<PAGE> 1
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 14,
1995
PSSFC Equipment Lease Trust 1995-1
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 33-84918 Application
- ---------------------------- ------------- -------------------
(State or Other Jurisdiction (Commission Pending.
of Incorporation) File Number) (I.R.S. Employer
Identification No.)
c/o Prudential Securities
Secured Financing
Corporation
Attention: Norman Chaleff 10292
One New York Plaza, 12th Fl. --------------------
New York, New York (Zip Code)
- ----------------------------
(Address of Principal
Executive Offices)
Registrant's telephone number, including area code (212) 778-1000
---------------
No Change
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
- --------------------------------------------------------------------------------
<PAGE> 2
Item 2. Acquisition or Disposition of Assets
Description of the Certificates and the Leases
Prudential Securities Secured Financing Corporation, as
Depositor (the "Depositor"), has registered issuances of an aggregate of up to
$400,000,000 in principal amount of leasebacked securities, on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, as
amended (the "Act"), by a Registration Statement on Form S-3 (Registration File
No. 33-84918) (as amended, the "Registration Statement"). The Depositor formed
the PSSFC Equipment Lease Trust 1995-1 (the "Trust"), a New York trust, pursuant
to a Pooling and Servicing Agreement, dated as of November 1, 1995 (the "Pooling
and Servicing Agreement"), among the Depositor, Phoenix Leasing Incorporated, as
servicer (the "Servicer") and Bankers Trust Company, as trustee (the "Trustee").
Pursuant to the Registration Statement, the Trust issued $21,423,000.00 in
aggregate principal amount of its 6.85% Lease-Backed Certificates, Class A (the
"Certificates"), on November 30, 1995. This Current Report on Form 8-K is being
filed to satisfy an undertaking to file copies of certain agreements executed in
connection with the issuance of the Certificates, the forms of which are being
filed as exhibits to the Pooling and Servicing Agreement attached hereto as
Exhibit 4.1.
The Certificates were issued pursuant to the Pooling and
Servicing Agreement attached hereto as Exhibit 4.1. The Certificates consist of
three classes, the Class A Certificates (the "Class A Certificates"), the Class
B Certificates and the Trust Certificate. Only the Class A Certificates were
issued pursuant to the Registration Statement.
The assets of the Trust consist of a segregated pool of
non-cancelable equipment finance leases, installment sale contracts and loan
contracts and any New Leases, (collectively, the "Leases"), together with all
monies received relating thereto after November 1, 1995, the equipment leased
thereunder and the proceeds thereof and any New Equipment (the "Equipment" and
together with the Leases, the "Receivables"), such amounts as from time to time
may be held in one or more accounts established by the Servicer, the rights to
proceeds under insurance policies covering the Equipment or the related lessors,
any guarantees of a lessee's obligation under a Lease, the rights of the
Depositor under the Receivables Transfer Agreement (as defined below) and the
Contribution Agreement (as defined below) and all proceeds of the foregoing. On
and prior to November 30, 1995 (the "Closing Date"), Phoenix Leasing
Incorporated ("PLI") transferred the initial Receivables and the related assets
to Phoenix Receivables II, Inc. (the "Phoenix Finance Subsidiary") pursuant to
the Contribution Agreement, dated as of November 1, 1995, attached hereto as
Exhibit 10.2, between PLI and the Phoenix Finance Subsidiary. On the Closing
Date, the Phoenix Finance Subsidiary
<PAGE> 3
transferred the initial Receivables and the related assets to the Depositor
pursuant to the Receivables Transfer Agreement, dated as of November 1, 1995,
attached hereto as Exhibit 10.1, among the Phoenix Finance Subsidiary, PLI and
the Depositor. The Depositor, in turn, then transferred the initial Receivables
and the related assets to the Trust pursuant to the Pooling and Servicing
Agreement, attached hereto as Exhibit 4.1.
Interest payments on the Class A Certificates are based on the
Outstanding Class A Certificate Principal Balance and the Class A Certificate
Rate. The Class A Certificate Rate will be 6.85% per annum. The Class A
Certificates have an Initial Class A Certificate Principal Balance of
$21,423,000.00.
As of the Closing Date, the Receivables possessed the
characteristics described in the Prospectus dated December 2, 1994 and the
Prospectus Supplement dated November 29, 1995 filed pursuant to Rule 424(b) of
the Act on November 30, 1995.
2
<PAGE> 4
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
(a) Not applicable
(b) Not applicable
(c) Exhibits:
1.1 Underwriting Agreement, dated November 28, 1995,
between Prudential Securities Secured Financing Corporation and
Prudential Securities Incorporated.
4.1 Pooling and Servicing Agreement, dated as of November 1,
1995, among Prudential Securities Secured Financing Corporation, as depositor,
Phoenix Leasing Incorporated, as servicer, and Bankers Trust Company, as
trustee.
10.1 Receivables Transfer Agreement, dated as of
November 1, 1995, among Prudential Securities Secured Financing
Corporation, Phoenix Leasing Incorporated and Phoenix Receivables
II, Inc.
10.2 Contribution Agreement, dated as of November 1, 1995,
between Phoenix Leasing Incorporated and Phoenix Receivables II, Inc.
3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
PSSFC EQUIPMENT LEASE TRUST 1995-1,
By: Prudential Securities Secured
Financing Corporation, as Depositor
By: /s/ Norman Chaleff
--------------------------
Name: Norman Chaleff
Title: Vice President
Dated: December 12, 1995
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
================================================================================
Exhibit No. Description Page No.
<S> <C> <C>
- --------------------------------------------------------------------------------
1.1 Underwriting Agreement, dated
November 28, 1995 between
Prudential Securities Secured
Financing Corporation and
Prudential Securities Incorporated.
- --------------------------------------------------------------------------------
4.1 Pooling and Servicing Agreement,
dated as of November 1, 1995, among
Prudential Securities Secured
Financing Corporation, as
depositor, Phoenix Leasing
Incorporated, as servicer, and
Bankers Trust Company, as trustee.
- --------------------------------------------------------------------------------
10.1 Receivables Transfer Agreement,
dated as of November 1, 1995, among
Prudential Securities Secured
Financing Corporation, Phoenix
Leasing Incorporated and Phoenix
Receivables II, Inc.
- --------------------------------------------------------------------------------
10.2 Contribution Agreement, dated as of
November 1, 1995, between Phoenix
Leasing Incorporated and Phoenix
Receivables II, Inc.
================================================================================
</TABLE>
<PAGE> 1
EXHIBIT 1.1
November 28, 1995
Prudential Securities Incorporated
One Seaport Plaza
New York, New York 10292
Prudential Securities Secured Financing Corporation (the
"Company") hereby confirms its agreement to sell certain equipment lease backed
certificates to Prudential Securities Incorporated (the "Underwriter") as
described herein. The certificates will be secured by the assets of a trust fund
(the "Trust Fund") consisting primarily of a segregated pool (the "Receivable
Pool") of finance leases, installment sale contracts and loan contracts (the
"Leases") and underlying equipment leased thereby (the "Equipment," together
with the Leases, the "Receivables"). The Company intends to purchase the
Receivables from Phoenix Receivables II, Inc. (the "Phoenix Finance
Subsidiary"), pursuant to the Receivables Transfer Agreement to be dated as of
November 1, 1995 (the "Receivables Transfer Agreement") among the Company and
the Phoenix Finance Subsidiary. The Leases shall have, as of the close of
business on November 1, 1995 (the "Cut-off Date"), a Lease Principal Balance (as
defined in the Pooling and Servicing Agreement) of not more than $29,756,661.70.
The certificates are to be issued pursuant to the Pooling and Servicing
Agreement to be dated as of November 1, 1995 (the "Pooling and Servicing
Agreement") among Phoenix Leasing Incorporated, as servicer of the Receivables,
the Company, as depositor and Bankers Trust Company, as trustee (the "Trustee").
All capitalized terms used but not otherwise defined herein
have the respective meanings set forth in the Pooling and Servicing Agreement.
The phrase "this Agreement" shall refer to this letter by the Company to
Prudential Securities Incorporated ("PSI") as agreed to and accepted by PSI as
of the date hereof.
1. Certificates. The certificates will be issued in classes as
follows: (i) a senior class consisting of the Class A Certificates (the "Class A
Certificates") and (ii) two classes of subordinate certificates with respect to
the Class A Certificates (the "Class B Certificates" and the "Trust
Certificate"). The Class B Certificates and the Trust Certificate are not being
sold hereby.
2. Representations and Warranties of the Company. The Company
represents and warrants to, and covenants with, the Underwriter that:
<PAGE> 2
A. The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (No. 33-84918) on Form
S-3 for the registration under the Securities Act of 1933, as amended (the
"Act"), of Equipment Lease Backed Securities (issuable in series), which
registration statement, as amended at the date hereof, has become effective.
Such registration statement, as amended to the date of this Agreement, meets the
requirements set forth in Rule 415(a)(1)(x) under the Act and complies in all
other material respects with such Rule. The Company proposes to file with the
Commission pursuant to Rule 424(b)(2) under the Act a supplement dated the date
hereof to the prospectus dated December 2, 1994 relating to the Class A
Certificates and the method of distribution thereof and has previously advised
the Underwriter of all further information (financial and other) with respect to
the Class A Certificates to be set forth therein. Such registration statement,
including the exhibits thereto, as amended at the date hereof, is hereinafter
called the "Registration Statement"; such prospectus dated December 21, 1994, in
the form in which it will be filed with the Commission pursuant to Rule
424(b)(2) under the Act is hereinafter called the "Basic Prospectus"; such
supplement dated the date hereof to the Basic Prospectus, in the form in which
it will be filed with the Commission pursuant to Rule 424(b)(2) of the Act, is
hereinafter called the "Prospectus Supplement"; and the Basic Prospectus and the
Prospectus Supplement together are hereinafter called the "Prospectus." Any
preliminary form of the Prospectus Supplement which has heretofore been filed
pursuant to Rule 424 is hereinafter called a "Preliminary Prospectus
Supplement." The Company will file with the Commission within fifteen days of
the issuance of the Class A Certificates a report on Form 8-K setting forth
specific information concerning the related Receivables (the "8-K").
B. As of the date hereof, when the Registration Statement
became effective, when the Prospectus Supplement is first filed pursuant to Rule
424(b)(2) under the Act, when, prior to the Closing Date (as defined below), any
other amendment to the Registration Statement becomes effective, and when any
supplement to the Prospectus is filed with the Commission, and at the Closing
Date, (i) the Registration Statement, as amended as of any such time, and the
Prospectus, as amended or supplemented as of any such time, will comply in all
material respects with the applicable requirements of the Act and the rules
thereunder and (ii) the Registration Statement, as amended as of any such time,
did not and will not contain any untrue statement of a material fact and did not
and will not omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and the Prospectus, as
amended or supplemented as of any such time, did not and will not contain an
untrue statement of a material fact and did not and will not omit to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no representations or warranties as to the information
contained in or omitted from the
2
<PAGE> 3
Registration Statement or the Prospectus or any amendment thereof or supplement
thereto in reliance upon and in conformity with the information furnished in
writing to the Company by or on behalf of the Underwriter specifically for use
in connection with the preparation of the Registration Statement and the
Prospectus.
C. The Company is duly organized, validly existing and in good
standing under the laws of the State of Delaware, has full power and authority
(corporate and other) to own its properties and conduct its business as now
conducted by it, and as described in the Prospectus, and is duly qualified to do
business in each jurisdiction in which it owns or leases equipment (to the
extent such qualification is required by applicable law) or in which the conduct
of its business requires such qualification except where the failure to be so
qualified does not involve (i) a material risk to, or a material adverse effect
on, the business, properties, financial position, operations or results of
operations of the Company or (ii) any risk whatsoever as to the enforceability
of any Lease.
D. There are no actions, proceedings or investigations pending,
or, to the knowledge of the Company, threatened, before any court, governmental
agency or body or other tribunal (i) asserting the invalidity of this Agreement,
the Class A Certificates, the Receivables Transfer Agreement or the Pooling and
Servicing Agreement, (ii) seeking to prevent the issuance of the Class A
Certificates or the consummation of any of the transactions contemplated by this
Agreement, the Receivables Transfer Agreement or the Pooling and Servicing
Agreement, (iii) which may, individually or in the aggregate, materially and
adversely affect the performance by the Company of its obligations under, or the
validity or enforceability of, this Agreement, the Class A Certificates, the
Receivables Transfer Agreement, or the Pooling and Servicing Agreement, or (iv)
which may affect adversely the federal income tax attributes of the Class A
Certificates as described in the Prospectus.
E. The execution and delivery by the Company of this Agreement,
the Receivables Transfer Agreement and the Pooling and Servicing Agreement are
within the corporate power of the Company and have been, or will be, prior to
the Closing Date duly authorized by all necessary corporate action on the part
of the Company and the execution and delivery of such instruments, the
consummation of the transactions therein contemplated and compliance with the
provisions thereof will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any statute or any agreement
or instrument to which the Company or any of its affiliates is a party or by
which it or any of them is bound or to which any of the property of the Company
or any of its affiliates is subject, the Company's charter or bylaws, or any
order, rule or regulation of any court, governmental agency or body or other
tribunal having jurisdiction over the Company, any of its affiliates or any of
its or their
3
<PAGE> 4
properties; and no consent, approval, authorization or order of, or filing with,
any court or governmental agency or body or other tribunal is required for the
consummation of the transactions contemplated by this Agreement or the
Prospectus in connection with the issuance and sale of the Class A Certificates
by the Company. Neither the Company nor any of its affiliates is a party to,
bound by or in breach or violation of any indenture or other agreement or
instrument, or subject to or in violation of any statute, order, rule or
regulation of any court, governmental agency or body or other tribunal having
jurisdiction over the Company or any of its affiliates, which materially and
adversely affects, or may in the future materially and adversely affect, (i) the
ability of the Company to perform its obligations under this Agreement, the
Pooling and Servicing Agreement or the Receivables Transfer Agreement or (ii)
the business, operations, results of operations, financial position, income,
properties or assets of the Company.
F. This Agreement has been duly executed and delivered by the
Company, and the Pooling and Servicing Agreement and the Receivables Transfer
Agreement will be duly executed and delivered by the Company, and each
constitutes and will constitute the legal, valid and binding obligation of the
Company enforceable in accordance with their respective terms, except as
enforceability may be limited by (i) bankruptcy, insolvency, liquidation,
receivership, moratorium, reorganization or other similar laws affecting the
enforcement of the rights of creditors, and (ii) general principles of equity,
whether enforcement is sought in a proceeding at law or in equity.
G. The Class A Certificates will conform in all material
respects to the description thereof to be contained in the Prospectus and will
be duly and validly authorized and, when duly and validly executed,
authenticated, issued and delivered in accordance with the Pooling and Servicing
Agreement and sold to the Underwriter as provided herein, will be validly issued
and outstanding and entitled to the benefits of the Pooling and Servicing
Agreement.
H. On the Closing Date, the Receivables will conform in all
material respects to the description thereof contained in the Prospectus and the
representations and warranties contained in this Agreement will be true and
correct in all material respects. The representations and warranties set out in
the Pooling and Servicing Agreement are hereby made to the Underwriter as though
set out herein, and at the dates specified in the Pooling and Servicing
Agreement, such representations and warranties were or will be true and correct
in all material respects.
I. The Company possesses all material licenses, certificates,
permits or other authorizations issued by the appropriate state, federal or
foreign regulatory agencies or bodies necessary to conduct the business now
operated by it and as described in the Prospectus and there are no proceedings,
pending
4
<PAGE> 5
or, to the best knowledge of the Company, threatened, relating to the revocation
or modification of any such license, certificate, permit or other authorization
which singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would materially and adversely affect the business,
operations, results of operations, financial position, income, property or
assets of the Company.
J. Any taxes, fees and other governmental charges in connection
with the execution and delivery of this Agreement, the Pooling and Servicing
Agreement, the Receivables Transfer Agreement, or the execution and issuance of
the Class A Certificates have been or will be paid at or prior to the Closing
Date.
K. There has not been any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company or its subsidiaries, taken as a whole, from July 15, 1994.
L. This Agreement, the Pooling and Servicing Agreement and the
Receivables Transfer Agreement will conform in all material respects to the
descriptions thereof contained in the Prospectus.
M. The Company is not aware of (i) any request by the
Commission for any further amendment of the Registration Statement or the
Prospectus or for any additional information, (ii) the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that purpose
or (iii) any notification with respect to the suspension of the qualification of
the Class A Certificates for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose.
3. Agreements of the Underwriter. The Underwriter agrees with
the Company that upon the execution of this Agreement and authorization by the
Underwriter of the release of the Class A Certificates, the Underwriter shall
offer the Class A Certificates for sale upon the terms and conditions set forth
in the Prospectus as amended or supplemented.
4. Purchase, Sale and Delivery of the Class A Certificates. The
Company hereby agrees, subject to the terms and conditions hereof, to sell the
Class A Certificates to the Underwriter, who, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, hereby agrees to purchase the entire aggregate principal
amount of the Class A Certificates. At the time of issuance of the Class A
Certificates, the Receivables will be transferred by the Company to the Trustee
on behalf of the Certificateholders pursuant to the Pooling and Servicing
Agreement.
5
<PAGE> 6
The Class A Certificates to be purchased by the Underwriter
will be delivered by the Company to the Underwriter (which delivery shall be
made through the facilities of The Depository Trust Company ("DTC")) against
payment of the purchase price therefor, equal to $21,423,000 with respect to the
Class A Certificates, plus interest accrued at the Class A Certificate Rate on
the Class A Certificates from November 25, 1995 to November 29, 1995, by a same
day federal funds wire payable to the order of the Company.
Settlement shall take place at the offices of Dewey Ballantine,
1301 Avenue of the Americas, New York, New York at 9 a.m., on November 30, 1995,
or at such other time thereafter as the Underwriter and the Company determine
(such time being herein referred to as the "Closing Date"). The Class A
Certificates will be prepared in definitive form and in such authorized
denominations as the Underwriter may request, registered in the name of Cede &
Co., as nominee of DTC.
The Company agrees to have the Class A Certificates available
for inspection and review by the Underwriter in New York City not later than 10
a.m. New York City time on the business day prior to the Closing Date.
5. Covenants of the Company. The Company covenants and agrees
with the Underwriter that:
A. The Company will promptly advise the Underwriter and its
counsel (i) when any amendment to the Registration Statement shall have become
effective, (ii) of any request by the Commission for any amendment to the
Registration Statement or the Prospectus or for any additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or threatening of
any proceeding for that purpose and (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Class A
Certificates for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. The Company will not file any amendment to the
Registration Statement or supplement to the Prospectus after the date hereof and
prior to the Closing Date for the Class A Certificates unless the Company has
furnished the Underwriter and its counsel copies of such amendment or supplement
for their review prior to filing and will not file any such proposed amendment
or supplement to which the Underwriter reasonably objects, unless such filing is
required by law. The Company will use its best efforts to prevent the issuance
of any stop order suspending the effectiveness of the Registration Statement
and, if issued, to obtain as soon as possible the withdrawal thereof.
B. If, at any time during the period in which the Prospectus is
required by law to be delivered, any event occurs as a result of which the
Prospectus as then amended or supplemented
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<PAGE> 7
would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it shall be
necessary to amend or supplement the Prospectus to comply with the Act or the
rules under the Act, the Company will promptly prepare and file with the
Commission, subject to Paragraph A of this Section 5, an amendment or supplement
that will correct such statement or omission or an amendment that will effect
such compliance and, if such amendment or supplement is required to be contained
in a post-effective amendment to the Registration Statement, will use its best
efforts to cause such amendment of the Registration Statement to be made
effective as soon as possible.
C. The Company will furnish to the Underwriter, without charge,
executed copies of the Registration Statement (including exhibits thereto) and,
so long as delivery of a Prospectus by the Underwriter or a dealer may be
required by the Act, as many copies of the Prospectus, as amended or
supplemented, and any amendments and supplements thereto as the Underwriter may
reasonably request. The Company will pay the expenses of printing all offering
documents relating to the offering of the Class A Certificates.
D. As soon as practicable, but not later than sixteen months
after the effective date of the Registration Statement, the Company will make
generally available to Class A Certificateholders an earnings statement covering
a period of at least 12 months beginning after the effective date of the
Registration Statement which will satisfy the provisions of Section 11(a) of the
Act and, at the option of the Company, will satisfy the requirements of Rule 158
under the Act.
E. During a period of 20 calendar days from the date as of
which this Agreement is executed, neither the Company nor any affiliate of the
Company will, without the Underwriter's prior written consent (which consent
shall not be unreasonably withheld), enter into any agreement to offer or sell
lease backed notes, except pursuant to this Agreement.
F. So long as any of the Class A Certificates are outstanding,
the Company will cause to be delivered to the Underwriter (i) all documents
required to be distributed to the Class A Certificateholders and (ii) from time
to time, any other information filed with any government or regulatory authority
that is otherwise publicly available, as the Underwriter may reasonably request.
G. The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, will pay all expenses
in connection with the transactions contemplated herein, including but not
limited to the expenses of printing (or otherwise reproducing) all documents
relating to the offering, the fees and disbursements of its counsel
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<PAGE> 8
and expenses of the Underwriter incurred in connection with (i) the issuance and
delivery of the Class A Certificates, (ii) preparation of all documents
specified in this Agreement, (iii) any fees and expenses of the Trustee and (iv)
any fees charged by investment rating agencies for rating the Class A
Certificates.
H. The Company agrees that, so long as any of the Class A
Certificates shall be outstanding, it will deliver or cause to be delivered to
the Underwriter (i) the annual statement as to compliance delivered to the
Trustee pursuant to the Pooling and Servicing Agreement, (ii) the annual
statement of a firm of independent public accountants furnished to the Trustee
pursuant to the Pooling and Servicing Agreement as soon as such statement is
furnished to the Company and (iii) any information and reports required to be
delivered by the Servicer pursuant to Article V of the Pooling and Servicing
Agreement.
I. The Company will enter into the Pooling and Servicing
Agreement and the Receivables Transfer Agreement and all related agreements on
or prior to the Closing Date.
J. The Company will endeavor to qualify the Class A
Certificates for sale to the extent necessary under any state securities or Blue
Sky laws in any jurisdictions as may be reasonably requested by the Underwriter,
if any, and will pay all expenses (including fees and disbursements of counsel)
in connection with such qualification and in connection with the determination
of the eligibility of the Class A Certificates for investment under the laws of
such jurisdictions as the Underwriter may reasonably designate, if any.
6. Conditions of the Underwriter's Obligation. The obligation
of the Underwriter to purchase and pay for the Class A Certificates as provided
herein shall be subject to the accuracy as of the date hereof and the Closing
Date (as if made at the Closing Date) of the representations and warranties of
the Company contained herein (including those representations and warranties set
forth in the Pooling and Servicing Agreement and incorporated herein), to the
accuracy of the statements of the Company made in any certificate or other
document delivered pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder, and to the following additional
conditions:
A. The Registration Statement shall have become effective no
later than the date hereof, and no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened, and the Prospectus shall have
been filed pursuant to Rule 424(b).
B. The Underwriter shall have received the Pooling and
Servicing Agreement and the Class A Certificates in form and
8
<PAGE> 9
substance satisfactory to the Underwriter, duly executed by all signatories
required pursuant to the respective terms thereof.
C. The Underwriter shall have received the favorable opinion of
Dewey Ballantine, counsel to the Company with respect to the following
items, dated the Closing Date, to the effect that:
(a) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of
the State of Delaware, and is qualified to do business in each
state necessary to enable it to perform its obligations under
the Pooling and Servicing Agreement. The Company has the
requisite power and authority to execute and deliver, engage in
the transactions contemplated by, and perform and observe the
conditions of, this Agreement, the Pooling and Servicing
Agreement and the Receivables Transfer Agreement.
(b) This Agreement, the Pooling and Servicing
Agreement and the Receivables Transfer Agreement have been duly
and validly authorized, executed and delivered by the Company,
all requisite corporate action having been taken with respect
thereto, and each constitutes the valid, legal and binding
agreement of the Company, and would be enforceable against the
Company in accordance with their respective terms.
(c) Neither the transfer of the Receivables to the
Trustee, the issuance or sale of the Class A Certificates nor
the execution, delivery or performance by the Company of the
Pooling and Servicing Agreement, the Receivables Transfer
Agreement or this Agreement (A) conflicts or will conflict with
or results or will result in a breach of, or constitutes or
will constitute a default under, (i) any term or provision of
the certificate of incorporation or bylaws of the Company; (ii)
any term or provision of any material agreement, contract,
instrument or indenture, to which the Company is a party or is
bound; or (iii) any order, judgment, writ, injunction or decree
of any court or governmental agency or body or other tribunal
having jurisdiction over the Company; or (B) results in, or
will result in the creation or imposition of any lien, charge
or encumbrance upon the Trust Fund or upon the Class A
Certificates, except as otherwise contemplated by the Pooling
and Servicing Agreement.
(d) No consent, approval, authorization or order of,
registration or filing with, or notice to, courts, governmental
agency or body or other tribunal is required under the laws of
the State of New York, for the execution, delivery and
performance of the Pooling and
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<PAGE> 10
Servicing Agreement, the Receivables Transfer Agreement, this
Agreement, or the offer, issuance, sale or delivery of the
Class A Certificates or the consummation of any other
transaction contemplated thereby by the Company, except such
which have been obtained.
(e) There are no actions, proceedings or
investigations pending or, to such counsel's knowledge,
threatened against the Company before any court, governmental
agency or body or other tribunal (i) asserting the invalidity
of this Agreement, the Pooling and Servicing Agreement, the
Receivables Transfer Agreement or the Class A Certificates (ii)
seeking to prevent the issuance of the Class A Certificates or
the consummation of any of the transactions contemplated by the
Pooling and Servicing Agreement, the Receivables Transfer
Agreement or this Agreement, (iii) which would materially and
adversely affect the performance by the Company of obligations
under, or the validity or enforceability of, the Class A
Certificates, the Pooling and Servicing Agreement, the
Receivables Transfer Agreement or this Agreement.
(f) Except as to any financial or statistical data
contained in the Registration Statement, to the best of such
counsel's knowledge, the Registration Statement does not
contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary in order to make the statements therein not
misleading.
(g) To the best of the knowledge of such counsel, the
Commission has not issued any stop order suspending the
effectiveness of the Registration Statement or any order
directed to any prospectus relating to the Class A Certificates
(including the Prospectus), and has not initiated or threatened
any proceeding for that purpose.
In rendering their opinions, the counsel described in this
Paragraph C may rely, as to matters of fact, on certificates of responsible
officers of the Company, the Trustee and public officials. Such opinions may
also assume the due authorization, execution and delivery of the instruments and
documents referred to therein by the parties thereto other than the Company.
D. The Underwriter shall have received a letter from Arthur
Anderson, dated on or before the Closing Date, in form and substance
satisfactory to the Underwriter and counsel for the Underwriter, to the effect
that they have performed certain specified procedures requested by the
Underwriter with respect to the information set forth in the Prospectus and
certain matters relating to the Company.
10
<PAGE> 11
E. The Class A Certificates shall have been rated "A" by Duff &
Phelps Credit Rating Company, and such rating shall not have been rescinded. The
Underwriter and counsel for the Underwriter shall have received copies of any
opinions of counsel supplied to the rating organizations relating to any matters
with respect to the Class A Certificates. Any such opinions shall be dated the
Closing Date and addressed to the Underwriter or accompanied by reliance letters
to the Underwriter or shall state that the Underwriter may rely upon them.
F. The Underwriter shall have received from the Company a
certificate, signed by the president, a senior vice president or a vice
president of the Company, dated the Closing Date, to the effect that the signer
of such certificate has carefully examined the Registration Statement, the
Pooling and Servicing Agreement, this Agreement and the Receivables Transfer
Agreement and that, to the best of his or her knowledge based upon reasonable
investigation:
1. the representations and warranties of the Company in this
Agreement, as of the Closing Date, the Pooling and Servicing Agreement,
the Receivables Transfer Agreement and in all related agreements, as of
the date specified in such agreements, are true and correct, and the
Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date;
2. there are no actions, suits or proceedings pending, or to
the best of such officer's knowledge, threatened against or affecting
the Company which if adversely determined, individually or in the
aggregate, would be reasonably likely to adversely affect the Company's
obligations under the Pooling and Servicing Agreement, the Receivables
Transfer Agreement or this Agreement in any material way; and no
merger, liquidation, dissolution or bankruptcy of the Company is
pending or contemplated;
3. the information contained in the Registration Statement
relating to the Company and the Receivables is true and accurate in all
material respects and nothing has come to his or her attention that
would lead such officer to believe that the Registration Statement
includes any untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein not misleading;
4. the information set forth in the List of Leases required to
be furnished pursuant to the Pooling and Servicing Agreement is true
and correct in all material respects;
5. there has been no amendment or other document filed
affecting the articles of incorporation or bylaws of the Company since
July 15, 1994, and no such amendment has been
11
<PAGE> 12
authorized. No event has occurred since July 15, 1994, which has
affected the good standing of the Company under the laws of the State
of Delaware;
6. there has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
July 15, 1994;
7. each person who, as an officer or representative of the
Company, signed or signs the Registration Statement, this Agreement,
the Pooling and Servicing Agreement, the Receivables Transfer Agreement
or any other document delivered pursuant hereto, on the date of such
execution, or on the Closing Date, as the case may be, in connection
with the transactions described in the Pooling and Servicing Agreement
and this Agreement was, at the respective times of such signing and
delivery, and is now, duly elected or appointed, qualified and acting
as such officer or representative, and the signatures of such persons
appearing on such documents are their genuine signatures.
The Company shall attach to such certificate a true and correct
copy of its articles of incorporation and bylaws which are in full force and
effect on the date of such certificate, and a certified true copy of the
resolutions of its Board of Directors with respect to the transactions
contemplated herein.
G. The Underwriter shall have received a favorable opinion of
counsel to the Trustee, dated the Closing Date and in form and substance
satisfactory to the Underwriter, to the effect that:
1. the Trustee is a banking corporation duly organized, validly
existing and in good standing under the laws of the State of New York
and has the power and authority to enter into and to take all actions
required of it under the Pooling and Servicing Agreement;
2. the Pooling and Servicing Agreement has been duly
authorized, executed and delivered by the Trustee and constitutes the
legal, valid and binding obligation of the Trustee, enforceable against
the Trustee in accordance with its terms, except as enforceability
thereof may be limited by (A) bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights
generally, as such laws would apply in the event of a bankruptcy,
insolvency or reorganization or similar occurrence affecting the
Trustee, and (B) general principles of equity regardless of whether
such enforcement is sought in a proceeding at law or in equity;
12
<PAGE> 13
3. no consent, approval, authorization or other action by any
governmental agency or body or other tribunal is required on the part
of the Trustee in connection with its execution and delivery of the
Pooling and Servicing Agreement or the performance of its obligations
thereunder;
4. the Class A Certificates have been duly executed,
authenticated and delivered by the Trustee and assuming delivery and
payment are validly issued therefor and outstanding and are entitled to
the benefits of the Pooling and Servicing Agreement; and
5. the execution and delivery of, and performance by the
Trustee of its obligations under, the Pooling and Servicing Agreement
do not conflict with or result in a violation of any statute or
regulation applicable to the Trustee, or the charter or bylaws of the
Trustee, or to the best knowledge of such counsel, any governmental
authority having jurisdiction over the Trustee or the terms of any
indenture or other agreement or instrument to which the Trustee is a
party or by which it is bound.
In rendering such opinion, such counsel may rely, as to matters
of fact, on certificates of responsible officers of the Company, the Trustee and
public officials. Such opinion may also assume the due authorization, execution
and delivery of the instruments and documents referred to therein by the parties
thereto other than the Trustee.
H. The Underwriter shall have received from the Trustee a
certificate, signed by the President, a senior vice president or a vice
president of the Trustee, dated the Closing Date, to the effect that each person
who, as an officer or representative of the Trustee, signed or signs the Class A
Certificates, the Pooling and Servicing Agreement or any other document
delivered pursuant hereto, on the date hereof or on the Closing Date, in
connection with the transactions described in the Pooling and Servicing
Agreement was, at the respective times of such signing and delivery, and is now,
duly elected or appointed, qualified and acting as such officer or
representative, and the signatures of such persons appearing on such documents
are their genuine signatures.
I. The Underwriter shall have received from Dewey Ballantine,
special counsel to the Underwriter, such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the Class A Certificates, the
Prospectus and such other related matters as the Underwriter shall reasonably
require.
J. The Underwriter and counsel for the Underwriter shall have
received copies of any opinions of counsel to the Company or the Trustee
supplied to the Trustee relating to matters with respect to the Class A
Certificates, the formation of the
13
<PAGE> 14
Trust or the acquisition of the Receivables. Any such opinions shall be
satisfactory to the Underwriter in form and substance.
K. The Underwriter shall have received an opinion from Dewey
Ballantine, special tax counsel to the Company to the effect that the statements
in the Prospectus Supplement under the headings "CERTAIN FEDERAL AND STATE
INCOME TAX CONSIDERATIONS" and "ERISA CONSIDERATIONS" accurately describe the
material federal, state and local income tax consequences to the holders of the
Class A Certificates.
L. The Underwriter shall have received such further
information, certificates and documents as the Underwriter may reasonably have
requested not fewer than three (3) full business days prior to the Closing Date.
M. The Underwriter shall have received from special counsel to
the Company, an opinion or survey in form and substance satisfactory to the
Underwriter, indicating the requirements of applicable local law which must be
complied with in order to transfer and service the Receivables pursuant to the
Pooling and Servicing Agreement.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all respects when and as provided in this Agreement, if
the Company is in breach of any covenants or agreements contained herein or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Underwriter and counsel to the Underwriter, this Agreement
and all obligations of the Underwriter hereunder, may be canceled on, or at any
time prior to, the Closing Date by the Underwriter. Notice of such cancellation
shall be given to the Company in writing, or by telephone or telegraph confirmed
in writing.
7. Expenses. If the sale of the Class A Certificates provided
for herein is not consummated by reason of a default by the Company in its
obligations hereunder, then the Company will reimburse the Underwriter, upon
demand, for all reasonable out-of-pocket expenses (including, but not limited
to, the reasonable fees and expenses of counsel for the Underwriter) that shall
have been incurred by it in connection with its investigation with regard to the
Company and the Class A Certificates and the proposed purchase and sale of the
Class A Certificates.
8. Indemnification and Contribution.
A. Regardless of whether any Class A Certificates are sold, the
Company will indemnify and hold harmless the Underwriter, each of their
respective officers and directors and each person who controls the Underwriter
within the meaning of the Act or the Securities Exchange Act of 1934 (the "1934
Act"), against any and
14
<PAGE> 15
all losses, claims, damages, or liabilities (including the cost of any
investigation, legal and other expenses incurred in connection with and amounts
paid in settlement of any action, suit, proceeding or claim asserted), joint or
several, to which they may become subject, under the Act, the 1934 Act or other
federal or state law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained (i) in the Registration Statement, or any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact necessary to make the
statements therein, not misleading or (ii) in the Basic Prospectus or the
Prospectus Supplement or any amendment thereto or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and will reimburse
each such indemnified party for any legal or other expenses reasonably incurred
by it in connection with investigating or defending against such loss, claim,
damage, liability or action; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information relating to the Underwriter furnished to the
Company by the Underwriter specifically for use in connection with the
preparation thereof.
B. Regardless of whether any Class A Certificates are sold, the
Underwriter will indemnify and hold harmless the Company, each of its officers
and directors and each person, if any, who controls the Company within the
meaning of the Act or the 1934 Act against any losses, claims, damages or
liabilities to which they become subject under the Act, the 1934 Act or other
federal or state law or regulation, at common law or otherwise, to the same
extent as the foregoing indemnity, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in (i)
the Registration Statement, or any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact necessary to make the statements therein not misleading or in
(ii) the Basic Prospectus or the Prospectus Supplement or any amendment thereto
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
therein in reliance upon and in conformity with written information relating to
the Underwriter furnished to the Company by the Underwriter specifically for use
in
15
<PAGE> 16
the preparation thereof and so acknowledged in writing, and will reimburse the
Company for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending against such loss, claim, damage,
liability or action.
C. In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to paragraphs A, B and E of this Section 8,
such person (hereinafter called the indemnified party) shall promptly notify the
person against whom such indemnity may be sought (hereinafter called the
indemnifying party) in writing thereof; but the omission to notify the
indemnifying party shall not relieve such indemnifying party from any liability
which it may have to any indemnified party otherwise than under such Paragraph.
The indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention of such
counsel, or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all such indemnified parties, and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by the
Underwriter in the case of parties indemnified pursuant to paragraph A of this
Section 8 and by the Company in the case of parties indemnified pursuant to
paragraphs B and E of this Section 8. The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated above, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written
16
<PAGE> 17
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
D. The Underwriter agrees to provide the Company no later than
the date on which the Prospectus Supplement is required to be filed pursuant to
Rule 424 with a copy of any Derived Information (defined below) for filing with
the Commission on Form 8-K.
E. The Underwriter agrees, assuming all Company- Provided
Information (defined below) is accurate and complete in all material respects,
to indemnify and hold harmless the Company, its respective officers and
directors and each person who controls the Company within the meaning of the
Securities Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they may become subject under the
Securities Act or the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement of a material fact contained in the Derived
Information provided by such Underwriter, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party for any legal or other expenses reasonably
incurred by him, her or it in connection with investigating or defending or
preparing to defend any such loss, claim, damage, liability or action as such
expenses are incurred. The obligations of the Underwriter under this Section
8(E) shall be in addition to any liability which the Underwriter may otherwise
have.
The procedures set forth in Section 8(C) shall be equally
applicable to this Section 8(E).
F. For purposes of this Section 8, the term "Derived
Information" means such portion, if any, of the information delivered to the
Companies pursuant to Section 8(D) for filing with the Commission on Form 8-K
as: (i) is not contained in the Prospectus without taking into account
information incorporated therein by reference; and (ii) does not constitute
Company- Provided Information. "Company-Provided Information" means any computer
tape furnished to the Underwriter by the Company concerning the assets
comprising the Trust.
G. If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any losses, claims, damages or
liabilities referred to herein, then
17
<PAGE> 18
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Underwriter from the sale of the Class A Certificates or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only relative benefits referred to
in clause (i) above but also the relative fault of the Company and of the
Underwriter in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Underwriter shall be deemed to be in such proportion so that the Underwriter is
responsible for that portion determined by multiplying the total amount of such
losses, claims, damages and liabilities, including legal and other expenses, by
a fraction, the numerator of which is (x) the excess of the Aggregate Resale
Price (as defined below) of the Class A Certificates over the aggregate purchase
price of the Class A Certificates specified in Section 4 of this Agreement and
the related Prospectus Supplement, and the denominator of which is (y) the
Aggregate Resale Price of the Class A Certificates, and the Company is
responsible for the balance, provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of the immediately preceding
sentence, the "Aggregate Resale Price" of the Class A Certificates at the time
of any determination shall be the weighted average of the purchase prices (in
each case expressed as a percentage of the aggregate principal amount of the
Class A Certificates so purchased), determined on the basis of such principal
amounts, paid to the Underwriter by all subsequent purchasers that purchased the
Class A Certificates on or prior to such date of determination. The relative
fault of the Company and the Underwriter shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriter and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
H. The Company and the Underwriter agree that it would not be
just and equitable if contribution pursuant to this Section 8 were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph G of this
Section 8. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in paragraph G of this
Section 8 shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating
18
<PAGE> 19
or defending any such action or claim. Notwithstanding the provisions of this
Section 8, the Underwriter shall not be required to contribute any amount by
which the Aggregate Resale Price exceeds the amount of any damages that the
Underwriter has otherwise been required to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission.
I. The Company and the Underwriter each expressly waive, and
agree not to assert, any defense to their respective indemnification and
contribution obligations under this Section 8 which they might otherwise assert
based upon any claim that such obligations are unenforceable under federal or
state securities laws or by reasons of public policy.
J. The obligations of the Company under this Section 8 shall be
in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
the Underwriter within the meaning of the Act or the 1934 Act; and the
obligations of the Underwriter under this Section 8 shall be in addition to any
liability that the Underwriter may otherwise have and shall extend, upon the
same terms and conditions, to each director of the Company and to each person,
if any, who controls the Company within the meaning of the Act or the 1934 Act;
provided, however, that in no event shall the Company or the Underwriter be
liable for double indemnification.
9. Information Supplied by Underwriter. The statements set
forth on the front cover page of the Prospectus Supplement regarding
market-making and under the heading "Method of Distribution" in the Prospectus
Supplement (to the extent such statements relate to the Underwriter) constitute
the only information furnished by the Underwriter to the Company for the
purposes of Sections 2(B) and 8(A) hereof. The Underwriter confirms that such
statements (to such extent) are correct.
10. Notices. All communications hereunder shall be in writing
and, if sent to the Underwriter, shall be mailed or delivered or telecopied and
confirmed in writing to Prudential Securities Incorporated, One Seaport Plaza,
New York, New York 10292, Attention: Norman Chaleff; and, if sent to the
Company, shall be mailed, delivered or telegraphed and confirmed in writing to
Prudential Securities Secured Financing Corporation, One New York Plaza, 12th
Floor, New York, New York 10292, Attention: General Counsel.
11. Survival. All representations, warranties, covenants and
agreements of the Company contained herein or in agreements or certificates
delivered pursuant hereto, the agreements of the Underwriter and the Company
contained in Section 8 hereof, and the agreement of the Underwriter contained in
Section 3 hereof, shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of the
19
<PAGE> 20
Underwriter or any controlling persons, or any subsequent purchaser or the
Company or any of its officers, directors or any controlling persons, and shall
survive delivery of and payment for the Class A Certificates. The provisions of
Sections 5, 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. Termination. The Underwriter shall have the right to
terminate this Agreement by giving notice as hereinafter specified at any time
at or prior to the Closing Date if (a) trading generally shall have been
suspended or materially limited on or by, as the case may be, the New York Stock
Exchange or the American Stock Exchange, (b) trading of any securities of the
Company shall have been suspended on any exchange or in any over-the-counter
market, (c) a general moratorium on commercial banking activities shall have
been declared by either federal or New York State authorities, (d) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis which, in the Underwriter's
reasonable judgment, is material and adverse, and, in the case of any of the
events specified in clauses (a) through (d), such event singly or together with
any other such event makes it in the Underwriter's reasonable judgment
impractical to market the Class A Certificates. Any such termination shall be
without liability of any other party except that the provisions of Paragraph G
of Section 5 (except with respect to expenses of the Underwriter) and Sections 7
and 8 hereof shall at all times be effective. If the Underwriter elects to
terminate this Agreement as provided in this Section 12, the Company shall be
notified promptly by the Underwriter by telephone, telegram or facsimile
transmission, in any case, confirmed by letter.
