirm (i) the representations and warranties set forth in Section 3.01(a) and
Section 3.01(b), respectively, as of the date hereof and (ii) that each
Subsequent Contract satisfies the representations and warranties set forth in
Section 3.02 of the Receivables Transfer Agreement relating to the Contracts,
which representations and warranties are herby re-made and incorporated by
reference as if fully set forth herein.
(c) Each of the Subsequent Transferors is solvent, is able to pay its
debts as they become due and has capital sufficient to carry on its business and
its obligations hereunder; each such Subsequent Transferor will not be rendered
insolvent by the execution and delivery of this Agreement or by the performance
of its respective obligations hereunder nor is it aware of any pending
insolvency; no petition of bankruptcy (or similar insolvency proceeding) has
been filed by or against any of the Subsequent Transferors prior to the date
hereof.
(d) All terms and conditions of the Receivables Transfer Agreement are
hereby ratified and confirmed; provided, however, that in the event of any
conflict the provisions of this Agreement shall control over the conflicting
provisions of the Receivables Transfer Agreement.
(e) Each of the Subsequent Transferors, the Servicer and each of the
Originators hereby confirm that each of the conditions precedent set forth in
Sections 2.02(c) and 5.02 of the Receivables Transfer Agreement have been
satisfied as of the date hereof.
(f) Each of the Subsequent Transferors, the Servicer and each of the
Originators represent and warrant that the aggregate Discounted Contract Balance
and the outstanding Revolver Balance of the Subsequent Contracts listed on the
List of Subsequent Contracts annexed hereto and sold to LLC I and/or LLC II
pursuant to this Agreement as of the related Subsequent Cut-Off Date is
$__________.
Section 3. Grant from LLC II to Indenture Trustee. LLC I and/or LLC II
hereby grants, as of the Subsequent Transfer Date, to the Indenture Trustee for
the benefit of the
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Noteholders to secure all of LLC I and/or LLC II's obligations under the
Indenture, a security interest in all of LLC I and/or LLC II's right, title and
interest in and to, whether now existing or hereafter created, (a) the
Subsequent Contracts and the Subsequent Conveyed Assets; (b) all funds on
deposit from time to time in the Lockbox Account and the Collection Account
allocable to the Subsequent Contracts and the Subsequent Conveyed Assets; (c)
all its rights under this Agreement; and (d) all present and future claims,
demands, causes and of choses in action in respect of any or all of the
foregoing and all payments on or under, and all proceeds of every kind and
nature whatsoever in respect of, any or all of the foregoing and all payments on
or under, and all proceeds of every kind and nature whatsoever in the conversion
thereof, voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing.
Section 4. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
Section 5. Waiver of Jury Trial. The Issuers, the Servicer, the Originators
and the Subsequent Transferors each hereby waive any right to have a jury
participate in resolving any dispute, sounding in contract, tort, or otherwise
arising out of, connected with, related to, or in connection with this
agreement. Instead, any dispute resolved in court will be resolved in a bench
trial without a jury.
Section 6. Counterparts. This Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts, each
of which, when so executed, shall be deemed to be an original; such
counterparts, together, shall constitute one and the same instrument.
Section 7. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the Subsequent Transferors, the Originators, the
Servicer, the Issuers and their respective successors and permitted assigns.
Section 8. Binding Effect; Third-Party Beneficiaries. This Agreement will
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. The Indenture Trustee and the
Noteholders are intended and express third party beneficiaries of this
Agreement.
Section 9. No Bankruptcy Petition Against the Transferors or the Issuers.
Each of the parties hereto agrees that, prior to the date that is one year and
one day after the payment in full of the latest maturing Notes issued by the
Issuers, it will not institute against any of Bravo or the Issuers, or join any
other Person in instituting against any of the Subsequent Transferors or the
Issuers, any bankruptcy, reorganization, arrangement, insolvency or
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liquidation proceedings or other proceedings under the laws of the United States
or any state of the United States. This Section 9 shall survive the termination
of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Subsequent Transfer Agreement as of the day and year first
written above.
HPSC, INC.
By: ________________________________
Name:
Title:
AMERICAN COMMERCIAL FINANCE CORPORATION
By: ________________________________
Name:
Title:
[HPSC BRAVO FUNDING CORP.]
[If applicable]
By: ________________________________
Name:
Title:
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HPSC EQUIPMENT RECEIVABLES 2000-1 LLC I
By: ________________________________
Name:
Title:
HPSC EQUIPMENT RECEIVABLES 2000-1 LLC II
By: ________________________________
Name:
Title:
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SCHEDULE I to EXHIBIT A
LIST OF SUBSEQUENT CONTRACTS
44
SCHEDULE 1
LIST OF INITIAL CONTRACTS