13. Successors. This Agreement will inure to the benefit of and
be binding upon the signatories hereto and their respective successors and
assigns (which successors and assigns do not include any person purchasing a
Class A Certificate from the Underwriter), and the officers and directors and
controlling persons referred to in Section 8 hereof and their respective
successors and assigns, and no other persons will have any right or obligations
hereunder.
14. APPLICABLE LAW; VENUE. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. ANY
ACTION OR PROCEEDING BROUGHT TO ENFORCE OR ARISING OUT OF ANY PROVISION OF THIS
AGREEMENT SHALL BE BROUGHT ONLY IN A STATE OR FEDERAL COURT LOCATED IN THE
BOROUGH OF MANHATTAN, NEW YORK CITY, NEW YORK, AND THE PARTIES HERETO EXPRESSLY
CONSENT TO THE JURISDICTION OF SUCH COURTS AND AGREE TO WAIVE ANY DEFENSE OR
CLAIM OF FORUM NON CONVENIENS THEY MAY HAVE WITH RESPECT TO ANY SUCH ACTION OR
PROCEEDING BROUGHT.
15. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall together constitute but one and the same
instrument.
20
<PAGE> 21
16. Amendments and Waivers. This Agreement may be amended,
modified, altered or terminated, and any of its provisions waived, only in a
writing signed on behalf of the signatories hereto.
21
<PAGE> 22
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
By: /s/ Paul B. Jenison
-----------------------------
Name: Paul B. Jenison
Title: Vice President
Agreed to and Accepted by:
(as of the date hereof)
PRUDENTIAL SECURITIES INCORPORATED
By: /s/ Paul B. Jenison
-----------------------------
Name: Paul B. Jenison
Title: Managing Director
[Underwriting Agreement Signature Page]
<PAGE> 1
EXHIBIT 4.1
================================================================================
POOLING AND SERVICING AGREEMENT
by and among
PHOENIX LEASING INCORPORATED
as Servicer,
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
as Depositor,
and
BANKERS TRUST COMPANY
as Trustee
---------------------------------------------
Dated as of November 1, 1995
---------------------------------------------
PSSFC Equipment Trust 1995-1
Equipment Lease-Backed Certificates
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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ARTICLE I. DEFINITIONS............................................ 1
Section 1.01. Definitions..................................... 1
ARTICLE II. TRANSFER OF INITIAL TRANSFERRED
PROPERTY; ORIGINAL ISSUANCE OF
CERTIFICATES........................................... 20
Section 2.01. Transfer of Initial Transferred
Property...................................... 20
Section 2.02. Custody of Leases and Lease
Files......................................... 21
Section 2.03. Conditions to Closing........................... 21
Section 2.04. Acceptance by Trustee........................... 22
Section 2.05. Liabilities of the Trust and
Parties to this Agreement;
Limitations Thereon........................... 23
ARTICLE III. REPRESENTATIONS, WARRANTIES AND
COVENANTS.............................................. 25
Section 3.01. Representations, Warranties and
Covenants of Depositor........................ 25
Section 3.02. Representations, Warranties and
Covenants of the Servicer..................... 27
ARTICLE IV. PERFECTION OF TRANSFER................................. 30
Section 4.01. Filing; Custody of Lease Files.................. 30
Section 4.02. Name Change or Relocation....................... 31
Section 4.03. Chief Executive Office.......................... 31
Section 4.04. Costs and Expenses.............................. 31
ARTICLE IV. CERTAIN TAX MATTERS.................................... 33
ARTICLE V. SERVICING OF THE TRANSFERRED PROPERTY.................. 34
Section 5.01. Retention of Servicer;
Responsibilities of Servicer.................. 34
Section 5.02. Standard of Care................................ 37
Section 5.03. Servicer Advances............................... 38
Section 5.04. Maintenance of Security Interest
in the Transferred Property................... 38
Section 5.05. Servicing Compensation; Payment
of Certain Expenses by
Servicer...................................... 38
Section 5.06. Servicer's Certificate.......................... 39
Section 5.07. Annual Statement as to
Compliance.................................... 39
</TABLE>
<PAGE> 3
<TABLE>
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<S> <C>
Section 5.08. Financial Statements and
Independent Accountant's
Servicing Certificate Review.................. 39
Section 5.09. Access to Certain Documentation
and Information Regarding the
Transferred Property.......................... 40
Section 5.10. Other Necessary Data............................ 42
Section 5.11. Release of Leases............................... 42
Section 5.12. Removal Related to Upgrades or
Trade-Ins and Delinquent
Leases........................................ 43
Section 5.13. Substitution.................................... 43
Section 5.14. Security Deposits............................... 45
ARTICLE VI. DEPOSITS, DISTRIBUTIONS, AND STATEMENTS
TO CERTIFICATEHOLDERS.................................. 46
Section 6.01. Collection Account.
................................................ 46
Section 6.02. Advance Payment Account and New
Transferred Property Funding
Account....................................... 47
Section 6.03. Investment of Monies Held in the
Accounts; Subaccounts......................... 48
Section 6.04. Transfer of New Transferred
Property; Distributions from
Accounts...................................... 48
Section 6.05. Statements to
Certificateholders............................ 54
Section 6.06. Compliance With Withholding
Requirements.................................. 57
Section 6.07. Disbursement Instructions....................... 57
ARTICLE VII. REMOVAL OF NONCONFORMING TRANSFERRED
PROPERTY............................................... 58
ARTICLE VIII. THE CERTIFICATES....................................... 59
Section 8.01. The Certificates............................... 59
Section 8.02. Initial Issuance of
Certificates................................. 61
Section 8.03. Registration of Transfer and
Exchange of Certificates..................... 62
Section 8.04. Mutilated, Destroyed, Lost or
Stolen Certificates.......................... 63
Section 8.05. Persons Deemed Owners.......................... 64
Section 8.06. Access to List of Certificate-
holders' Names and Addresses................. 64
Section 8.07. Acts of Certificateholders..................... 64
</TABLE>
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<TABLE>
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<S> <C>
ARTICLE IX. THE SERVICER AND THE DEPOSITOR......................... 66
Section 9.01. ............................................... 66
Liability of Servicer; Indemnities.............................. 66
Section 9.02. Merger, Consolidation, or
Assumption of the Obligations of
Servicer............................................... 67
Section 9.03. Limitation on Liability of
Servicer and Others.................................... 67
Section 9.04. Servicer Not to Resign......................... 68
Section 9.05. Liability of the Depositor..................... 68
Section 9.06. Limitation on Liability of the
Depositor.................................... 68
Section 9.07. Indemnity for Liability Claims................. 69
Section 9.08. General Limitation of Liability................ 69
ARTICLE X. SERVICING TERMINATION.................................. 70
Section 10.01. Events of Servicing Termination................ 70
Section 10.02. Trustee to Act; Appointment of
Successor.................................... 72
Section 10.03. Notification to
Certificateholders........................... 73
Section 10.04. Waiver of Past Defaults........................ 74
Section 10.05. Effects of Termination of
Servicer..................................... 74
ARTICLE XI. THE TRUSTEE............................................ 75
Section 11.01. Duties of Trustee.............................. 75
Section 11.02. Eligible Investments........................... 76
Section 11.03. Trustee's Assignment of Leases................. 77
Section 11.04. Certain Matters Affecting the
Trustee...................................... 77
Section 11.05. Trustee Not Liable for
Certificates or Leases....................... 78
Section 11.06. Trustee May Own Certificates................... 79
Section 11.07. Trustee's Fees and Expenses.................... 80
Section 11.08. Eligibility Requirements for
Trustee...................................... 80
Section 11.09. Resignation or Removal of
Trustee...................................... 81
Section 11.10. Successor Trustee.............................. 82
Section 11.11. Merger or Consolidation of
Trustee...................................... 82
Section 11.12. Appointment of Co-Trustee or
Separate Trustee............................. 83
Section 11.13. Trustee May Enforce Claims
Without Possession of
Certificate.................................. 84
</TABLE>
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<TABLE>
<CAPTION>
Page
<S> <C>
Section 11.14. Suits for Enforcement.......................... 85
Section 11.15. Representations and Warranties
of Trustee................................... 85
ARTICLE XII. TERMINATION............................................ 87
Section 12.01. Termination of the Trust....................... 87
Section 12.02. Optional Removal of All
Transferred Property; Final
Disposition of Funds......................... 87
Section 12.03. Termination Upon Liquidation of
Transferor................................... 88
ARTICLE XIII. MISCELLANEOUS PROVISIONS............................... 91
Section 13.01. Amendment...................................... 91
Section 13.02. Limitation on Rights of
Certificateholders........................... 91
Section 13.03. Counterparts................................... 93
Section 13.04. Governing Law.................................. 93
Section 13.05. Notices........................................ 93
Section 13.06. Severability of Provisions..................... 93
Section 13.07. Assignment..................................... 94
Section 13.08. Binding Effect................................. 94
Section 13.09. Survival of Agreement.......................... 94
Section 13.10. Captions....................................... 94
Section 13.11. Exhibits....................................... 94
Section 13.12. Calculations................................... 94
Section 13.13. General Interpretive Principles................ 94
EXHIBITS
EXHIBIT A Form of Class A Certificate
EXHIBIT B Form of Class B Certificate
EXHIBIT C Form of Trust Certificate
EXHIBIT D Form of Servicer's Certificate
EXHIBIT E Form of Assignment
EXHIBIT E(1) Wiring Instructions Form
EXHIBIT F Form of Transferee Certification
EXHIBIT F-1 Form of Transferee Certification
EXHIBIT G Form of Transferee Certification
SCHEDULES
SCHEDULE I List of Initial Leases
</TABLE>
iv
<PAGE> 6
This POOLING AND SERVICING AGREEMENT, dated as of November 1,
1995, is made with respect to the formation of the PSSFC Leasing Receivables
Trust 1995-1 and is made by and among Phoenix Leasing Incorporated, a California
corporation, as Servicer, Prudential Securities Secured Financing Corporation, a
Delaware corporation, as Depositor, and Bankers Trust Company, a New York
banking corporation, as Trustee.
WITNESSETH:
In consideration of the mutual agreements herein
contained, and of other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01. Definitions. Whenever used in this Agreement,
the following words and phrases, unless the context otherwise requires, shall
have the following meanings:
Accounts: The Collection Account, the Advance Payment Account
and the New Transferred Property Funding Account.
Actual Payment: With respect to a Collection Period and a
Lease, all Scheduled Payments, Prepayments, Final Lease Payments, Residual
Receipts and Defaulted Residual Receipts received by the Servicer from or on
behalf of a User with respect to such Lease during such Collection Period.
Actual Payments do not include Initial Unpaid Amounts, Reconveyance Amounts,
Advance Payments and Servicer Advances.
Actuarial Method: The method of allocating a Scheduled
Payment or Overdue Payment between principal and interest, pursuant to which
the portion of such payment that is allocated to interest is the product of (a)
the Discount Rate multiplied by (b) the Lease Principal Balance (before giving
effect to such principal payment) multiplied by (c) one-twelfth (1/12).
Additional Lease: Any Lease transferred to the Trust pursuant to Section
6.04(a) hereof.
Advance Payment: With respect to a Lease and a Collection
Period, any Scheduled Payment, Final Lease Payment, Purchase Option Payment or
portion of either made by or on behalf of a User and received by the Servicer
during such Collection Period, which Scheduled Payment, Final Lease
<PAGE> 7
Payment, Purchase Option Payment or portion of either does not become due until
a subsequent Collection Period.
Advance Payment Account: The account or accounts established
and maintained pursuant to Section 6.03(a) hereof.
Affiliate: With respect to any Person, any other Person
directly or indirectly controlling, controlled by or under direct or indirect
common control with such specified Person. For the purposes of this
definition, "control," when used with respect to any specified Person, means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all
amendments hereof.
Applicable Certificates: For so long as the Class A
Certificate Principal Balance is greater than zero, the Class A Certificates.
Following reduction of the Class A Certificate Principal Balance to zero, and
for so long as the Class B Certificate Principal Balance is greater than zero,
the Class B Certificates. Following reduction of the Class B Certificate
Balance to zero, the Trust Certificates.
Applicant: The meaning ascribed to such term in Section 8.06
hereof.
Available Funds: With respect to a Payment Date, shall mean
all amounts held in the Collection Account on the related Determination Date,
other than Residual Receipts and other than any such amounts which relate to
amounts due during the Collection Period in which such Payment Date or any
subsequent Payment Date occurs.
Base Principal Amount: With respect to any Payment Date other
than the Payment Date which is also the Initial Amortization Date an amount
equal to the excess of (x) the aggregate Lease Principal Balances of the Leases
as of the close of business on the second preceding Calculation Date over (y)
the aggregate Lease Principal Balances of the Leases as of the close of
business on the immediately preceding Calculation Date. With respect to the
Payment Date which is also the Initial Amortization Date an amount equal to the
excess of (x) the aggregate Lease Principal Balances of the Leases as of the
close of business on the Closing Date over (y) the aggregate Lease Principal
Balances of the Leases as of the close of business on the immediately preceding
Calculation Date.
2
<PAGE> 8
Business Day: Any day other than a Saturday, a Sunday or a
day on which banking institutions in New York, New York, San Raphael,
California, or in the city and State where the Trustee's or the Servicer's
principal offices are located, are authorized or obligated by law, executive
order or governmental decree to be closed; provided, however, that the Servicer
shall, from time to time, deliver written notice to the other parties hereto of
any differences in Business Days between the States of California (or any other
state where the Servicer has its principal office) and New York.
Calculation Date: The last day of a Collection Period.
Amounts calculated from Calculation Date balances shall be calculated from such
balances as of the close of business on the Calculation Date.
Certificateholder or Holder: The Person in whose name a
Certificate is registered in the Certificate Register.
Certificate Register: The register maintained pursuant to
Section 8.03 hereof.
Certificates: The Class A Certificates, the Class B
Certificates and the Trust Certificates.
Class A Base Principal Distribution Amount: (i) With respect
to any Payment Date prior to the Class B Termination Date, the product of (x)
the Class A Percentage and (y) the Base Principal Amount for such Payment Date.
(ii) With respect to the Class B Termination Date, the amount
described in clause (i) above plus the portion of the Class B Base
Principal Amount not applied as a reduction of the Class B Certificate
Principal Balance on the Class B Termination Date.
(iii) With respect to any Payment Date following the Class B
Termination Date, the Base Principal Amount for such Payment Date.
Class A Certificate: Any one of the Class A Certificates
executed and authenticated by the Trustee, substantially in the form of Exhibit
A hereto.
Class A Certificate Factor: The seven digit decimal number
that the Servicer will compute or cause to be computed for each Collection
Period and will make available to the Trustee on the related Determination Date
representing the ratio of (x) the Class A Certificate Principal Balance which
will be outstanding on the next Payment Date (after taking into account all
distributions to be made on such Payment Date) to (y) the Initial Class A
Certificate Principal Amount.
3
<PAGE> 9
Class A Certificateholder: The Person in whose name a Class A
Certificate is registered in the Certificate Register.
Class A Certificate Interest: With respect to any Payment
Date, the interest accrued on the Class A Certificates during the related
Interest Accrual Period, equal to the product of (x) one-twelfth of the Class A
Certificate Rate and (y) the aggregate Class A Certificate Principal Balance
outstanding immediately prior to such Payment Date.
Class A Certificate Principal Balance: At any time, the
Initial Class A Certificate Principal Amount minus all payments theretofore
received by the Class A Certificateholders on account of principal.
Class A Certificate Rate: 6.850% per annum.
Class A Overdue Interest: With respect to any Payment Date
the difference between (I) the sum of
A) the excess if any of any Class A Certificate Interest
due on such Payment Date over the Class A Certificate Interest paid on
such Payment Date and;
B) the product of (i) the amount of Class A Overdue
Interest due on the immediately preceding Payment Date and (ii)
one-twelfth of the Discount Rate plus 1,
and (II) any Class A Overdue Interest paid in the current period.
Class A Overdue Principal: With respect to any Payment Date,
the difference, if any, equal to (a) the aggregate of the Class A Base
Principal Distribution Amounts due on all prior Payment Dates and (b) the
aggregate amount of the principal (from whatever source) actually distributed
to Class A Certificateholders on all prior Payment Dates.
Class A Percentage: 72%.
Class A Percentage Interest: The interest in the Class A
Portion of the Trust that is evidenced by a Class A Certificate and that is set
forth on the face of such Certificate; provided, however, that the Trustee
shall only issue Class A Certificates evidencing in the aggregate Class A
Percentage Interests totalling 100%. To the extent that, for federal income
tax purposes, the Class A Certificates constitute indebtedness, all references
in this Agreement to Holders of Class A Certificates owning a specified
percentage of the outstanding Class A Certificate Principal Balance shall be
construed to mean Holders of Class A Certificates
4
<PAGE> 10
evidencing such specified percentage of the then outstanding indebtedness.
Class A Portion: The aggregate interest in the Trust
evidenced by the Class A Certificates.
Class B Base Principal Distribution Amount: With respect to
any Payment Date, the product of (x) the Class B Percentage and (y) the Base
Principal Amount for such Payment Date.
Class B Certificate: Anyone of the Class B Certificates
executed and authenticated by the Trustee, substantially in the form of Exhibit
B hereto.
Class B Certificate Factor: The seven digit decimal number
that the Servicer will compute or cause to be computed for each Collection
Period and will make available to the Trustee on the related Determination Date
representing the ratio of (x) the Class B Certificate Principal Balance which
will be outstanding on the next Payment Date (after taking into account all
distributions to be made on such Payment Date) to (y) the Initial Class B
Certificate Principal Amount.
Class B Certificateholder: The Person in whose name a Class B
Certificate is registered in the Certificate Register.
Class B Certificate Interest: With respect to any Payment
Date, the interest accrued on the Class B Certificates during the related
Interest Accrual Period, equal to the product of (x) one-twelfth of the Class B
Certificate Rate and (y) the aggregate Class B Certificate Principal Balance
outstanding immediately prior to such Payment Date.
Class B Certificate Principal Balance: At any time, the
Initial Class B Certificate Principal Amount minus all payments theretofore
received by the Class B Certificateholders on account of principal.
Class B Certificate Rate: 8.10% per annum.
Class B Overdue Interest: With respect to any Payment Date
the difference between (I) the sum of
A) the excess if any of any Class B Certificate Interest
due on such Payment Date over the Class B Certificate Interest paid on
such Payment Date and;
B) the product of (i) the amount of Class B Overdue
Interest due on the immediately preceding Payment Date and (ii)
one-twelfth of the Discount Rate plus 1,
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<PAGE> 11
and (II) any Class B Overdue Interest paid in the current period.
Class B Overdue Principal: With respect to any Payment Date,
the difference, if any, equal to (a) the aggregate of the Class B Base
Principal Distribution Amounts due on all prior Payment Dates and (b) the
aggregate amount of the principal (from whatever source) actually distributed
to Class B Certificateholders on all prior Payment Dates.
Class B Percentage: 19%.
Class B Percentage Interest: The interest in the Class B
Portion of the Trust that is evidenced by a Class B Certificate and that is set
forth on the face of such Certificate; provided, however, that the Trustee
shall only issue Class B Certificates evidencing in the aggregate Class B
Percentage Interests totalling 100%. To the extent that, for federal income
tax purposes, the Class B Certificates constitute indebtedness, all references
in this Agreement to Holders of Class B Certificates owning a specified
percentage of the outstanding Class B Certificate Principal Balance shall be
construed to mean Holders of Class B Certificates evidencing such specified
percentage of the then outstanding indebtedness.
Class B Portion: The aggregate interest in the Trust
evidenced by the Class B Certificates.
Class B Termination Date: The Payment Date on which the Class
B Certificate Principal Balance is reduced to zero.
Closing Date: November 30, 1995.
Code: The Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
Collection Account: The account or accounts established and
maintained pursuant to Section 6.02 hereof.
Collection Period: With respect to any Payment Date, the
immediately preceding calendar month.
Computer Tape: Collectively, the computer tapes generated by
the Servicer which provide information relating to the Leases and which were,
or will be, used by the Servicer in selecting the Leases contributed to the
Transferor pursuant to the Contribution Agreement.
Contribution Agreement: The Contribution Agreement, dated as
of the date hereof, between the Contributor and the Transferor, whereby the
Contributor (i) transfers, contributes and assigns the Initial Transferred
Property as a capital
6
<PAGE> 12
contribution to the Transferor; and (ii) agrees to contribute and assign the
New Transferred Property to the Transferor from time to time. The term
"Contribution Agreement" includes the term "Contribution Agreement Supplement".
Contribution Agreement Supplement. Each Contribution
Agreement Supplement executed and delivered pursuant to the Contribution
Agreement.
Contributor: Phoenix Leasing Incorporated, a California
corporation.
Corporate Trust Office: The principal office of the Trustee
at which at any particular time its corporate trust business shall be
administered, which office at the date of this Agreement is specified in
Section 13.05 hereof.
Cut-Off Date: With respect to the Initial Leases, the close
of business on November 1, 1995. With respect to any New Lease transferred to
the Trust, the close of business on the day preceding the date of such
transfer.
Defaulted Lease: A Delinquent Lease (a)(i) with respect to
which a User is contractually delinquent for four consecutive months (without
regard to any Servicer Advances or the application of any Security Deposit) or
(ii) as to which the Servicer has determined in accordance with its customary
servicing practices, for purposes of this Agreement, that eventual payment of
the remaining Scheduled Payments thereunder is unlikely or (iii) such Lease has
been rejected by or on behalf of the User in a bankruptcy proceeding and (b) as
to which a Release Event has not occurred; provided, however, for purposes of
the definition of the term Required Amortization Event only, a Delinquent Lease
that would have been a Defaulted Lease except for the occurrence of a Release
Event described in Section 5.12(b), shall be considered a Defaulted Lease.
Defaulted Residual Receipts. All proceeds of the sale of
Equipment related to Defaulted Leases and any amounts collected related to the
failure of such User to pay any required amounts under the related Lease or to
return the Equipment, in each case as reduced by (i) any unreimbursed Servicer
Advances with respect to such Lease or such Equipment and (ii) any reasonably
incurred out-of-pocket expenses incurred by the Servicer in enforcing such
Lease or in liquidating such Equipment, including any applicable taxes and any
attorneys' fees.
Delinquent Lease: A Lease (a) as to which less than 90% of
the Scheduled Payment was received when due by the Servicer as of the close of
business on the last day of the
7
<PAGE> 13
month in which such payment was due and (b) which is not a Defaulted Lease.
Depository: The Depository Trust Company, 55 Water Street,
New York, New York 10041 and any successor Depository hereafter named.
Determination Date: With respect to a Collection Period, a
date which is the fifteenth day of the calendar month in the month immediately
succeeding the month in which such Collection Period ends, or if such day is
not a Business Day, the immediately preceding Business Day; provided, however,
that in no event shall such Determination Date be later than three Business
Days prior to the Payment Date for such Collection Period.
Direct Participant: Any broker-dealer, bank or other
financial institution for which the Depository holds Class A Notes from time to
time as a securities depositary.
Discount Rate: 8.611%.
Electronic Ledgers: The electronic master records of all
contracts of the Contributor and the Servicer similar to and including the
Leases.
Eligible Investments: Any of the following:
(i) direct obligations of the United States of America, (including
obligations issued or held in book-entry form on the books of the
Department of the Treasury of the United States of America) and including
certificates or other instruments evidencing direct ownership of future
interest or principal payments on such direct obligations of the United
States (such as CATS, TIGRS, Treasury Receipts and Stripped Treasury
Coupons), which obligations are rated or assessed in the highest rating
category by the Rating Agency in its highest rating category, or if such
investment is not rated by the Rating Agency, then in the highest rating
category by S&P and Moody's and held by a custodian in safekeeping on
behalf of the holders of such receipts) or obligations the full and timely
payment of the principal of and interest on which is fully guaranteed by
the United States of America, but excluding shares of or investments in
mutual funds or unit investment trusts unless rated by each Rating Agency
then rating the Certificates in its highest rating category which, in each
of the foregoing cases, are not subject to early redemption;
(ii) interest-bearing demand or time deposits (including
certificates of deposit) in banks, provided
8
<PAGE> 14
such deposits are either (a) with banks whose short term obligations are
rated by the Rating Agency in the highest rating category, or, if such
deposits are not rated by the Rating Agency, are rated no lower than
"A-1+" by S&P and "P-1" by Moody's and that are federally chartered
commercial banks which deposits are collateralized as to both principal
and accrued interest at 103% by obligations described in clause (i)
provided that such bank shall create a valid first perfected security
interest for the Trustee in such obligations or (b) fully insured by the
Federal Deposit Insurance Corporation;
(iii) repurchase agreements with a term not exceeding 30 days
pursuant to a written agreement between the Trustee and either a primary
dealer on the Federal Reserve reporting dealer list which falls under the
jurisdiction of the SIPC and the unsecured securities of which are rated by
the Rating Agency in its highest rating category, or if such investment is
not rated by the Rating Agency, then in the highest rating category by
Moody's and S&P or a federally chartered commercial bank with combined
capital and surplus aggregating at least one hundred million dollars
($100,000,000) whose accounts are insured by the Federal Deposit Insurance
Corporation and the unsecured securities of which are rated by each Rating
Agency then rating the Certificates in its highest rating category, the
underlying securities of which are obligations described in clause (i) of
this definition, are held by the Trustee free and clear of all third party
claims and are required to be continuously maintained at a market value
(valued at least weekly) at least equal to 103% of the repurchase price
from time to time payable with respect thereto, and in which the Trustee
has a perfected security interest free of all third-party claims;
(iv) commercial paper rated, at the time of purchase, by the
Rating Agency in its highest rating category, or, if such investment is not
rated by the Rating Agency, then rated "Prime-l" by Moody's and "A-1+" or
better by S&P and issued by corporations organized and operating within the
United States and having total assets in excess of five hundred million
dollars ($500,000,000); and
(v) any no-load money market fund having a rating by the Rating
Agency in its highest rating category, or, if such investment is not rated
by the Rating Agency, then rated by S&P of "AAAm-G," or "AAAm" and by
Moody's of "Aaa" or "P-1";
Any Eligible Investment must mature no later than the Business
Day prior to the next Payment Date.
9
<PAGE> 15
Equipment: The equipment leased to a User pursuant to any
Lease.
ERISA: The Employee Retirement Income Security Act of 1974,
as amended.
Event of Servicing Termination: An event described in Section
10.01 hereof.
Excess Amounts: With respect to any Lease, any payment
required to be paid by the related User pursuant to such Lease at the maturity
of such Lease in excess of the Final Lease Payment with respect to such Lease.
Excess Cash: The amount that would otherwise be payable to
the holder of the Trust Certificate if the Trust Certificate Principal Balance
on such Payment Date is below 5.00% from Available Funds and Residual Receipts
then remaining in the Collection Account and from the amount then remaining in
the New Transferred Property Account, up to an amount equal to the aggregate
Lease Principal Balance of the New Leases available to be transferred to the
Trust.
Final Lease Payment: With respect to any Lease, any payment
set forth in such Lease and required to be paid by the related User at the
maturity of such Lease.
Financing Statements:
<TABLE>
<CAPTION>
Debtor Secured Party Assignee States Filed
------ ------------- -------- ------------
<S> <C> <C> <C>
Phoenix Warehouse Inc., a Contributor Trustee California, New
Nevada Corporation Jersey, Nevada,
Washington
Phoenix Warehouse II Inc., a Contributor Trustee California, New
California Corporation Jersey, Washington
Contributor Transferor Trustee California, New
Jersey, New York,
Washington
Transferor Depositor Trustee California, New
Jersey, New York,
Washington
</TABLE>
10
<PAGE> 16
<TABLE>
<CAPTION>
Debtor Secured Party Assignee States Filed
------ ------------- -------- ------------
<S> <C> <C> <C>
Depositor Trustee None Delaware,
California,
New Jersey,
New York,
Washington
</TABLE>
Growth Capital Leases: Those Leases originated as part of the
Servicer's Growth Capital portfolio, most often constituting leases to young
companies whose financing has been provided primarily by venture capitalists or
strategic corporate partners.
Holder: See Certificateholder.
Independent Accountant: A firm of nationally recognized
independent certified public accountants with respect to the Contributor within
the meaning of the Securities Act of 1933, as amended, and the applicable
published rules and regulations thereunder, which shall be one of the so-called
"Big Six" accounting firms.
Indirect Participant: Any financial institution for whom any
Direct Participant holds an interest in a Class A Note.
Initial Amortization Date: The earlier to occur of (x) the
Payment Date in December 1996 and (y) in the event that a Required Amortization
Event occurs on a Payment Date, such payment Date, or otherwise, on the Payment
Date which immediately follows the occurrence of a Required Amortization Event.
Initial Class A Certificate Principal Amount: $21,423,000.00.
Initial Class B Certificate Principal Amount: $5,654,000.00.
Initial Equipment: The Equipment transferred to the Trust on
the Closing Date.
Initial Leases: The Leases transferred to the Trust on the
Closing Date.
Initial Transferred Property: The property transferred and
assigned by the Transferor to the Trust pursuant to Section 2.01 hereof, except
for the Initial Unpaid Amounts relating thereto.
Initial Unpaid Amount: With respect to a Lease, the excess
of (x) the aggregate amount of all Scheduled Payments due prior to the Cut-Off
Date over (y) the aggregate
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<PAGE> 17
of all Scheduled Payments made prior to the Cut-Off Date with respect to such
Lease.
Insurance Policy: With respect to an item of Equipment and
the related Lease, any insurance policy required to be maintained by the User
pursuant to such Lease that covers physical damage to such Equipment and
liability resulting from the use, operation or possession of such Equipment
(including policies procured by the Contributor on behalf of the User).
Insurance Proceeds: With respect to an item of Equipment and
the related Lease, any amount received during a Collection Period pursuant to
an Insurance Policy issued with respect to such Equipment and related Lease.
Interest Accrual Period: With respect to each Payment Date
the period commencing on the prior Payment Date (or on November 25, 1995 with
respect to the December 26, 1995 Payment Date) and ending on the day
immediately preceding such Payment Date.
Interest-Only Period: The period from the Closing Date to,
but excluding, the Initial Amortization Date.
Investment Earnings: Any and all income from the investment
of monies held, from time to time, in the Collection Account, the Advance
Payment Account and the New Transferred Property Funding Account pursuant to
Section 6.04 hereof, net of any losses on any investments held in such
accounts.
Lease: Each of the agreements conveyed to the Trust,
including, as applicable, schedules, supplements and amendments thereto, under
which the Contributor leases specified Equipment to a User and which are
identified on the List of Initial Leases delivered on the Closing Date or, with
respect to New Leases, on the List of New Leases delivered on the related
Transfer Date.
Lease File: With respect to each Lease, the following
documents:
(i) The executed original counterpart of the Lease that
constitutes "chattel paper" for purposes of Sections 9-105(l)(b) and
9-305 of the UCC;
(ii) Copies of all documents (which may be in micro-fiche
form or on the Servicer's computerized information system), if any,
that the Contributor or the Servicer keeps on file for benefit of the
Contributor in accordance with the Contributor's or the Servicer's
customary procedures indicating that the Equipment is owned by the
Contributor and copies of any and all other
12
<PAGE> 18
material documents that the Contributor or the Servicer keeps on file
for the benefit of the Contributor in accordance with the
Contributor's or the Servicer's customary procedures relating to any
individual Lease, User or Equipment; and
(iii) Copies (together with all amendments, assignments,
and continuations thereof and including evidence of filing with the
appropriate office) of all UCC financing statements heretofore filed,
or filed prior to the applicable Cut-Off Date with respect to New
Leases identifying the User as debtor, the Contributor as secured
party, and one of the Subsidiaries as the assignee if any.
Lease Pool: At any time, all Leases held as part of the
Trust.
Lease Principal Balance: On any date of calculation with
respect to a Lease which is not a Defaulted Lease, the present value of the
Scheduled Payments and Final Lease Payment, if any, to become due with respect
to such Lease on and after such date of calculation, discounted monthly to the
Calculation Date immediately following such date of calculation (or to such
date of calculation if such date of calculation is a Calculation Date) at
one-twelfth of the Discount Rate; with respect to any Lease which has become a
Defaulted Lease, zero.
Lien: Any security interest, lien, charge, pledge, equity or
encumbrance of any kind.
List of Initial Leases: The schedules of all Initial Leases
originally transferred to the Trust, (i) which shall include for each Lease
listed thereon (a) a number identifying such Lease, (b) the Lease Principal
Balance, (c) the User, (d) the State in which the User's billing address is
located, (e) the original and remaining maturity of the Lease term, (f) the
Scheduled Payment amount for such Lease, (g) the Final Lease Payment, if any,
on such Lease and (h) industry classification of the User and (ii) which shall
be delivered to the Trustee (electronically or otherwise) on the Closing Date.
List of New Leases: The schedules of all New Leases conveyed
to the Trust on a Transfer Date, (i) which shall include for each Lease listed
thereon (a) a number identifying such Lease, (b) the Lease Principal Balance,
(c) the User, (d) the State in which the User's billing address is located, (e)
the original and remaining maturity of the Lease term, (f) the Scheduled
Payment amount for such Lease and (g) the Purchase Option Payment on such Lease
and (ii) which shall be delivered to the Trustee on such Transfer Date.
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Majority Holders: Certificateholders of Certificates of the
Applicable Class that together own Certificates with an aggregate Percentage
Interest in excess of 50%.
Moody's: Moody's Investors Service.
New Leases: Those Leases listed on the List of New Leases
attached to the related Contribution Agreement Supplement.
New Transferred Property: The property transferred and
assigned from the Transferor to the Trust pursuant to Section 6.04(a) hereof,
except for the Initial Unpaid Amounts relating thereto.
New Transferred Property Funding Account: The account or
accounts established and maintained pursuant to Section 6.02(d) hereof.
Offset Amount: The meaning ascribed to such term in Section
5.14 hereof.
Opinion of Counsel: A written opinion of counsel, who may be
counsel employed by the Servicer or other counsel, in each case acceptable to
the addressees thereof.
Payment Date: The 25th day of each month, or, if such day is
not a Business Day, the next succeeding Business Day.
Person: Any legal person, including any individual,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
Pool Factor: The seven digit decimal number that the Servicer
will compute or cause to be computed for each Collection Period and will make
available on the related Determination Date representing the ratio of (x) the
aggregate Lease Principal Balance as of the immediately preceding Calculation
Date to (y) the aggregate Lease Principal Balance as of the most recent Cut-Off
Date.
Predecessor Lease: As defined in Section 5.13 hereof.
Prepayment: With respect to a Collection Period and a Lease
(except a Defaulted Lease), the amount received by the Servicer during such
Collection Period from or on behalf of a User with respect to such Lease in
excess of the sum of (x) the Scheduled Payment and any Final Lease Payment due,
or any Purchase Option Payment made during such Collection Period,
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plus (y) the aggregate of any overdue Scheduled Payments, Initial Unpaid
Amounts and unpaid Servicing Charges for such Lease, so long as such amount is
designated by the User as a prepayment and the Servicer has consented to such
prepayment. Neither Residual Receipts nor Defaulted Residual Receipts are
"Prepayments." The term "Reconveyance Amount" and the provisions relating to
payment of Reconveyance Amounts shall govern the prepayment in full of any
Lease during the period from the Cut-Off Date to and excluding the Closing
Date.
Prepayment Amount: With respect to a Payment Date and a
Lease, an amount, without duplication, equal to the sum of (i) the Lease
Principal Balance as of the immediately preceding Payment Date (without any
deduction for any Security Deposit paid by a User, unless such Security Deposit
has been deposited in the Collection Account pursuant to Section 5.14 hereof);
(ii) the product of (x) such Lease's Lease Principal Balance as of the
immediately preceding Payment Date and (y) one-twelfth of the Discount Rate;
(iii) any Scheduled Payments theretofore due and not paid by a User; and (iv)
any Final Lease Payment or Purchase Option Payment due or to become due under
the Lease.
Private Certificates: The Class B Certificates and the Trust
Certificates.
Purchase Option Payment: With respect to a Lease, any payment
set forth in such Lease payable by the User (including any Security Deposit
applied in respect thereof) upon the exercise of a purchase option for the
Equipment relating to such Lease, whether or not the User actually exercises
such purchase option, or with respect to any Lease which does not set forth a
purchase option, any payment made by a User to purchase the Equipment relating
to such Lease at the end of the term of such Lease.
Rating Agency: Duff & Phelps Credit Rating Company.
Receivables Transfer Agreement: The Receivables Transfer
Agreement dated as of November 1, 1995 between the Transferor and the
Depositor. The term Receivables Transfer Agreement includes the term
"Receivables Transfer Agreement Supplement."
Receivables Transfer Agreement Supplement: Each Receivables
Transfer Agreement Supplement executed and delivered pursuant to the
Receivables Transfer Agreement.
Reconveyance Amount: With respect to any Lease, the sum,
without duplication, of (i) the Lease Principal Balance of such Lease (without
any deduction for any Security Deposit paid by a User, unless such Security
Deposit has been deposited in the Collection Account pursuant to Section 5.14
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hereof) as of the date of reconveyance with respect to a Lease that is
reconveyed by the Trust, or as of the Closing Date with respect to a Lease that
shall have been prepaid in full on or after the Cut-Off Date and prior to the
Closing Date, (ii) the product of (x) such Lease's Lease Principal Balance as
of such date and (y) one-twelfth of the Discount Rate and (iii) any Scheduled
Payments or Final Lease Payment theretofore due and not paid by a User,
together with any unreimbursed Servicer Advances.
Record Date: With respect to any Payment Date other than the
December 26, 1995 Payment Date, the last day of the immediately preceding
calendar month. With respect to the December 26, 1995 Payment Date, the Record
Date shall be December 18, 1995.
Release Event: As defined in Section 5.11 hereof.
Remaining Available Funds: With respect to any Payment Date,
the Available Funds, if any, remaining on deposit in the Collection Account
following the payment on such Payment Date of the Servicing Fee, the Trustee's
Fee, Class A Interest, Class A Overdue Interest, Class B Interest, Class B
Overdue Interest, Class A Base Principal Distribution Amount, Class B Base
Principal Distribution Amount, Class A Overdue Principal and Class B Overdue
Principal.
Representation Letter: Letters to, or agreements with, the
Depository to effectuate a book entry system with respect to the Class A Notes
registered in the Note Register under the nominee name of the Depository.
Required Amortization Event: The earliest to occur of any of
the following: (i) the occurrence of an "Event of Servicing Termination" under
Article X hereof that has not been waived, (ii) the amount on deposit in the
New Transferred Property Funding Account exceeds $2,000,000, (iii) any event of
the type described in clauses (iv) through (vii), inclusive, of Section
10.01(a) having occurred with respect to the Contributor, the Transferor or the
Depositor, (iv) as of any Determination Date, the three-month average ratio of
the aggregate Lease Principal Balance of Delinquent Leases which are 61 days or
more delinquent to the aggregate Lease Principal Balance of all Leases, exceeds
7.5% or (v) as of any Determination Date, the ratio of the aggregate Lease
Principal Balances of all Defaulted Leases which became Defaulted Leases during
the Interest-Only Period to the aggregate Lease Principal Balances of all
leases, exceeds 6.5%.
Residual Receipts: All Purchase Option Payments, Excess
Amounts and proceeds of the sale of Equipment in the event the related User
does not purchase the Equipment at the end of the related Lease to the extent
such proceeds exceed
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any Scheduled Payments and Final Lease Payments remaining unpaid.
Responsible Officer: When used with respect to the Trustee,
any officer assigned to the Corporate Trust Office (or any successor thereto),
including any Vice President, Assistant Vice President, Assistant Treasurer,
Assistant Secretary, any trust officer or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and having direct responsibility for the administration of
this Agreement, and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
Scheduled Payments: With respect to a Payment Date and a
Lease, the periodic payment (exclusive of any amounts in respect of insurance
or taxes and reflecting any adjustment for any partial Prepayment and further
reflecting the effect of any permitted modification to such Lease) set forth in
such Lease due from the User (including any Security Deposit applied with
respect thereto) in the related Collection Period, calculated without regard to
any modification granted pursuant to Section 5.01(c)(iv) of this Agreement,
except for any modification made pursuant to Section 5.01(c)(iv)(C).
Securities Act: The Securities Act of 1933, as amended.
Security Deposit: Any amount paid to the Contributor by a
User as a security deposit or as a payment in advance of any amounts to become
due on a Lease, which has not previously been refunded to such User or applied
toward such User's obligations under such Lease.
Servicer: The Person performing the duties of the Servicer
hereunder, initially Phoenix Leasing Incorporated.
Servicer Advance: Any amount paid by the Servicer with
respect to a Delinquent Lease pursuant to Section 5.03.
Servicer Fee: The fee payable to the Servicer on each Payment
Date in consideration for the Servicer's performance of its duties pursuant to
Article V, in an amount equal to the product of (x) one-twelfth of the Servicer
Fee Rate and (y) the aggregate Lease Principal Balances as of the prior
Calculation Date.
Servicer Fee Rate: 1.50% percent per annum.
Servicer's Certificate: A written informational statement,
substantially in the form of Exhibit D hereto, to
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<PAGE> 23
be provided by the Servicer in accordance with Section 5.06 of this Agreement
and signed by a Servicing Officer and furnished to the Trustee and the Rating
Agency by the Servicer.
Servicer Termination Notice: The notice described in Section
10.01 hereof.
Servicing Charges: The sum of (i) any late payment charges
paid by a User on a Delinquent Lease after application of any such charges to
amounts then due under such Lease and (ii) any other incidental charges or fees
received from a User.
Servicing Officer: Those officers of the Servicer involved
in, or responsible for, the administration and servicing of the Leases, as
identified on the list of Servicing Officers furnished by the Servicer to the
Trustee, the Rating Agency and the Certificateholders from time to time. There
shall not be fewer than four Servicing Officers.
State: Any state of the United States of America and, in
addition, the District of Columbia and Puerto Rico.
S&P: Standard & Poor's.
Subordinated Amount: As of any Payment Date, the excess, if
any, of (x) the aggregate Lease Principal Balances as of the immediately
preceding Calculation Date over (y) the Class A Certificate Principal Balance
as of such Payment Date, and after taking into account all payments to be made
on such Payment Date.
Subsidiaries: Phoenix Warehouse Inc., a Nevada corporation,
and a wholly-owned subsidiary of the Contributor and Phoenix Warehouse II Inc.,
a California corporation, and a wholly-owned subsidiary of the Contributor.
Substitute Lease: As defined in Section 5.13 hereof.
Transfer Date: Any date on which the Trust acquires New
Transferred Property pursuant to Section 6.04(a).
Transferor: Phoenix Receivables II, Inc., a Delaware
corporation.
Transferred Property: The property conveyed, transferred and
assigned by the Transferor to the Trust pursuant to Section 2.01 and 6.04(a)
hereof, except for the Initial Unpaid Amounts relating thereto.
Trust: The trust created by this Agreement, the estate of
which consists of the Trust Property.
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Trust Certificate: Any one of the Trust Certificates executed
and authenticated by the Trustee, substantially in the form of Exhibit C
hereto.
Trust Certificate Percentage Interest: The interest in the
Trust Certificate Portion of the Trust that is evidenced by a Trust Certificate
and that is set forth on the face of such Certificate; provided, however, that
the Trustee shall only issue Trust Certificates evidencing in the aggregate
Trust Certificate Percentage Interests totalling 100%.
Trust Certificate Portion: The aggregate interest in the
Trust evidenced by the Trust Certificates.
Trust Certificate Principal Balance: As of any Payment Date,
the positive difference, if any, between (i) the sum of (x) the aggregate Lease
Principal Balances of all Leases as of the immediately preceding Calculation
Date (y) the aggregate Lease Principal Balances as of the day prior to such
Payment Date of all New Leases to be conveyed to the Trust on such Payment Date
and (z) the amount on deposit in the New Transferred Property Funding Account
as of such Payment Date (and after taking into account any deposits or
withdrawals therein on such Payment Date) and (ii) the sum of (x) the
outstanding Class A Certificate Principal Balance and (y) the outstanding Class
B Certificate Principal Balance as of such Payment Date, after taking into
account any distribution of the Base Principal Amount, Residual Receipts and
Defaulted Residual Receipts on such Payment Date.
Trust Property: The Transferred Property, and funds from time
to time deposited in the Collection Account, the Advance Payment Account and
the New Transferred Property Funding Account.
Trustee: The institution executing this Agreement as Trustee,
or its successor in interest, and any successor Trustee appointed as provided
herein, or any successor to the Trustee's corporate trust business (or a
substantial portion thereof).
UCC: The Uniform Commercial Code as in effect in the
applicable jurisdiction.
User: Any obligor, under any Lease, whose recourse
obligations thereunder constitute the principal source of payments under any
Lease, including any guarantor (excluding the Servicer) of such obligations.
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ARTICLE II.
TRANSFER OF INITIAL TRANSFERRED PROPERTY;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Transfer of Initial Transferred Property. The
Depositor, simultaneously with the execution and delivery of this Agreement,
does hereby contribute, transfer, assign, and otherwise transfer and grant to
the Trustee, without recourse (except as otherwise expressly set forth herein),
to be held in trust for the benefit of the Certificateholders as their
interests may appear as provided in this Agreement, all the right, title, and
interest of the Depositor in and to (a) (i) any Initial Equipment that is owned
by the Depositor and any and all income and proceeds from such Initial
Equipment, but subject to the rights of the User to quiet enjoyment of such
Initial Equipment under the related Initial Lease and (ii) any security
interest of the Depositor in any of the Initial Equipment that is not owned by
the Depositor, (b) the Initial Leases, including, without limitation, all
Scheduled Payments, Residual Receipts, Defaulted Residual Receipts and any
other payments due or made with respect to the Initial Leases after the Cut-Off
Date relating to such Initial Leases, (c) any guarantees of a User's
obligations under an Initial Lease, (d) all other documents in the Lease Files
relating to the Initial Leases, including, without limitation, any UCC
financing statements related to the Initial Leases or the Initial Equipment,
(e) any Insurance Policies and Insurance Proceeds with respect to the Initial
Leases, (f) all of the Depositor's right, title and interest in and to, and
rights under, the Receivables Transfer Agreement and the Contribution Agreement
executed and delivered in accordance therewith, and (g) any and all income and
proceeds of any of the foregoing; provided, however, that the contribution,
transfer and assignment effected by this Section 2.01 shall not include the
Initial Unpaid Amounts relating thereto or any warrants issued by a User to the
Contributor.
It is the intention of the Depositor, which intention is
acknowledged by the Trustee, that this assignment and related issuance of
Certificates hereunder constitute the acquisition by the Trust of the
Transferred Property conveying good title thereto and constituting a sale for
financial accounting purposes, free and clear of all Liens from the Depositor
to the Trust, and that the Transferred Property not be part of the Depositor's
estate in the event of the insolvency or bankruptcy of the Depositor. In the
event that the Transferred Property is held to be property of the Depositor's
estate, or if for any reason this Agreement is held or deemed to create a
security interest in the Transferred Property, then (x) this Agreement shall
also be deemed to be a security agreement within the meaning of
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Article 8 and Article 9 of the Uniform Commercial Code as in effect in the
States of New York and California and (y) the transfer provided for in this
Section 2.01 shall be deemed to be a grant by the Depositor to the Trustee of
(A) a valid first priority perfected security interest in all of the
Depositor's right, title and interest in and to the Transferred Property,
except for the Equipment not owned by the Depositor, and (B) a valid assignment
of its security interest in the Equipment not owned by the Depositor. The
Depositor hereby grants such a security interest.
In the case of any Initial Lease which has been prepaid in
full after the Cut-Off Date relating to the Initial Leases and prior to the
Closing Date, the Depositor shall, on the Closing Date, deposit the
Reconveyance Amount therefor and for the related Equipment in the Collection
Account in lieu of taking the actions described in Sections 2.02 and 4.01 with
respect thereto.
Section 2.02. Custody of Leases and Lease Files. The
executed original counterpart of each Lease, together with the other documents
or instruments, if any, which constitute a part of a Lease File shall be held
by the Servicer as custodian for the Trustee, as provided in Section 4.01(b)
hereof.
Section 2.03. Conditions to Closing. As conditions to the
execution, authentication and delivery of the Certificates by the Trustee and
the sale of the Certificates by the Depositor (by issuance thereof by the Trust
upon the Depositor's instructions) on the Closing Date, (i) the Depositor shall
have received by wire transfer the net proceeds of sale of the Class A
Certificates in authorized denominations equal in the aggregate to the Initial
Class A Certificate Principal Amount and (ii) the Trustee shall have received
the following on or before the Closing Date:
(a) The List of Initial Leases, certified by the President,
any Senior Vice President, any Vice President or any Assistant Vice
President of the Servicer;
(b) Copies of resolutions of the Board of Directors of the
Depositor approving the execution, delivery and performance of this
Agreement and the transactions contemplated hereby, certified by a
Secretary or an Assistant Secretary of the Depositor;
(c) A copy of an officially certified document, dated not
more than 30 days prior to the Closing Date and confirmed on the
Business Day prior to the Closing Date by telegram, telephone or other
similar means, evidencing the due organization and good standing of
the Depositor in the State of Delaware;
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(d) Copies of the Certificate of Incorporation and By-Laws of
the Depositor certified by the Secretary of the Depositor;
(e) Delivery of the executed Financing Statements, prepared
for filing;
(f) A certificate listing the Servicing Officers of the
Servicer as of the Closing Date;
(g) Executed copies of the Contribution Agreement and of the
Receivables Transfer Agreement;
(h) Copies of resolutions of the managing partners or Board
of Directors of the Contributor, the Transferor and Servicer approving
the execution, delivery and performance of this Agreement, the
Contribution Agreement and the Receivables Transfer Agreement to which
such entity is a party and the transactions contemplated hereby and
thereby, certified by a Secretary or an Assistant Secretary of such
entity;
(i) A copy of an officially certified document, dated not
more than 30 days prior to the Closing Date and confirmed on the
Business Day prior to the Closing Date by telegram, telephone or other
similar means, evidencing the due organization and good standing of
the Contributor and Servicer in the State of California and the
Transferor in the State of Delaware;
(j) Copies of the Certificate of Incorporation and By-Laws of
the Transferor's manager and of the Servicer, certified by a Secretary
or an Assistant Secretary of the Transferor's manager and of the
Servicer.
Section 2.04. Acceptance by Trustee. The Trustee
acknowledges its acceptance, simultaneously with the execution and delivery of
this Agreement, of all right, title and interest in and to the Transferred
Property and declares that the Trustee holds and will hold such right, title
and interest upon the trusts herein set forth for the benefit of all present
and future Certificateholders and the holder of the Trust Certificate for the
use and purpose and subject to the terms and provisions of this Agreement. The
Depositor hereby (x) appoints the Trustee as the Depositor's attorney-in-fact
with all power independently to enforce all of the Depositor's rights against
the Transferor hereunder, under the Contribution Agreement and under the
Receivables Transfer Agreement and (y) directs the Trustee to enforce such
rights. The Trustee hereby accepts such appointment and agrees to enforce such
rights.
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Section 2.05. Liabilities of the Trust and Parties to this
Agreement; Limitations Thereon. (a) The obligations evidenced by the
Certificates provide recourse only to the Trust Property and provide no
recourse against the Depositor, the Transferor, the Contributor, the Servicer,
the Trustee, or any other Person. The Holder of the Trust Certificate hereby
instructs the Trustee to, and the Trustee hereby agrees to, cause the Trust to
pay to (i) the Class A Certificateholders (x) an amount of principal equal to
the Initial Class A Certificate Principal Amount and (y) Class A Certificate
Interest and (ii) to the Class B Certificateholders (x) an amount of principal
equal to the Initial Class B Certificate Principal Amount and (y) Class B
Certificate Interest, in each case at the times, from the sources and on the
terms and conditions set forth herein.
(b) The Depositor, the Transferor, the Contributor and
the Servicer shall not be liable to the Trust, the Trustee or the
Certificateholders except as provided in Article VII and Sections 9.01, 9.03,
9.04, 9.06, 9.08, 9.10 and 11.07 hereof, and, with respect to the Contributor,
as provided in the Contribution Agreement and, with respect to the Transferor,
as provided in the Receivables Transfer Agreement. Without limiting the
generality of the foregoing, if any User fails to pay any Scheduled Payment,
Final Lease Payment, exercised Purchase Option Payment or other amounts due
under a Lease, then neither the Trustee, the Trust nor the Certificateholders
will have any recourse against the Depositor, the Transferor, the Contributor
or the Servicer for such Scheduled Payment, Final Lease Payment, exercised
Purchase Option Payment, other amounts due under the Lease or any losses,
damages, claims, liabilities or expenses incurred by the Trustee, the Trust or
any Certificateholder as a direct or indirect result thereof, except as may be
provided for in Article VII and Sections 9.01, 9.03, 9.04, 9.06, 9.08, 9.10 and
11.07 hereof, and, with respect to the Contributor, as provided in the
Contribution Agreement and, with respect to the Transferor, as provided in the
Receivables Transfer Agreement.
(c) The Trustee agrees that in the event of a default by
a User under the terms of a Lease, which default is not cured within any
applicable cure period set forth in such Lease, the Trustee, the Trust, and the
Certificateholders shall be expressly limited to the sources of payment
specified herein. In addition, the Trustee shall have the right to exercise
the rights of the Contributor (assigned to the Transferor and then to the
Depositor and then to the Trustee) under the Leases, the Insurance Policies and
any document in any Lease File in the name of the Trustee, the Trust and the
Certificateholders, either directly or through the Servicer as agent, and the
Trustee is hereby directed by the Depositor to exercise such rights; provided,
however, that the Trustee
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shall not be required to take any action pursuant to this Section 2.05(c)
except upon written instructions from the Servicer. A carbon, photographic or
other reproduction of this Agreement or any financing statement is sufficient
as a financing statement in any State.
(d) The receipt of the Transferred Property by the
Trustee pursuant to this Agreement does not constitute and is not intended to
result in an assumption by the Trustee, the Trust or any Certificateholder of
any obligation (except for the obligation not to disturb a User's right of
quiet enjoyment) of the Contributor or the Servicer to any User or other Person
in connection with the Equipment, the Leases, the Insurance Policies or any
document in the Lease Files.
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ARTICLE III.
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 3.01. Representations, Warranties and Covenants of
Depositor. The Depositor hereby makes the following representations,
warranties and covenants to the Trustee and the Certificateholders on which the
Trustee relies in accepting the Initial Transferred Property in trust and in
authenticating the Certificates, and on which the initial Certificateholders
have relied in purchasing the Certificates. Such representations, warranties
and covenants are made as of the Closing Date, shall be deemed to be
re-affirmed on each subsequent Transfer Date and shall survive each sale,
transfer and assignment of any Transferred Property to the Trustee, until the
Certificates have been paid in full.
(a) The Depositor represents and warrants, as to itself:
(i) The Depositor is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and is in compliance with the laws of the State of
Delaware and each other applicable jurisdiction to the extent
necessary to perform its obligations under this Agreement. The
Depositor has the full power and authority and all requisite
authorizations, approvals, orders, licenses, certificates and permits
of and from all government or regulatory officials and bodies to own
its properties, to conduct its business and to execute and deliver,
engage in the transactions contemplated by, and perform and observe
its obligations under, this Agreement; all such authorizations,
approvals, orders, licenses and certificates are in full force and
effect; and, there are no legal or governmental proceedings pending
or, to the best knowledge of the Depositor, threatened that would
result in a material modification, suspension or revocation thereof;
(ii) This Agreement has been duly and validly
authorized, executed and delivered by the Depositor, all requisite
corporate action having been taken, and, assuming the due
authorization, execution and delivery hereof by the Servicer and the
Trustee, constitutes or will constitute the legal, valid and binding
agreement of the Depositor, enforceable in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws
relating to or affecting creditors' rights generally and by general
equity principles (regardless of whether such enforcement is
considered in
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a proceeding in equity or at law) and by an implied covenant of good
faith and fair dealing;
(iii) No consent, approval, authorization or order
of or registration or filing with, or notice to, any governmental
authority, court or any other third party is required for the
execution, delivery and performance of or compliance by the Depositor
with its obligations under this Agreement or the consummation by the
Depositor of any of the transactions contemplated hereby or thereby;
(iv) None of the execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby or
thereby, or the fulfillment of or compliance with the terms and
conditions of this Agreement, (i) conflicts or will conflict with or
results or will result in a breach of, or constitutes or will
constitute a default or results or will result in an acceleration
under (A) the charter or bylaws of the Depositor, or (B) of any term,
condition or provision of any material indenture, deed of trust,
contract or other agreement or instrument to which the Depositor or
any of its subsidiaries is a party or by which it or any of its
subsidiaries is bound; (ii) results or will result in a violation of
any law, rule, regulation, order, judgment or decree applicable to the
Depositor of any court or governmental authority having jurisdiction
over the Depositor or its subsidiaries; or (iii) results in the
creation or imposition of any lien, charge or encumbrance which would
have a material adverse effect upon the Transferred Property or any
documents or instruments evidencing or securing the Transferred
Property;
(v) There are no actions, suits or proceedings
before or against or investigations of, the Depositor pending, or to
the knowledge of the Depositor, threatened, before any court,
administrative agency or other tribunal, and no notice of any such
action, which, in the Depositor's reasonable judgment, might
materially and adversely affect the performance by the Depositor of
its obligations under this Agreement, or the validity or
enforceability of this Agreement;
(vi) The Depositor is not in default with respect
to any order or decree of any court or any order, regulation or demand
of any Federal, state, municipal or governmental agency that would
materially and adversely affect its performance hereunder;
(vii) The Depositor's principal place of business
is 130 John Street, New York, New York 10038; and
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(viii) The Depositor's Registration Statement relating to
the Class A Certificates has been declared effective under the
Securities Act of 1933, as amended; such Registration Statement
complies as to form with all requirements of such Act. The statements
contained in the Registration Statement which describe the Depositor
or matters or activities for which the Depositor is responsible or
which are attributed to the Depositor therein are true and correct in
all material respects, and the Registration Statement does not contain
any untrue statement of a material fact with respect to the Depositor
or omit to state a material fact required to be stated therein or
necessary in order to make the statements contained therein with
respect to the Depositor not misleading. To the best of the
Depositor's knowledge and belief, the Registration Statement does not
contain any untrue statement of a material fact required to be stated
therein or omit to state any material fact required to be stated
therein or necessary to make the statements contained therein not
misleading.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 3.01 shall survive delivery
of the respective Lease Files to the Servicer as custodian for the Trustee and
shall inure to the benefit of the Trustee and the Certificateholders.
Section 3.02. Representations, Warranties and Covenants of the Servicer.
The Servicer hereby makes the following representations, warranties and
covenants to the Trustee and the Certificateholders on which the Trustee relies
in accepting the Initial Transferred Property in trust and authenticating the
Certificates, on which the initial Certificateholders have relied in purchasing
the Certificates from the Depositor. Such representations, warranties and
covenants are made as of the Closing Date, shall be deemed to be re-affirmed on
each subsequent Transfer Date and shall survive the contribution, transfer, and
assignment of any Transferred Property to the Trustee.
(a) The Servicer represents and warrants as to itself and its
responsibilities:
(i) Organization and Good Standing. The Servicer is a
corporation duly organized, validly existing in good standing under the
laws of the State of California, has the power to own its assets and to
transact the business in which it is presently engaged, and had at all
relevant times and now has the power, authority and legal right to
service the Leases.
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(ii) Due Qualification. The Servicer is duly qualified to do
business as a foreign corporation and is in good standing, and has
obtained all material necessary licenses and approvals, in all
jurisdictions where the failure to be so qualified and in good standing
or obtain such licenses or approvals would have a material adverse
effect on the Servicer's business and operations or in which the
servicing of the Leases as required by this Agreement requires or will
require such qualification, licenses or approvals.
(iii) Authorization. The Servicer has the power, authority and
legal right to execute, deliver and perform this Agreement, and the
execution, delivery and performance of this Agreement have been duly
authorized by the Servicer by all necessary corporate action.
(iv) Binding Obligation. This Agreement, assuming due
authorization, execution and delivery by the Trustee and the Depositor,
constitutes a legal, valid and binding obligation of the Servicer,
enforceable against the Servicer 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.
(v) No Violation. The consummation by the Servicer of the
transactions contemplated by this Agreement and the fulfillment of the
terms hereof will not conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice, lapse
of time or both) a default under, the charter documents or by-laws of
the Servicer, or any material indenture, agreement, mortgage, deed of
trust or other instrument to which the Servicer is a party or by which
it is bound, or result in the creation or imposition of any Lien upon
any of its material 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, [to the best of the
Servicer's knowledge,] any order, rule or regulation applicable to the
Servicer of any court or of any Federal or State regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or any of its properties.
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(vi) No Proceedings. There are no proceedings or investigations
to which the Servicer, or any of the Servicer's Affiliates, is a party
pending or, to the best of the Servicer's knowledge, threatened before
any court, regulatory body, administrative agency or other tribunal or
governmental instrumentality (A) asserting the invalidity of this
Agreement, the Contribution Agreement, the Receivables Transfer
Agreement or the Certificates, (B) seeking to prevent the issuance of
the Certificates or the consummation of any of the transactions
contemplated by this Agreement, the Contribution Agreement, the
Receivables Transfer Agreement or (C) seeking any determination or
ruling that might materially and adversely affect the performance by
the Servicer of its obligations under, or the validity or
enforceability of, this Agreement.
(vii) Approvals. All approvals, authorizations, consents, orders
or other actions of any Person or court required on the part of the
Servicer in connection with the execution and delivery of this
Agreement have been or will be taken or obtained on or prior to the
Closing Date.
(b) The Servicer additionally covenants as follows as to the
Transferred Property:
(i) Lien in Force. The Servicer shall not release or assign any
Lien in favor of the Trustee on any item of Equipment related to any
Lease in whole or in part, except as provided herein. The Servicer
shall use its best efforts to remove, or to cause the related User to
remove, any Liens on the Trust Estate other than the Lien created
hereby.
(ii) Fulfill Obligations. The Servicer will in all material
respects duly fulfill all obligations on the Servicer's part to be
fulfilled under or in connection with the Trust Property. The Servicer
will not amend, rescind, cancel or modify any Lease or term or
provision thereof, except as contemplated herein, and the Servicer will
not do anything that would materially impair the rights of the
Certificateholders in the Transferred Property, except as contemplated
herein.
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ARTICLE IV.
PERFECTION OF TRANSFER
Section 4.01. Filing; Custody of Lease Files. (a) On the
Closing Date with respect to the Initial Transferred Property and on the related
Transfer Date with respect to the New Transferred Property, the Financing
Statements shall be submitted for filing in the respective filing offices named
therein. From time to time thereafter, the Servicer shall take or cause to be
taken such actions and execute such documents as are necessary to perfect and
protect the Trust's and the Certificateholders' interests in the Transferred
Property against all other Persons, including, without limitation, the filing of
financing statements, amendments thereto and continuation statements, the
execution of transfer instruments and the making of notations on or taking
possession of all records or documents of title.
(b) (i) The Trustee on behalf of the Trust hereby
acknowledges the transfer of the Transferred Property by the Depositor hereunder
and declares that the Trustee, through a custodian, will hold such Transferred
Property, including, the Lease Files, in trust, for the use and benefit of all
Certificateholders subject to the terms and provisions hereof.
(ii) The Servicer shall hold and acknowledges that it is
holding the Lease Files and all other Transferred Property that it may from time
to time receive hereunder as custodian for the Trustee.
(iii) The Servicer shall perform its duties under this
Section 4.01 in accordance with the standard set forth in Section 5.02 as such
standard applies to servicers acting as custodial agents. The Servicer shall
promptly report to the Trustee any failure by it to hold the complete Lease
Files as herein provided and shall promptly take appropriate action to remedy
any such failure but only to the extent (i) any such failure is caused by the
acts or omissions of the Servicer and (ii) such remedial action is otherwise
within its capabilities or control. As custodian, the Servicer shall have and
perform the following powers and duties:
(x) hold the Lease Files on behalf of the Trustee for
the benefit of the Trust, maintain accurate records pertaining to each
Lease to enable it to comply with the terms and conditions of this
Agreement, and maintain a current inventory thereof;
(y) implement policies and procedures in accordance
with the Servicer's normal business practices with respect to the
handling and custody of the Lease
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Files so that the integrity and physical possession of the Lease Files
will be maintained; and
(z) attend to all details in connection with
maintaining custody of the Lease Files on behalf of the Trustee on
behalf of the Trust.
(iv) In acting as custodian of the Lease Files, the
Servicer agrees further that it does not and will not have or assert any
beneficial ownership interest in the Leases or the Lease Files. Promptly upon
the Trust's acquisition thereof and the Servicer's receipt thereof, the Servicer
on behalf of the Trust shall mark conspicuously each original contractual
document with a User, and its master data processing records evidencing each
Lease with a legend, acceptable to the Trustee, evidencing that the Trust has
acquired the Leases and all right and title thereto and interest therein as
provided herein.
(v) The Servicer agrees to maintain the related Lease
Files at its office located in San Rafael, California or at such other offices
of the Servicer as shall from time to time be identified by prior written notice
to the Trustee. Subject to the foregoing, the Servicer may temporarily move
individual Lease Files or any portion thereof without notice as necessary to
conduct collection and other servicing activities.
Section 4.02. Name Change or Relocation. If any change
in the Depositor's name, identity, structure or the location of its principal
place of business or chief executive office occurs, then the Depositor shall
deliver thirty (30) days' prior written notice of such change or relocation to
the Servicer and the Trustee. No later than five days after the effective date
of such change or relocation, the Depositor, as the case may be, shall file such
amendments or statements as may be required to preserve and protect the Trust's
and the Certificateholders' interests in the Transferred Property and deliver
copies thereof to the Trustee.
Section 4.03. Chief Executive Offices. During the term
of this Agreement, the Depositor will maintain its chief executive office and
principal places of business in one of the States of the United States.
Section 4.04. Costs and Expenses. The Servicer agrees to pay
all reasonable costs and disbursements in connection with the perfection and the
maintenance of perfection, as against all third parties, of the Trust's and the
Certificateholders' right, title and interest in and to the Trust Property
(other than the Equipment, except with respect to Equipment related to Growth
Capital Leases located in California, Washington or New Jersey). The Servicer
agrees
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to pay all taxes (other than net income taxes or taxes imposed in lieu thereof),
if any, owed in connection with ownership of the Equipment, together with all
taxes required by the terms of the Leases to be paid by the Servicer on behalf
of the related Users.
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ARTICLE IV.
CERTAIN TAX MATTERS
The parties hereto agree that it is their mutual intent that,
for all applicable tax purposes, the Class A Certificates and the Class B
Certificates shall constitute indebtedness and that for all applicable tax
purposes, accordingly, the Holder of the Trust Certificate shall be treated as
sole and exclusive owner of the Transferred Property. Further, each party
hereto, including the Certificateholders, hereby covenants to every other party
hereto to treat the Class A Certificates and the Class B Certificates as
indebtedness for all applicable tax purposes in all tax filings, reports and
returns and otherwise, and further covenants that neither it nor any of its
Affiliates will take or participate in the taking of, or permit to be taken, any
action that is inconsistent with the treatment of the Class A Certificates or of
the Class B Certificates as indebtedness for tax purposes. All successors and
assigns of the parties hereto shall be bound by the provisions hereof.
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ARTICLE V.
SERVICING
OF THE TRANSFERRED PROPERTY
Section 5.01. Retention of Servicer; Responsibilities of
Servicer. (a) The Holder of the Trust Certificate hereby retains the Servicer
for the purpose of servicing the Transferred Property; provided, however, that
the Servicer shall service the Transferred Property only in conformance with the
terms of this Agreement and the Leases and shall take no action to affect
adversely in any material manner the interests of the Certificateholders in the
Transferred Property. In consideration of such retention, the Holder of the
Trust Certificate hereby agrees to pay to the Servicer the Servicer Fee, such
Servicer Fee to be paid as provided in Section 6.04(c)(iii) hereof.
(b) The Servicer, for the benefit of the Class A and Class B
Certificateholders, for itself and on behalf of the Holder of the Trust
Certificate, shall be responsible for managing and servicing the Transferred
Property, enforcing and making collections on the Leases and any Insurance
Policies and enforcing any security interest in any item of Equipment not owned
by the Trust, each in accordance with the standards and procedures set forth in
this Agreement. The Servicer's responsibilities shall include collecting and
posting of all payments, responding to inquiries of Users, investigating
delinquencies, accounting for collections and furnishing monthly and annual
statements to the Trustee, with copies to the Rating Agency, with respect to
distributions, making Servicer Advances, providing appropriate Federal income
tax information to the Trustee for use in providing information to the
Certificateholders, collecting and remitting sales and property taxes on behalf
of taxing authorities and maintaining the perfected security interest of the
Trustee and the Certificateholders in the Transferred Property.
The Servicer shall have full power and authority, acting at its
sole discretion, to do any and all things in connection with such managing,
servicing, enforcement and collection that it may deem necessary or desirable,
including the prudent delegation of such responsibilities. Without limiting the
generality of the foregoing, the Servicer shall, and is hereby authorized and
empowered by the Holders of the Trust Certificate and the Trustee, subject to
Section 5.02 hereof, to execute and deliver (on behalf of itself, the
Certificateholders, the Trustee or any of them) any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
all other comparable instruments, with respect to the Leases, the Lease Files
and the other Transferred Property. The Servicer also may, for itself and on
behalf of the Holders of the Trust Certificate,
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in its sole discretion, waive any prepayment charge, late payment charge or
penalty, or any other fees that may be collected in the ordinary course of
servicing any Lease. Notwithstanding the foregoing, the Servicer shall not,
except pursuant to a judicial order from a court of competent jurisdiction, or
as otherwise expressly provided in this Agreement, release or waive the right to
collect the Scheduled Payments or any unpaid balance on any Lease which is not a
Defaulted Lease. The Trustee shall execute and deliver any powers of attorney
and other documents reasonably necessary or appropriate to enable the Servicer
to carry out its servicing duties hereunder as may be prepared by the Servicer,
at the Servicer's expense, and delivered to the Trustee for execution and
delivery. The Trustee is not responsible for any legal insufficiencies in any
such powers of attorney or other documents.
(c) The Servicer shall conduct any Transferred Property
management, servicing, collection or enforcement actions in the following
manner:
(i) The Servicer may sue to enforce or collect upon
Leases as agent for the Trust. If the Servicer elects to commence a
legal proceeding to enforce a Lease, the act of commencement shall be
deemed to be an automatic assignment of the Lease to the Servicer for
purposes of collection only. The Servicer may effect a settlement with
a User with respect to a Defaulted Lease for less than the total amount
due, in accordance with the Servicer's standard servicing procedures.
If, however, in any enforcement suit or legal proceeding, it is held
that the Servicer may not enforce a Lease on the ground that it is not
a real party in interest or a holder entitled to enforce the Lease,
then the Trustee on behalf of the Trust shall, at the Servicer's
written request and upon receipt from the Servicer of satisfactory
indemnity, take such steps as the Servicer deems necessary to enforce
the Lease, including the execution of a limited power of attorney form
the Trustee to the Servicer, or the institution of a suit in its name
or the names of the Certificateholders;
(ii) The Servicer shall exercise any rights of recourse
against third parties that exist with respect to any Lease in
accordance with the Servicer's usual practice. In exercising recourse
rights, the Servicer is authorized on the Trustee's behalf to reassign
the Lease to the person against whom recourse exists to the extent
necessary, and at the price set forth in the document creating the
recourse. The Servicer will not reduce or diminish such recourse
rights, except to the extent that it exercises such rights;
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(iii) The Servicer may grant to the User under any Lease
which does not meet the definition of "Defaulted Lease" any rebate,
refund or adjustment that the Servicer in good faith believes is
required because of Prepayment in full of such Lease; provided,
however, that the Servicer will not permit any rescission or
cancellation of any Lease or take any action with respect to any Lease
which would materially impair the rights of the Trustee, or the
Certificateholders in the Lease or proceeds thereof; and provided,
further, that the amount payable by the User with respect to the
Prepayment in full of a Lease, after giving effect to any such rebate,
refund or adjustment described above (and without credit for any
Security Deposit previously paid by the User), will not be less than
the Prepayment Amount;
(iv) The Servicer may waive, modify or vary any term of
any Lease or consent to the postponement of strict compliance with any
such term if in the Servicer's reasonable and prudent determination
such waiver, modification or postponement is not materially adverse to
the Certificateholders; provided, however, that (A) the Servicer shall
not forgive any payment of rent, principal or interest, except as
provided in this Section 5.01(c)(iv), (B) unless the related Lease
meets the requirements to be a "Defaulted Lease", the Servicer shall
not permit any modification with respect to any Lease that would reduce
or increase the Lease Principal Balance of the Lease, provided, that in
no event shall the new maturity date be later than the latest maturity
date of any other Lease then held by the Trust and (C) the Servicer may
accept Prepayment in part or in full; provided, however, that (1) in
the event of a Prepayment in full, the Servicer may consent to such
Prepayment only in an amount not less than the Prepayment Amount and
(2) in the event of a partial Prepayment, the Servicer may consent to
such partial Prepayment only if (x) following such Prepayment in part
there are no delinquent amounts then due from the User, (y) such
partial Prepayment will not reduce the Lease Principal Balance by more
than an amount equal to (I) the amount of such partial Prepayment minus
(II) unpaid interest at the Discount Rate, accrued through the Payment
Date immediately following such partial Prepayment, on the outstanding
Lease Principal Balance prior to such partial Prepayment and (z) the
Servicer in connection with such partial Prepayment accurately
recalculates the Lease Principal Balance and the allocation of
Scheduled Payments to principal and interest;
(v) In the event that the Servicer acquires title to any
item of Equipment in the enforcement of any Lease, the Servicer shall
use its best efforts to sell or
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otherwise dispose promptly of such item of Equipment, consistent with
the standard of care set forth in Section 5.02 hereof. The Servicer
shall not lease, as lessee, operate or otherwise manage any such items
of Equipment unless the Servicer itself contributes to the Trust the
related Reconveyance Amounts, in which case the Servicer may remove
such items of Equipment from the Trust;
(vi) Notwithstanding any provision to the contrary
contained in this Agreement, the Servicer shall exercise any right
under a Lease to accelerate the unpaid Scheduled Payments and Final
Lease Payment thereunder not later than the earlier of (A) the date on
which the User has been contractually delinquent for four consecutive
payments or (B) the date on which the Servicer determines, in its sole
discretion and in accordance with its customary servicing practices,
that eventual payment of all unpaid Scheduled Payments is unlikely;
provided, however, that the Servicer will not accelerate any Scheduled
Payment or Final Lease Payment unless permitted to do so by the terms
of the Lease or under applicable law;
(vii) Any payments received from a User will be allocated
first, to any Scheduled Payments or Final Lease Payments due on the
related Lease; second, to any Purchase Option Payments due on such
Leases, third, to any sales, property or use taxes due or payable to
any taxing authority, and fourth to all other amounts then payable by
the User;
(viii) The Servicer may not allow an offset of the amount
of any Security Deposit against any Scheduled Payment or Purchase
Option Payment under such Lease, except as expressly permitted in
Section 5.14 hereof; and
(ix) With respect to any Lease which does not have a
written purchase option, the Servicer shall, before the end of the term
thereof, offer the User the option to purchase the related Equipment at
the end of such term for the fair market value of such Equipment.
(d) In no event may the Servicer modify Leases pursuant
to clause (c)(iv)(A) above if the aggregate cumulative Lease Principal Balances
of all Leases so modified, together with the aggregate cumulative Lease
Principal Balances at the time of the modification of all Substitute Leases
delivered pursuant to Section 5.13 hereof, exceed 10% of the aggregate Lease
Principal Balance as of the Cut-Off Date.
Section 5.02. Standard of Care. In managing and servicing the
Transferred Property and enforcing and making
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collections on the Leases and any Insurance Policies related to the Leases
pursuant to this Agreement, the Servicer will exercise that degree of skill and
care consistent with that which the Servicer customarily exercises with respect
to similar contracts owned, managed or serviced by it. The Servicer shall comply
with all applicable Federal and State laws and regulations; shall maintain all
State and Federal licenses and franchises necessary for it to perform its
servicing responsibilities hereunder and shall not materially impair the rights
of the Trustee or the Certificateholders in any Leases or payments thereunder or
the Equipment.
Section 5.03. Servicer Advances. No later than the related
Determination Date, the Servicer shall make a Servicer Advance for each Lease
which is a Delinquent Lease on the related Calculation Date in an amount equal
to the Scheduled Payments, or portion thereof, which were due but not received
during the prior Collection Period (and not previously covered by an
unreimbursed Servicer Advance); provided, however, that the Servicer shall not
be obligated to make any Servicer Advance pursuant to this Section 5.03 that the
Servicer determines in its sole discretion and in accordance with its customary
servicing practices is unlikely to be eventually repaid from Scheduled Payments,
Final Lease Payments, Residual Receipts or Defaulted Residual Receipts made by
or on behalf of the related User. On each Determination Date, the Servicer shall
deliver to the Trustee and the Rating Agency the Servicer's Certificate listing
the aggregate amount of Scheduled Payments and Final Lease Payments not received
for the immediately prior Collection Period as of the related Calculation Date
which it has determined, in its sole discretion and in accordance with its
customary servicing practices, is likely to be recoverable from the related
Users.
Section 5.04. Maintenance of Security Interest in the
Transferred Property. The Servicer shall, in accordance with customary servicing
procedures and at its own expense, use its best efforts to maintain perfection
of the security interest created by this Agreement in the Transferred Property
(other than the Equipment, except with respect to Equipment related to Gross
Capital Leases located in California, Washington or New Jersey, and other than
Transferred Property removed from the Trust pursuant to Section 5.12 or Article
VII hereof). In connection with enforcing a Defaulted Lease the Servicer shall
prepare, and the Contributor, the Transferor and the Depositor shall execute and
the Servicer shall file UCC-1 statements naming the Trust as secured party with
respect to the related Equipment. The Servicer shall take any action necessary
to reperfect or to cause the re-perfection of such security interest on behalf
of the Trust, as necessary.
Section 5.05. Servicing Compensation; Payment of Certain
Expenses by Servicer. As compensation for its
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activities, the Servicer shall be entitled to receive the Servicer Fee and any
Servicing Charges. The Servicer shall be required to pay all expenses incurred
by it in connection with its activities hereunder, including, without
limitation, (a) fees and disbursements of the Independent Accountants, taxes
imposed on the Servicer or the Trust (but excluding any sales taxes or other
taxes imposed on any User, the Depositor, the Transferor, the Contributor, the
Trustee, any Certificateholder, or any other Person), (b) expenses incurred in
connection with distributions and reports to Certificateholders and (c) all
other fees and expenses not expressly stated hereunder to be for the account of
the Certificateholders. The Servicer shall be reimbursed for any and all such
amounts pursuant to Section 6.04(c)(iii) hereof, by the Trustee on behalf of the
Holder of the Trust Certificate.
Section 5.06. Servicer's Certificate. Not later than 12:00 noon
New York City time on each Determination Date, the Servicer shall deliver to the
Trustee and the Rating Agency a Servicer's Certificate containing the
information set forth on Exhibit D hereto, as of the related Payment Date.
Section 5.07. Annual Statement as to Compliance. The Servicer
will deliver to the Depositor, the Trustee and the Rating Agency, not later than
90 days after the end of each fiscal year, commencing with the fiscal year
commencing July 1, 1995, an officer's certificate signed on behalf of the
Servicer by a Servicing Officer, dated as of the last day of such fiscal year,
stating that (a) a review of the activities of the Servicer during the preceding
12-month period and of the Servicer's performance under this Agreement has been
made under such Servicing Officer's supervision and (b) nothing has come to such
Servicing Officer's attention to indicate that an Event of Servicing Termination
hereunder has occurred and is continuing on such last day of such fiscal year
or, if an Event of Servicing Termination has so occurred and is continuing,
specifying each such Event of Servicing Termination known to such Servicing
Officer and the nature and status thereof, and the steps, if any, necessary to
remedy such Event of Servicing Termination.
Section 5.08. Financial Statements and Independent Accountant's
Servicing Certificate Review. (a) The Servicer shall, not later than 90 days
after the end of each fiscal year, commencing with the fiscal year commencing
June 30, 1996, deliver to the Depositor, the Trustee and the Rating Agency a
copy of the Servicer's annual financial statements for such fiscal year, audited
by the Independent Accountant.
(b) The Servicer shall, within 60 days after the end of each
calendar quarter, commencing with the quarter ending December 31, 1995, deliver
to the Depositor, the
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Trustee and the Rating Agency quarterly, unaudited financial statements of the
Servicer for such calendar quarter.
(c) The Servicer shall inform the Depositor, the Rating Agency
and the Trustee in writing, and the Trustee shall, upon written request, give
notice to the Certificateholders, of the Servicer's fiscal year and any change
in such fiscal year.
(d) The Servicer shall cause the Independent Accountant (who
may also render other services to the Servicer and its Affiliates) to prepare a
statement to the Trustee and the Rating Agency dated as of June 30, 1996, and
annually as of the same month and day thereafter until the Certificate Principal
Balance has been reduced to zero, to the effect that the Independent Accountant
has examined the servicing procedures, manuals, guides and records of the
Servicer and the accounts and records of the Servicer relating to the
Transferred Property and the Lease Files (which procedures, manuals, guides and
records shall be described in one or more schedules to such statement), that the
Independent Accountant has compared the information contained in the Servicer's
Certificates delivered in the relevant period with information contained in the
accounts and records for such period, and that, on the basis of such examination
and comparison, nothing has come to the Independent Accountant's attention to
indicate that, during the relevant period, (i) the Servicer has not serviced the
Transferred Property in compliance with such servicing procedures, manuals and
guides and in the same manner required by the Servicer's standards and with the
same degree of skill and care consistent with that which the Servicer
customarily exercises with respect to similar property owned by it and otherwise
in compliance with this Agreement, (ii) such accounts and records have not been
maintained in accordance with Section 5.02 hereof, (iii) the information
contained in the Servicer's Certificates does not reconcile with the information
contained in such accounts and records or (iv) that such certificates, accounts
and records have not been properly prepared and maintained in all material
respects, except in each case for (A) such exceptions as the Independent
Accountant shall believe to be immaterial and (B) such other exceptions as shall
be set forth in such statement. On or before September 30 of each year,
commencing on September 30, 1996, the Servicer shall deliver to the Trustee and
the Rating Agency a copy of such statement.
Section 5.09. Access to Certain Documentation and Information
Regarding the Transferred Property. (a) The Servicer shall provide the Trustee,
any Certificateholder and their duly authorized representatives, attorneys or
accountants access to any and all documentation regarding the Transferred
Property (including the List of Initial Leases and the Lists of Additional
Leases described in Section 5.09(b)
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hereof) that the Servicer may possess, such access being afforded without charge
but only upon reasonable request and during normal business hours, so as not to
interfere unreasonably with the Servicer's normal operations or customer or
employee relations, at offices of the Servicer designated by the Servicer.
The Servicer also agrees (i) to make available at the offices
of the Servicer on a reasonable basis during normal business hours to any
Certificateholder or prospective Certificateholder a knowledgeable financial or
accounting officer for the purpose of answering reasonable questions respecting
recent developments affecting the Servicer and (ii) to allow the
Certificateholder or prospective Certificateholder to inspect the Servicer's
servicing facilities during normal business hours for the purpose of satisfying
such Certificateholder or prospective Certificateholder that the Servicer has
the ability to service the Transferred Property in accordance with this
Agreement.
(b) At all times during the term hereof, the Servicer shall
either (i) keep available in physical form at its principal executive office for
inspection by the Trustee, any Certificateholder or their duly authorized
representatives, attorneys or accountants a list of all Leases then held as a
part of the Trust, together with a reconciliation of such list to the List of
Initial Leases and all Lists of Additional Leases and each of the Servicer's
Certificates, indicating the cumulative removals and additions of Leases from
the Trust or (ii) maintain electronic facilities which allow such list and
reconciliation to be generated.
(c) The Servicer will maintain accounts and records as to each
respective Lease serviced by the Servicer that are accurate and sufficiently
detailed as to permit (i) the reader thereof to know as of the most recent
Calculation Date the status of such Lease, including payments and recoveries
made and payments owing (and the nature of each), and (ii) reconciliation
between payments or recoveries on (or with respect to) each Lease and the
amounts from time to time deposited in the Collection Account in respect of such
Lease.
(d) The Servicer will maintain its computerized accounts and
records so that, from and after the time of transfer hereunder of each Lease to
the Trustee, the Servicer's accounts and records (including any back-up computer
archives) that refer to any Lease indicate clearly that the Lease is Trust
Property. Indication of a Lease being Trust Property will be deleted from or
modified on the Servicer's accounts and records when, and only when, a Release
Event has occurred with respect to such Lease.
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(e) Nothing in this Section 5.09 shall derogate from the
obligation of the Servicer to observe any applicable law prohibiting disclosure
of information regarding the Users, and the failure, as a result of such
obligation of the Servicer, to provide access as provided in this Section 5.09
shall not constitute a breach of this Section 5.09.
(f) The Trustee and the Certificateholders shall use their
respective best efforts to maintain in confidence all information which has been
described as "confidential" and obtained by any of them regarding the Users and
the Leases, whether upon exercise of their respective rights under this Section
5.09 or otherwise, unless, in the case of the Trustee, such non- disclosure
shall interfere with the day to day business affairs of the Trustee, its audits
and administrative oversight, or violate any applicable law or regulation
applicable to the Trustee or unless ordered by a court of appropriate
jurisdiction. No person entitled to receive copies of such reports or tapes
shall use the information therein for the purpose of soliciting the customers of
the Servicer or for any other purpose except as set forth in this Agreement.
Section 5.10. Other Necessary Data. The Servicer shall, on
request of the Trustee, furnish the Trustee such data necessary for the
administration of the Trust as can be generated by the Servicer's existing data
processing systems; to the extent that the Servicer's existing data processing
systems cannot generate such data, the Servicer will cooperate with the Trustee
in finding a method of furnishing such data.
Section 5.11. Release of Leases. (a) Upon (i) payment in full
of any Lease by the User or by any Person on behalf of such User, (ii) any
removal of a Lease by the Servicer pursuant to Article VII hereof, (iii) any
Defaulted Lease with respect to which the Servicer has reasonably determined
that all Residual Receipts and Defaulted Residual Receipts relating thereto have
been received, or (iv) any removal of a Lease by the Servicer pursuant to
Sections 5.12(a), 5.12(b) or 12.02 hereof (the events described in clauses (i)
through (v) being "Release Events"), the Servicer will notify the Trustee on the
next succeeding Determination Date by certification (which certification shall
include a statement to the effect that all amounts received in connection with
such Release Event which are required to be deposited in the Collection Account
pursuant to Section 6.02(b) hereof have been so deposited) of a Servicing
Officer on behalf of the Servicer and the Servicer may deliver the Lease to the
Person purchasing such Lease.
Upon the Trustee's receipt of such delivery and request, such
Lease and the related Transferred Property appurtenant thereto shall be deemed
to be released from the
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Trust. Upon release of such Lease, the Servicer is authorized to execute an
instrument in satisfaction of such Lease and to do such other acts and execute
such other documents as it deems necessary to discharge the User thereunder and
release the related Equipment (v) to the related User in the event of a Release
Event described in clause (i) preceding, (x) to the Servicer in the event of a
Release Event described in clause (ii) preceding, (y) to the Person, if any,
purchasing the related Equipment in the event of a Release Event described in
clause (iii) preceding, or, if no person is purchasing such Equipment to the
Holders of the Trust Certificate and (z) to itself in the event of a Release
Event described in clause (iv) preceding.
(b) With respect to all Leases so released from the Trust, the
Trustee shall assign, without recourse, representation or warranty, to the
appropriate Person as directed by the Servicer, all the Trustee's right, title
and interest in and to such Lease and Transferred Property appurtenant thereto,
such assignment being an assignment outright and not for security. Such Person
will thereupon own such Lease and related Transferred Property appurtenant
thereto free of any further obligation to the Trustee or the Certificateholders
with respect thereto. The Trustee shall also execute and deliver all such other
instruments or documents as shall be reasonably requested by any such Person to
be required or appropriate to effect a valid transfer of title to a Lease and
the Transferred Property appurtenant thereto. Any instrument or documents
required to be executed by the Trustee pursuant to this Section 5.11(b) shall be
prepared by the Servicer (or such Person) at the Servicer's (or such Person's)
expense.
Section 5.12. Removal Related to Upgrades or Trade-Ins and
Delinquent Leases. (a) In the event that a User requests an upgrade or trade-in
of Equipment, the Servicer may remove the Equipment and the related Lease from
the Trust by deposit of the Reconveyance Amount in the Collection Account on or
before any Determination Date.
(b) The Servicer may remove any Delinquent Lease and related
Transferred Property from the Trust with respect to which Lease the User is in
default or such default is, in the Servicer's judgment, imminent, by deposit by
the Servicer of the Reconveyance Amount in the Collection Account on or before
any Determination Date.
Section 5.13. Substitution. The Servicer has the right (but not
the obligation), at any time, to substitute one or more Leases (each a
"Substitute Lease") and the Equipment subject thereto for a Lease (each a
"Predecessor Lease") and the Equipment subject thereto if:
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(i) The Predecessor Lease is then in default and, as of the
most recent Determination Date, has been in default for at least thirty (30)
consecutive days or a bankruptcy petition has been filed by or against the User;
(ii) The aggregate Lease Principal Balance(s) of such
Substitute Lease or Leases is at least equal to the aggregate Lease Principal
Balance(s) of such Substitute Lease or Leases, each as of the Calculation Date
immediately following the date of such substitution; and
(iii) The Substitute Lease or Leases does not have a maturity
date later than the maturity date of any other Lease held by the Trust.
Any substitution pursuant to this Section 5.13 shall become
effective upon (i) delivery to the Trustee of an instrument or instruments
effectively transferring to the Trust all right, title and interest of the
Servicer in and to the Substitute Lease being substituted and the Equipment
subject thereto, and (ii) delivery to the Servicer by the Trustee of an
instrument or instruments transferring to the Servicer, without representation
or warranty except with respect to unencumbered title, all of the Trust's right,
title and interest in and to the Predecessor Lease and the related Equipment for
which the substitution is being made.
In connection with any such substitution the Servicer shall be
deemed to have made the representations and warranties set forth in Section
3.01(a) of the Contribution Agreement with respect to the Substitute Lease,
except (i) that the only representations made with respect to Section
3.01(a)(xix)(b) of the Contribution Agreement shall be (D) and (G), which shall
be true as of the date of substitution, and (ii) that following any substitution
not more than 5% of the aggregate Lease Principal Balance shall relate to
Equipment in any single state other than California, Washington or New Jersey.
In no event shall the Servicer substitute Leases if the
aggregate cumulative Lease Principal Balances of such Substitute Leases at the
time of substitution together with the aggregate cumulative Lease Principal
Balances of all Leases modified pursuant to Section 5.01(c)(iv)(A) hereof is
greater than 10% of the aggregate Lease Principal Balance as of the most recent
Cut-Off Date.
On each Determination Date, the Servicer shall give written
notice to the Trustee and any Rating Agency of each substitution of Leases made
during the preceding Collection Period. The Trustee is under no obligation to
verify that any such substitution of Leases was made in accordance with the
provisions of this Agreement.
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Section 5.14. Security Deposits. On the Closing Date
the Servicer shall deposit to the Advance Payments Account the aggregate amount
of Security Deposits held by it as of the Closing Date with respect to the
Leases, together with any Security Deposits received by the Servicer with
respect to the Leases after the Closing Date. The Security Deposits are held in
the Advance Payment Account on behalf of the Users and the Certificateholders,
as their interests may appear. In the event that (i) any User requests that a
Security Deposit be applied as an offset against such User's payment obligations
or Purchase Option Payment under a Lease or (ii) any Lease becomes a Defaulted
Lease, the Servicer shall direct the Trustee, on the related Determination Date,
to withdraw from the Advance Payment Account and deposit to the Collection
Account an amount (the "Offset Amount") equal to the lesser of (a) the amount of
such Security Deposit and (b) the amount of all unpaid and remaining Scheduled
Payments, Final Lease Payments and Purchase Option Payments not then on deposit
in the Collection Account, as payment in respect of, first, any unpaid Scheduled
Payments or Final Lease Payments under the related Lease, and second, any unpaid
Purchase Option Payment under the related Lease. The Servicer shall not permit
any User any offset for its Security Deposit until the Offset Amount is
deposited in the Collection Account, as required by this Section 5.14.
In no event shall the Trust, the Depositor, the Trustee, the
Transferor, or any Certificateholder be liable to any User with respect to the
Security Deposits. The Servicer shall indemnify and hold harmless the Trustee
and the Certificateholders for any loss, cost and expense (including legal fees
and expenses incurred by such parties in connection with the prosecution of
claims made in connection therewith) suffered as a result of the Servicer's
misappropriation or misapplication of any Security Deposit. This right of
indemnification shall survive the termination of this Agreement.
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ARTICLE VI.
DEPOSITS, DISTRIBUTIONS, AND STATEMENTS TO
CERTIFICATEHOLDERS
Section 6.01. Collection Account. (a) The Servicer shall
establish and maintain the Collection Account with the Trustee as one or more
segregated trust accounts in the Trustee's corporate trust department, in the
name of "PSSFC Equipment Trust 1995-1 (Phoenix Leasing) Collection Account, in
trust for the registered holders of Equipment Lease-Backed Certificates." At the
Servicer's written direction, the Trustee shall make withdrawals from the
Collection Account only as provided in this Agreement.
(b) At the times indicated in this Section 6.01(b) or in
Section 6.01(c) below, the following amounts shall be deposited in the
Collection Account in immediately available funds:
(i) The Servicer shall deposit or cause to be deposited
the aggregate amounts of Actual Payments;
(ii) The Servicer shall deposit the aggregate Servicer
Advances payable pursuant to Section 5.03 hereof;
(iii) The Trustee shall transfer from the Advance Payment
Account any Scheduled Payment, Final Lease Payment (or portion thereof)
or Purchase Option Payment theretofore funded by the related User
through a deposit to the Advance Payment Account of an Advance Payment
or of a Security Deposit;
(iv) The Servicer shall deposit any Reconveyance Amounts
payable by it under this Agreement, the Receivables Transfer Agreement
or the Contribution Agreement;
(v) Investment earnings, as described in Section 6.03(a);
and
(vi) The amount, if any, on deposit in the New Transferred
Property Funding Account shall be withdrawn therefrom on the Initial
Amortization Date and deposited in the Collection Account in
immediately available funds.
(c) The Servicer shall so transfer the aggregate amount of
Actual Payments no later than two Business Days after the Servicer's
identification of such amount. The Servicer shall so deposit the aggregate
amount of Servicer Advances no later than the related Determination Date. The
Servicer shall instruct the Trustee to deposit the portion of
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any Advance Payment due and owing for a Collection Period no later than the
related Determination Date, and the portion of any Security Deposit as provided
by Section 5.14. The Contributor or the Servicer shall so deposit the aggregate
Reconveyance Amounts no later than the related Determination Date. Except as
otherwise expressly set forth, any other deposits and transfers of funds to be
made pursuant to this Section 6.01 shall be made no later than the second
Business Day immediately preceding the related Payment Date.
(d) Notwithstanding the foregoing, the Servicer may
deduct from amounts otherwise payable to the Collection Account, Advance Payment
Account or New Transferred Property Funding Account amounts previously deposited
by the Servicer into the Collection Account but (i) subsequently uncollectible
as a result of dishonor of the instrument of payment for or on behalf of the
User or (ii) later determined to have resulted from mistaken deposits.
Section 6.02. Advance Payment Account and New Transferred
Property Funding Account.
(a) The Servicer shall establish and maintain the Advance
Payment Account with the Trustee as one or more non-interest bearing,
segregated trust accounts in the Trustee's corporate trust department,
in the name of "PSSFC Equipment Trust 1995-1 (Phoenix Leasing) Advance
Payment Account, in trust for the registered holders of Equipment
Lease-Backed Certificates." The Trustee shall make or permit
withdrawals from the Advance Payment Account only as provided in this
Agreement.
(b) The Servicer shall deposit or cause to be deposited any
Advance Payments in the Advance Payment Account in immediately
available funds no later than two Business Days after the Servicer's
identification of such payments. Security Deposits shall be deposited
therein as required by Section 5.14 hereof.
(c) The Trustee shall withdraw payments from the Advance
Payment Account in accordance with Section 6.01(c) hereof and deposit
such amounts into the Collection Account.
(d) The Transferor shall establish and maintain the New
Transferred Property Funding Account with the Trustee as one or more
non-interest bearing, segregated trust accounts in the Trustee's
corporate trust department, in the name of "PSSFC Equipment Trust
1995-1 New Transferred Property Funding Account, in trust for the
registered holders of Equipment Lease-Backed Certificates." The Trustee
shall make or permit
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withdrawals from the New Transferred Property Funding Account only as
provided in this Agreement.
Section 6.03. Investment of Monies Held in the Accounts;
Subaccounts. (a) The Servicer shall direct the Trustee to invest the amounts in
each Account in Eligible Investments that mature not later than the Business Day
immediately preceding the next Payment Date following the investment of such
amounts. Eligible Investments shall not be sold or disposed of prior to their
maturities. Investment earnings on amounts held in any Account shall be
deposited in the Collection Account as earned.
(b) The Trustee and the Servicer may, from time to time and in
connection with the administration of each Account, establish and maintain with
the Trustee one or more sub-accounts of any of the Accounts, as the Trustee
and/or the Servicer may consider useful.
Section 6.04. Transfer of New Transferred Property;
Distributions from Accounts.
(a)(i) On each Payment Date during the Interest-Only Period,
and provided that no Required Amortization Event has occurred as set
forth in the Servicer's Certificate,
(1) pursuant to Section 6.04(c)(vii), the Trustee
shall pay from the Available Funds and Residual Receipts then
remaining in the Collection Account and from amounts then
remaining in the New Transferred Property Funding Account, an
amount which would be, in the absence of losses, equal to the
sum of (A) the Base Principal Amount with respect to such
Payment Date and (B) the Residual Receipts and the Defaulted
Residual Receipts received by the Servicer during the prior
Collection Period and (C) the amount described in Section
6.04(a)(i)(2), if any, on such Payment Date upon the order of
the Depositor in consideration of the transfer of New
Transferred Property, which New Transferred Property shall have
been transferred by the Contributor to the Transferor pursuant
to the terms of a properly executed Contribution Agreement
Supplement and by the Transferor to the Depositor pursuant to
the terms of a properly executed Receivables Transfer Agreement
Supplement and which relate to Leases having an aggregate Lease
Principal Balance on such Payment Date equal as nearly as
practicable to but not less than the amount of such Base
Principal Amount, Residual Receipts and Defaulted Residual
Receipts; and
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(2) if the Trust Certificate Principal Balance on such
Payment Date is below 5.00% of the aggregate Lease Principal
Balance of the Leases as of such Payment Date, any amounts
otherwise payable to the holder of the Trust Certificate
pursuant to Section 6.04(c)(ix) ("Excess Cash") hereof shall be
disbursed upon the order of the Depositor in consideration of
the transfer of the New Transferred Property to the extent
described in the next sentence. The New Leases relating to such
New Transferred Property shall have an aggregate Lease
Principal Balance on such Payment Date equal as nearly as
practicable to, but in no event less than the Excess Cash;
provided, however, that the Depositor shall
only be required to transfer New Leases to the extent necessary
to increase the Trust Certificate Principal Balance to 5.00%.
(ii) If the Depositor, on any Payment Date during the
Interest-Only Period, provided that no Required Amortization Event has
occurred or, due to the operation of this clause (ii), will occur on
such Payment Date, advises the Trustee that it cannot convey to the
Trust New Transferred Property relating to New Leases having an
aggregate Lease Principal Balance as of the day preceding such Payment
Date at least equal to an amount which, in the absence of losses, would
equal the sum of (x) the Base Principal Amount with respect to such
Payment Date and (y) the Residual Receipts and Defaulted Residual
Receipts received by the Servicer during the preceding Collection
Period and (z) the amount described in Section 6.04(a)(i)(2) hereof, if
any, on such Payment Date, then, pursuant to Section 6.04(c)(vii), the
Trustee shall deposit to the New Transferred Property Funding Account
any difference between an amount which, in the absence of losses, would
equal (A) the sum of (I) the Base Principal Amount with respect to such
Payment Date, and (II) the Residual Receipts and the Defaulted Residual
Receipts received by the Servicer during the prior Collection Period
and (III) the Excess Cash for such Payment Date and (B) the aggregate
Lease Principal Balances of all New Leases relating to the New
Transferred Property transferred to the Trust by the Depositor on such
Payment Date. On future Payment Dates during the Interest-Only Period,
amounts shall be disbursed from the New Transferred Property Funding
Account upon the order of the Depositor in an amount equal to the
aggregate Lease Principal Balances of the New Leases relating to the
New Transferred Property, to the extent that such New Transferred
Property is available from the Depositor after the Depositor has
transferred to the Trust the New Transferred Property required to be
transferred on such future Payment Dates pursuant to clauses (1) [and
(2)] of
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Section 6.04(a)(i) above. If, on the Initial Amortization Date,
any amount is on deposit in the New Transferred Property Funding
Account, it shall be deposited in the Collection Account prior to
making any payments or distributions on such Payment Date from the
Collection Account and the New Transferred Property Account shall be
closed.
(iii) Following the Interest-Only Period, the Depositor has
the option (but not the obligation) to convey New Transferred Property
to the Trust on each Payment Date. Such New Transferred Property shall
relate to New Leases having an aggregate Lease Principal Balance not in
excess of the aggregate amount of Prepayments deposited to the
Collection Account with respect to the prior Collection Period;
provided, however, that the Depositor may not so transfer New
Transferred Property relating to New Leases having an aggregate Lease
Principal Balance in excess of $5,000,000; and provided, further, that
the final maturity date of any such New Lease shall not be later than
January 1, 2003. The Trustee shall disburse on the applicable Transfer
Date upon the order of the Depositor an amount equal to the lesser of
100% of the aggregate Lease Principal Balances of such New Leases as of
the day preceding such Transfer Date and the aggregate amount of
Prepayments deposited to the Collection Account with respect to the
prior Collection Period. The Trustee on behalf of the Trust shall
accept the transfer of any qualifying New Leases so tendered by the
Depositor.
(iv) In connection with each transfer of New Transferred
Property pursuant to this Section 6.04(a), the Trustee shall have
received on the Determination Date preceding each Payment Date a List
of New Leases listing all New Leases to be transferred to the Trust on
such Transfer Date, together with (x) a Contribution Agreement
Supplement, properly completed by an appropriate officer of the
Contributor and (y) a Receivables Transfer Agreement Supplement,
properly completed by an appropriate officer of the Transferor.
(b) If a Required Amortization Event occurs, then no further
transfers of New Leases pursuant to paragraphs (a)(i) or (a)(ii) above shall
occur, and all amounts that would otherwise have been disbursed in consideration
of such conveyances shall be retained in the Collection Account and shall be
distributed, as provided in paragraph (c) below.
(c) On each Payment Date, the Trustee shall pay the entire
amount of money then on deposit in the Collection Account with respect to the
related Collection Period, as indicated on the Servicer's Certificate, pursuant
to Section
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6.01 hereof to the Persons to which such money is then due, calculated on the
basis of the Servicer's Certificate for the related Collection Period;
provided, however, that the failure of the Servicer to deliver a
Servicer's Certificate shall not preclude the Trustee from paying (i) the Class
A Certificate Interest due on such Payment Date pursuant to Section 6.04(c)(iv)
hereof in an amount equal to the product of (x) one-twelfth of the Class A
Certificate Rate and (y) the Class A Certificate Principal Balance reflected on
the Servicer's Certificate most recently delivered by the Servicer and (ii) the
Class B Certificate Interest due on such Payment Date pursuant to Section
6.04(c)(v) hereof in an amount equal to the product of (x) one-twelfth of the
Class B Certificate Rate and (y) the Class B Certificate Principal Balance
reflected on the Servicer's Certificate most recently delivered by the Servicer.
On each Payment Date prior to the Initial Amortization Date, the Trustee shall
pay such money to the following Persons, in the following order of priority,
without duplication:
(i) From the amount then remaining in the Collection Account to
the Contributor by wire transfer of immediately available funds, the
aggregate amount of any Initial Unpaid Amounts inadvertently deposited
in the Collection Account;
(ii) From the amount then remaining in the Collection Account to
any party entitled thereto, by check, any indemnity payments paid
pursuant to any Lease, to the extent that such amounts are
inadvertently deposited in the Collection Account;
(iii) From the Available Funds then remaining in the Collection
Account to the Servicer by wire transfer to the account designated in
writing by the Servicer of immediately available funds, the aggregate
amount of the following:
(x) The Servicer Fee;
(y) An amount necessary to reimburse the Servicer for
any unrecoverable Servicer Advances; and
(z) Any Servicing Charges inadvertently deposited in
the Collection Account;
(iv) From the Available Funds then remaining in the Collection
Account, to the Class A Certificate-holders, the Class A Certificate
Interest and Class A Overdue Interest for the related Interest Accrual
Period;
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(v) From the Available Funds then remaining in the Collection
Account, to the Class B Certificateholders, the Class B Certificate
Interest and the Class B Overdue Interest for the related Interest
Accrual Period;
(vi) From the amount then remaining in the Collection Account, to
the Servicer by wire transfer of immediately available funds to the
account designated in writing by the Servicer, any other amounts due
the Servicer as expressly provided in this Agreement, under Section
9.03 or otherwise;
(vii) From the Available Funds and Residual Receipts then
remaining in the Collection Account and from amounts then remaining in
the New Transferred Property Funding Account, upon the order of the
Depositor up to an amount equal to the aggregate Lease Principal
Balances of the New Leases available to be transferred to the Trust;
(viii) From the Available Funds and Residual Receipts then
remaining in the Collection Account, to the New Transferred Property
Funding Account; and
(ix) To the Holder of the Trust Certificate, any remaining
amounts to the extent not otherwise required pursuant to the terms of
this Agreement to be (a) disbursed upon the order of the Depositor in
consideration of the transfer of New Transferred Property on such
Payment Date or (b) deposited in the New Transferred Property Funding
Account on such Payment Date.
(d) On and after the Payment Date which is also the Initial
Amortization Date, the Trustee shall pay such money to the following Persons, in
the following order of priority, without duplication:
(i) From the amount then remaining in the Collection Account to
the Contributor by wire transfer of immediately available funds, the
aggregate amount of any Initial Unpaid Amounts inadvertently deposited
in the Collection Account;
(ii) From the amount then remaining in the Collection Account to
any party entitled thereto, by check, any indemnity payments paid
pursuant to any Lease, to the extent that such amounts are
inadvertently deposited in the Collection Account;
(iii) From the Available Funds then remaining in the Collection
Account to the Servicer by wire transfer
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to the account designated in writing by the Servicer of immediately
available funds, the aggregate amount of the following:
(x) The Servicer Fee;
(y) An amount necessary to reimburse the Servicer
for any unrecoverable Servicer Advances; and
(z) Any Servicing Charges inadvertently deposited
in the Collection Account;
(iv) From the Available Funds then remaining in the Collection
Account, to the Class A Certificateholders, the Class A Certificate
Interest and Class A Overdue Interest for the related Interest Accrual
Period;
(v) Until the Class A Certificate Principal Balance has been
reduced to zero, to the Class A Certificateholders, (a) from the
Available Funds then remaining in the Collection Account, the sum of
(1) the Class A Base Principal Distribution Amount for such Payment
Date, and (2) any Class A Overdue Principal and (b) one-half of the
Residual Receipts received by the Servicer during the prior Collection
Period;
(vi) From the Available Funds then remaining in the Collection
Account, to the Class B Certificateholders, the Class B Certificate
Interest and the Class B Overdue Interest for the related Interest
Accrual Period;
(vii) Until the Class B Certificate Principal Balance has been
reduced to zero, to the Class B Certificateholders, (a) from the
Available Funds then remaining in the Collection Account, the sum of
(1) the Class B Base Principal Distribution Amount for such Payment
Date, and (2) any Class B Overdue Principal and (b) one-half of the
Residual Receipts received by the Servicer during the prior Collection
Period;
(viii) From the Available Funds then remaining in the Collection
Account, to the Servicer by wire transfer of immediately available
funds to the account designated in writing by the Servicer, any other
amounts due the Servicer as expressly provided in this Agreement, under
Section 9.03 or otherwise; and
(ix) Upon the order of the Depositor, the amount of Prepayments
deposited to the Collection Account with respect to the related
Collection Period may be disbursed in consideration of the transfer of
New Transferred
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Property relating to New Leases having a cumulative aggregate Lease
Principal Balance not in excess of 5,000,000 in accordance with Section
6.04(a)(iii).
(x) To the Holder of the Trust Certificate, any remaining
amounts.
(e) All payments to Certificateholders shall be made on each
Payment Date to each Certificateholder of record on the related Record Date by
check, or, if requested by such Certificateholder, by wire transfer to the
account designated in writing in the form of Exhibit E(1) hereto (or such other
account as the Certificateholder may designate in writing) delivered to the
Trustee on or prior to the related Determination Date, in immediately available
funds, in amounts equal to such Certificateholder's pro rata share (based on the
aggregate Class A Percentage Interest in the case of the Class A
Certificateholders, the aggregate Class B Percentage Interest in the case of the
Class B Certificateholders and the aggregate Trust Certificate Percentage
Interest in the case of Holder of the Trust Certificate) of such payment.
Section 6.05. Statements to Certificateholders. (a) If the
Servicer has delivered the Servicer's Certificate on the preceding Determination
Date, then on each Payment Date the Trustee will forward it to the Rating
Agency, and mail to each Private Certificateholder, a statement (which statement
is based exclusively upon information that the Servicer furnished to the Trustee
in the Servicer's Certificate delivered pursuant to Section 5.06 hereof or
otherwise pursuant to this Agreement), not later than one Business Day prior to
such Payment Date, setting forth the following information (per $1,000 of
Initial Class A Certificate Principal Amount or of Initial Class B Certificate
Principal Amount (as the case may be) as to (i) and (ii) below):
(i) With respect to a statement to a Class A
Certificateholder or a Class B Certificateholder, the amount of such
payment allocable to such Certificateholder's Percentage Interest of
the Principal Distribution Amount and Class A or Class B Overdue
Principal;
(ii) With respect to a statement to a Class A
Certificateholder or a Class B Certificateholder, the amount of such
payment allocable to such Certificateholder's Percentage Interest of
Class A or Class B Certificate Interest and Class A or Class B Overdue
Interest;
(iii) The aggregate amount of fees and compensation
received by the Servicer pursuant to Section 6.04(c)(iii) hereof for
the Collection Period;
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(iv) The aggregate Class A Certificate Principal Balance,
the aggregate Class B Certificate Principal Balance, the Class A
Certificate Percentage, the Class A Certificate Factor, the Class B
Certificate Factor, the Pool Factor and the aggregate Lease Principal
Balance, after taking into account all distributions made on such
Payment Date;
(v) The total unreimbursed Servicer Advances with respect
to the related Collection Period;
(vi) The Subordinated Amount as of such Payment Date;
(vii) The amount of Residual Receipts and Defaulted
Residual Receipts for the related Collection Period and the aggregate
Lease Principal Balances for all Leases that became Defaulted Leases
during the related Collection Period;
(viii) The total number of Leases and the aggregate Lease
Principal Balances thereof, together with the number and aggregate
Lease Principal Balances of all Leases as to which the Users, as of the
related Calculation Date, have missed one, two, three or four Scheduled
Payments (including Final Lease Payments), and Delinquent Leases
reconveyed; and
(ix) The aggregate Lease Principal Balance of the New
Transferred Property, if any.
(b) By January 31 of each calendar year, commencing January 31,
1997, or as otherwise required by applicable law, the Trustee shall furnish to
each Person who at any time during the immediately preceding calendar year was a
Certificateholder a statement containing the applicable aggregate amounts with
respect to such Certificateholder reported pursuant to Sections 6.04(c)(i) and
6.04(c)(ii) hereof for such calendar year or, in the event such Person was a
Certificateholder during a portion of such calendar year, for the applicable
portion of such year, for the purposes of such Certificateholder's preparation
of federal income tax returns. In addition to the foregoing the Trustee shall
make available to Certificateholders any other information provided to the
Trustee or otherwise in the Trustee's possession reasonably requested by
Certificateholders in connection with tax matters, in accordance with the
directions of the Servicer.
(c) The Servicer and the Trustee shall furnish to each Private
Certificateholder, on request, during the term of this Agreement, such periodic,
special or other reports or information not specifically provided for herein, as
shall be
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necessary, reasonable or appropriate with respect to such Private
Certificateholder all such reports or information to be provided by and in
accordance with such applicable instructions and directions as the Private
Certificateholder may reasonably require and as the Servicer and the Trustee may
reasonably be able to produce. A Private Certificateholder may, by notice to the
Trustee, waive receipt of any reports. The Trustee's obligation under this
Section 6.05(c) shall only pertain to information provided by the Servicer to
the Trustee or otherwise in the Trustee's possession.
(d) The Trustee shall promptly send to each Private
Certificateholder and to the Rating Agency in writing:
(i) Notice of any breach by the Contributor, the
Depositor or the Servicer of any of their
respective representations, warranties and
covenants made herein, in the Receivables
Transfer Agreement or in the Contribution
Agreement;
(ii) A copy of each Servicer's Certificate received
by the Trustee pursuant to Section 5.06 hereof;
(iii) A copy of each Servicer compliance statement
delivered to the Trustee pursuant to Section
5.07 hereof;
(iv) A copy of each financial statement and
Independent Accountant's review delivered to the
Trustee pursuant to Section 5.08 hereof;
(v) Notice of any failure of the Trustee to conform
to the eligibility requirements for the Trustee
pursuant to Section 11.09 hereof;
(vi) Notice of the appointment of any co-trustee or
separate trustee pursuant to Section 11.13
hereof;
(vii) Notice of any breach by the Trustee of its
representations and warranties set forth in
Section 11.16 hereof;
(viii) Notice of the occurrence of any Required
Amortization Event (which shall also be given to
the Rating Agency);
provided, however, that in each case the Trustee shall only be
required to send such notices and other items to the Private
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Certificateholders to the extent that the Trustee has itself received the
related information and the Private Certificateholders have not already received
such notice or other items. Except as may be specifically provided herein, the
Trustee shall have no obligation to seek to obtain any such information.
Section 6.06. Compliance With Withholding Requirements.
Notwithstanding any other provisions of this Agreement, the Trustee, as paying
agent for and on behalf of, and at the direction of the Servicer, shall comply
with all federal withholding requirements respecting payments (or advances
thereof) to Certificateholders as may be applicable to instruments constituting
indebtedness for federal income tax purposes. Any amounts so withheld shall be
treated as having been paid to the related Certificateholder for all purposes of
this Agreement. In no event shall the consent of Certificateholders be required
for any withholding.
Section 6.07. Disbursement Instructions. The Depositor
hereby instructs the Trustee to disburse any funds to be disbursed "upon the
order of" the Depositor pursuant to this Agreement to the account of the
Transferor at State Street Bank and Trust, Boston, Massachusetts, ABA Routing
#011000028, BNF = Benham Prime Money Market, AC-0505 893 8, FBO Phoenix Leasing
Inc., #2110017.
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ARTICLE VII.
REMOVAL OF NONCONFORMING TRANSFERRED PROPERTY
Upon discovery by the Depositor, the Trustee or the Servicer of
a breach of any of the representations or warranties set forth in Section
3.01(a) of the Contribution Agreement that materially and adversely affects any
Lease, the related Equipment or the related Lease File, as the case may be, or
if the Servicer fails to cause delivery of any UCC-3 financing statement in
accordance with this Agreement, the party discovering such breach shall give
prompt written notice to the other parties. The Trustee has no obligation to
review or monitor the Transferred Property for compliance with such
representations and warranties. As of the last day of the calendar month
following the month of its discovery or its receipt of notice of breach (or, at
the Contributor's election, any earlier date), the Contributor shall, pursuant
to the Contribution Agreement unless such breach shall have been waived or cured
in all material respects, remove such Lease and the related Transferred Property
from the Trust. In consideration for the removal of such Transferred Property,
the Contributor shall pursuant to the Contribution Agreement, no later than the
Determination Date prior to the Payment Date next following such date, pay the
Reconveyance Amount to the Trustee for deposit into the Collection Account. Any
such nonconforming Lease so removed shall not be deemed to be a Defaulted Lease
for purposes of this Article VII.
The obligation of the Contributor pursuant to the Contribution
Agreement to remove any Transferred Property from the Trust and to remit the
Reconveyance Amount, as appropriate, with respect to the related Lease as to
which a breach has occurred and is continuing shall constitute the sole remedy
against the Contributor for such breach available to the Trustee or the
Certificateholders.
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ARTICLE VIII.
THE CERTIFICATES
Section 8.01. The Certificates. (a) Class A
Certificates will be issued in denominations of $1,000 and multiples thereof of
Initial Class A Certificate Principal Amount, and the Class B Certificates will
be issued in denominations of $1,000,000 and $1,000 increments above $1,000,000
of Initial Class B Certificate Principal Amount. The Trust Certificates will be
issued without denomination. Each Certificate shall represent a validly issued
and binding obligation, but only if such Certificate has been executed and
authenticated by a Responsible Officer of the Trustee by manual signature.
Certificates bearing the manual signatures of individuals who were, at the time
when such signatures were affixed, authorized to sign on behalf of the Trust
shall be valid and binding obligations, notwithstanding that such individuals or
any of them have ceased to be so authorized prior to the authentication and
delivery of such Certificates or did not hold such offices at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form set forth in the form
of the Certificates of the related Class, attached as Exhibits hereto, signed by
the Trustee by manual signature, and such certificate upon any Certificate shall
be conclusive evidence, and the only evidence, that such Certificate has been
duly authenticated and delivered hereunder. All Class A Certificates shall be
substantially in the form set forth in Exhibit A hereto, all Class B
Certificates shall be substantially in the form set forth in Exhibit B hereto,
and the Trust Certificate shall be substantially in the form set forth in
Exhibit C hereto. The Certificates shall be dated the date of their
authentication. Neither the Certificates nor the Leases are insured by the
Federal Deposit Insurance Corporation or any other governmental agency.
(b) It is intended that the Class A Certificates be registered
so as to participate in a global book-entry system with the Depository, as set
forth herein. The Class A Certificates shall, except as otherwise provided in
the next paragraph, be initially issued in the form of a single fully registered
Class A Certificate with a denomination equal to the Initial Class A Certificate
Principal Amount. Upon initial issuance, the ownership of each such Class A
Certificate shall be registered in the Certificate Register in the name of Cede
& Co., or any successor thereto, as nominee for the Depository.
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The Depositor and the Trustee are hereby authorized to execute
and deliver the Representation Letter with the Depository.
With respect to Class A Certificates registered in the
Certificate Register in the name of Cede & Co., as nominee of the Depository,
the Depositor, the Transferor, the Contributor, the Servicer and the Trustee
shall have no responsibility or obligation to Direct or Indirect Participants or
beneficial owners for which the Depository holds Class A Certificates from time
to time as a Depository. Without limiting the immediately preceding sentence,
the Depositor, the Transferor, the Contributor, the Servicer and the Trustee
shall have no responsibility or obligation with respect to (i) the accuracy of
the records of the Depository, Cede & Co., or any Direct or Indirect Participant
with respect to any ownership interest in any Class A Certificate, (ii) the
delivery to any Direct or Indirect Participant or any other Person, other than a
Certificateholder, of any notice with respect to the Class A Certificates or
(iii) the payment to any Direct or Indirect Participant or any other Person,
other than a Certificateholder, of any amount with respect to any distribution
of principal or interest on the Class A Certificates. No Person other than a
Certificateholder shall receive a certificate evidencing such Class A
Certificate.
Upon delivery by the Depository to the Trustee of written
notice to the effect that the Depository has determined to substitute a new
nominee in place of Cede & Co., and subject to the provisions hereof with
respect to the payment of interest by the mailing of checks or drafts to the
Certificateholders appearing as Certificateholders at the close of business on a
Record Date, the name "Cede & Co." in this Agreement shall refer to such new
nominee of the Depository.
(c) In the event that (i) the Depository or the Servicer
advises the Trustee in writing that the Depository is no longer willing or able
to discharge properly its responsibilities as nominee and depository with
respect to the Class A Certificates and the Servicer or the Depository is unable
to locate a qualified successor or (ii) the Trustee at its sole option elects to
terminate the book-entry system through the Depository, the Class A Certificates
shall no longer be restricted to being registered in the Certificate Register in
the name of Cede & Co. (or a successor nominee) as nominee of the Depository. At
that time, the Servicer may determine that the Class A Certificates shall be
registered in the name of and deposited with a successor depository operating a
global book-entry system, as may be acceptable to the Servicer, or such
depository's agent or designee but, if the Servicer does not select such
alternative global book-entry system, then the Class A Certificates may be
registered
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in whatever name or names Certificateholders transferring Class A Certificates
shall designate, in accordance with the provisions hereof; provided, however,
that any such reregistration shall be at the expense of the Servicer.
(d) Notwithstanding any other provision of this Agreement to
the contrary, so long as any Class A Certificate is registered in the name of
Cede & Co., as nominee of the Depository, all distributions of principal or
interest on such Class A Certificates as the case may be and all notices with
respect to such Class A Certificates as the case may be shall be made and given,
respectively, in the manner provided in the Representation Letter.
(e) No transfer of any Private Certificate shall be made unless
such transfer is made pursuant to an effective registration statement under the
Securities Act and effective registration or qualification under any State
securities laws or "Blue Sky" laws or in a transaction which does not require
such registration or qualification. If such a transfer is to be made in reliance
upon an exemption from the Securities Act other than Rule 144A thereunder, (i)
the Trustee shall require an Opinion of Counsel that such transfer may be made
pursuant to an exemption from the Securities Act, describing the applicable
exemption and the basis therefor, which Opinion of Counsel shall not be an
expense of the Contributor, the Servicer, the Transferor, the Depositor, the
Trustee or the Trust or (ii) the Trustee shall require the transferee to execute
a certification, substantially in the form of Exhibit G hereto, setting forth
the facts surrounding such transfer. In the event that a transfer is to be made
in reliance on Rule 144A under the Securities Act, the Private Certificateholder
shall cause its prospective transferee to execute and deliver a certificate
substantially in the form of Exhibit F hereto; provided,
however, that with respect to any sale of a Private Certificate by an
investment company registered under the Investment Company Act of 1940, as
amended, made in reliance on Rule 144A, the Certificateholder may (in lieu of
delivering a certificate in the form of Exhibit F) deliver to the Trustee a
certificate in the form of Exhibit F-1 hereto with a copy of a Qualified
Institutional Buyer Certificate in the form of Addendum 1 thereto. The Servicer
promptly shall furnish to any Holder, or any prospective purchaser designated by
a Holder, the information required to be delivered to Holders and prospective
purchasers of Private Certificates in connection with the resale of the Private
Certificates to permit compliance with Rule 144A in connection with such resale.
No Private Certificate may be subdivided for resale or other transfer into a
unit smaller than a unit the initial offering price of which would have been
$500,000.
Section 8.02. Initial Issuance of Certificates. The Trustee has
delivered upon the instruction of the
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Depositor, in exchange for the Transferred Property, Class A Certificates and
Class B Certificates duly authenticated by the Trustee, in authorized
denominations equaling in the aggregate the Initial Class A Certificate
Principal Amount and the Initial Class B Certificate Principal Amount and Trust
Certificates duly authenticated by the Trustee, evidencing an aggregate Trust
Certificate Percentage Interest of 100%.
Section 8.03. Registration of Transfer and Exchange of
Certificates. (a) The Trustee shall maintain, or cause to be maintained, at
the Corporate Trust Office, a Certificate Register in which the Trustee shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. All Certificates shall be so registered.
(b) Upon surrender for registration of transfer of any
Certificate at the Corporate Trust Office, the Trustee shall execute on behalf
of the Trust, authenticate and deliver, subject to the requirements of Section
8.01(e) hereof in the case of the Private Certificates, in the name of the
designated transferee or transferees, one or more new Certificates in authorized
denominations of the same class, of a like aggregate Percentage Interest, dated
the date of such authentication.
(c) At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same class (of authorized denominations
in the case of Class A Certificates and Class B Certificates) of a like
aggregate Class A Percentage Interest, Class B Percentage Interest or Trust
Certificate Percentage Interest, as the case may be, upon surrender of the
Certificates to be exchanged at any such office or agency. Whenever any
Certificates are so surrendered for exchange the Trustee on behalf of the Trust
shall execute on behalf of the Trust, authenticate and deliver the Certificates
that the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for registration of transfer or exchange
shall be accompanied by a written instrument of transfer substantially in the
form of Exhibit E hereto, duly executed by the Holder thereof or its attorney
duly authorized in writing.
(d) No service charge shall be made for any registration of
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
(e) All Certificates surrendered for registration of transfer
or exchange shall be delivered to the Trustee and cancelled and subsequently
destroyed by the Trustee.
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(f) Notwithstanding anything to the contrary herein, the Trust
Certificate shall not be transferable under any condition and the Transferor, by
accepting the Trust Certificate, agrees absolutely and unconditionally that it
shall not assign any or all of its interest in the Trust Certificate to any
Person; provided that the Transferor may pledge its rights to distributions with
respect to the Trust Certificate. Any transfer of any or all of the interest in
the Trust Certificate in violation of the foregoing shall be null and void and
of no effect.
(g) Notwithstanding the foregoing, in the case of any sale or
other transfer of record or beneficial ownership of a Certificate, the
transferee of such Certificate shall be deemed to have represented and warranted
that either (i) it is not acquiring its interest in the Certificate with the
assets of (A) an employee benefit plan (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")) subject
to Title I of ERISA, (B) a plan or other arrangement described in Section 4975
of the Code or (C) any entity whose underlying assets include plan assets by
reason of an investment in such entity by a plan described in (A) or (B) above
or (ii) Prohibited Transaction Class Exemption 84-14 applies to the acquisition
and holding of the Certificate by such transferee.
Section 8.04. Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificate is surrendered to the Trustee, or
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate, and (b) there is delivered to the Transferor, the
Servicer and the Trustee such security or indemnity as may be required by them
to save each of them harmless (provided, that with respect to a Private
Certificateholder which is an insurance company, a letter of indemnity furnished
by it shall be sufficient for this purpose), then, in the absence of notice to
the Trustee that such Certificate has been acquired by a bona fide purchaser,
the Trustee on behalf of the Trust shall execute on behalf of the Trust,
authenticate and deliver in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate a new Certificate of like Class and
Percentage Interest. In connection with the issuance of any new Certificate
under this Section 8.04, the Trustee may require the payment by the
Certificateholder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto. Any other expenses (including
the fees and expenses of the Trustee) in connection therewith shall be paid by
the Servicer. Any duplicate Certificate issued pursuant to this Section 8.04
shall constitute a Certificate duly issued by the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
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Section 8.05. Persons Deemed Owners. The Trustee may
treat the Person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions pursuant to Section
6.04 hereof and for all other purposes whatsoever, and the Trustee shall not be
affected by any notice to the contrary.
Section 8.06. Access to List of Certificateholders' Names
and Addresses. The Trustee will furnish or cause to be furnished to the
Servicer within 15 days after receipt by the Trustee of a request therefor from
the Servicer in writing, a list, of the names and addresses of the
Certificateholders as of the most recent Record Date. If one or more
Certificateholders representing a Class A Percentage Interest, a Class B
Percentage Interest or a Trust Certificate Percentage Interest of not less than
25% (an "Applicant") shall apply in writing to the Trustee, and such
application shall state that the Applicant desires to communicate with other
Certificateholders with respect to its rights under this Agreement or under the
Certificates, then the Trustee shall, within five Business Days after the
receipt of such application, send such notice to the current list of
Certificateholders. Every Certificateholder, by receiving and holding a
Certificate, agrees with the Depositor, the Servicer and the Trustee that none
of the Depositor, the Servicer nor the Trustee shall be held accountable by
reason of the disclosure of any such information, regardless of the source from
which such information was derived.
Section 8.07. Acts of Certificateholders. (a) Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Agreement to be given or taken by Certificateholders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Certificateholders in person or by an agent duly appointed
in writing, and, except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to the
Trustee and where required to the Transferor or the Servicer. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and (subject to Section 11.01
hereof) conclusive in favor of the Trustee, the Transferor and the Servicer, if
made in the manner provided in this Section 8.07.
(b) The fact and date of the execution by any Certificateholder
of any such instrument or writing may be proven in any reasonable manner which
the Trustee deems sufficient.
(c) The ownership of Certificates shall be proven by the
Certificate Register.
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(d) Any request, demand, authorization, direction, notice,
consent, waiver or other act by a Certificateholder shall bind every holder of
every Certificate issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, in respect of anything done or omitted to
be done by the Trustee, the Transferor or the Servicer in reliance thereon,
whether or not notation of such action is made upon such Certificate.
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ARTICLE IX.
THE SERVICER AND THE DEPOSITOR
Section 9.01. Liability of Servicer; Indemnities. (a) The
Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Servicer herein. Such obligations
shall include the following:
(i) The Servicer shall indemnify, defend and hold
harmless the Trustee (which shall include any of its directors,
employees, officers and agents), the Trust, the Transferor, the
Certificateholders, the Depositor and the Contributor against and from
any and all costs, expenses, losses, damages, claims and liabilities
arising out of or resulting from the use, repossession or operation of
the Equipment by the Servicer or any of its Affiliates; and
(ii) The Servicer shall indemnify, defend and hold
harmless the Trustee (which shall include any of its directors,
employees, officers and agents), the Trust, the Transferor, the
Certificateholders, the Depositor and the Contributor against and from
any and all losses, expenses (including the fees and expenses of
counsel) claims, damages and liabilities to the extent that such
losses, claims, damages or liabilities arose out of, or were imposed
upon the Trustee, the Trust, the Transferor, the Certificateholders,
the Contributor, the Depositor in connection with or by reason of (i)
the failure by the Servicer to perform its duties under this Agreement
or errors or omissions of the Servicer related to such duties including
the making of any inaccurate representations or warranties hereunder;
or (ii) in the case of the Trustee, its performance of its duties
hereunder, except to the extent that such loss, expense, claim, damage
or liability resulted from the Trustee's negligence or wilful
misconduct. The indemnification provided to the Trustee pursuant to
this Article by the Servicer shall survive the payment in full of the
Certificates, the termination of the Trust, and the resignation of the
Trustee or removal of the Trustee.
(b) The Servicer shall pay any amounts owing pursuant to
Section 9.01(a) hereof directly to the indemnified Person, and such amounts
shall not be deposited in the Collection Account or the Advance Payment Account.
(c) Indemnification under this Section 9.01 shall include,
without limitation, reasonable fees and expenses of counsel and expenses of
litigation reasonably incurred. If the Servicer has made any indemnity payments
to the Trustee,
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the Trust, the Transferor, the Certificateholders, the Contributor or the
Depositor pursuant to this Section 9.01 and such party thereafter collects any
of such amounts from others, such party will promptly repay such amounts
collected to the Servicer, without interest.
Section 9.02. Merger, Consolidation, or Assumption of the
Obligations of Servicer. Any corporation (i) into which the Servicer may be
merged or consolidated, (ii) resulting from any merger or consolidation to which
the Servicer shall be a party or (iii) succeeding to the business of the
Servicer, shall be the successor to the Servicer hereunder without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding, and such corporation in
any of the foregoing cases shall execute an agreement of assumption, in a form
reasonably satisfactory to the Trustee, agreeing to perform every obligation of
the Servicer hereunder; provided, however, that the Servicer shall not merge or
consolidate with any other corporation nor discontinue its existence until the
Trustee has received confirmation from the Rating Agency that such action shall
not affect the rating of the Class A Certificates or of the Class B
Certificates, and any corporation succeeding to the business of the Servicer by
merger, consolidation or otherwise shall have a net worth of at least
$10,000,000. The Servicer shall provide prompt written notice of any such event
to the Trustee and to the Rating Agency.
Section 9.03. Limitation on Liability of Servicer and Others.
Neither the Servicer nor any of the directors or officers or employees or agents
of the Servicer shall be under any liability to the Trustee, the Trust, the
Contributor, the Transferor, the Depositor or the Certificateholders, except as
provided herein, for any action taken or for refraining from the taking of any
action pursuant to this Agreement or for errors in judgment; provided, however,
that this provision shall not protect the Servicer or any Person against any
liability that would otherwise be imposed by reason of willful misconduct, bad
faith or negligence in the performance of duties hereunder. The Servicer and any
director or officer or employee or agent of the Servicer may rely in good faith
on any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. Except as provided herein, the
Servicer shall not be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its duties to service the Transferred
Property in accordance with this Agreement and that in its opinion may involve
it in any expense or liability; provided, however, that the Servicer may take
any such non-incidental action that is reasonable and that may be necessary or
desirable in respect of this Agreement and the rights and duties of the parties
hereto and the interests of
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the Certificateholders hereunder, provided that the Servicer shall notify the
Trustee of such proposed action and the Servicer may thereafter commence such
action unless the Trustee shall have disapproved the proposed action by so
notifying the Servicer within five Business Days. In the event the Servicer
takes such action, the reasonably incurred legal expenses and costs of such
action and any liabilities resulting therefrom shall be expenses, costs and
liabilities of the Trust, and the Servicer shall be entitled to be reimbursed
therefor pursuant to Section 6.04(c)(iii) hereof.
Section 9.04. Servicer Not to Resign. Subject to the provisions
of Section 9.02 hereof, the Servicer shall not resign from the obligations and
duties hereby imposed on it as Servicer except upon determination that the
performance of its duties hereunder is no longer permissible under applicable
law. Any such determination permitting the resignation of the Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee and
to the Rating Agency. No such resignation shall become effective until a
successor Servicer shall have assumed the responsibilities and obligations of
the Servicer in accordance with Section 9.02 or Section 10.02 hereof.
Section 9.05. Liability of the Depositor. The Depositor shall
be liable for payments in respect of the Certificates in accordance herewith
only to the extent of the obligations specifically undertaken by the Depositor
herein. The Transferor shall be liable for all other obligations of the Trust.
Section 9.06. Limitation on Liability of the Depositor. The
directors, officers, employees or agents of the Depositor shall not be under any
liability to the Trust, the Trustee, the Certificateholders, the Contributor,
the Servicer, the Transferor or any other Person hereunder or pursuant to any
document delivered hereunder, it being expressly understood that all such
liability is expressly waived and released as a condition of, and as
consideration for, the Depositor's execution and delivery of this Agreement and
the issuance of the Certificates. The Depositor shall not be under any liability
to the Trust, the Trustee, the Certificateholders, the Contributor, the
Servicer, the Transferor or any other Person for any action taken or for
refraining from the taking of any action in its capacity as Depositor pursuant
to this Agreement whether arising from express or implied duties under this
Agreement; provided, however, that this provision shall not protect the
Depositor against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith, misrepresentation or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Depositor may rely in good faith on any document of any
kind
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prima facie properly executed and submitted by any other
Person respecting any matters arising hereunder.
Section 9.07. Indemnity for Liability Claims. The Holder of the
Trust Certificate on behalf of the Trust shall indemnify, defend and hold
harmless the Trustee (which shall include any of its directors, employees,
officers and agents), the Trust, the Transferor, the Certificateholders, the
Depositor and the Contributor against and from any and all costs, expenses,
losses, damages, claims and liabilities arising out of or resulting from the
use, repossession or operation of the Equipment to the extent not covered by the
Servicer's indemnity provided by Section 9.01 hereof.
Section 9.08. General Limitation of Liability. In no event
shall any indemnifying party hereunder be liable to any indemnified party for
any indirect, incidental, special or consequential damages arising out of its
representations, warranties, or agreements contained in this Agreement, even if
such party has been advised of the possibility of such damages, whether any
claim for recovery is based on theories of contract, negligence or tort
(including strict liability).
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ARTICLE X.
SERVICING TERMINATION
Section 10.01. Events of Servicing Termination. (a) If any of
the following events (each an "Event of Servicing Termination") shall occur and
be continuing:
(i) Any failure by the Servicer to deliver to the
Trustee for distribution to Certificateholders any proceeds or payments
required to be so delivered under the terms of the Certificates and
pursuant to Section 6.01 or Section 6.02 of this Agreement that
continues unremedied for a period of (A) two Business Days with respect
to Servicer Advances or (B) three Business Days with respect to all
other proceeds or payments or deposits (including Security Deposits)
required to be paid hereunder;
(ii) Any failure by the Servicer to submit a
Servicer's Certificate pursuant to Section 5.06 hereof that continues
unremedied for a period of two Business Days following receipt of
written, telecopied or telephonic (confirmed promptly in writing)
notice of such failure given to the Servicer by the Trustee;
(iii) Any failure on the part of the Servicer duly to
observe or perform in any material respect any other covenants or
agreements of the Servicer set forth in the Certificates or in this
Agreement, as the case may be, or any breach of a representation or
warranty of the Servicer set forth in Section 3.02 of this Agreement,
which failure or breach (A) materially and adversely affects the rights
of the Trustee, Certificateholders or the Depositor and (B) continues
unremedied for a period of 30 days after the earlier to occur of (x)
the date on which written notice of such failure or breach, requiring
the situation giving rise to such failure or breach to be remedied,
shall have been given to a Servicing Officer of the Servicer by the
Trustee or to a Servicing Officer of the Servicer or a Responsible
Officer of the Trustee by the Depositor or any Holder of Certificates
or (y) the date on which any Servicing Officer or Responsible Officer
of the Trustee first knows, or reasonably should have known, of such
failure or breach;
(iv) The Servicer shall consent to the appointment of
a custodian, receiver, trustee or liquidator (or other similar
official) of itself, or of a substantial part of its property, or shall
admit in writing its inability to pay its debts generally as they come
due, a court of competent jurisdiction shall determine that the
Servicer is generally not paying its
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debts as they come due or the Servicer shall make a general assignment
for the benefit of creditors;
(v) The Servicer shall file a voluntary petition in
bankruptcy or a voluntary petition or an answer seeking reorganization
in a proceeding under any bankruptcy laws (as now or hereafter in
effect) or an answer admitting the material allegation of a petition
filed against the Servicer in any such proceeding, or the Servicer
shall, by voluntary petition, answer or consent, seek relief under the
provisions of any now existing or future bankruptcy or other similar
law providing for the reorganization or winding up of debtors, or
providing for an agreement, composition, extension or adjustment with
its creditors;
(vi) An order, judgment or decree shall be entered in
any proceeding by any court of competent jurisdiction appointing,
without the consent (express or legally implied) of the Servicer, a
custodian, receiver, trustee or liquidator (or other similar official)
of the Servicer, or any substantial part of its property, or
sequestering any substantial part of its property, and any such order,
judgment or decree or appointment or sequestration shall remain in
force undismissed, unstayed or unvacated for a period of 90 days after
the date of entry thereof;
(vii) A petition against the Servicer in a proceeding
under applicable bankruptcy laws or other insolvency laws, as now or
hereafter in effect, shall be filed and shall not be stayed, withdrawn
or dismissed within 90 days thereafter, or if, under the provisions of
any law providing for reorganization or winding-up of debtors which may
apply to the Servicer, any court of competent jurisdiction shall assume
jurisdiction, custody or control of the Servicer, or any substantial
part of its property, and such jurisdiction, custody or control shall
remain in force unrelinquished, unstayed or unterminated for a period
of 90 days; or
(viii) Any assignment by the Servicer to a delegate of
its duties or rights hereunder, except as specifically permitted
hereunder, or any attempt to make such an assignment;
then, and in each and every case, so long as an Event of Servicing Termination
shall not have been remedied within any applicable period set forth above, as
applicable, the Trustee or the Majority Holders may, by notice (the "Servicer
Termination Notice") then given in writing to the Servicer, terminate all, but
not less than all, of the rights and obligations of the Servicer under this
Agreement. The Trustee
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shall furnish a copy of any Servicer Termination Notice to the Rating Agency.
(b) On and after the time the Servicer receives a Servicer
Termination Notice pursuant to this Section 10.01, all authority and power of
the Servicer under this Agreement, whether with respect to the Certificates or
the Leases or otherwise, shall pass to and be vested in the successor Servicer
appointed pursuant to Section 10.02 hereof and, without limitation, such
successor Servicer is hereby authorized and empowered to execute and deliver, on
behalf of the Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such Servicer Termination
Notice, whether to complete the transfer of the Leases and related documents or
otherwise.
The Servicer agrees to cooperate with the Trustee and the
successor Servicer in effecting the termination of the responsibilities and
rights of the Servicer hereunder, including, without limitation, the transfer to
the successor Servicer for administration by it of all cash amounts that shall
at the time be held by the Servicer for deposit, or have been deposited by the
Servicer, in the Collection Account or the Advance Payment Account or thereafter
received with respect to Leases. To assist the successor Servicer in enforcing
all rights under Insurance Policies to the extent that they relate to the
Leases, the Servicer, at its own expense, shall transfer its electronic records
relating to such Leases to the successor Servicer in such electronic form as the
successor Servicer may reasonably request and shall transfer the related Lease
Files and all other records, correspondence and documents relating to the Leases
that it may possess to the successor Servicer in the manner and at such times as
the successor Servicer shall reasonably request. In addition to any other
amounts that are then payable to the Servicer under this Agreement, the Servicer
shall be entitled to receive reimbursement for any unreimbursed Servicer
Advances made during the period prior to the delivery of a Servicer Termination
Notice pursuant to this Section 10.01.
Section 10.02. Trustee to Act; Appointment of Successor. (a) On
and after the time the Servicer receives a Servicer Termination Notice pursuant
to Section 10.01, the Trustee shall without further action be the successor in
all respects to the Servicer in its capacity as Servicer under this Agreement
and the transactions set forth or provided for herein and shall be subject to
all the responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof; provided, however, that (i) the
Trustee shall not assume any obligations of the Servicer pursuant to Article VII
hereof, (ii) the Trustee
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shall not be required to make any Servicer Advance if such Servicer Advance
would be prohibited by applicable law or if the Trustee in the exercise of its
sole discretion determines that such Servicer Advance would not be reimbursed
and (iii) the Trustee shall not be liable for any acts or omissions of the
Servicer or for any breach by either the Servicer or the Contributor of any of
its representations and warranties contained herein or in any related document
or agreement. As compensation for acting as Servicer hereunder, the Trustee
shall be entitled to the Servicer Fees, Servicing Charges and other compensation
(whether payable out of the Collection Account or otherwise) as the Servicer
would have been entitled to hereunder if no such Servicer Termination Notice had
been given.
(b) Notwithstanding the above, the Trustee may appoint, or
petition a court of competent jurisdiction to appoint, any established financial
institution reasonably acceptable to the Majority Holders, which has a net worth
of, or is a member of a consolidated group of entities which has a net worth of,
not less than $10,000,000 and whose regular business includes the servicing of
receivables of a similar nature to the Leases, as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder. The Trustee and such successor shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. The Trustee shall inform the Rating Agency of
the identity of the successor Servicer.
(c) Notwithstanding the foregoing, if (x) the Trustee is not
legally permitted to act as Servicer under any applicable law and provides to
the Depositor an Opinion of Counsel to such effect or (y) the Trustee is
unwilling so to act, then the Trustee and the Depositor collectively shall use
their best efforts to identify a successor, other than the Trustee, to the
Servicer which is willing to act as Servicer under the terms and conditions
specified herein and for a fee equal to or less than the Servicer Fee. In any
event the Trustee shall, pursuant to Section 10.01(a) hereof, act as successor
Servicer until a different successor Servicer is appointed.
Section 10.03. Notification to Certificateholders. The Servicer
shall promptly notify the Trustee of any Event of Servicing Termination upon
actual knowledge thereof by a Servicing Officer. Upon any termination of, or
appointment of a successor to, the Servicer pursuant to this Article X, the
Trustee shall give prompt written notice thereof to the Certificateholders at
their respective addresses appearing in the Certificate Register, the Depositor
and the Rating Agency.
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Section 10.04. Waiver of Past Defaults. The Majority Holders,
on behalf of all Certificateholders, may waive any default by the Servicer in
the performance of its obligations hereunder and its consequences. Upon any such
waiver of a past default, such default shall cease to exist, and any Event of
Servicing Termination arising therefrom shall be deemed to have been remedied
for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except to the
extent expressly waived.
Section 10.05. Effects of Termination of Servicer. (a) Upon the
appointment of the successor Servicer, the Servicer shall immediately remit any
Scheduled Payments, Final Lease Payments, Residual Receipts, Defaulted Residual
Receipts or Overdue Payments that it may receive pursuant to any Lease or
otherwise to the successor Servicer for the benefit of the Trust after such date
of appointment.
(b) After the delivery of a Servicer Termination Notice, the
former Servicer shall have no further obligations with respect to the management
or servicing of the Transferred Property or the enforcement, custody or
collection of the Leases, and the successor Servicer shall have all of such
obligations, except that the former Servicer will transmit or cause to be
transmitted directly to the successor Servicer for the benefit of the Trust,
promptly upon receipt and in the same form in which received, any amounts held
by the former Servicer (properly endorsed where required for the successor
Servicer to collect them) received as payments upon or otherwise in connection
with the Leases. The former Servicer's indemnification obligations pursuant to
Section 9.04 hereof will survive the termination of the Servicer hereunder but
will not extend to any acts or omissions of a successor Servicer.
(c) Notwithstanding Section 10.05(b) hereof, the Servicer
hereby agrees that in the event that it no longer continues to perform as
Servicer hereunder, the Servicer will instruct the Contributor pursuant to the
Contribution Agreement to exercise any rights under any Lease or guaranty
thereof or Insurance Policy for the benefit of the Trustee, the Trust and the
Certificateholders upon the request of the Trustee.
(d) An Event of Servicing Termination shall not affect the
rights and duties of the parties hereunder (including, but not limited to, the
obligations and indemnities of the Servicer pursuant to Article VII, 9.01 and
11.08 hereof) other than those relating to the management, servicing, custody or
collection of the Leases.
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ARTICLE XI.
THE TRUSTEE
Section 11.01. Duties of Trustee. (a) The Trustee undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. If an Event of Servicing Termination of which a Responsible Officer
of the Trustee shall have actual knowledge has occurred and has not been cured
or waived, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent Person would exercise or use under the circumstances in the conduct
of such Person's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform as to form to the requirements of this Agreement. No acceptance of, or
reliance on, any such item by the Trustee shall constitute a representation by
the Trustee of the enforceability or sufficiency of such item.
(c) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Servicing
Termination, and after the curing of all such Events of Servicing
Termination that may have occurred, the duties and obligations of the
Trustee shall be determined solely by the express provisions of this
Agreement; the Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth in this
Agreement; no implied covenants or obligations shall be read into this
Agreement against the Trustee; and in the absence of bad faith on the
part of the Trustee, the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee
and, if specifically required to be furnished pursuant to any provision
of this Agreement, conforming to the requirements of this Agreement;
(ii) The Trustee shall not be liable for an error of
judgment made in good faith by a Responsible Officer of the Trustee
unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
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(iii) The Trustee shall not be liable with respect to
any action taken, suffered or omitted to be taken by it in good faith
in accordance with this Agreement, pursuant to the direction of the
Certificates evidencing Percentage Interests in the related Class of
not less than 25%, relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising,
suffering or omitting to take any trust or power conferred upon the
Trustee, under this Agreement; and
(iv) The Trustee shall not be charged with knowledge
of any failure by the Servicer to comply with the obligations of the
Servicer referred to in Section 10.01(a)(i) hereof or any other Event
of Servicing Termination unless a Responsible Officer of the Trustee
obtains actual knowledge of such failure or the Trustee receives
written notice of such failure from the Servicer, the Depositor or any
Certificateholder.
(d) The Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Servicer under this Agreement except during such time,
if any, as the Trustee shall be the successor to, and be vested with the rights,
duties, powers and privileges of, the Servicer in accordance with the terms of
this Agreement.
(e) On each Determination Date, the Trustee shall give notice,
by telecopy, to a Servicing Officer of the Servicer if the total amount then on
deposit in the Collection Account is less than the amount indicated in the
Servicer's Certificate.
Section 11.02. Eligible Investments. The Servicer shall direct
the Trustee to invest in Eligible Investments, as further specified from time to
time by written notice to the Trustee executed by a Servicing Officer, any cash
amounts deposited in the Collection Account and the Advance Payment Account
pursuant to the terms of this Agreement, immediately upon deposit of any such
cash amounts; provided, however, that each such Eligible Investment (i) shall
mature no later than the Business Day immediately preceding the Payment Date in
respect of the Collection Period during which such deposit was made and (ii)
shall not be sold or disposed of prior to its maturity. The Trustee shall not be
liable or responsible for
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losses on any investments made by it pursuant to and in compliance with such
instructions of the Servicer pursuant to this Section 11.02.
Section 11.03. Trustee's Assignment of Leases. If in any
enforcement suit or legal proceeding it is held, or in connection with the
collection of a Defaulted Lease the Servicer or its assigns reasonably
anticipate, that the Servicer or its assigns may not or will not be able to
enforce a Lease on the ground that neither the Servicer nor its assigns are a
real party in interest or a holder entitled to enforce the Lease, then the
Trustee shall, at the Servicer's or its assigns' expense, take such steps as the
Trustee deems necessary to enforce the Lease, including (i) bringing suit in the
Trustee's name or the names of the Certificateholders and (ii) executing and
delivering all such instruments or documents as shall be required to transfer
title to a Lease to the Servicer or its assigns or otherwise enforce such Lease.
Section 11.04. Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 11.01:
(i) The Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, officer's
certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(ii) The Trustee may consult with counsel and any
Opinion of Counsel or advice shall constitute full and complete
authorization and protection in respect of any action taken or suffered
or omitted by it hereunder in good faith and in accordance with such
Opinion of Counsel or advice;
(iii) The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement, or
to institute, conduct or defend any litigation hereunder or in relation
hereto, at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement unless
such Certificateholders shall have offered to the Trustee security or
indemnity against the costs, expenses, and liabilities that may be
incurred therein or thereby that are reasonable in the opinion of the
Trustee; provided, however, that nothing contained herein shall relieve
the Trustee of the obligations, upon the occurrence of an Event of
Servicing Termination (that has not been cured), to exercise such of
the rights and powers vested in it by this Agreement and to use the
same
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degree of skill and care in their exercise as a prudent Person
would exercise under the circumstances in the conduct of such Person's
own affairs;
(iv) The Trustee shall not be personally liable for
any action taken, suffered or omitted by it in good faith and believed
by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(v) Prior to the occurrence of an Event of Servicing
Termination of which a Responsible Officer of the Trustee shall have
actual knowledge and after the curing of all Events of Servicing
Termination that may have occurred, the Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or
document, unless requested in writing to do so by Holders of Applicable
Certificates evidencing Percentage Interests of not less than 25%;
provided, however, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded
to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such cost, expense or liability as a
condition to so proceeding. The reasonable expense of every such
examination shall be paid by the requesting party or, if paid by the
Trustee, shall be reimbursed by the Servicer upon demand. Nothing in
this clause (v) shall derogate from the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information
regarding the Users; and
(vi) The Trustee may execute any of the trusts or
powers or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian. The Trustee shall not be
responsible for the misconduct or negligence of any of the Trustee's
agents or attorneys appointed with due care by the Trustee hereunder or
that of the Contributor, the Servicer, the Depositor or the Transferor.
Section 11.05. Trustee Not Liable for Certificates or
Leases. The Certificates do not represent an obligation issued by Bankers
Trust Company or any Affiliate thereof. The promise to pay the Certificates
according to their terms and the terms of this Agreement set forth in the
Certificates and in Section 2.05 hereof provides recourse to the Trust Property
only. The Trustee does not assume any responsibility for the accuracy of the
statements herein or in the Certificates
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(other than the certificate of authentication on the Certificates). The Trustee
makes no representations as to the validity or sufficiency of this Agreement or
of the Certificates (other than the certificate of authentication on the
Certificates) or of any Lease or related document. The Trustee shall at no time
have any responsibility or liability for or with respect to the legality,
validity or enforceability of any security interest in any Equipment or any
Lease, to the perfection or priority thereof, or to the efficacy of the Trust or
any portion thereof to pay any Certificate, the existence or validity of any
Lease, the validity of the assignment of any Lease or the related Transferred
Property to the Trust or of any intervening assignment, the review of any Lease,
any Lease File or the Computer Tape (it being understood that neither the
Trustee nor any of its agents have reviewed or intend to review such matters,
the sole responsibility for such review being vested in the Transferor), the
completeness of any Lease File, the receipt by it or its custodian of any Lease,
the performance or enforcement of any Lease, subject to Section 5.01(b) hereof,
the compliance by the Depositor with any covenant or the breach by the
Contributor, the Depositor, the Transferor of any warranty or representation
made hereunder, under the Contribution Agreement, the Receivables Transfer
Agreement or in any related document or the accuracy of any such warranty or
representation, any investment of monies in the Collection Account or the
Advance Payment Account (except to the extent that the Trustee, in its
individual capacity, is an obligor with respect to any such investment) or any
loss resulting therefrom, the acts or omissions of the Servicer, or any User,
any action of the Servicer taken in the name of the Trustee, any action by the
Trustee taken at the instruction of the Servicer or the preparation and filing
of tax returns for the Trust. No recourse shall be had for any claim based on
any provision of this Agreement, the Certificates or any Lease or assignment
thereof against Bankers Trust Company in its individual capacity, and Bankers
Trust Company shall not have any personal obligation, liability or duty
whatsoever to any Certificateholder or any other Person with respect to any such
claim, and any such claim shall be asserted solely against the Trust or any
indemnitor who shall furnish indemnity as provided herein, except for such
liability as is determined to have resulted from its own negligence or willful
misconduct. The Trustee shall not be accountable for the use or application by
the Contributor, the Depositor or the Transferor of any of the Certificates or
of the proceeds of such Certificates or for the use or application of any funds
paid to the Servicer in respect of the Leases.
Section 11.06. Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it
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would have if it were not Trustee, subject to the definition of the term
"Certificateholder" in Section 1.01 hereof.
Section 11.07. Trustee's Fees and Expenses. (a) The Servicer on
behalf of the Holder of the Trust Certificate agrees:
(i) to pay to the Trustee from time to time
reasonable compensation for all services rendered by it hereunder
(which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(ii) except to the extent otherwise expressly provided
herein, to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Agreement (including the
reasonable compensation and expenses and disbursements of any of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(iii) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred, except to
the extent that such loss, liability or expense was incurred through
negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of this Trust and the performance
of its duties hereunder, including the costs and expenses of defending
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
(b) The Servicer's obligations under this Section 11.07 shall
survive the termination of this Agreement. The Trustee shall not be entitled to
any other or additional compensation or reimbursement, except as expressly
provided herein or as otherwise agreed from time to time.
(c) Subject to Section 11.09, the failure by the Servicer to
pay to the Trustee any compensation or other expenses shall not relieve the
Trustee of its obligations hereunder.
Section 11.08. Eligibility Requirements for Trustee. The
Trustee hereunder shall at all times be a corporation having its principal
office in a State, organized and doing business under the laws of any State or
the United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by Federal or State authority; provided,
however,
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that no entity shall qualify as Trustee hereunder to the extent that such
qualification would, in itself, affect any then current rating of the Class A or
Class B Certificates by the Rating Agency. If such corporation publishes reports
of condition at least annually, pursuant to law or the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section 11.08, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. Any successor Trustee's deposit ratings shall
be at least "investment grade" by the Rating Agency, or if such deposits are not
rated by the Rating Agency, then "investment grade" by Moody's and S&P. In case
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 11.08, the Trustee shall resign immediately in the
manner and with the effect specified in Section 11.09 hereof.
Section 11.09. Resignation or Removal of Trustee. (a) The
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Servicer, the Depositor and each
Certificateholder. Upon receiving such notice of resignation, the Servicer shall
promptly appoint a successor Trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor Trustee. If no successor Trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 11.08 and shall fail to resign after
written request therefor by the Servicer, the Holders of Applicable Certificates
evidencing Percentage Interests of more than 25%, or if at any time the Trustee
shall be legally unable to act, or shall be adjudged a bankrupt or insolvent, or
a receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation, or liquidation, then
the Servicer, or Holders of Applicable Certificates evidencing Percentage
Interests of more than 25% of the related Class may remove the Trustee. If the
Servicer or Certificateholders remove the Trustee, the Servicer or such
Certificateholders shall promptly appoint a successor Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor Trustee.
(c) Any resignation or removal of the Trustee and appointment
of a successor Trustee pursuant to this Section
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11.10 shall not become effective until acceptance of appointment by the
successor Trustee as provided in Section 11.11 hereof. Notice of the resignation
or removal of the Trustee shall be given in writing to the Rating Agency.
Section 11.10. Successor Trustee. (a) Any successor Trustee
appointed as provided in Section 11.09 hereof shall execute, acknowledge and
deliver to the Servicer, the Depositor and predecessor Trustee an instrument
accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
like effect as if originally named as Trustee. The predecessor Trustee shall
deliver to the successor Trustee all documents and statements held by it
hereunder. The Servicer, the Depositor and the predecessor Trustee shall execute
and deliver such instruments and do such other things as may reasonably be
required for fully and certainly vesting and confirming in the successor Trustee
all such rights, powers, duties and obligations.
(b) No successor Trustee shall accept appointment as provided
in this Section 11.10 unless at the time of such acceptance such successor
Trustee shall be eligible as the Trustee under the provisions of Section 11.08
hereof, and as a successor Servicer under the provisions of Section 10.02
hereof.
(c) Upon acceptance of appointment by a successor Trustee as
provided in this Section 11.10, the Servicer shall mail notice of the succession
of such Trustee hereunder to all Certificateholders at their addresses as shown
in the Certificate Register. If the Servicer fails to mail such notice within 10
days after acceptance of appointment by such successor Trustee, then the
successor Trustee shall cause such notice to be mailed at the expense of the
Servicer.
Section 11.11. Merger or Consolidation of Trustee. Any
corporation into which the Trustee may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion,
or consolidation to which the Trustee shall be a party, or any corporation
succeeding to the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation shall be eligible
under the provisions of Section 11.08 hereof, without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
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Section 11.12. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or any Equipment may at the time be located, the Servicer, the
Depositor and the Trustee, acting jointly, shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust, or any part thereof, and, subject
to the other provisions of this Section 11.12, such powers, duties, obligations,
rights and trusts as the Servicer, the Depositor and the Trustee may consider
necessary or desirable. If the Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, or in
the case an Event of Servicing Termination shall have occurred and be
continuing, the Trustee and Depositor, acting jointly, shall have the power to
make such appointment; provided, however, that if the Depositor shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor Trustee under Section 11.08 hereof, and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 11.10 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) All rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Trustee joining in such act), except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be
performed (whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Property or
any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee but solely at
the direction of the Trustee;
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(ii) No trustee hereunder shall be personally liable
by reason of any act or omission of any other trustee hereunder; and
(iii) The Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article XI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Servicer and the Depositor.
(d) Any separate trustee or co-trustee may at any time
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, then
all of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
(e) The Trustee shall be responsible for the payment of any
fees or expenses of any separate trustee or co-trustee.
Section 11.13. Trustee May Enforce Claims Without Possession of
Certificate. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name or in its capacity as Trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Certificateholders in respect of which such
judgment has been recovered.
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Section 11.14. Suits for Enforcement. In case an Event of
Servicing Termination as defined in Section 10.01 hereof or other default by the
Servicer or the Transferor hereunder shall occur and be continuing, the Trustee,
in its discretion, may, subject to the provisions of Section 10.04 hereof,
proceed to protect and enforce its rights and the rights of the
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Agreement or in aid of the execution of
any power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy, as the Trustee, being advised by counsel, shall deem
most effectual to protect and enforce any of the rights of the Trustee or the
Certificateholders.
Section 11.15. Representations and Warranties of Trustee. The
Trustee represents and warrants that:
(a) Organization and Good Standing. The Trustee is a New York
banking corporation duly organized, validly existing and in good standing under
the laws of the state of New York.
(b) Authorization. The Trustee has the power, authority and
legal right to execute, deliver and perform this Agreement, and the execution,
delivery and performance of this Agreement have been duly authorized by the
Trustee by all necessary corporate action.
(c) Binding Obligations. This Agreement, assuming due
authorization, execution and delivery by all other parties thereto, constitutes
the legal, valid and binding obligation of the Trustee, enforceable against the
Trustee in accordance with its terms, except that (i) 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 the rights of trust companies in
particular and (ii) 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.
(d) No Proceedings. There are no proceedings or investigations
to which the Trustee, or any of the Trustee's Affiliates, is a party pending,
or, to the best of Trustee's knowledge, threatened, before any court, regulatory
body, administrative agency or other tribunal or governmental instrumentality
(A) asserting the invalidity of this Agreement or the Certificates, (B) seeking
to prevent the issuance of the Certificates or the consummation of any of the
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transactions contemplated by this Agreement or (C) seeking any determination or
ruling that would materially and adversely affect the performance by the Trustee
of its obligations under, or the validity or enforceability of, this Agreement
or the Certificates.
(e) Successor Servicer. As of the Closing Date, there exist no
impediments, legal or otherwise, to the Trustee serving as successor Servicer
hereunder.
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ARTICLE XII.
TERMINATION
Section 12.01. Termination of the Trust. The respective
obligations and responsibilities of the Contributor, the Servicer, the
Transferor, the Trustee, the Depositor and the Trust created hereby shall
terminate (i) at the option of the Holder of the Trust Certificate, at any time
which is 123 days after the payment to Certificateholders of all amounts
required to be paid to them pursuant to this Agreement, reducing the Class A
Certificate Principal Balance, the Class B Certificate Principal Balance and the
Trust Certificate Principal Balance to zero or (ii) after the 60th day following
the Expected Final Payment Date (which date shall be February 25, 2003), if on
such 60th day, the Class A Certificate Principal Balance and the Class B
Certificate Principal Balance have not been reduced to zero; provided, however,
that in no event shall the trust created hereby continue beyond the expiration
of 21 years from the death of the last survivor of the descendants living on the
date of this Agreement of Michael Jordan, of the State of North Carolina.
Notwithstanding the foregoing, the representations and warranties and
indemnification obligations of the Contributor, the Servicer and the Transferor
hereunder and under the Contribution Agreement and the Receivables Transfer
Agreement shall survive the termination of the Trust and of this Agreement. Upon
termination of the Trust, the Trustee shall release any remaining Trust Property
to the Holders of the Trust Certificate but not if the Class A Certificate
Principal Balance and Class B Certificate Principal Balance have not been
reduced to zero.
Section 12.02. Optional Removal of All Transferred Property;
Final Disposition of Funds. (a) On any Payment Date following any Calculation
Date as of which the aggregate Class A Certificate Principal Balance and the
Class B Certificate Principal Balance is less than ten percent (10.00%) of the
aggregate Initial Class A Certificate Principal Amount and the Initial Class B
Certificate Principal Amount (an "Optional Removal Date"), the Holders of the
Trust Certificate shall have the option to cause the retirement of the
Certificates by depositing with the Trustee the sum of (i) the Class A
Certificate Principal Balance and the Class B Certificate Principal Balance as
of such Payment Date (after giving effect to the payment of any principal on
such Payment Date), (ii) the Class A and Class B Certificate Interest due on
such Payment Date and (iii) the amount, if any, of all Class A Overdue Principal
and all Class B Overdue Principal and all Class A Overdue Interest and all Class
B Overdue Interest. Upon receipt of such amounts and all amounts then owed to
the Trustee the Trustee shall (x) make the final payment in full
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to the Certificateholders and (y) release any remaining Trust Property to the
Holders of the Trust Certificate.
(b) Notice of any termination pursuant to this Section 12.02
shall be given promptly by the Trustee, by letter to Certificateholders mailed
not earlier than the 10th day and not later than the 20th day of the month
immediately preceding the month of such final Payment Date specifying (i) the
Payment Date upon which final payment of the Certificates will be made, (ii) the
scheduled amount of any such final payment, (iii) that interest shall cease to
accrue on the Class A and Class B Certificates on such final Payment Date and
(iv) the address for presentation of the Certificates for final payment. On such
final Payment Date, the Trustee shall cause to be distributed to
Certificateholders an amount equal to (x) the amount otherwise distributable to
the Certificateholders on such Payment Date but for such purchase pursuant to
this Section 12.02 and (y) each Class A and Class B Certificateholder's pro rata
share (based on the aggregate related Certificate Percentage) of the Class A or
Class B Certificate Principal Balance deposited by the Holders of the Trust
Certificate into the Collection Account pursuant to this Section 12.02. After
such Payment Date, interest on the Class A and Class B Certificates shall cease
to accrue.
(c) The final payment on any Certificate shall only be made
upon the presentation of such Certificate to the Trustee at the office specified
in the notice described in paragraph (b) above.
In the event that any amount due to any Certificateholder
remains unclaimed, the Servicer shall, at its expense, cause to be published
once, in the eastern edition of The Wall Street Journal, notice that such money
remains unclaimed. If, within the period then specified in the escheat laws of
the State of New York after such publication, such amount remains unclaimed, the
Servicer shall be entitled to all unclaimed funds and other assets which remain
subject hereto, and the Trustee upon transfer of such funds shall be discharged
of any responsibility for such funds and, the Certificateholders shall look to
the Servicer for payment.
Section 12.03. Termination Upon Liquidation of Transferor. (a)
Upon a Transferor Liquidation (as defined below), the trust shall terminate, and
the assets thereof shall be sold as and to the extent necessary to fund the
payment in cash to the Certificateholders of the Class A Certificate Principal
Balance then outstanding, any Overdue Principal and all Interest and Overdue
Interest due thereon, the Class B Certificate Principal Balance then
outstanding, any Overdue Principal and all Interest and Overdue Interest due
thereon, any amounts owed to the Trustee, and the
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remaining assets of the Trust shall be distributed to the Transferor.
(b) A "Transferor Liquidation" shall occur when:
(i) Transferor shall consent to the appointment of a
custodian, receiver, trustee or liquidator (or other similar official)
of itself, or of a substantial part of its property, or shall admit in
writing its inability to pay its debts generally as they come due, or a
court of competent jurisdiction shall determine that the Transferor is
generally not paying its debts as they come due, or the Transferor
shall make a general assignment of the benefit of creditors;
(ii) Transferor shall file a voluntary petition in
bankruptcy or a voluntary petition or an answer seeking reorganization
in a proceeding under any bankruptcy laws (as now or hereafter in
effect) or an answer admitting the material allegation of a petition
filed against the Transferor in any such proceeding, or the Transferor
shall, by voluntary petition, answer or consent, seek relief under the
provisions of any now existing or future bankruptcy or other similar
law providing for the reorganization or winding-up of debtors, or
providing for an agreement, composition, extension or adjustment with
its creditors;
(iii) an order, judgment or decree shall be entered in
any proceeding by any court of competent jurisdiction appointing,
without the consent (express or legally implied) of the Transferor, a
custodian, receiver, trustee or liquidator (or other similar official)
of the Transferor, or any substantial part of its property, or
sequestering any substantial part of its property, and any such order,
judgment or decree or appointment or sequestration shall remain in
force undismissed, unstayed or unvacated for a period of 90 days after
the date of entry thereof; or
(iv) a petition against the Transferor in a proceeding
under applicable bankruptcy laws or other insolvency laws, as now or
hereafter in effect, shall be filed and shall not be stayed, withdrawn
or dismissed within 90 days thereafter, or if, under the provisions of
any law providing for reorganization or winding-up of debtors which may
apply to the Transferor, any court of competent jurisdiction shall
assume jurisdiction, custody or control of the Transferor, or any
substantial part of its property, and such jurisdiction, custody or
control shall remain in force unrelinquished, unstayed or unterminated
for a period of 90 days.
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(c) The Transferor shall give prompt written notice to the
Trustee, the Servicer and the Rating Agency of the occurrence of any event
constituting a Transferor Liquidation. The Trustee shall give prompt written
notice of such Transferor Liquidation event to each Certificateholder.
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ARTICLE XIII.
MISCELLANEOUS PROVISIONS
Section 13.01. Amendment. (a) This Agreement may be amended
from time to time by the Servicer, the Depositor and the Trustee, without the
consent of any of the Certificateholders, to cure any ambiguity herein;
provided, however, that such action shall not, as evidenced by an Opinion of
Counsel acceptable to the Trustee and at the expense of the Transferor,
adversely affect in any respect the interests of any Certificateholder.
(b) This Agreement may also be amended from time to time by the
Servicer, the Depositor and the Trustee with the consent of the Holders of
Certificates of each Class evidencing at least 50% in Percentage Interest in
such Class for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Certificateholders; provided, however, that no such
amendment shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on Leases or
distributions that are required to be made on any Certificate without the
consent of the Holder of such Certificate or (ii) reduce the aforesaid
percentage required to consent to any such amendment, without the consent of the
Holders of all Certificates then outstanding.
(c) Prior to the effectiveness of any amendment under Section
13.01(a) or (b), the Rating Agency shall have confirmed the respective rating of
the Certificates.
(d) Promptly after the execution of any such amendment, the
Trustee shall furnish written notification of the text of such amendment (and
any consent required with respect thereto) to each Certificateholder and the
Rating Agency.
(e) Approval of the particular form of any proposed amendment
or consent shall not be necessary for the consent of the Certificateholders
under Section 13.01(b), but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by the Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe.
Section 13.02. Limitation on Rights of Certificateholders. (a)
The death or incapacity of any Certificateholder shall not operate to terminate
this Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to
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take any action or commence any proceeding in any court for a partition or
winding up of the Trust, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
(b) No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of default and of the continuance thereof, as hereinbefore
provided, and unless also the Holders of Certificates of the Applicable Class
evidencing an aggregate Percentage Interest of not less than 25% in such class
shall have made written request upon the Trustee to institute such action, suit
or proceeding in the name of the Certificateholders and shall have offered to
the Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the Trustee, for
30 days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding.
(c) The Majority Holders may direct the time, method and place
of conducting any proceeding for any remedy with respect to the Certificates or
exercising any trust or power conferred on the Trustee with respect to such
Certificates; provided, however, that:
(1) such direction shall not be in conflict with any rule or
law or with this Agreement;
(2) the Trustee shall have been provided with indemnity
satisfactory to it; and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction; provided,
however, that the Trustee need not take any action which it determines
might involve it in liability or may be unjustly prejudicial to the
Certificateholders not so directing.
(d) It is understood and intended, and expressly covenanted by
each Certificateholder with every other Certificateholder and the Trustee, that
no one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of this
Agreement to affect, disturb or prejudice the rights of the Holders of any other
of the Certificates, to obtain or seek to obtain priority over or preference to
any other Holder of the same class of Certificates or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all
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Certificateholders of the same class. For the protection and enforcement of the
provisions of this Section 13.02, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 13.03. Counterparts. For the purpose of facilitating
the execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
Section 13.04. 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 regard to the conflict of laws provisions of
any State.
Section 13.05. Notices. All demands, notices and communications
(other than periodic communications of a routine nature made in connection with
the dissemination of information regarding the Transferred Property, the
Servicer and the Trust required to be delivered hereunder, which shall be
delivered or mailed by first class mail) hereunder shall be in writing,
personally delivered or mailed by overnight courier, and shall be deemed to have
been duly given upon receipt (a) in the case of the Servicer, at 2401 Kerner
Boulevard, San Rafael, California, 94901-5527, Attention: Chief Financial
Officer, telephone 415-485-4500, telecopy 415-485-4506, (b) in the case of the
Depositor, at 130 John Street, New York, New York 10038, Attention: General
Counsel, telephone 212-214-6931, telecopy 212-214-6789, (c) in the case of the
Trustee, at Four Albany Street, New York, New York 10006, Attention: Corporate
Trust and Agency Group, telephone 212-250-6137, telecopy 212-250-6439 and (d) in
the case of the Rating Agency, at 55 East Monroe Street, Chicago, Illinois
60603, telephone 312-263-2619, telecopy 312-263-2852. Any notice required or
permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the Certificate
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given on the fifth Business Day
following mailing, whether or not the Certificateholder receives such notice.
Section 13.06. 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 the remaining covenants,
agreements, provisions or terms of this Agreement and shall in
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no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 13.07. Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Sections 9.02 hereof, this
Agreement may not be assigned by the Servicer except with prior written consent
of the Depositor and of the Holders of the Certificates of the Applicable Class
evidencing Percentage Interests of not less than 66-2/3%. Notice of any such
assignment received by a Responsible Officer of the Trustee shall be given to
the Rating Agency by the Trustee.
Section 13.08. Binding Effect. This Agreement shall inure to
the benefit of, and shall be binding upon the Servicer, the Depositor, the
Trustee and the Certificateholders and their respective successors and permitted
assigns, subject, however, to the limitations contained in this Agreement. This
Agreement shall not inure to the benefit of any Person other than the Depositor,
the Servicer, the Trustee and the Certificateholders.
Section 13.09. Survival of Agreement. All covenants,
agreements, representations and warranties made herein and in the other
documents delivered pursuant hereto shall survive the sale of the Transferred
Property and the issuance of the Certificates and shall continue in full force
and effect until terminated pursuant to Section 12.01 hereof.
Section 13.10. Captions. The captions or headings in this
Agreement are for convenience only and in no way define, limit or describe the
scope or intent of any provisions or sections of this Agreement.
Section 13.11. Exhibits. The exhibits to this Agreement are
hereby incorporated herein and made a part hereof and are an integral part of
this Agreement.
Section 13.12. Calculations. Except as otherwise provided in
this Agreement, all interest rate calculations under this Agreement, including
those with respect to the Leases, will be made on the basis of a 360-day year
and twelve 30-day months and will be carried out to at least seven decimal
places. All payments on the Certificates and the Leases shall be calculated on
the Actuarial Method.
Section 13.13. 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
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plural as well as the singular, and the use of any gender herein shall be deemed
to include the other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles 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.
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IN WITNESS WHEREOF, the Servicer, the Depositor and the Trustee
have caused this Agreement to be duly executed by their respective officers, all
as of the day and year first above written.
PHOENIX LEASING INCORPORATED,
as Servicer
By: /s/ Paritosh K. Choksi
-----------------------------
Name: Paritosh K. Choksi
Title: Senior Vice President
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION,
as Depositor
By: /s/ Valerie H. Kay
-----------------------------
Name: Valerie H. Kay
Title: Vice President
BANKERS TRUST COMPANY,
as Trustee
By: /s/ Louis Bodi
-----------------------------
Name: Louis Bodi
Title: Assistant Vice President
<PAGE> 102
EXHIBIT A
FORM OF CLASS A CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC") TO ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
PSSFC EQUIPMENT LEASE TRUST 1995-1
6.85% EQUIPMENT LEASE-BACKED CERTIFICATE, CLASS A
evidencing a Class A Percentage Interest in a Trust, the property of
which includes a pool of equipment, the related equipment leases and
other property appurtenant thereto conveyed to the Trust by Prudential
Securities Secured Financing Corporation ("PSSFC").
Principal in respect of this Class A Certificate is payable monthly as
set forth herein, after an initial interest-only period which is
scheduled to end on the December 1996 Payment Date, but which may end
earlier if a Required Amortization Event occurs earlier. Accordingly,
the unpaid principal balance of the Class A Percentage Interest
evidenced hereby may be less than the initial principal amount set
forth below.
This Class A Certificate does not represent any interest in or
obligation of PSSFC, Phoenix Leasing Incorporated, or any Affiliate of
any of them. Neither the Class A Certificates nor the Leases are
insured by any governmental agency.
CUSIP: 693932AD7
Class A
Certificate $21,423,000 Initial Percentage
No. A-1 Principal Amount Interest: 100%
THIS CERTIFIES THAT CEDE & CO. is the registered owner of a
$21,423,000 (Twenty-One Million, Four-Hundred Twenty-Three Thousand Dollars)
nonassessable, fully-paid, 100% Class A Percentage Interest in the Class A
Certificates issued by PSSFC Equipment Trust 1995-1 (the "Trust") formed by
PSSFC. The Trust hereby agrees to pay to such registered holder its pro rata
share (based on the aggregate Class A Percentage
<PAGE> 103
Interest held by such registered Holder) of the amounts which all Holders of
the Class A Certificates are entitled to receive, as hereinafter set forth in
this Class A Certificate and as more fully set forth in the Agreement (defined
below), at all times from the sources and on the terms and conditions
hereinafter set forth and as more fully set forth in the Agreement.
The property of the Trust includes a pool of equipment finance
leases, installment sale contracts and loan contracts (the "Leases"), the
equipment financed or leased thereby, if any, (the "Equipment"), all Scheduled
Lease Payments, Final Lease Payments, Residual Receipts, Defaulted Residual
Receipts and other monies due thereunder after November 1, 1995 (the "Cut-Off
Date"), and other property. The Trust was created pursuant to the Pooling and
Servicing Agreement (the "Agreement"), dated as of November 1, 1995, by and
among PSSFC, Phoenix Leasing Incorporated, as Servicer, and Bankers Trust
Company, as trustee of the Trust (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Agreement.
This Class A Certificate is one of the duly authorized Class A
Certificates designated as "6.85% Equipment Lease Backed Certificates of PSSFC
Equipment Lease Trust 1995-1, Class A" (the "Class A Certificates"). This
Class A Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class A
Certificate, by virtue of the acceptance hereof, assents and by which such
Holder is bound.
- --------------------------------------------------------------------------------
IN WITNESS WHEREOF, the Trust has caused this Class A
Certificate to be duly executed.
PSSFC EQUIPMENT LEASE TRUST 1995-1
By: BANKERS TRUST COMPANY, not in its
individual capacity, but solely as
Trustee
Dated: November 30, 1995
By: _________________________________
A-2
<PAGE> 104
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates of the Series designated herein, issued
under the within-mentioned Pooling and Servicing Agreement.
BANKERS TRUST COMPANY, not in its
individual capacity but solely as Trustee
By:___________________________________
________________________________________________________________________________
This Class A Certificate does not purport to summarize the
Agreement and reference is made to the Agreement for information with respect
to the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and immunities of the Trustee. Copies of the
Agreement and all amendments thereto will be provided to any Class A
Certificateholder, at its expense, upon a written request to the Trustee:
Bankers Trust Company, Four Albany Street, New York, New York 10006, Attention:
Corporate Trust.
Under the Agreement, the Trust is obligated to pay, to the
extent that monies are available in the Collection Account for such
distributions, on the 25th day of each month or, if such 25th day is not a
Business Day, the Business Day immediately following (the "Payment Date"),
commencing in December 1995, to the person in whose name this Class A
Certificate is registered and at the address specified in the Certificate
Register at the close of business on the Record Date, an amount from certain
monies deposited in the Collection Account with respect to the related
Collection Period equal to the product of the Class A Percentage Interest
evidenced by this Class A Certificate and an amount equal to the sum of (i) the
Class A Certificate Interest and (ii) on and after the Payment date which is
also the Initial Amortization Date, but not prior thereto, the sum of (A) Class
A Base Principal Distribution Amount and (b) one-half of the residual Receipts
received by the Servicer during the prior Collection Period. The Initial
Amortization Date is the earlier to occur of (x) the Payment Date occurring in
December 1996 and (y) the Payment Date which immediately follows the Required
Amortization Event. The final payment of principal and interest on this Class
A Certificate will not be later than the February 25, 2004 Payment Date.
Payments on this Class A Certificate will be made by the
Trustee by check mailed, or upon request of the Holder hereof, by wire transfer
of immediately available funds, to the Person entitled thereto, as specified by
such Person in
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accordance with the terms of the Agreement or by such other means as the Person
entitled thereto and the Trustee shall agree, without the presentation or
surrender of this Class A Certificate or the making of any notation hereon.
The Holder hereof, by its acceptance of this Class A
Certificate, agrees to look solely to the funds in the Collection Account to
the extent available for payment to the Holder hereof as provided in the
Agreement for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Holder hereof for any amounts due under this
Class A Certificate or the Agreement.
The Class A Certificates do not represent an obligation of, or
an interest in, the Trustee or any Affiliate thereof. The Class A Certificates
are limited in right of payment to certain collections and recoveries
respecting the Leases, all or more specifically set forth above in the
Agreement. Pursuant to the Agreement, the Trust shall, in addition to the
Class A Certificates, issue Class B Certificates and the Trust Certificate.
THE RIGHT TO RECEIVE PAYMENTS WITH RESPECT TO THE CLASS B CERTIFICATES AND THE
TRUST CERTIFICATE IS SUBORDINATE TO THE PRIOR PAYMENT IN FULL OF ALL AMOUNTS OF
PRINCIPAL AND INTEREST DUE AND PAYABLE ON THE CLASS A CERTIFICATES ON EACH
PAYMENT DATE.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of PSSFC and the Servicer and the rights of the Class A
Certificateholders under the Agreement at any time by the Servicer, PSSFC and
the Trustee with, for so long as the Class A Certificates remain outstanding,
the consent of Class A Certificateholders owning Class A Certificates
representing an aggregate Class A Percentage Interest of not less than 50%.
Any such consent by the Holder of this Class A Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Class A
Certificate and of any Class A Certificate issued upon the transfer hereof or
in exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Class A Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Class A
Certificateholders.
As provided in the Agreement, the transfer of this Class A
Certificate is registrable in the Certificate Register upon surrender of this
Class A Certificate for registration of transfer at the offices or agencies
maintained by the Trustee accompanied by a written instrument of transfer in
form satisfactory to the Trustee duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Class A Certificates of authorized denominations evidencing the same aggregate
Class A Percentage
A-4
<PAGE> 106
Interest in the Trust will be issued to the designated transferee or
transferees.
The Class A Certificates are issuable only as registered Class
A Certificates without coupons in minimum denominations of $1,000 of the
Initial Class A Certificate Principal Amount. As provided in the Agreement and
subject to certain limitations therein set forth, Class A Certificates are
exchangeable for new Class A Certificates of authorized denominations
evidencing the same aggregate Class A Percentage Interest, as requested by the
Class A Certificateholder surrendering the same.
The Holder of the Trust Certificate will have the option,
subject to certain conditions set forth in the Agreement, including the deposit
of the sum specified in the Agreement, to remove all, but not less than all, of
the property in the Trust, and thereby cause early retirement of the
Certificates as of any Payment Date following the date on which the aggregate
Class A Certificate Principal Balance and the Class B Certificate Principal
Balance is less than 10% of the Initial Class A Certificate Principal Amount
and the Initial Class B Certificate Principal Amount. In the event of such
removal, the entire outstanding Class A Certificate Principal Balance and the
Class B Certificate Principal Balance, together with accrued interest thereon
at the related Certificate Rate, will be required to be paid to the Class A
Certificateholders and the Class B Certificateholders on such Payment Date.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient
to cover any tax or governmental charge payable in connection therewith.
The Servicer, PSSFC and the Trustee and any agent of any of
the foregoing may treat the person in whose name this Class A Certificate is
registered as the owner hereof for all purposes, and none of the foregoing
shall be affected by any notice to the contrary.
A-5
<PAGE> 107
EXHIBIT B
FORM OF CLASS B CERTIFICATE
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY ONLY (A) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (B) TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A OR (C) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT SUBJECT, IN THE CASE OF CLAUSES (B) OR (C)
ABOVE, TO COMPLIANCE BY THE HOLDER AND THE TRANSFEREE WITH THE PROVISIONS OF
THE POOLING AND SERVICING AGREEMENT APPLICABLE TO SUCH TRANSFER.
PSSFC EQUIPMENT LEASE TRUST 1995-1
8.10% EQUIPMENT LEASE-BACKED CERTIFICATE, CLASS B
evidencing a Class B Percentage Interest in a Trust, the property of
which includes a pool of equipment, the related equipment leases and
other property appurtenant thereto conveyed to the Trust by Prudential
Securities Secured Financing Corporation ("PSSFC").
Principal in respect of this Class B Certificate is payable monthly as
set forth herein, after an initial interest-only period which is
scheduled to end on the December 1996 Payment Date, but which may end
earlier if a required Amortization Event occurs earlier. Accordingly,
the unpaid principal balance of the Class B Percentage Interest
evidenced hereby may be less than the initial principal amount set
forth below.
This Class B Certificate does not represent any interest in or
obligation of PSSFC, Phoenix Leasing Incorporated, or any Affiliate of
any of them. Neither the Class B Certificates nor the Leases are
insured by any governmental agency.
Class B
Certificate $__________ Initial Percentage
No. B-1 Principal Amount Interest: ___%
<PAGE> 108
THIS CERTIFIES THAT _________________________ is the
registered owner of a $_______________ (______________________ Dollars)
nonassessable, fully-paid, ___% Class B Percentage Interest in the Class B
Certificates issued by PSSFC Equipment Trust 1995-1 (the "Trust") formed by
PSSFC. The Trust hereby agrees to pay to such registered holder its pro rata
share (based on the aggregate Class B Percentage Interest held by such
registered Holder) of the amounts which all Holders of the Class B Certificates
are entitled to receive, as hereinafter set forth in this Class B Certificate
and as more fully set forth in the Agreement (defined below), at all times from
the sources and on the terms and conditions hereinafter set forth and as more
fully set forth in the Agreement.
The property of the Trust includes a pool of equipment finance
leases, installment sale contracts and loan contracts (the "Leases"), the
equipment financed or leased thereby, if any, (the "Equipment"), all Scheduled
Lease Payments, Final Lease Payments, Residual Receipts, Defaulted Residual
Receipts and other monies due thereunder after November 1, 1995 (the "Cut-Off
Date"), and other property. The Trust was created pursuant to the Pooling and
Servicing Agreement (the "Agreement"), dated as of November 1, 1995, by and
among PSSFC, Phoenix Leasing Incorporated, as Servicer, and Bankers Trust
Company, as trustee of the Trust (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Agreement.
This Class B Certificate is one of the duly authorized Class B
Certificates designated as "8.10% Equipment Lease Backed Certificates of PSSFC
Equipment Lease Trust 1995-1, Class B" (the "Class B Certificates"). This
Class B Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Class B
Certificate, by virtue of the acceptance hereof, assents and by which such
Holder is bound.
- --------------------------------------------------------------------------------
IN WITNESS WHEREOF, the Trust has caused this Class B
Certificate to be duly executed.
PSSFC EQUIPMENT LEASE TRUST 1995-1
By: BANKERS TRUST COMPANY, not in its
individual capacity, but solely as
Trustee
Dated: November 30, 1995
By:___________________________________
B-2
<PAGE> 109
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates of the Series designated herein, issued
under the within-mentioned Pooling and Servicing Agreement.
BANKERS TRUST COMPANY, not in its
individual capacity but solely as Trustee
By:_________________________________________
________________________________________________________________________________
This Class B Certificate does not purport to summarize the
Agreement and reference is made to the Agreement for information with respect
to the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and immunities of the Trustee. Copies of the
Agreement and all amendments thereto will be provided to any Class B
Certificateholder, at its expense, upon a written request to the Trustee:
Bankers Trust Company, Four Albany Street, New York, New York 10006, Attention:
Corporate Trust.
Under the Agreement, the Trust is obligated to pay, to the
extent that monies are available in the Collection Account for such
distributions, on the 25th day of each month or, if such 25th day is not a
Business Day, the Business Day immediately following (the "Payment Date"),
commencing in December 1995, to the person in whose name this Class B
Certificate is registered and at the address specified in the Certificate
Register at the close of business on the Record Date, an amount from certain
monies deposited in the Collection Account with respect to the related
Collection Period equal to the product of the Class B Percentage Interest
evidenced by this Class B Certificate and an amount equal to the sum of (i) the
Class B Certificate Interest and (ii) on and after the Payment Date which is
also the Initial Amortization Date, but not prior thereto, the sum of (A) Class
B Base Principal Distribution Amount and (B) one-half of the Residual Receipts
received by the Servicer during the prior Collection Period. The Initial
Amortization Date is the earlier to occur of (x) the Payment Date occurring in
December 1996 and (y) the Payment Date which immediately follows the Required
Amortization Event. The final payment of principal and interest on this Class
B Certificate will not be later than the February 25, 2004 Payment Date.
Payments on this Class B Certificate will be made by the
Trustee by check mailed, or upon request of the Holder hereof, by wire transfer
of immediately available funds, to the Person entitled thereto, as specified by
such Person in
B-3
<PAGE> 110
accordance with the terms of the Agreement or by such other means as the Person
entitled thereto and the Trustee shall agree, without the presentation or
surrender of this Class B Certificate or the making of any notation hereon.
The Holder hereof, by its acceptance of this Class B
Certificate, agrees to look solely to the funds in the Collection Account to
the extent available for payment to the Holder hereof as provided in the
Agreement for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Holder hereof for any amounts due under this
Class B Certificate or the Agreement.
The Class B Certificates do not represent an obligation of, or
an interest in, the Trustee or any Affiliate thereof. The Class B Certificates
are limited in right of payment to certain collections and recoveries
respecting the Leases, all or more specifically set forth above in the
Agreement. Pursuant to the Agreement, the Trust shall, in addition to the
Class B Certificates, issue Class A Certificates and the Trust Certificate.
THE RIGHT TO RECEIVE PAYMENTS WITH RESPECT TO THE CLASS B CERTIFICATES IS
SUBORDINATE TO THE PRIOR PAYMENT IN FULL OF ALL AMOUNTS OF PRINCIPAL AND
INTEREST DUE AND PAYABLE ON THE CLASS A CERTIFICATES ON EACH PAYMENT DATE. THE
RIGHT TO RECEIVE PAYMENTS WITH RESPECT TO THE TRUST CERTIFICATE IS SUBORDINATE
TO THE PRIOR PAYMENT IN FULL OF ALL AMOUNTS OF PRINCIPAL AND INTEREST DUE AND
PAYABLE ON THE CLASS A CERTIFICATES AND THE CLASS B CERTIFICATES ON EACH
PAYMENT DATE.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of PSSFC, the Servicer and the rights of the Class B
Certificateholders under the Agreement at any time by the Servicer, PSSFC and
the Trustee with, for so long as the Class B Certificates remain outstanding,
the consent of Class B Certificateholders owning Class B Certificates
representing an aggregate Class B Percentage Interest of not less than 50%.
Any such consent by the Holder of this Class B Certificate shall be conclusive
and binding on such Holder and upon all future Holders of this Class B
Certificate and of any Class B Certificate issued upon the transfer hereof or
in exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Class B Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Class B
Certificateholders.
As provided in the Agreement, the transfer of this Class B
Certificate is registrable in the Certificate Register upon surrender of this
Class B Certificate for registration of transfer at the offices or agencies
maintained by the Trustee accompanied by a written instrument of transfer in
form
B-4
<PAGE> 111
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Class B
Certificates of authorized denominations evidencing the same aggregate Class B
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.
The Class B Certificates are issuable only as registered Class
B Certificates without coupons in minimum denominations of $1,000 of the
Initial Class B Certificate Principal Amount. As provided in the Agreement and
subject to certain limitations therein set forth, Class B Certificates are
exchangeable for new Class B Certificates of authorized denominations
evidencing the same aggregate Class B Percentage Interest, as requested by the
Class B Certificateholder surrendering the same.
No transfer of any Class B Certificate shall be made unless
such transfer is made pursuant to an effective registration statement or
otherwise in accordance with the requirements of the Securities Act of 1933, as
amended (the "Act"). If such a transfer is to be made in reliance upon an
exemption from the Act other than Rule 144A under the Act, (i) the Trustee
shall require an Opinion of Counsel that such transfer may be made pursuant to
an exemption, describing the applicable exemption and the basis therefor, from
the Act and laws or is being made pursuant to the Act and laws, which Opinion
of Counsel shall not be an expense of the Trustee or the Trust, or (ii) the
Trustee shall require the transferee to execute a certification, substantially
in the form attached as an Exhibit to the Agreement, setting forth the facts
surrounding such transfer. In the event that a transfer is to be made in
reliance on Rule 144A under the Act, the Holder of the Class B Certificate
shall cause its prospective transferee to execute and deliver a certificate
substantially in the form attached as an Exhibit to the Agreement. The
Servicer shall promptly furnish to any Holder, or any prospective purchaser
designated by a Holder, the information required to be delivered to holders and
prospective purchasers of Class B Certificates in connection with resales of
the Class B Certificates to permit compliance with the Rule 144A in connection
with such resales.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient
to cover any tax or governmental charge payable in connection therewith.
The Holder of the Trust Certificate will have the option,
subject to certain conditions set forth in the Agreement, including the deposit
of the sum specified in the Agreement, to remove all, but not less than all, of
the property in the Trust, and thereby cause early retirement of
B-5
<PAGE> 112
the Certificates as of any Payment Date following the date on which the
aggregate Class A Certificate Principal Balance and the Class B Certificate
Principal Balance is less than 10% of the Initial Class A Certificate Principal
Amount and the Initial Class B Certificate Principal Amount. In the event of
such removal, the entire outstanding Class A Certificate Principal Balance and
the Class B Certificate Principal Balance, together with accrued interest
thereon at the related Certificate Rate, will be required to be paid to the
Class A Certificateholders and the Class B Certificateholders on such Payment
Date.
The Servicer, PSSFC and the Trustee and any agent of any of
the foregoing may treat the person in whose name this Class B Certificate is
registered as the owner hereof for all purposes, and none of the foregoing
shall be affected by any notice to the contrary.
B-6
<PAGE> 113
EXHIBIT C
FORM OF TRUST CERTIFICATE
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY ONLY (A) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (B) TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A OR (C) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT SUBJECT, IN THE CASE OF CLAUSES (B) OR (C)
ABOVE, TO COMPLIANCE BY THE HOLDER AND THE TRANSFEREE WITH THE PROVISIONS OF
THE POOLING AND SERVICING AGREEMENT APPLICABLE TO SUCH TRANSFER.
PSSFC EQUIPMENT LEASE TRUST 1995-1
TRUST CERTIFICATE
evidencing a Trust Certificate Percentage Interest in a Trust, the
property of which includes a pool of equipment, the related equipment
leases and other property appurtenant thereto conveyed to the Trust by
Prudential Securities Secured Financing Corporation ("PSSFC").
Principal in respect of this Trust Certificate is payable monthly as
set forth herein.
This Trust Certificate does not represent any interest in or
obligation of PSSFC, Phoenix Leasing Incorporated, or any Affiliate of
any of them. Neither the Trust Certificate nor the Leases are insured
by any governmental agency.
Trust Certificate
Certificate Percentage
No. 1 Interest:___%
<PAGE> 114
THIS CERTIFIES THAT ___________________________ is the
registered owner of a nonassessable, fully-paid, ___% Trust Certificate
Percentage Interest in the Trust Certificate issued by PSSFC Equipment Trust
1995-1 (the "Trust") formed by PSSFC. The Trust hereby agrees to pay to such
registered holder its pro rata share (based on the aggregate Trust Certificate
Percentage Interest held by such registered Holder) of the amounts which all
Holders of the Trust Certificates are entitled to receive, as hereinafter set
forth in this Trust Certificate and as more fully set forth in the Agreement
(as defined below), at all times from the sources and on the terms and
conditions hereinafter set forth and as more fully set forth in the Agreement.
The property of the Trust includes a pool of equipment finance
leases, installment sale contracts and loan contracts (the "Leases"), the
equipment financed or leased thereby, if any, (the "Equipment"), all Scheduled
Lease Payments, Final Lease Payments, Residual Receipts, Defaulted Residual
Receipts and other monies due thereunder after November 1, 1995 (the "Cut-Off
Date"), and other property. The Trust was created pursuant to the Pooling and
Servicing Agreement (the "Agreement"), dated as of November 1, 1995, by and
among PSSFC, Phoenix Leasing Incorporated, as Servicer, and Bankers Trust
Company, as trustee of the Trust (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Agreement.
This Trust Certificate is the duly authorized Trust
Certificate designated as "Trust Certificate of PSSFC Equipment Lease Trust
1995-1" (the "Trust Certificate"). This Trust Certificate is issued under and
is subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Trust Certificate, by virtue of the acceptance
hereof, assents and by which such Holder is bound.
- --------------------------------------------------------------------------------
IN WITNESS WHEREOF, the Trust has caused this Trust
Certificate to be duly executed.
PSSFC EQUIPMENT LEASE TRUST 1995-1
By: BANKERS TRUST COMPANY, not in its
individual capacity, but solely as
Trustee
Dated: November 30, 1995
By:___________________________________
Assistant Vice President
C-2
<PAGE> 115
CERTIFICATE OF AUTHENTICATION
This is the Trust Certificate of the Series designated herein, issued under the
within-mentioned Pooling and Servicing Agreement.
BANKERS TRUST COMPANY, not in its individual
capacity but solely as Trustee
By:________________________________________
Assistant Vice President
_______________________________________________________________________________
This Trust Certificate does not purport to summarize the
Agreement and reference is made to the Agreement for information with respect
to the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and immunities of the Trustee. Copies of the
Agreement and all amendments thereto will be provided to any Holder of this
Trust Certificate, at its expense, upon a written request to the Trustee:
Bankers Trust Company, Four Albany Street, New York, New York 10006, Attention:
Corporate Trust.
Under the Agreement, the Trust is obligated to pay, to the
extent that monies are available in the Collection Account for such
distributions, on the 25th day of each month or, if such 25th day is not a
Business Day, the Business Day immediately following (the "Payment Date"),
commencing in December 1995, to the person in whose name this Trust Certificate
is registered and at the address specified in the Certificate Register at the
close of business on the Record Date, an amount from certain monies deposited
in the Collection Account with respect to the related Collection Period equal
to the product of the Trust Certificate Percentage Interest evidenced by this
Trust Certificate and the amount distributable to all Holders of the Trust
Certificate as set forth in the Agreement. The final payment on this Trust
Certificate will not be later than the February 25, 2004 Payment Date.
Payments on this Trust Certificate will be made by the Trustee
by check mailed, or upon request of the Holder hereof, by wire transfer of
immediately available funds, to the Person entitled thereto, as specified by
such Person in accordance with the terms of the Agreement or by such other
means as the Person entitled thereto and the Trustee shall agree, without the
presentation or surrender of this Trust Certificate or the making of any
notation hereon.
The Holder hereof, by its acceptance of this Trust
Certificate, agrees to look solely to the funds in the
C-3
<PAGE> 116
Collection Account to the extent available for payment to the Holder hereof as
provided in the Agreement for payment hereunder and that the Trustee in its
individual capacity is not personally liable to the Holder hereof for any
amounts due under this Trust Certificate or the Agreement.
The Trust Certificate does not represent an obligation of, or
an interest in, the Trustee or any Affiliate thereof. The Trust Certificate is
limited in right of payment to certain collections and recoveries respecting
the Leases, all or more specifically set forth above in the Agreement.
Pursuant to the Agreement, the Trust shall, in addition to the Trust
Certificate, issue Class A Certificates and Class B Certificates. THE RIGHT TO
RECEIVE PAYMENTS WITH RESPECT TO THE TRUST CERTIFICATE IS SUBORDINATE TO THE
PRIOR PAYMENT IN FULL OF ALL AMOUNTS OF PRINCIPAL AND INTEREST DUE AND PAYABLE
ON THE CLASS A CERTIFICATES AND THE CLASS B CERTIFICATES ON EACH PAYMENT DATE.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of PSSFC and the Servicer and the rights of Holder of the Trust
Certificate under the Agreement at any time by the Servicer, PSSFC and the
Trustee with, for so long as the Trust Certificates remain outstanding, the
consent of Holder of the Trust Certificate. Any such consent by the Holder of
this Trust Certificate shall be conclusive and binding on such Holder and upon
all future Holders of this Trust Certificate and of any Trust Certificate
issued upon the transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent is made upon this Trust Certificate. The
Agreement also permits the amendment thereof, in certain limited circumstances,
without the consent of the Holder of the Trust Certificate.
As provided in the Agreement, the transfer of this Trust
Certificate is registrable in the Certificate Register upon surrender of this
Trust Certificate for registration of transfer at the offices or agencies
maintained by the Trustee accompanied by a written instrument of transfer in
form satisfactory to the Trustee duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Trust Certificates of authorized denominations evidencing the same aggregate
Trust Certificate Percentage Interest in the Trust will be issued to the
designated transferee or transferees.
The Holder of the Trust Certificate will have the option,
subject to certain conditions set forth in the Agreement, including the deposit
of the sum specified in the Agreement, to remove all, but not less than all, of
the property in the Trust, and thereby cause early retirement of the
Certificates as of any Payment Date following the date on
C-4
<PAGE> 117
which the aggregate Class A Certificate Principal Balance and the Class B
Certificate Principal Balance is less than 10% of the Initial Class A
Certificate Principal Amount and the Initial Class B Certificate Principal
Amount. In the event of such removal, the entire outstanding Class A
Certificate Principal Balance and the Class B Certificate Principal Balance,
together with accrued interest thereon at the related Certificate Rate, will be
required to be paid to the Class A Certificateholders and the Class B
Certificateholders on such Payment Date.
No transfer of any Trust Certificate shall be made unless such
transfer is made pursuant to an effective registration statement or otherwise
in accordance with the requirements of the Securities Act of 1933, as amended
(the "Act"). If such a transfer is to be made in reliance upon an exemption
from the Act other than Rule 144A under the Act, (i) the Trustee shall require
an Opinion of Counsel that such transfer may be made pursuant to an exemption,
describing the applicable exemption and the basis therefor, from the Act and
laws or is being made pursuant to the Act and laws, which Opinion of Counsel
shall not be an expense of the Trustee or the Trust, or (ii) the Trustee shall
require the transferee to execute a certification, substantially in the form
attached as an Exhibit to the Agreement, setting forth the facts surrounding
such transfer. In the event that a transfer is to be made in reliance on Rule
144A under the Act, the Holder of the Trust Certificate shall cause its
prospective transferee to execute and deliver a certificate substantially in
the form attached as an Exhibit to the Agreement. The Servicer shall promptly
furnish to any Holder, or any prospective purchaser designated by a Holder, the
information required to be delivered to holders and prospective purchasers of
Trust Certificates in connection with resales of the Trust Certificate to
permit compliance with the Rule 144A in connection with such resales.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient
to cover any tax or governmental charge payable in connection therewith.
The Servicer, PSSFC, the Trustee and any agent of any of the
foregoing may treat the person in whose name this Trust Certificate is
registered as the owner hereof for all purposes, and none of the foregoing
shall be affected by any notice to the contrary.
C-5
<PAGE> 118
EXHIBIT D
FORM OF SERVICER'S CERTIFICATE
PSSFC EQUIPMENT LEASE TRUST 1995-1
SERVICER'S CERTIFICATE
FOR THE COLLECTION PERIOD ENDING _______________, 199__
PURSUANT TO
THE POOLING AND SERVICING AGREEMENT
SECTION 6.01(b)(III)
Amount on deposit in the Advance Payment Account
to be transferred to the Collection Account:
Scheduled and Final Payments $_________
Purchase Option Payments $_________
Security Deposits $_________
Total: $____________
SECTION 6.04(a)
Amount on deposit in the Collection Account
to be distributed with respect to the
Collection Period:
(i) Initial Unpaid Amounts
inadvertently deposited
in the Collection Account $___________
(ii) Any other amounts due
to the Servicer $___________
(iii) Amounts to be distributed
to the Holder of the Trust
Certificate $___________
<PAGE> 119
SECTION 5.11
The following amounts which were required to be deposited in the
Collection Account pursuant to Section 5.11 have been so deposited:
$____________
$____________
$____________
$____________
Total: $____________
SECTION 5.13
Predecessor Leases:
ID # Lessee Lease Principal Balance
Substitute Leases:
ID # Lessee Lease Principal Balance
D-2
<PAGE> 120
SECTION 6.05
*Amounts in i and ii below are stated per $1,000 of Initial Class A
and B Certificate Principal Amounts
i. Base Principal Amount $____________
Excess Principal Amount $____________
Principal Distribution Amount $____________
Class A Percentage 72.00%
Subordinate Percentage 19.00%
Class A Base Principal Distribution Amount $____________
Class B Base Principal Distribution Amount $____________
Class A Overdue Principal $____________
Class B Overdue Principal $____________
ii. Class A Certificate Interest $____________
Class B Certificate Interest $____________
Class A Overdue Interest $____________
Class B Overdue Interest $____________
iii. Servicer Fee $____________
Reimbursement of Unreimbursed
Servicer Advances $____________
Servicing Fees Inadvertently
Deposited in the Collection
Account $____________
Total: $____________
D-3
<PAGE> 121
iv. Class A Certificate Principal Balance $____________
Class B Certificate Principal Balance $____________
Initial Class A Certificate Principal
Amount $21,423,000.00
Initial Class B Certificate Principal
Amount $5,654,000.00
Class A Certificate Factor $____________
Class B Certificate Factor $____________
Pool Factor $____________
Lease Principal Balance as of Cut-Off
Date $29,756,661.70
Lease Principal Balance after taking
into account all distributions made
on such Payment Date $____________
v. Unreimbursed Services Advance Related
to this Collection Period $____________
vi. Subordinated Amount $____________
Lease Principal Balances of all Leases
which became Defaulted Leases during
this Collection Period $____________
D-4
<PAGE> 122
vii. Residual Receipts
(a) Purchase Option Payments $_____________
(b) Sales Proceeds of Equipment
to Parties other than the
User $_____________
(c) Subsequent Recoveries on
Defaulted Leases $_____________
less
(d) Unreimbursed Servicer Advances
with respect to Defaulted
Leases $_____________
(e) Out-of-Pocket Expenses
Related to Defaulted Leases $_____________
(f) Unreimbursed taxes, etc.... $_____________
Total Residual Receipts: $____________
<TABLE>
<CAPTION>
Number
Dollars of Leases
------- ---------
<S> <C> <C> <C>
viii. Total Lease Principal Balances $___________ _____
Lease Principal Balances of Leases
which are:
1 Month Delinquent $___________ _____
2 Months Delinquent $___________ _____
3 Months Delinquent $___________ _____
4 Months Delinquent $___________ _____
Delinquent Lease Reconveyed $___________ _____
</TABLE>
D-5
<PAGE> 123
Section 5.03
ix. Scheduled Payments and Final Lease Payments
not received for the immediately prior Collection
Period as of the ________________ Calculation Date,
which are likely to be recoverable from the related
Users (Servicer Advances). $____________
D-6
<PAGE> 124
EXHIBIT E
FORM OF ASSIGNMENT
THIS ASSIGNMENT dated as of the __ day of _________, ____, by
and between __________ ("Assignor") and __________ ("Assignee"), provides:
That for and in consideration of the sum of TEN DOLLARS
($10.00) and other valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, the parties hereby agree as follows:
13.14. Assignor hereby grants, transfers and assigns to
Assignee all of the right, title and interest of Assignor, as
Certificateholder, in, to and under that certain Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of November 1, 1995
among Phoenix Leasing Incorporated, as servicer (the "Servicer"), Prudential
Securities Secured Financing Corporation and Bankers Trust Company, as trustee
(the "Trustee") and that certain [Class B/Trust] Certificate, No. _, Series
1995-1 (the "Certificate") issued thereunder by the Trustee.
13.15. For the purpose of inducing Assignee to purchase the
Certificate from Assignor, Assignor warrants and represents that:
(a) Assignor is the lawful owner of the Certificate
with the full right to transfer the Certificate free from any and all claims
and encumbrances whatsoever;
(b) The Assignor has not received notice, and has no
knowledge of any offsets, counterclaims or other defenses available to the
Servicer with respect to the Pooling and Servicing Agreement or the
Certificate; and
(c) The Assignor has no knowledge of and has not
received notice of any amendments to the Pooling and Servicing Agreement or the
Certificate.
13.16. By execution hereof Assignee agrees to be bound, as
Certificateholder, by all of the terms, covenants and conditions of the Pooling
and Servicing Agreement and the Certificate and from and after the date hereof
Assignee assumes for the benefit of each of Phoenix Leasing Incorporated, the
Servicer, the Transferor, the Trustee and the Assignor all of Assignor's
obligations as Certificateholder thereunder.
13.17. This Assignment may be executed in one or more
counterparts and by the different parties hereto on
<PAGE> 125
separate counterparts, each of which, when so executed, shall be deemed to be
an original; such counterparts, together, shall constitute one and the same
agreement.
WITNESS the following signatures.
<TABLE>
<CAPTION>
[ASSIGNOR] [ASSIGNEE]
<S> <C>
By _________________________ By _______________________
Its ________________________ Its ______________________
Taxpayer Taxpayer
Identification No. _________ Identification No. _______
</TABLE>
E-2
<PAGE> 126
EXHIBIT E(1)
WIRING INSTRUCTIONS FORM
____________, 1995
Bankers Trust Company
Four Albany Street
New York, New York 10006
Re: Lease Backed Certificates, Series 1995-1, Issued by PSSFC Equipment
Lease Trust
Dear Sirs:
In connection with the sale of the above-captioned
Certificate by __________ to __________ ("Transferee") you, as Trustee with
respect to the related Certificates, are instructed to make all remittances to
Transferee as Certificateholder as of ____________,19__ by wire transfer
pursuant to the instructions set forth on Schedule 1 hereto and you are
directed to send all notices to the appropriate party at the address set forth
on Schedule 1 hereto. You are further instructed to treat the Transferee as
the record holder for purposes of the ________ 199_ payment.
[TRANSFEREE]
By:______________________________
Title:___________________________
Acknowledged
[TRANSFEROR]
By:_________________________________
Title:______________________________
<PAGE> 127
EXHIBIT F
FORM OF TRANSFEREE CERTIFICATION
Prudential Securities
Secured Financing Corporation
One New York Plaza, 12th Floor
New York, New York 10292
Phoenix Leasing Incorporated
2401 Kerner Boulevard
San Rafael, California 94901
Bankers Trust Company
Four Albany Street
New York, New York 10006
Re: PSSFC Equipment Lease Trust 1995-1, [Class B/Trust]
Lease-Backed Certificates, Series 1995-1, No. __,
issued under that certain Pooling and Servicing
Agreement, dated as of November 1, 1995, by and among
Phoenix Leasing Incorporated, as servicer (the
"Servicer"), Prudential Securities Secured Financing
Corporation, as depositor (the "Depositor") and
Bankers Trust Company, as trustee (the "Trustee").
Dear Sirs:
__________________________________ as registered holder
("Seller") intends to transfer the captioned Certificate to
___________________________________________ ("Purchaser"), for registration in
the name of __________________________________.
1. In connection with such transfer and in accordance with
Article VIII of the captioned Agreement, the Seller hereby certifies the
following facts: Neither the Seller nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Certificate,
any interest in the Certificate or any other similar security, offer to buy or
accept a transfer, pledge or other disposition of the Certificate, any interest
in the Certificate or any other similar security with, any person in any
manner, or made any general solicitation by means of general advertising or in
any other manner, or taken any other action which would constitute a
distribution of the Certificate under the Securities Act of 1933, as amended
(the "1933 Act"), or which would render the disposition of the Certificate a
violation of Section 5 of the 1933 Act or require registration pursuant
thereto.
<PAGE> 128
2. The Purchaser warrants and represents to, and covenants
with, the Depositor, the Trustee and the Servicer pursuant to Article VIII of
the Pooling and Servicing Agreement as follows:
a. The Purchaser understands that the Certificate has not
been registered under the 1933 Act or the securities laws of any state.
b. The Purchaser is acquiring the Certificate for investment
for its own account only and not for any other person.
c. The Purchaser considers itself a substantial,
sophisticated institutional investor having such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of investment in the Certificate.
d. The Purchaser has been furnished with all information
regarding the Certificate that it has requested from the Contributor, the
Trustee or the Servicer.
e. The Purchaser is a "qualified institutional buyer" as that
term is defined in Rule 144A under the 1933 Act ("Rule 144") and has completed
either of the forms of certification to that effect attached hereto as Annex 1
or Annex 2. The Purchaser is aware that the sale to it is being made in
reliance on Rule 144A. The Purchaser is acquiring the Certificate for its own
account or for the account of a qualified institutional buyer, understands that
the Certificate may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer to whom notice is
given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the 1933
Act.
3. The Purchaser warrants and represents to, and covenants
with, the Servicer, the Depositor, and the Trustee that the Purchaser is not an
employee benefit plan within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") ("Plan"), or a
plan within the meaning of Section 4975(e)(1) of the Internal Revenue Code of
1986 ("Code") (also a "Plan"), and the Purchaser is not directly or indirectly
purchasing the Certificate on behalf of, as investment manager of, as named
fiduciary of, as trustee of, or with assets of a Plan.
4. This document 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
F-2
<PAGE> 129
to be an original; such counterparts, together, shall constitute one and the
same document.
IN WITNESS WHEREOF, each of the parties have caused this
document to be executed by their duly authorized officers as of the date set
forth below.
<TABLE>
<S> <C>
_____________________________ ___________________________
Seller Purchaser
By:__________________________ By:________________________
Name: Name:
Title: Title:
Taxpayer Identification Taxpayer Identification
No._______________________ No._____________________
Date:________________________ Date:______________________
</TABLE>
F-3
<PAGE> 130
ANNEX 1 TO EXHIBIT F
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Purchasers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to the parties
addressed in the Transferee Certificate to which this certification relates
with respect to the Certificate described therein:
1. As indicated below, the undersigned is the President,
Chief Financial Officer, Senior Vice President or other executive officer of
the Purchaser.
2. In connection with purchases by the Purchaser, the
Purchaser is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because (i) the Purchaser
owned and/or invested on a discretionary basis more than $100,000,0001 in
securities (except for the excluded securities referred to below) as of the end
of the Purchaser's most recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Purchaser satisfies the criteria in the
category marked below.
___ Corporation, etc. The Purchaser is a corporation (other than
a bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code.
___ Bank. The Purchaser (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
____________________
(1) The Purchaser must own and/or invest on a discretionary basis at
least $100,000,000 in securities unless the Purchaser is a dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934, and, in that
case, the Purchaser must own and/or invest on a discretionary basis at least
$10,000,000 in securities.
<PAGE> 131
___ Savings and Loan. The Purchaser (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
___ Broker-dealer. The Purchaser is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934.
__
Insurance Company. The Purchaser is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
___ State or Local Plan. The Purchaser is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA Plan. The Purchaser is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
___ Investment Advisor. The Purchaser is an investment advisor
registered under the Investment Advisers Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Purchaser, (ii) securities
that are part of an unsold allotment to or subscription by the Purchaser, if
the Purchaser is a dealer, (iii) bank deposit notes and certificates of
deposit, (iv) loan participations, (v) repurchase agreements, (vi) securities
owned but subject to a repurchase agreement and (vii) currency, interest rate
and commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Purchaser, the
Purchaser used the cost of such securities to the Purchaser and did not include
any of the securities referred to in the preceding paragraph. Further, in
determining such aggregate amount, the Purchaser may have included securities
owned by subsidiaries of the Purchaser, but only if such subsidiaries are
consolidated with the Purchaser in its financial statements
F-2
<PAGE> 132
prepared in accordance with generally accepted, accounting principles and if
the investments of such subsidiaries are managed under the Purchaser's
direction. However, such securities were not included if the Purchaser is a
majority-owned, consolidated subsidiary of another enterprise and the Purchaser
is not itself a reporting company under the Securities Exchange Act of 1934.
5. The Purchaser acknowledges that it is familiar with Rule
144A and understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Purchaser may be in reliance on Rule
144A.
__ ___ Will the Purchaser be purchasing the
Yes No Certificate only for the Purchaser's own
account?
6. If the answer to the foregoing question is "no", the
Purchaser agrees that, in connection with any purchase of securities sold to
the Purchaser for the account of a third party (including any separate account)
in reliance on Rule 144A, the Purchaser will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Purchaser agrees that the Purchaser
will not purchase securities for a third party unless the Purchaser has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.
7. The Purchaser will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Purchaser's purchase of the
Certificate will constitute a reaffirmation of this certification as of the
date of such purchase.
_______________________________
Print Name of Purchaser
By:____________________________
Name:
Title:
Date:__________________________
F-3
<PAGE> 133
ANNEX 2 TO EXHIBIT F
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Purchasers That Are Registered Investment Companies]
The undersigned hereby certifies as follows to the parties
addressed in the Transferee Certificate to which this certification relates with
respect the Certificate described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Purchaser or, if the Purchaser
is a "qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933 ("Rule 144A") because Purchaser is part of a Family
of Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Purchaser, the Purchaser is
a "qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Purchaser is an investment company registered under the Investment Company Act
of 1940, and (ii) as marked below, the Purchaser alone, or the Purchaser's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Purchaser's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Purchaser or the Purchaser's Family of Investment Companies, the
cost of such securities was used.
____ The Purchaser owned $______________________ in securities
(other than the excluded securities referred to below) as of
the end of the Purchaser's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
____ The Purchaser is part of a Family of Investment Companies which
owned in the aggregate $____________ in securities (other than
the excluded securities referred to below) as of the end of the
Purchaser's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used
herein means two or more registered investment companies (or series thereof)
that have the same investment adviser or investment advisers that are affiliated
(by virtue of being majority owned subsidiaries of the same party or because one
investment adviser is a majority owned subsidiary of the other).
<PAGE> 134
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Purchaser or are part of the
Purchaser's Family of Investment Companies, (ii) bank deposit notes and
certificates of deposit, (iii) loan participations, (iv) repurchase agreements,
(v) securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
5. The Purchaser is familiar with Rule 144A and understands
that the seller to it and the other parties related to the Certificates are
relying and will continue to rely on the statements made herein because one or
more sales to the Purchaser will be in reliance on Rule 144A. In addition, the
Purchaser will only purchase for the Purchaser's own account.
6. The undersigned will notify the parties addressed in the
Transferee Certificate to which this certification relates of any changes in the
information and conclusion herein. Until such notice, the Purchaser's purchase
of the Certificate will constitute a reaffirmation of this certification by the
undersigned as of the date of such purchase.
---------------------------------------
Print Name of Purchaser or Adviser
By:
------------------------------------
Name:
Title:
IF AN ADVISER:
---------------------------------------
Print Name of Purchaser
Date:
----------------------------------
F-2
<PAGE> 135
EXHIBIT F-1
FORM OF TRANSFEREE CERTIFICATION
Prudential Securities
Secured Financing Corporation
One New York Plaza, 12th Floor
New York, New York 10292
Phoenix Leasing Incorporated
2401 Kerner Boulevard
San Rafael, California 94901
Bankers Trust Company
Four Albany Street
New York, New York 10006
[Successor Servicer]
Re: PSSFC Equipment Lease Trust 1995-1, [Class B/Trust]
Lease-Backed Certificate, Series 1995-1, No. __,
issued under that certain Pooling and Servicing
Agreement, dated as of November 1, 1995, among Phoenix
Leasing Incorporated, as servicer (the "Servicer"),
Prudential Securities Secured Financing Corporation,
as depositor (the "Depositor") and Bankers Trust
Company, as trustee (the "Trustee")
Dear Sirs:
_________________________________________ as registered holder
("Seller") intends to transfer the captioned Certificate to
_____________________________ ("Purchaser"), for registration in the name of
_____________________________.
1. Seller certifies to the Trustee that it is an investment
company registered under the Investment Company Act of 1940, as amended.
Attached hereto is a true and correct copy of the Qualified
Institutional Buyer's Certificate of the Purchaser. We have required no further
information with respect to the Purchaser's status as "qualified institutional
buyer" [other than the following:]
2. The Purchaser warrants and represents to, and covenants
with, the Servicer, the Depositor, and the Trustee that the Purchaser is not an
employee benefit plan within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") ("Plan"), or a plan
within the meaning of Section 4975(e)(1) of the Internal
<PAGE> 136
Revenue Code of 1986 ("Code") (also a "Plan"), and the Purchaser is not directly
or indirectly purchasing the Certificate on behalf of, as investment manager of,
as named fiduciary of, as trustee of, or with assets of a Plan.
F-2
<PAGE> 137
ADDENDUM 1 TO EXHIBIT F-1
RULE 144A
QUALIFIED INSTITUTIONAL BUYER CERTIFICATE
Dear Sirs:
In connection with our purchase(s) from or through you (or
others) of privately offered debt or equity securities ("Rule 144A Eligible
Securities") pursuant to Rule l44A under the Securities Act of 1933, we certify
as follows:
1. We are a "qualified institutional buyer" as defined in
Rule 144A.
2. As of the date set forth below, which date is
subsequent to the close of our most recent fiscal year
on ____________________, we beneficially owned and/or
invested on a discretionary basis an amount of
securities (as determined in accordance with Rule
144A) in excess of $100,000,000.
We represent that we will only purchase Rule 144A Eligible
Securities for our own account or for the account of other qualified
institutional buyers.
You, any issuer of Rule 144A Eligible Securities, trustee,
paying or fiscal agent, and other participants in any transaction in Rule 144A
Eligible Securities purchased by us may rely upon this certificate, and we will
advise you promptly should we cease to be a qualified institutional buyer.
This certificate has been executed on our behalf by one of our
executive officers.
-------------------------------------
Name of Company
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Date:
--------------------------------
<PAGE> 138
EXHIBIT G
FORM OF TRANSFEREE CERTIFICATION
Prudential Securities
Secured Financing Corporation
One New York Plaza, 12th Floor
New York, New York 10292
Phoenix Leasing Incorporated
2401 Kerner Boulevard
San Rafael, California 94901
Bankers Trust Company
Four Albany Street
New York, New York 10006
Re: PSSFC Equipment Lease Trust 1995-1, [Class
B/Trust] Lease-Backed Certificate, Series
1995-1, No. __, issued under that certain
Pooling and Servicing Agreement, dated as of
November 1, 1995, among Prudential Securities
Secured Financing Corporation, as depositor
(the "Depositor"), Phoenix Leasing
Incorporated, as servicer (the "Servicer") and
Bankers Trust Company, as trustee (the
"Trustee")
Dear Sirs:
________________________________________ as registered holder
("Seller") intends to transfer the captioned Certificate to
____________________________ ("Purchaser"), for registration in the name of
___________________________.
1. In connection with such transfer and in accordance with
Article VIII of the captioned Agreement, the Seller hereby certifies the
following facts: Neither the Seller nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Certificate, any
interest in the Certificate or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificate, any interest in the Certificate or any other similar security with,
any person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action which would
constitute a distribution of the Certificate under the Securities Act of 1933,
as amended (the "1933 Act"), or which would render the disposition of the
Certificate a violation of Section 5 of the 1933 Act or require registration
pursuant thereto.
<PAGE> 139
2. The Purchaser warrants and represents to, and covenants
with, the Seller, the Trustee and the Servicer pursuant to Article VIII of the
Pooling and Servicing Agreement as follows:
a. The Purchaser understands that the Certificate has
not been registered under the 1933 Act or the securities laws of any
state.
b. The Purchaser is acquiring the certificate for
investment for its own account only and not for any other person.
c. The Purchaser considers itself a substantial,
sophisticated institutional investor having such knowledge and
experience in financial and business matters that it is capable of
evaluating the merits and risks of investment in the Certificate.
d. The Purchaser has been furnished with all
information regarding the Certificate that it has requested from the
Contributor, the Trustee or the Servicer.
e. Neither the Purchaser nor anyone acting on its
behalf has offered, transferred, pledged, sold or otherwise disposed of
the Certificate, any interest in the Certificate or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Certificate, any interest in the
Certificate or any other similar security from, or otherwise approached
or negotiated with respect to the Certificate, any interest in the
Certificate or any other similar security with, any person in any
manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action, that
would constitute a distribution of the Certificate under the 1933 Act
or that would render the disposition of the Certificate a violation of
Section 5 of the 1933 Act or require registration pursuant thereto, nor
will it act, nor has it authorized or will it authorize any person to
act, in such manner with respect to the Certificate.
3. The Purchaser warrants and represents to, and covenants
with, the Servicer, the Depositor and the Trustee that the Purchaser is not an
employee benefit plan within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") ("Plan"), or a plan
within the meaning of Section 4975(e)(1) of the Internal Revenue Code of 1986
("Code") (also a "Plan"), and the Purchaser is not directly or indirectly
purchasing the certificate on behalf of, as investment manager of, as named
fiduciary of, as trustee of, or with assets of a Plan.
G-2
<PAGE> 140
4. This document 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 document.
IN WITNESS WHEREOF, each of the parties have caused this
document to be executed by their duly authorized officers as of the date set
forth below.
- ------------------------------ ------------------------------
Seller Purchaser
By: By:
--------------------------- ---------------------------
Name: Name:
Title: Title:
Taxpayer Identification Taxpayer Identification
No. No.
------------------- --------------------
Date: Date:
------------------------- -------------------------
G-3
<PAGE> 141
SCHEDULE I
<TABLE>
<CAPTION>
SCHEDULE LESSEE PURCH PRICE
<S> <C> <C>
1 17TH AVENUE LIMITED, INC. 37,357
2 200 COMMERCIAL STREET ASSOCIATES, LP 127,223
3 200 COMMERCIAL STREET ASSOCIATES, LP 111,223
4 200 COMMERCIAL STREET ASSOCIATES 133,928
5 4800 LEESBURG PIKE ASSOCIATES 26,216
6 A & R RESOURCES, INC. 66,990
7 ACADEMIC SYSTEMS CORPORATION 67,018
8 ACADEMIC SYSTEMS CORPORATION 66,562
9 ACADEMIC SYSTEMS CORPORATION 56,033
10 ACADEMIC SYSTEMS CORPORATION 18,750
11 ACTIMED LABORATORIES, INC. 150,000
12 ACTIMED LABORATORIES, INC. 79,711
13 ACTUATE SOFTWARE CORPORATION 51,897
14 ACTUATE SOFTWARE CORPORATION 43,032
15 ADAPTIVE SOLUTIONS, INC. 204,411
16 ADAPTIVE SOLUTIONS, INC. 307,445
17 ADAPTIVE SOLUTIONS, INC. 51,063
18 ADAPTIVE SOLUTIONS, INC. 79,064
19 ADVANCED FIBRE COMMUNICATIONS 98,044
20 ADVANCED FIBRE COMMUNICATIONS 40,717
21 ADVANCED FIBRE COMMUNICATIONS 153,496
22 ADVANCED FIBRE COMMUNICATIONS 96,447
23 ADVANCED FIBRE COMMUNICATIONS 119,020
24 ALM MARKETING GROUP, INC. 44,596
25 ANCHORLINE CORPORATION 113,702
26 ARBOR SOFTWARE CORPORATION 184,908
27 ARBOR SOFTWARE CORPORATION 55,762
28 ARBOR SOFTWARE CORPORATION 88,287
29 ARBOR SOFTWARE CORPORATION 222,689
30 ARBOR SOFTWARE CORPORATION 79,846
</TABLE>
<PAGE> 142
<TABLE>
<CAPTION>
SCHEDULE LESSEE PURCH PRICE
<S> <C> <C>
31 ARBOR SOFTWARE CORPORATION 168,633
32 ARRIS PHARMACEUTICAL CORPORATION 107,951
33 ARRIS PHARMACEUTICAL CORPORATION 32,236
34 ARRIS PHARMACEUTICAL CORPORATION 429,008
35 ARRIS PHARMACEUTICAL CORPORATION 146,296
36 BAGELTRIO LC 106,014
37 BBD STORES, INC. 46,489
38 BBD STORES, INC. 30,946
39 BBD STORES, INC. 15,115
40 BEST WESTERN SUMMIT INN, INC. 81,819
41 BRUCE S & SON OK HONG 22,348
42 BUDGETEER MOTOR INN 76,605
43 BUDGETEER MOTOR INN 30,556
44 BUSH ENTERPRISES, INC. 21,171
45 BUSH ENTERPRISES, INC. 50,832
46 CALYPTE BIOMEDICAL CORPORATION 177,217
47 CANJI, INC. 196,162
48 CANJI, INC. 46,558
49 CANJI, INC. 123,225
50 CATERING OF CENTRAL TEXAS, INC. 30,879
51 CHARLESTON WV HOTEL LTD PTR 41,749
52 CHROMATIC RESEARCH, INC. 176,800
53 CIRCLE G RANCHES HOTEL & RESTAURANT 20,000
54 COINSTAR, INC. 459,600
55 COLONIAL INN EAST, INC. 122,242
56 DAVID EDWARD THORNSBERRY BIGGS 28,750
57 DAVID EDWARD THORNSBERRY BIGGS 30,924
58 DAZEL CORPORATION 86,665
59 DELUXE, INC. DBA DAYS INN YORK 69,909
60 DENTON CORPORATION 59,344
61 DEPOTECH CORPORATION 58,156
</TABLE>
<PAGE> 143
<TABLE>
<CAPTION>
SCHEDULE LESSEE PURCH PRICE
<S> <C> <C>
62 DEPOTECH CORPORATION 130,355
63 DEPOTECH CORPORATION 41,502
64 DEPOTECH CORPORATION 104,073
65 DEPOTECH CORPORATION 88,153
66 DEPOTECH CORPORATION 93,878
67 DIAMETRICS MEDICAL, INC. 358,790
68 DIGITRAN CORPORATION 93,677
69 DIGITRAN CORPORATION 51,574
70 DIGITRAN CORPORATION 93,368
71 DIGITRAN CORPORATION 95,696
72 DIPAK H PATEL DBA FRIENDSHIP INN 51,734
73 DIPAK H PATEL DBA FRIENDSHIP INN 27,747
74 DIVA COMMUNICATIONS, INC. 140,218
75 DIVA COMMUNICATIONS, INC. 203,654
76 DIVA COMMUNICATIONS, INC. 144,066
77 DJONT OPERATIONS L.L.C. 60,080
78 DJONT OPERATIONS L.L.C. 56,383
79 DJONT OPERATIONS L.L.C. 59,030
80 DJONT OPERATIONS L.L.C. 3,238
81 DKN HOSPITALITY GROUP 38,298
82 DOCTOR BAGEL, INC. 163,444
83 DRALTS, INC. 65,410
84 DRALTS, INC. 14,935
85 EASY LIVING, INC. 22,068
86 EASY LIVING, INC. 15,137
87 ECONOMY MOTOR HOTEL, INC. 35,453
88 EL CID INN 31,596
89 EL CID INN 21,110
90 EL CID INN 27,548
91 EMBASSY/SHAW PARSIPPANY 56,047
92 EMBASSY SUITES EPT LIMITED PRTNERSH 4,549
</TABLE>
<PAGE> 144
<TABLE>
<CAPTION>
SCHEDULE LESSEE PURCH PRICE
<S> <C> <C>
93 EQUITY INNS, L.P. 25,119
94 EQUITY INNS, L.P. 25,104
95 ESCALADE 70,744
96 ESCALADE 139,384
97 ESCALADE 5,994
98 ESCALADE 13,525
99 ESCALADE 63,174
100 ESCALADE 94,586
101 ESCALADE 40,509
102 ESCALADE 20,673
103 ESCALADE 76,985
104 EVOLUTIONARY TECHNOLOGIES, INC. 75,846
105 EVOLUTIONARY TECHNOLOGIES, INC. 179,499
106 EXCEL ENTERPRISES, INC. 219,521
107 EXPRESSGOLF, INC. 40,000
108 FAIR LEE ASSOCIATES L.P. 13,029
109 FAMCO OF TAMPA, INC. 51,225
110 FAMCO OF TAMPA, INC. 26,082
111 FCOAM, INC. 61,158
112 FELCOR SUITES LIMITED PARTNERSHIP 94,848
113 FREDERICK T. USHER 109,880
114 FREDERICK T. USHER 93,737
115 GALAXY INVESTMENTS CORPORATION 46,854
116 GALAXY INVESTMENTS CORPORATION 32,729
117 GOLDEN OPERATING CORPORATION 123,456
118 GOODMAN 55/MCNEIL PARTNERSHIP 42,608
119 GREAT WESTERN BAGELS, L.C. 264,912
120 GREAT WESTERN BAGELS, L.C. 105,081
121 HALLWOOD HOTELS, INC. 38,513
122 HAY-LODGE, INC. 147,870
123 HEIDBREDER, INC. 158,497
</TABLE>
<PAGE> 145
<TABLE>
<CAPTION>
SCHEDULE LESSEE PURCH PRICE
<S> <C> <C>
124 HESTIA CORPORATION 49,385
125 HIGGINS ENTERPRISES, L.P. 33,030
126 HIGGINS ENTERPRISES, L.P. 43,724
127 HIGGINS ENTERPRISES, L.P. 3,027
128 HKN, INC. 37,497
129 HKN, INC. 45,689
130 HYANNIS DAIRY FAMRS, INCORPORATED 244,217
131 INFINITY FINANCIAL TECHNOLOGY, INC. 39,212
132 INFINITY FINANCIAL TECHNOLOGY, INC. 105,026
133 INFINITY FINANCIAL TECHNOLOGY, INC. 98,729
134 INFINITY FINANCIAL TECHNOLOGY, INC. 123,033
135 INQUIRY.COM, INC. 90,569
136 INTER-LINK INVESTMENTS, INC. 23,648
137 INTER-LINK INVESTMENTS, INC. 10,423
138 INTERCARDIA, INC. 12,775
139 INTERCARDIA, INC. 13,700
140 INTERCARDIA, INC. 30,267
141 INTRINSA CORPORATION 19,317
142 JALISCO, INC. 27,318
143 JAY RAM, INC. 36,300
144 JAYANTIM NATHU AND DAXA J. PATEL 37,212
145 JAYANTILAL R. PATEL 104,169
146 JAYANTILAL R. PATEL 44,706
147 KAMRANNA, INC. DBA SIR SPEEDY #7399 83,678
148 KANTI PATEL AND KALA PATEL 71,841
149 KANTI PATEL AND KALA PATEL 25,744
150 KANTI PATEL AND KALA PATEL 8,786
151 KARMA, INC. 25,507
152 KEARNS & MCDOWELL DEVELOPERS, LLC 37,994
153 KML ENTERPRISES INC. 209,000
154 KNOWLEDGE ADVENTURE, INC. 107,169
</TABLE>
<PAGE> 146
<TABLE>
<CAPTION>
SCHEDULE LESSEE PURCH PRICE
<S> <C> <C>
155 KNOWLEDGE ADVENTURE, INC. 149,054
156 KNOWLEDGE ADVENTURE, INC. 252,583
157 KRISHNA CORPORATION 25,949
158 KRISHNA CORPORATION 39,487
159 KRISHNA MOTEL, INC. 37,569
160 L.R.T.R., INC. 138,032
161 LANSDALE ATLANTIC ASSOCIATES 21,904
162 LATITUDE COMMUNICATIONS, INC. 80,378
163 LATITUDE COMMUNICATIONS, INC. 26,749
164 LATITUDE COMMUNICATIONS, INC. 62,466
165 LEE STREET II, L.L.C. 275,297
166 LEHIGH VALLEY HEEL QUICKLING 66,015
167 LEROY & SHERIDA STONE 154,268
168 LEROY & SHERIDA STONE 59,557
169 LEROY & SHERIDA STONE 22,598
170 LEUKOSITE, INC. 182,655
171 LOGAN MOTEL DBA HOJO INN 27,940
172 LOMBARD HOTEL GROUP 82,000
173 LONCAR VENTURES, INC. 91,150
174 LOOKING GLASS TECHNOLOGIES, INC. 59,862
175 LOOKING GLASS TECHNOLOGIES, INC. 57,525
176 LOOKING GLASS TECHNOLOGIES, INC. 143,864
177 MACON BAGELS, LLC 232,506
178 MAHANIDHI CORPORATION 152,223
179 MARIANNA LODGING, INC. 40,785
180 MAYUR B. PATEL 173,071
181 MERCATOR GENETICS, INC. 97,810
182 MERCATOR GENETICS, INC. 108,406
183 MERCATOR GENETICS, INC. 233,956
184 MESSINIA, INC. 40,987
185 MESSINIA, INC. 95,771
</TABLE>
<PAGE> 147
<TABLE>
<CAPTION>
SCHEDULE LESSEE PURCH PRICE
<S> <C> <C>
186 MICRO INTERVENTIONAL SYSTEMS 369,980
187 MINERVA SYSTEMS, INC. 270,218
188 MINERVA SYSTEMS, INC. 140,802
189 MRC HOTEL PARTNERS LTD. 25,553
190 MUELLER INVESTMENTS 2,506
191 MULTEX SYSTEMS, INC. 53,877
192 MULTEX SYSTEMS, INC. 50,407
193 NACHAS REALTY CORP. DBA RAMADA INN 55,687
194 NESBITT PARTNERS SAN LUIS OBISPO 80,343
195 NETSCAPE COMMUNICATIONS CORPORATION 445,057
196 NETSCAPE COMMUNICATIONS CORPORATION 96,379
197 NEXSTAR PHARMACEUTICALS, INC. 537,706
198 NEXSTAR PHARMACEUTICALS, INC. 51,152
199 NEXSTAR PHARMACEUTICALS, INC. 125,856
200 NIRMAN ENTERPRISES ASSOCIATES 36,534
201 NITEEN HOTELS (NY) CORP. 66,851
202 NITEEN HOTELS (NY) CORP. 24,858
203 NO NAME, INC. 8,140
204 NOGALES CHICKEN, LTD. 80,319
205 NOGALES CHICKEN, LTD. 23,056
206 NORTH MOUNTAIN SOFTWARE, INC. 25,399
207 O'CONNOR/MCI ASSOCIATES 32,039
208 OASIS PROPERTY, INC. 31,451
209 OBJECTIVITY, INC. 46,002
210 OCALA QUALITY MANAGEMENT, INC. 30,585
211 OMAHA HOTEL, INC. 25,151
212 OMAHA HOTEL, INC. 7,539
213 OMAHA HOTEL, INC. 13,390
214 OURN, INC. 35,253
215 P & S INVESTMENT, INC. 81,725
216 PABLO ALVARADO 25,970
</TABLE>
<PAGE> 148
<TABLE>
<CAPTION>
SCHEDULE LESSEE PURCH PRICE
<S> <C> <C>
217 PABLO ALVARADO 58,234
218 PAC ASSOCIATES 15,314
219 PEACH PROPERTIES DBA SLEEP INN 110,998
220 PLASMA & MATERIALS TECHNOLOGIES INC. 154,491
221 PLASMA & MATERIALS TECHNOLOGIES INC. 123,491
222 PLASMA & MATERIALS TECHNOLOGIES INC. 250,000
223 PND MOTEL CORPORATION 45,303
224 PND MOTEL CORPORATION 31,593
225 POP ROCKET, INC. 67,844
226 PREGO RESTAURANTS, INC. 152,969
227 PREGO RESTAURANTS, INC. 39,192
228 PRUDENTIAL/HEI JOINT VENTURE 51,779
229 R & B FOTO, INC. 188,147
230 R & R ENTERPRISES, L.L.C. 2,339
231 RADISH COMMUNICATIONS SYSTEMS, INC. 55,820
232 RADISH COMMUNICATIONS SYSTEMS, INC. 50,758
233 RAMBUS INC. 110,061
234 RAMBUS INC. 44,683
235 RAMBUS INC. 65,755
236 RAMBUS INC. 146,310
237 RBM COMPANY 80,455
238 RED BRICK SYSTEMS 216,750
239 RED BRICK SYSTEMS 100,500
240 RED BRICK SYSTEMS 97,857
241 RER LODGING, INC. 53,712
242 RICHARD H. CONKLIN 77,536
243 RICHMAR INN 262,964
244 RICHMAR INN 46,694
245 RICHMAR INN 23,931
246 ROCKY MOUNTAIN BAGEL COMPANY, INC. 202,536
247 S & B MOTELS, INC. 81,893
</TABLE>
<PAGE> 149
<TABLE>
<CAPTION>
SCHEDULE LESSEE PURCH PRICE
<S> <C> <C>
248 S & B MOTELS, INC. 103,062
249 S & B MOTELS, INC. 18,472
250 S & K INTERNATIONAL INCORPORATED 42,202
251 S & S PIZZA, INC. 20,600
252 S & S PIZZA, INC. 63,443
253 S & S PIZZA, INC. 30,534
254 S. EIGHT CORP. 69,529
255 S. EIGHT CORP. 19,716
256 SAHI I, LIMITED 49,674
257 SAIRAM PROPERTIES, INC. 35,106
258 SAIRAM PROPERTIES, INC. 17,356
259 SANJIT INVESTMENTS, INC. 45,988
260 SARJIT S. GHOMAN & RAMJIT K. GHOMAN 46,292
261 SARJIT S. GHOMAN & RAMJIT K. GHOMAN 125,915
262 SARJIT S. GHOMAN & RAMJIT K. GHOMAN 66,828
263 SAROS CORPORATION 638,034
264 SAROS CORPORATION 133,019
265 SEQ, LTD. 89,441
266 SEQ, LTD. 101,887
267 SEQ, LTD. 148,533
268 SGF BUSINESS SERVICES, INC. 66,000
269 SHEENAL, INC. 50,166
270 SILICON VIDEO CORPORATION 95,302
271 SILICON VIDEO CORPORATION 482,144
272 SILICON VIDEO CORPORATION 74,376
273 SITARAMBHAI N. BHAKTA 42,161
274 SITARAMBHAI N. BHAKTA 41,301
275 SONUS PHARMACEUTICALS, INC. 117,171
276 STOUGARD SAFARI BURGERS, INC. 206,994
277 SUNRISE BAGEL COMPANY 106,641
278 SUNRISE BAGEL COMPANY 65,449
</TABLE>
<PAGE> 150
<TABLE>
<CAPTION>
SCHEDULE LESSEE PURCH PRICE
<S> <C> <C>
279 SUNRISE BAGEL COMPANY 22,950
280 SUPERIOR BAKERY NO. 1 LLC 161,263
281 TEE TO GREEN GOLF, INC. 26,843
282 TERRAPIN TECHNOLOGIES, INC. 121,970
283 TERRAPIN TECHNOLOGIES, INC. 55,314
284 TESSERA, INC. 78,965
285 TESSERA, INC. 37,119
286 TESSERA, INC. 54,656
287 THE ADDRAE GROUP LTD. 40,000
288 THE ADDRAE GROUP LTD. 26,108
289 THE BELLEVUE INN, A PARTNERSHIP 186,612
290 THE BELLEVUE INN, A PARTNERSHIP 48,655
291 THE BELLEVUE INN, A PARTNERSHIP 5,237
292 THE LEE GROUP MANAGEMENT CORP. 15,566
293 THE PARKWOOD INN, LTD. DBA PARKWOOD 60,043
294 THE PARKWOOD INN, LTD. DBA PARKWOOD 43,847
295 THE PARKWOOD INN, LTD. DBA PARKWOOD 116,060
296 THE PARKWOOD INN, LTD. DBA PARKWOOD 30,818
297 THE VANTIVE CORPORATION 39,521
298 THE VANTIVE CORPORATION 110,575
299 THE VANTIVE CORPORATION 61,655
300 THE VANTIVE CORPORATION 226,268
301 THE VANTIVE CORPORATION 58,095
302 THOMAS J. LAPLANTE 43,394
303 TRANSCEND THERAPEUTICS, INC. 25,993
304 TRANSCEND THERAPEUTICS, INC. 35,764
305 TRAVELHOST, INC. 44,329
306 TRAVELHOST, INC. 45,604
307 TREKO DEVELOPMENT-PORTAGE L.L.C. 100,604
308 TREKO DEVELOPMENT-PORTAGE L.L.C. 30,646
309 TRUPOS, INC. 128,637
</TABLE>
<PAGE> 151
<TABLE>
<CAPTION>
SCHEDULE LESSEE PURCH PRICE
<S> <C> <C>
310 TUKWILA ASSOCIATES LIMITED 25,378
311 TYSON CORNER HOTEL ASSOCIATES, L.P. 53,126
312 UNICORN GROUP ONE 69,784
313 UPPER MARLBORO ENTERTAINMENT, INC. 244,462
314 VAN K. NGUYEN 130,000
315 VANLEE CORP. 86,882
316 VATEROTT PROPERTIES 23,918
317 VERITY, INC. 146,911
318 WALDEN AVE-BLEND ALL HOTEL DEV CO. 46,232
319 WALTER FAMILY PARTNERSHIP 42,968
320 WATERMARK SOFTWARE, INC. 32,658
321 WATUPPA ENTERPRISES 22,136
322 WILLIAM D. BAYLIS 20,008
323 ZARCO HOTELS, INCORPORATED 156,119
324 ZARCO HOTELS, INCORPORATED 43,135
325 ZEBA GROUP, INC. 101,832
</TABLE>
<PAGE> 1
EXHIBIT 10.1
PHOENIX RECEIVABLES II, INC.,
PHOENIX LEASING INCORPORATED
and
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION,
---------------------------
RECEIVABLES TRANSFER AGREEMENT
Dated as of November 1, 1995
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
ARTICLE ONE DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE TWO TRANSFER OF LEASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.01. Agreement to Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.02. Transfer Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.03. Transfer of Transferred Property . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.04. Delivery of Lease Files . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.05. Further Transfer of Transferred Property . . . . . . . . . . . . . . . . . . . . 5
Section 2.06. Cost of Delivery of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.07. Transfers of New Transferred Property . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE THREE REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.01. Representations and Warranties of the Phoenix Finance Subsidiary . . . . . . . . 6
Section 3.02. Covenants of the Phoenix Finance Subsidiary . . . . . . . . . . . . . . . . . . . 9
Section 3.03. Representations and Warranties of PSSFC . . . . . . . . . . . . . . . . . . . . . 10
Section 3.04. Representations and Warranties of PLI . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE FOUR MERGER OR CONSOLIDATION; COSTS; INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . 12
Section 4.01. Merger or Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.02. Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.03. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.04. Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE FIVE CONDITIONS OF CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.01. Conditions of PSSFC's Obligations . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.02. Conditions of the Phoenix Finance Subsidiary's Obligations . . . . . . . . . . . 19
Section 5.03. Termination of PSSFC's Obligations . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE SIX MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.02. Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 6.03. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 6.04. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 6.05. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . 21
Section 6.06. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 6.07. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 6.08. Confirmation of Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 6.09. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 6.10. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
EXHIBIT A Form of Receivables Transfer Agreement Supplement
</TABLE>
ii
<PAGE> 4
This agreement (this "Agreement"), dated as of November 1, 1995,
between PHOENIX RECEIVABLES II, INC., a Delaware corporation (the "Phoenix
Finance Subsidiary"), PHOENIX LEASING INCORPORATED, a California corporation
("PLI"), and PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION, a Delaware
corporation ("PSSFC").
W I T N E S S E T H:
WHEREAS, pursuant to the Contribution Agreement dated as of November 1,
1995 (the "Contribution Agreement") between PLI and the Phoenix Finance
Subsidiary, PLI transferred and assigned all of its right, title and interest in
and to the Initial Assets (as defined in the Contribution Agreement) to Phoenix
Finance Subsidiary upon the terms and conditions thereunder; and
WHEREAS, the Phoenix Finance Subsidiary desires to transfer and assign
all of its right, title and interest in and to the Transferred Property (as
defined below) to PSSFC upon the terms and conditions hereinafter set forth; and
WHEREAS, it is contemplated that the Transferred Property transferred
hereunder will be transferred by PSSFC to the Trust formed pursuant to the
Pooling and Servicing Agreement dated as of November 1, 1995 (the "Pooling and
Servicing Agreement") among PSSFC, PLI, as servicer (the "Servicer") and Bankers
Trust Company, as trustee (the "Trustee"); and
WHEREAS, it is contemplated that following such transfers and
assignments the Servicer will service the Transferred Property pursuant to the
Pooling and Servicing Agreement; and
WHEREAS, the Phoenix Finance Subsidiary desires to transfer to PSSFC,
the Phoenix Finance Subsidiary's right, title and interest in and under the
Contribution Agreement; and
WHEREAS, pursuant to the Pooling and Servicing Agreement, PSSFC will
transfer to the Trustee, for the benefit of the Trust and the
Certificateholders, PSSFC's right, title and interest in and under this
Agreement, and the Phoenix Finance Subsidiary agrees that all covenants and
agreements made by it herein shall also be for the benefit of the Trust and the
Certificateholders;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto agree as follows:
<PAGE> 5
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions. Whenever used herein, the following words
and phrases, unless the context otherwise requires, shall have the meanings
specified in this Article:
"Commission" means the Securities and Exchange Commission.
"Contribution Agreement" has the meaning ascribed thereto in the first
WHEREAS Clause of this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Initial Transferred Property" means (a) (i) any Initial Equipment that
is owned by the Phoenix Finance Subsidiary and any and all income and proceeds
from such Initial Equipment, but subject to the rights of any User to quiet
enjoyment of such Initial Equipment under the related Initial Lease and (ii) any
security interest of the Phoenix Finance Subsidiary in any of the Initial
Equipment that is not owned by the Phoenix Finance Subsidiary, (b) the Initial
Leases, including, without limitation, all Scheduled Payments, Residual Receipts
and any other payments due with respect to the Initial Leases after the Cut-Off
Date relating to such Initial Leases, (c) any guarantees of a User's obligations
under an Initial Lease, (d) all other documents in the Lease Files with respect
to the Initial Leases, including, without limitation, any Uniform Commercial
Code financing statements relating to the Initial Leases or the Initial
Equipment, (e) any Insurance Policies and Insurance Proceeds with respect to the
Equipment, (f) all of the Phoenix Finance Subsidiary's right, title and interest
in and to, and rights under, the Contribution Agreement, (h) the Security
Deposits and (i) any and all income and proceeds of any of the foregoing;
provided, however, that the right, title and interest in and to the Initial
Unpaid Amounts relating to the Initial Equipment, or to any warrants issued by a
User to PLI, shall not be transferred or assigned pursuant hereto.
"New Transferred Property" shall have the meaning set forth in the
related Receivables Transfer Agreement Supplement.
"Phoenix Finance Subsidiary" has the meaning ascribed thereto in the
first paragraph of this Agreement.
"PLI" has the meaning ascribed thereto in the first paragraph of this
Agreement.
2
<PAGE> 6
"Pooling and Servicing Agreement" has the meaning ascribed thereto in
the third WHEREAS Clause of this Agreement.
"Prospectus" means the Prospectus dated December 2, 1994 relating to
the offering by PSSFC from time to time of its Equipment Lease Backed Securities
(Issuable in Series) in the form in which it was or will be filed with the
Securities Exchange Commission pursuant to Rule 424(b) under the Securities Act
with respect to the offer and sale of the Class A Certificates.
"Prospectus Supplement" means the Preliminary Prospectus Supplement
dated November 21, 1995 and the Prospectus Supplement dated November 29, 1995,
relating to the offering of the Class A Certificates in the form in which it was
or will be filed with the Commission pursuant to Rule 424(b) under the
Securities Act with respect to the offer and sale of the Class A Certificates.
"PSSFC" has the meaning ascribed thereto in the first paragraph of this
Agreement.
"Receivables Transfer Agreement Supplement" means any Receivables
Transfer Agreement Supplement in the form of Exhibit A hereto.
"Registration Statement" means that certain registration statement on
Form S-3, as amended (Registration No. 33- 84918) relating to the offering by
PSSFC from time to time of its Equipment Lease Backed Securities (Issuable in
Series) as heretofore declared effective by the Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Termination Event" means the existence of any one or more of the
following conditions:
(a) A stop order suspending the effectiveness of the Registration
Statement shall have been issued or a proceeding for that purpose shall have
been initiated or threatened by the Commission; or
(b) Subsequent to the execution and delivery of this Agreement, a
downgrading, or public notification of a possible change, without indication of
direction, shall have occurred in the rating afforded any of the debt securities
or claims paying ability of any person providing any form of credit enhancement
for any of the Certificates, by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Securities Act; or
3
<PAGE> 7
(c) Subsequent to the execution and delivery of this Agreement, there
shall have occurred an adverse change in the condition, financial or otherwise,
earnings, affairs, regulatory situation or business prospects of the Phoenix
Finance Subsidiary reasonably determined by PSSFC to be material; or
(d) Subsequent to the date of this Agreement there shall have occurred
any of the following: (i) a suspension or material limitation in trading in
securities substantially similar to the Certificates; (ii) a general moratorium
on commercial banking activities in New York declared by either Federal or New
York State authorities; or (iii) the engagement by the United States in
hostilities, or the escalation of such hostilities, or any calamity or crisis,
if the effect of any such event specified in this clause (iii) in the reasonable
judgment of PSSFC makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Class A Certificates on the terms and in
the manner contemplated in the Prospectus Supplement.
"this Agreement" shall have the meaning ascribed thereto in the first
paragraph of this agreement.
"Transferred Property" shall mean, collectively, the Initial
Transferred Property and all New Transferred Property theretofore transferred by
the Phoenix Finance Subsidiary to PSSFC pursuant to a Receivables Transfer
Agreement Supplement.
"Trustee" has the meaning ascribed thereto in the third WHEREAS Clause
of this Agreement.
Capitalized terms used herein that are not otherwise defined shall have
the respective meanings ascribed thereto in the Pooling and Servicing Agreement.
ARTICLE TWO
TRANSFER OF LEASES
Section 2.01. Agreement to Transfer. (a) Subject to the terms and
conditions of this Agreement, the Phoenix Finance Subsidiary hereby agrees to
transfer, and PSSFC hereby agrees to accept the transfer of, on the Closing
Date, the Initial Transferred Property.
(b) The closing for the transfer of the Initial Transferred Property
shall take place at the offices of Dewey Ballantine, New York, New York, at
10:00 a.m., New York time, on the Closing Date or such other place and time as
the parties shall agree.
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Section 2.02. Transfer Price. On the Closing Date, as full
consideration for the Phoenix Finance Subsidiary's Transfer of the Initial
Transferred Property to PSSFC, PSSFC will deliver to the Phoenix Finance
Subsidiary (i) cash equal to the sum of (A) $21,423,000 with respect to the
Class A Certificates, and (B) 5 days' accrued interest on the Class A
Certificates, at the rate of 6.85%, payable by wire transfer of same day funds
and (ii) the Class B and the Trust Certificate to be issued pursuant to the
Pooling and Servicing Agreement.
Section 2.03. Transfer of Transferred Property. On the Closing Date and
on any Transfer Date, the Phoenix Finance Subsidiary shall transfer, assign, set
over and convey to PSSFC, without recourse but subject to the terms of this
Agreement, all right, title and interest in and to the Initial Transferred
Property and any New Transferred Property, as the case may be.
Upon payment of the transfer price for the Initial Transferred Property
and any New Transferred Property as provided in Section 2.02 of this Agreement
and in the related Receivables Transfer Agreement Supplement, as the case may
be, the Phoenix Finance Subsidiary shall have, and shall be deemed to have,
transferred, assigned, set over and conveyed such Initial Transferred Property
and New Transferred Property, as the case may be. The Phoenix Finance
Subsidiary's accounting and other records shall accurately reflect the transfer
of the Transferred Property to PSSFC. Upon the transfer of such Transferred
Property, the ownership of each related Lease, and the contents of the related
Lease shall immediately vest in PSSFC and the ownership of all related records
and documents with respect to each Lease prepared by or which come into the
possession of the Phoenix Finance Subsidiary shall immediately vest in PSSFC.
The contents of any Lease in the possession of the Phoenix Finance Subsidiary at
any time after such transfer, and any Scheduled Lease payments due after the
Cut-Off Date and received by the Phoenix Finance Subsidiary, shall be held in
trust by the Phoenix Finance Subsidiary for the benefit of PSSFC as the owner
thereof, and shall be promptly delivered by the Phoenix Finance Subsidiary to or
upon the order of PSSFC.
Section 2.04. Delivery of Lease Files. In connection with the
assignment and transfer of the Transferred Property and Lease Files to PSSFC
pursuant to this Agreement, the Phoenix Finance Subsidiary shall cause the Lease
Files relating to the Leases to be delivered to the Servicer to be held on
behalf of the Trustee and the Certificateholders.
Section 2.05. Further Transfer of Transferred Property. The Phoenix
Finance Subsidiary acknowledges that pursuant to the Pooling and Servicing
Agreement, PSSFC intends
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to transfer on the Closing Date and on any Transfer Date all of its right, title
and interest in and to the Initial Transferred Property and any New Transferred
Property, as the case may be, to the Trustee for the benefit of the
Certificateholders. PSSFC has the right to assign its interest under this
Agreement and any Receivables Transfer Agreement Supplement to the Trustee as
may be required to effect the purposes of the Pooling and Servicing Agreement,
without further notice to, or consent of, the Phoenix Finance Subsidiary, and
the Trustee shall succeed to such of the rights and obligations of PSSFC
hereunder as shall be so assigned. PSSFC shall, pursuant to the Pooling and
Servicing Agreement, assign to the Trustee all of its right, title and interest
in and to the Transferred Property (as defined in the Pooling and Servicing
Agreement and its right to exercise the remedies created by Section 3.03 of the
Contribution Agreement for breaches of the representations and warranties of PLI
in Section 3.01 thereof.
Section 2.06. Cost of Delivery of Documents. As between the Phoenix
Finance Subsidiary and PSSFC, the costs relating to the delivery of the
documents specified in this Article Two in connection with the Leases shall be
borne by the Phoenix Finance Subsidiary.
Section 2.07. Transfers of New Transferred Property. Each transfer of
New Transferred Property shall be evidenced by the execution and delivery by the
Phoenix Finance Subsidiary and PSSFC of a Receivables Transfer Agreement
Supplement in the form of Exhibit A hereto. Each such transfer shall be
effective as of the related Transfer Date.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES AND COVENANTS
Section 3.01. Representations and Warranties of the Phoenix Finance
Subsidiary. The Phoenix Finance Subsidiary hereby represents and warrants to PLI
and PSSFC, as of the date of execution of this Agreement and as of the Closing
Date, which representations and warranties shall be deemed re-affirmed as of
each Transfer Date, that:
(a) The Phoenix Finance Subsidiary is duly organized, validly existing,
and in good standing as a corporation under the laws of the State of Delaware
and has all licenses necessary to carry on its business as now being conducted
and is licensed, qualified and in good standing in each State the laws of which
require licensing or qualification in order to conduct business of the type
conducted by the Phoenix Finance Subsidiary and to perform its obligations as
the Phoenix Finance Subsidiary hereunder and under any Receivables Transfer
Agreement Supplement; the
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Phoenix Finance Subsidiary has the full power and authority to own its property,
to carry on its business as presently conducted to execute and deliver this
Agreement and any Receivables Transfer Agreement Supplement and to perform in
accordance herewith and therewith; the execution, delivery and performance of
this Agreement and each Receivables Transfer Agreement Supplement (including all
instruments of transfer to be delivered pursuant to this Agreement and each
Receivables Transfer Agreement Supplement) by the Phoenix Finance Subsidiary and
the consummation of the transactions contemplated hereby and thereby have been
duly and validly authorized by all necessary action; this Agreement and each
Receivables Transfer Agreement Supplement evidences the valid, binding and
enforceable obligation of the Phoenix Finance Subsidiary; and all requisite
action has been taken by the Phoenix Finance Subsidiary to make this Agreement
and each Receivables Transfer Agreement Supplement valid, binding and
enforceable upon the Phoenix Finance Subsidiary in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium and other, similar laws relating to or
affecting creditors' rights generally or by the application of general equitable
principles in any proceeding, whether at law or in equity;
(b) All actions, approvals, consents, waivers, exemptions, variances,
franchises, orders, permits, authorizations, rights and licenses required to be
taken, given or obtained, as the case may be, by or from any federal, state or
other governmental authority or agency, that are necessary in connection with
the execution and delivery by the Phoenix Finance Subsidiary of this Agreement
and any Receivables Transfer Agreement Supplement, have been duly taken, given
or obtained, as the case may be, are in full force and effect, are not subject
to any pending proceedings or appeals (administrative, judicial or otherwise)
and either the time within which any appeal therefrom may be taken or review
thereof may be obtained has expired or no review thereof may be obtained or
appeal therefrom taken, and are adequate to authorize the consummation of the
transactions contemplated by this Agreement and each Receivables Transfer
Agreement Supplement on the part of the Phoenix Finance Subsidiary and the
performance by the Phoenix Finance Subsidiary of its obligations under this
Agreement and each Receivables Transfer Agreement Supplement;
(c) The consummation of the transactions contemplated by this Agreement
and each Receivables Transfer Agreement Supplement will not result in the breach
of any terms or provisions of the charter or bylaws of the Phoenix Finance
Subsidiary or result in the breach of any term or provision of, or conflict with
or constitute a default under or result in the acceleration of any obligation
under, any
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material agreement, indenture, contract or loan or credit agreement or other
material instrument to which the Phoenix Finance Subsidiary or its property, is
subject, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Phoenix Finance Subsidiary or its property is
subject;
(d) Neither this Agreement nor the information contained in the
Prospectus Supplement under the captions "The Receivables Pool", "The Servicer",
"The Servicer's Growth Capital Portfolio" and "The Servicer's Franchise Business
Lease Portfolio" nor any statement, report or other document prepared by the
Phoenix Finance Subsidiary or PLI and furnished or to be furnished pursuant to
this Agreement or in connection with the transactions contemplated hereby
contains any untrue statement or alleged untrue statement of any material fact
or omits to state a material fact necessary to make the statements contained
herein or therein, in light of the circumstances under which they were made, not
misleading;
(e) There is no action, suit, proceeding or investigation pending or,
to the best of the knowledge of the Phoenix Finance Subsidiary, threatened,
before any court, administrative agency or tribunal against the Phoenix Finance
Subsidiary which, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial condition,
properties or assets of the Phoenix Finance Subsidiary or in any material
prohibition or impairment of the right or ability of the Phoenix Finance
Subsidiary to carry on its business substantially as now conducted, or in any
material liability on the part of the Phoenix Finance Subsidiary or which would
draw into question the validity or enforceability of this Agreement, each
Receivables Transfer Agreement Supplement or the Leases or of any action taken
or to be taken in connection with the obligations of the Phoenix Finance
Subsidiary contemplated herein, or which would be likely to impair materially
the ability of the Phoenix Finance Subsidiary to perform under the terms of this
Agreement or under any Receivables Transfer Agreement Supplement or that might
prohibit its entering into this Agreement or under any Receivables Transfer
Agreement Supplement or the consummation of any of the transactions contemplated
hereby or thereby;
(f) The Phoenix Finance Subsidiary is not in violation of or in default
with respect to, and the execution and delivery of this Agreement and each
Receivables Transfer Agreement Supplement by the Phoenix Finance Subsidiary and
its performance of and compliance with the terms hereof and thereof will not
constitute a violation or default with respect to, any order or decree of any
court or any order, regulation or demand of any federal, state, municipal or
governmental agency, which violation or default might have
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consequences that would materially and adversely affect the condition (financial
or other) or operations of the Phoenix Finance Subsidiary or its properties or
might have consequences that would materially and adversely affect its
performance hereunder or thereunder;
(g) Upon the further transfer by PSSFC of the Transferred Property to
the Trust, the Trust will either have good title to each related Lease and such
other items comprising the corpus of the Trust free and clear of any Lien or
will have a valid first priority perfected security interest in each related
Lease and such other items compromising the corpus of the Trust free and clear
of any Lien; and
(h) The transfer, assignment and conveyance of the Leases by the
Phoenix Finance Subsidiary pursuant to this Agreement are not subject to the
bulk transfer laws or any similar statutory provisions in effect in any
applicable jurisdiction.
Section 3.02. Covenants of the Phoenix Finance Subsidiary. The Phoenix
Finance Subsidiary covenants to PLI and PSSFC as follows:
(a) The Phoenix Finance Subsidiary shall cooperate with PSSFC and the
firm of independent certified public accountants retained with respect to the
issuance of the Certificates in making available all information and taking all
steps reasonably necessary to permit the accountants' letters required hereunder
to be delivered within the times set for delivery herein.
(b) The Phoenix Finance Subsidiary agrees to satisfy or cause to be
satisfied on or prior to the Closing Date all of the conditions to PSSFC's
obligations set forth in Section 5.01 hereof that are within the Phoenix Finance
Subsidiary's (or its agents') control.
(c) The Phoenix Finance Subsidiary hereby agrees to do all acts,
transactions, and things and to execute and deliver all agreements, documents,
instruments, and papers by and on behalf of the Phoenix Finance Subsidiary as
PSSFC or its respective counsel may reasonably request in order to consummate
the transfer of the Initial Transferred Property to PSSFC and the subsequent
transfer thereof to the Trustee, and the rating, issuance and sale of the
Certificates.
(d) The Phoenix Finance Subsidiary hereby agrees to arrange separately
for the payment by a Person other than PSSFC to the Trustee of all of the
Trustee's fees and expenses in connection with the transactions contemplated by
the Pooling and Servicing Agreement, including, without
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limitation, all of the Trustee's fees and expenses in connection with any
actions taken by the Trustee pursuant to Section 11.12 thereof. For the
avoidance of doubt, the parties hereto acknowledge that it is the intention of
the parties that PSSFC shall not pay any of the Trustee's fees and expenses in
connection with the transactions contemplated by the Pooling and Servicing
Agreement.
(e) The Phoenix Finance Subsidiary agrees to enter into Receivables
Transfer Agreement Supplements with PSSFC for the transfer of New Transferred
Property upon the receipt of any New Assets (as defined in the Contribution
Agreement) from PLI and to transfer all of its right, title and interest in such
New Transferred Property to PSSFC in accordance herewith and with a Receivables
Transfer Agreement Supplement.
Section 3.03. Representations and Warranties of PSSFC. PSSFC hereby
represents and warrants to PLI and the Phoenix Finance Subsidiary as of the date
of execution of this Agreement and as of the Closing Date, which representations
and warranties shall be deemed re-affirmed upon each Transfer Date, that:
(a) PSSFC is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware;
(b) PSSFC has the corporate power and authority to purchase each Lease
and to execute, deliver and perform, and to enter into and consummate all the
transactions contemplated by this Agreement and each Receivables Transfer
Agreement Supplement;
(c) This Agreement and each Receivables Transfer Agreement Supplement
has been duly and validly authorized, executed and delivered by PSSFC, and
constitutes the legal, valid and binding agreement of PSSFC, enforceable against
PSSFC in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or registration or
filing with, or notice to, any governmental authority or court is required for
the execution, delivery and performance of or compliance by PSSFC with this
Agreement and each Receivables Transfer Agreement Supplement or the consummation
by PSSFC of any of the transactions contemplated hereby or thereby, except such
as have been made on or prior to the Closing Date;
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(e) PSSFC has filed or will file the Prospectus and Prospectus
Supplement with the Commission in accordance with Rule 424(b) under the
Securities Act;
(f) None of the execution and delivery of this Agreement, any
Receivables Transfer Agreement Supplement, the purchase of the Leases from the
Phoenix Finance Subsidiary, the consummation of the other transactions
contemplated hereby, or the fulfillment of or compliance with the terms and
conditions of this Agreement and each Receivables Transfer Agreement Supplement,
(i) conflicts or will conflict with the charter or bylaws of PSSFC or conflicts
or will conflict with or results or will result in a breach of, or constitutes
or will constitute a default or results or will result in an acceleration under,
any term, condition or provision of any material indenture, deed of trust,
contract or other agreement or other instrument to which PSSFC is a party or by
which it is bound and which is material to PSSFC, or (ii) results or will result
in a violation of any law, rule, regulation, order, judgment or decree of any
court or governmental authority having jurisdiction over PSSFC.
Section 3.04. Representations and Warranties of PLI. PLI hereby
represents and warrants to the Phoenix Finance Subsidiary and PSSFC as of the
date of execution of this Agreement and as of the Closing Date, which
representations and warranties shall be deemed re-affirmed upon each Transfer
Date, that:
(a) PLI is a corporation duly organized, validly existing and in good
standing under the laws of the State of California;
(b) PLI has the corporate power and authority to execute, deliver and
perform, and to enter into and consummate all the transactions contemplated by
this Agreement and each Receivables Transfer Agreement Supplement;
(c) This Agreement and each Receivables Transfer Agreement Supplement
has been duly and validly authorized, executed and delivered by PLI, and
constitutes the legal, valid and binding agreement of PLI, enforceable against
PLI in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or registration or
filing with, or notice to, any governmental authority or court is required for
the execution, delivery and performance of or compliance by PLI with this
Agreement and
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each Receivables Transfer Agreement Supplement or the consummation by PLI of any
of the transactions contemplated hereby or thereby, except such as have been
made on or prior to the Closing Date;
(e) None of the execution and delivery of this Agreement, any
Receivables Transfer Agreement Supplement, the consummation of the other
transactions contemplated hereby, or the fulfillment of or compliance with the
terms and conditions of this Agreement and each Receivables Transfer Agreement
Supplement, (i) conflicts or will conflict with the charter or bylaws of PLI or
conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under, any term, condition or provision of any material indenture,
deed of trust, contract or other agreement or other instrument to which PLI is a
party or by which it is bound and which is material to PLI, or (ii) results or
will result in a violation of any law, rule, regulation, order, judgment or
decree of any court or governmental authority having jurisdiction over PLI.
ARTICLE FOUR
MERGER OR CONSOLIDATION; COSTS; INDEMNIFICATION
Section 4.01. Merger or Consolidation. The Phoenix Finance Subsidiary
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 and
each Receivables Transfer Agreement Supplement or any of the Leases and to
perform its duties under this Agreement and each Receivables Transfer Agreement
Supplement.
Any partnership or corporation (i) into which the Phoenix Finance
Subsidiary may be merged or consolidated, (ii) resulting from any merger,
conversion, or consolidation to which the Phoenix Finance Subsidiary shall be
party, or (iii) succeeding to the Phoenix Finance Subsidiary's business
substantially as a whole, shall execute an agreement of assumption to perform
all of the Phoenix Finance Subsidiary's obligations under this Agreement and any
Receivables Transfer Agreement Supplement, and upon such execution will be the
Phoenix Finance Subsidiary's successor under this Agreement and any Receivables
Transfer Agreement Supplement, without the execution or filing of any document
or any further act on the part of any of the parties to this Agreement or any
Receivables Transfer Agreement Supplement, anything in this Agreement or any
Receivables Transfer Agreement Supplement to the contrary notwithstanding;
provided, however, that (a) immediately after giving effect to such transaction,
no
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representation or warranty made pursuant to Section 3.01 shall have been
breached, (b) the Phoenix Finance Subsidiary shall have delivered to PSSFC, the
Rating Agency and the Trustee an Officer's Certificate and an opinion of
counsel, satisfactory to each of them, each stating that such consolidation,
merger, or succession and such agreement of assumption comply with this Section
4.01 and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, (c) the Phoenix Finance
Subsidiary shall have delivered to PSSFC, the Rating Agency and the Trustee an
opinion of counsel, satisfactory to each of them, either (1) stating that, in
the opinion of such counsel, 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 PSSFC and the Trust, in
the Leases and reciting the details of such filings, or (2) stating that, in the
opinion of such counsel, no such action shall be necessary to preserve and
protect such interest and (d) such partnership or corporation shall have
organizational documents with similar restrictions as those of the Phoenix
Finance Subsidiary.
Section 4.02. Costs. In connection with the transactions contemplated
under this Agreement and any Receivables Transfer Agreement Supplement and the
Pooling and Servicing Agreement, the Phoenix Finance Subsidiary shall promptly
pay or cause to be paid (or shall promptly reimburse PSSFC to the extent that
PSSFC shall have paid or otherwise incurred): (i) the fees and disbursements of
counsel to PLI and the Phoenix Finance Subsidiary's counsel; (ii) (a) the fees
of PSSFC's counsel and (b) disbursements of the PSSFC's counsel; (iii) the fees
and disbursements of Arthur Andersen; (iv) the fees of Duff & Phelps Credit
Rating Company; (v) the fees of the Trustee, the fees and disbursements of the
Trustee's counsel, if any, the fees and expenses of the institution (which may,
but need not, be the Servicer or the Trustee) selected as calculating agent and
the fees of the Trustee for custodial acceptance and lease deposit; (vi)
expenses incurred in connection with printing the Prospectus relating to the
Class A Certificates, the Prospectus Supplement, any amendment or supplement
thereto, any preliminary prospectus and the Certificates; (vii) fees and
expenses relating to the filing of documents with the Securities and Exchange
Commission (including, without limitation, periodic reports under the Exchange
Act) and (viii) the shelf registration amortization fee paid in connection with
the issuance of the A Certificates.
Section 4.03. Indemnification. (a) (i) PLI agrees to indemnify and hold
harmless PSSFC, each of its directors, each of its officers who have signed the
Registration Statement, Prudential Securities Incorporated and each of its
directors and each person or entity who controls PSSFC or
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Prudential Securities Incorporated or any such person, within the meaning of
Section 15 of the Securities Act, against any and all losses, claims, damages
or liabilities, joint and several, to which PSSFC, Prudential Securities
Incorporated or any such person or entity may become subject, under the
Securities Act or otherwise, and will reimburse PSSFC, Prudential Securities
Incorporated and each such controlling person for any legal or other expenses
incurred by PSSFC, Prudential Securities Incorporated or such controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Prospectus Supplement or any amendment or supplement to the Prospectus
Supplement approved in writing by the Phoenix Finance Subsidiary or PLI or the
omission or the alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements in the Prospectus
Supplement or any amendment or supplement to the Prospectus Supplement approved
in writing by the Phoenix Finance Subsidiary or PLI, in light of the
circumstances under which they were made, not misleading, but only to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission relates to the information contained in the Prospectus
Supplement referred to in Section 3.01(d). This indemnity agreement will be in
addition to any liability which PLI may otherwise have.
(ii) PLI agrees to indemnify and to hold each of PSSFC, the
Trustee and each Certificateholder harmless against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments, and any
other costs, fees and expenses that PSSFC, the Trustee and any
Certificateholder may sustain in any way related to (i) the failure of the
Phoenix Finance Subsidiary or PLI to perform its duties in compliance with the
terms of this Agreement or (ii) the breach by either the Phoenix Finance
Subsidiary or PLI of any of the representations or warranties made by it in
this Agreement. PLI shall immediately notify PSSFC, the Phoenix Finance
Subsidiary, the Trustee and each Certificateholder if a claim is made by a
third party with respect to this Agreement, and PLI shall assume the defense of
any such claim and pay all expenses in connection therewith, including
reasonable counsel fees, and promptly pay, discharge and satisfy any judgment
or decree which may be entered against PSSFC, the Servicer, the Trustee and/or
Certificateholder in respect of such claim.
(b) PSSFC agrees to indemnify and hold harmless the
Phoenix Finance Subsidiary, each of its directors and each person or entity who
controls the Phoenix Finance Subsidiary or any such person, within the meaning
of Section 15 of the
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Securities Act, against any and all losses, claims, damages or liabilities,
joint and several, to which the Phoenix Finance Subsidiary or any such person
or entity may become subject, under the Securities Act or otherwise, and will
reimburse the Phoenix Finance Subsidiary and any such director or controlling
person for any legal or other expenses incurred by the Phoenix Finance
Subsidiary or any such director or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, the
Prospectus, the Prospectus Supplement, any amendment or supplement to the
Prospectus or the Prospectus Supplement or the omission or the alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, but only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission is other than a
statement or omission relating to the information set forth in subsection
(a)(i) of this Section 4.03. This indemnity agreement will be in addition to
any liability which PSSFC may otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 4.03 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 4.03, notify the indemnifying party in
writing of the commencement thereof, but the omission to so notify the
indemnifying party will not relieve the indemnifying party from any liability
which the indemnifying party may have to any indemnified party hereunder except
to the extent such indemnifying party has been prejudiced thereby. In case any
such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party. After notice
from the indemnifying party to such indemnified party of its election to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 4.03 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it that are different from or
additional
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to those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assert such legal defenses
and to otherwise participate in the defense of such action on behalf of such
indemnified party or parties. The indemnifying party shall not be liable for
the expenses of more than one separate counsel.
(d) PSSFC agrees, assuming all PLI-Provided Information
(defined below) is accurate and complete in all material respects, to indemnify
and hold harmless PLI, its respective officers and directors and each person
who controls PLI within the meaning of the Securities Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several,
to which they may become subject under the Securities Act or the Exchange Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
of a material fact contained in the Derived Information provided by PSSFC, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and agrees to reimburse each such indemnified party for
any legal or other expenses reasonably incurred by him, her or it in connection
with investigating or defending or preparing to defend any such loss, claim,
damage, liability or action as such expenses are incurred. The obligations of
PSSFC under this Section 4.03(d) shall be in addition to any liability which
PSSFC may otherwise have.
The procedures set forth in Section 4.03(c) shall be equally
applicable to this Section 4.03(d).
(e) For purposes of this Section 4.03, the term "Derived
Information" means such portion, if any, of the information used by PSSFC for
filing with the Commission on Form 8-K as: (i) is not contained in the
Prospectus without taking into account information incorporated therein by
reference; and (ii) does not constitute PLI-Provided Information. "PLI-Provided
Information" means any computer tape furnished to PSSFC by PLI concerning the
assets comprising the Trust.
(f) In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
the preceding parts of this Section 4.03 is for any reason held to be
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or subsection (b) of this Section 4.03 in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, the indemnifying party shall contribute
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to the amount paid or payable by the indemnified party as a result of such
losses, claims, damages or liabilities (or actions in respect thereof);
provided, however, that no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. In determining the amount of contribution to which the
respective parties are entitled, there shall be considered the relative
benefits received by the Phoenix Finance Subsidiary and PLI, on the one hand,
and PSSFC on the other, PLI's, the Phoenix Finance Subsidiary's and PSSFC's
relative knowledge and access to information concerning the matter with respect
to which the claim was asserted, the opportunity to correct and prevent any
statement or omission, and any other equitable considerations appropriate in
the circumstances. PLI, the Phoenix Finance Subsidiary and PSSFC agree that it
would not be equitable if the amount of such contribution were determined by
pro rata or per capita allocation. For purposes of this Section 4.03, each
director of PSSFC, each officer of PSSFC who signed the Registration Statement,
and each person, if any who controls PSSFC within the meaning of Section 15 of
the Securities Act, shall have the same rights to contribution as PSSFC, and
each director of the Phoenix Finance Subsidiary, and each person, if any who
controls the Phoenix Finance Subsidiary within the meaning of Section 15 of the
Securities Act, shall have the same rights to contribution as the Phoenix
Finance Subsidiary.
Section 4.04. Liabilities. By entering into this Agreement,
the Phoenix Finance Subsidiary agrees to be liable, directly to each of PSSFC,
the Trustee and each Certificateholder, for the entire amount of any losses,
claims, damages or liabilities (other than those incurred by a
Certificateholder in the capacity of an investor in the Certificates or those
which arise from any action by any Certificateholder) of the Trust (to the
extent Trust assets remaining after the Certificateholders have been paid in
full are insufficient to pay such losses, claims, damages or liabilities) and
the actions of the Servicer taken pursuant to the Pooling and Servicing
Agreement as though the Trust were a partnership under the New York Revised
Limited Partnership Act in which the Phoenix Finance Subsidiary was a general
partner.
ARTICLE FIVE
CONDITIONS OF CLOSING
Section 5.01. Conditions of PSSFC's Obligations. The
obligations of PSSFC to accept the transfer of the Initial Transferred Property
will be subject to the satisfaction, on the Closing Date of the following
conditions. Upon payment of
17
<PAGE> 21
the transfer price for the Transferred Property such conditions shall be deemed
satisfied or waived.
(a) The obligations of the Phoenix Finance Subsidiary
required to be performed by it on or prior to the Closing Date pursuant to the
terms of this Agreement shall have been duly performed and complied with in all
material respects and all of the representations and warranties of the Phoenix
Finance Subsidiary under this Agreement shall be true and correct as of the
Closing Date in all material respects and no event shall have occurred which,
with notice or the passage of time, would constitute a default under this
Agreement, and PSSFC shall have received a certificate to the effect of the
foregoing signed by an authorized officer of the Phoenix Finance Subsidiary.
(b) PSSFC shall have received (i) a letter dated the date
of this Agreement, in form and substance acceptable to PSSFC and its counsel,
prepared by Arthur Andersen & Co., independent certified public accountants,
regarding the numerical information contained in the Prospectus Supplement.
(c) The Initial Leases will be acceptable to PSSFC, in
its sole discretion.
(d) PSSFC shall have received the following additional
closing documents, in form and substance satisfactory to PSSFC and its counsel:
(i) the List of Initial Leases;
(ii) the Pooling and Servicing Agreement and the
Underwriting Agreement dated as of November 29, 1995 between PSSFC and
Prudential Securities Incorporated and all documents required
thereunder, duly executed and delivered by each of the parties thereto
other than PSSFC;
(iii) a copy of the Phoenix Finance Subsidiary's charter
and bylaws and all amendments, revisions, and supplements thereto;
(iv) an opinion of the counsel for the Phoenix Finance
Subsidiary as to various corporate matters in form and substance
acceptable to PSSFC, its counsel and Duff & Phelps Credit Rating Co.
(it being agreed that the opinion shall expressly provide that the
Trustee shall be entitled to rely on the opinion);
(v) an opinion of counsel for the Phoenix Finance
Subsidiary, in form acceptable to PSSFC, its counsel and Duff & Phelps
Credit Rating Company as to such matters as shall be required for the
assignment of a rating to the
18
<PAGE> 22
Class A Certificates of A and Class B Certificates of B by Duff &
Phelps Credit Rating Co. (it being agreed that such opinions shall
expressly provide that the Trustee shall be entitled to rely on such
opinions);
(vi) a letter from Duff & Phelps Credit Rating Company
that it has assigned a rating of A to the Class A Certificates and B
to the Class B Certificates;
(vii) an opinion of counsel for the Trustee in form and
substance acceptable to PSSFC, its counsel and Duff & Phelps Credit
Rating Company (it being agreed that the opinion shall expressly
provide that the Phoenix Finance Subsidiary shall be entitled to rely
on the opinion); and
(viii) an opinion of counsel for the Servicer, in form
and substance acceptable to PSSFC, its counsel and Duff & Phelps
Credit Rating Company (it being agreed that the opinion shall
expressly provide that the Trustee shall be entitled to rely on the
opinion).
(e) All proceedings in connection with the transactions
contemplated by this Agreement and all documents incident hereto shall be
satisfactory in form and substance to PSSFC and its counsel.
(f) The Phoenix Finance Subsidiary shall have furnished
PSSFC with such other certificates of its officers or others and such other
documents or opinions as PSSFC or its counsel may reasonably request.
Section 5.02. Conditions of the Phoenix Finance Subsidiary's
Obligations. The obligations of the Phoenix Finance Subsidiary under this
Agreement shall be subject to the satisfaction, on the Closing Date, of the
following conditions:
(a) Each of the obligations of PSSFC required to be
performed by it at or prior to the Closing Date, pursuant to the terms of this
Agreement shall have been duly performed and complied with and all of the
representations and warranties of PSSFC contained in this Agreement shall be
true and correct as of the Closing Date and the Phoenix Finance Subsidiary
shall have received a certificate to that effect signed by an authorized
officer of PSSFC.
(b) The Phoenix Finance Subsidiary shall have received
the following additional documents:
(i) the Pooling and Servicing Agreement, and all
documents required thereunder, in each case executed by PSSFC as
applicable; and
19
<PAGE> 23
(ii) a copy of a letter from Duff & Phelps Credit
Rating Co. to PSSFC to the effect that it has assigned a rating of A
to the Class A Certificates and B to the Class B Certificates.
(c) PSSFC shall have furnished the Phoenix Finance
Subsidiary with such other certificates of its officers or others and such
other documents to evidence fulfillment of the conditions set forth in this
Agreement as the Phoenix Finance Subsidiary may reasonably request.
Section 5.03. Termination of PSSFC's Obligations. PSSFC may
terminate its obligations hereunder by notice to the Phoenix Finance Subsidiary
at any time before delivery of and payment of the transfer price for the Initial
Transferred Property if: (i) any of the conditions set forth in Section 5.01 are
not satisfied when and as provided therein; (ii) there shall have been the entry
of a decree or order by a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to PLI or the Phoenix Finance
Subsidiary; (iii) there shall have been the consent by PLI or the Phoenix
Finance Subsidiary to the appointment of a conservator or receiver or liquidator
in any insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings of or relating to PLI or the Phoenix Finance Subsidiary
or of or relating to substantially all of the property of PLI or the Phoenix
Finance Subsidiary; (iv) any purchase and assumption agreement with respect to
PLI or the Phoenix Finance Subsidiary or the assets and properties of PLI or the
Phoenix Finance Subsidiary shall have been entered into; or (v) a Termination
Event shall have occurred. The termination of PSSFC's obligations hereunder
shall not terminate PSSFC's rights hereunder or its right to exercise any remedy
available to it at law or in equity.
ARTICLE SIX
MISCELLANEOUS
Section 6.01. Notices. All demands, notices and
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered to or mailed by registered mail, postage
prepaid, or transmitted by telex or telegraph and confirmed by a similar mailed
writing, if to PSSFC, addressed to PSSFC at Prudential Securities Secured
Financial Corporation, 199 Water Street, 26th Floor, New York, New York 10292,
Attention: General Counsel, or to such other address as PSSFC may designate in
writing to PLI and the Phoenix Finance Subsidiary, if to the Phoenix Finance
Subsidiary, addressed to Phoenix Receivables II, Inc. at 2401
20
<PAGE> 24
Kerner Boulevard, San Rafael, California 94901, Attention: Chief Financial
Officer, or to such other address as the Phoenix Finance Subsidiary may
designate in writing to PLI and PSSFC and if to PLI, addressed to Phoenix
Leasing Incorporated, 2401 Kerner Boulevard, San Rafael, California 94901,
Attention: Chief Financial Officer, or to such other address as PLI may
designate in writing to PSSFC and the Phoenix Finance Subsidiary.
Section 6.02. Severability of Provisions. Any part,
provision, representation, warranty or covenant of this Agreement which is
prohibited or which is held to be void or unenforceable shall be ineffective to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation, warranty or
covenant of this Agreement which is prohibited or unenforceable or is held to be
void or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction as to any Lease shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereto waive any provision of law which
prohibits or renders void or unenforceable any provision hereof.
Section 6.03. Further Assurances. The Phoenix Finance
Subsidiary agrees to execute and deliver such instruments and take such actions
as PSSFC may, from time to time, reasonably request in order to effectuate the
purpose and to carry out the terms of this Agreement and any Receivables
Transfer Agreement Supplement.
Section 6.04. Survival. The parties to this Agreement agree
that the representations, warranties and agreements made by each of them herein
and in any certificate or other instrument delivered pursuant hereto shall be
deemed to be relied upon by the other party hereto, notwithstanding any
investigation heretofore or hereafter made by such other party or on such other
party's behalf, and that the representations, warranties and agreements made by
the parties hereto in this Agreement or in any such certificate or other
instrument shall survive the delivery of and payment for the Transferred
Property.
Section 6.05. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 6.06. Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon
21
<PAGE> 25
the parties hereto and their respective successors and permitted assigns.
Except as expressly permitted by the terms hereof, this Agreement may not be
assigned, pledged or hypothecated by any party hereto to a third party without
the written consent of the other parties to this Agreement; provided, however,
that PSSFC may assign its rights hereunder without the consent of the Phoenix
Finance Subsidiary.
Section 6.07. Governing Law. This Agreement shall be
construed in accordance with and governed by the laws of the State of New York
(without regard to conflicts of laws principles), and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Section 6.08. Confirmation of Intent. It is the intention of
the Phoenix Finance Subsidiary and PSSFC that the assignment and transfer
hereunder and under any Receivables Transfer Agreement Supplements transfer good
title to the Transferred Property to PSSFC and constitute a sale for financial
accounting purposes, free and clear of all Liens, from the Phoenix Finance
Subsidiary to PSSFC, and that the Transferred Property not be part of the
Phoenix Finance Subsidiary's estate in the event of the insolvency or bankruptcy
of the Phoenix Finance Subsidiary. In the event that the Transferred Property is
held to be property of the Phoenix Finance Subsidiary's estate, or if for any
reason this Agreement or any Receivables Transfer Agreement Supplement is held
or deemed to create a security interest in the Transferred Property, then (x)
this Agreement and under any Receivables Transfer Agreement Supplement shall
also be deemed to be a security agreement within the meaning of Article 8 and
Article 9 of the Uniform Commercial Code as in effect in the States of New York,
California, Washington and New Jersey and (y) the transfer provided for in this
Agreement and under any Receivables Transfer Agreement Supplements shall be
deemed to be a grant by the Phoenix Finance Subsidiary to PSSFC of (A) a valid
first priority perfected security interest in all of the Phoenix Finance
Subsidiary's right, title and interest in and to the Transferred Property,
except for the Equipment not owned by the Phoenix Finance Subsidiary, and (B) a
valid assignment of its security interest in the Equipment not owned by the
Phoenix Finance Subsidiary. The Phoenix Finance Subsidiary hereby grants such a
security interest.
Section 6.09. Execution in Counterparts. This Agreement may
be executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
Section 6.10. Miscellaneous. (a) (i) This Agreement
supersedes all prior agreements and understandings
22
<PAGE> 26
relating to the subject matter hereof and (ii) this Agreement may be amended
from time to time by the Phoenix Finance Subsidiary and PSSFC without the
consent of any of the Certificateholders, to cure any ambiguity herein;
provided, however, that such action shall not, as evidenced by an opinion of
counsel acceptable to the Trustee and at the expense of the Phoenix Finance
Subsidiary, adversely affect in any respect the interests of any
Certificateholder. A copy of any such opinion shall be delivered to the Rating
Agency by PSSFC.
(b) This Agreement may also be amended from time to time
by the Phoenix Finance Subsidiary and PSSFC with the consent of the Majority
Holders for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement, or of modifying in any
manner the rights of the Certificateholders.
(c) A copy of any amendment to this Agreement shall be
delivered to the Rating Agency by PSSFC.
(d) The parties agree that the Trustee is an intended
third-party beneficiary of this Agreement and each Receivables Transfer
Agreement Supplement to the extent necessary to enforce the rights and to
obtain the benefit of the remedies of PSSFC under this Agreement and each
Receivables Transfer Agreement Supplement which are assigned to the Trustee for
the benefit of the Certificateholders pursuant to the Pooling and Servicing
Agreement and to the extent necessary to obtain the benefit of the enforcement
of the obligations and covenants of the Phoenix Finance Subsidiary under
Sections 4.01 and 4.02 of this Agreement.
[Signatures Commence on Following Page]
23
<PAGE> 27
IN WITNESS WHEREOF, the parties hereto have caused their names
to be signed by their respective officers thereunto duly authorized as of the
date first above written.
PHOENIX RECEIVABLES II, INC.
By: /s/ Paritosh K. Choksi
-----------------------------------
Name: Paritosh K. Choksi
Title: Chief Financial Officer
PHOENIX LEASING INCORPORATED
By: /s/ Paritosh K. Choksi
----------------------------------
Name: Paritosh K. Choksi
Title: Chief Financial Officer
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
By: /s/ Valerie H. Kay
-----------------------------------
Name: Valerie H. Kay
Title: Vice President
[Signature Page]
<PAGE> 28
EXHIBIT A
Form of Receivables Transfer Agreement Supplement
This Receivables Transfer Agreement Supplement (this
"Agreement"), dated ____________ (the "Transfer Date"), is entered into among
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION ("PSSFC"), a California
corporation located at 2401 Kerner Boulevard, San Rafael, California
94901-5527, PHOENIX LEASING INCORPORATED ("PLI"), in its individual capacity, a
California corporation located at 2401 Kerner Boulevard, San Rafael, California
94901-5527 and PHOENIX RECEIVABLES II, INC. (the "Phoenix Finance Subsidiary"),
a Delaware corporation located at 2401 Kerner Boulevard, San Rafael, California
94901-5527.
W I T N E S S E T H:
Reference is hereby made to that certain Receivables Transfer
Agreement dated as of November 1, 1995 (the "Receivables Transfer Agreement")
between the Phoenix Finance Subsidiary and PSSFC. Pursuant to the Receivables
Transfer Agreement, the Phoenix Finance Subsidiary agreed to transfer, and
PSSFC agreed to accept, from time to time, New Transferred Property (as defined
below) for transfer by PSSFC to the Trust. The Receivables Transfer Agreement
provides that each such transfer of New Transferred Property be evidenced by
the execution of delivery of a Receivables Transfer Agreement Supplement in the
form of this Receivables Transfer Agreement Supplement.
The New Transferred Property consists of (a) (i) any New
Equipment that is owned by the Phoenix Finance Subsidiary and any and all
income and proceeds from such New Equipment, but subject to the rights of any
User to quiet enjoyment of such New Equipment under the related New Lease and
(ii) any security interest of the Phoenix Finance Subsidiary in any of the New
Equipment that is not owned by the Phoenix Finance Subsidiary, (b) the New
Leases, including, without limitation, all Scheduled Payments, Residual
Receipts and any other payments due with respect to the New Leases after the
Cut-Off Date relating to such New Leases, (c) any guarantees of a User's
obligations under a New Lease, (d) all other documents in the Lease Files with
respect to the New Leases, including, without limitation, any Uniform
Commercial Code financing statements relating to the New Leases or to the New
Equipment; (e) any Insurance Policies and Insurance Proceeds with respect to
the New Equipment, (f) the Security Deposits and (g) any and all income and
proceeds of any of the foregoing; but shall not consist of any right, title and
interest in and to the Initial Unpaid Amounts relating to the New Equipment, or
any warrants issued by a User to PLI.
The New Leases are those Leases listed on the List of New
Leases attached hereto.
<PAGE> 29
The Cut-Off Date with respect to the New Leases is the close
of business on the day prior to the Transfer Date.
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:
Section 1. Definitions. For the purposes of this Agreement,
capitalized terms used herein but not otherwise defined herein shall have the
respective meanings assigned to such terms in the Receivables Transfer
Agreement.
Section 2. Transfer. (a) The Phoenix Finance Subsidiary
hereby makes an additional transfer to PSSFC of all of its respective right,
title and interest in, to, and under the New Transferred Property, whether now
existing or hereafter arising, and the Phoenix Finance Subsidiary hereby
assigns, transfers, grants and transfers to the PSSFC, without recourse, all of
its right, title and interest in and to the New Transferred Property, whether
now existing or hereafter arising. Upon PSSFC's receipt of the New Transferred
Property, PSSFC shall transfer the New Transferred Property to the Trust in
accordance with the Pooling and Servicing Agreement.
(b) On the Transfer Date, as full consideration for the
Phoenix Finance Subsidiary's transfer of the New Transferred Property to PSSFC,
PSSFC will deliver to the Phoenix Finance Subsidiary cash equal to the
aggregate Lease Principal Balance of the New Leases as of the related Cut-Off
Date.
(c) In connection with such transfer, the Phoenix Finance
Subsidiary shall, at its own expense, cause its books and records to be marked
to show that the New Transferred Property has been transferred to PSSFC in
accordance with this Agreement and that the New Transferred Property has been
transferred to the Trust in accordance with the Pooling and Servicing Agreement
on or prior to the Transfer Date.
Section 3. Amendment. This Agreement may be amended from
time to time by the Phoenix Finance Subsidiary and PSSFC only with the prior
written consent of the Servicer and the Trustee.
Section 4. Governing Law. This Agreement and any amendment
hereof pursuant to Section 4 hereof 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 5. 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.
A-2
<PAGE> 30
Section 6. Binding Effect; Third-Party Beneficiaries. This
Agreement will inure to the benefit of and be binding upon the parties hereto,
the Servicer, the Trust, the Certificateholders and their respective successors
and permitted assigns.
Section 7. Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
[REMAINDER INTENTIONALLY LEFT BLANK]
A-3
<PAGE> 31
IN WITNESS WHEREOF, the Phoenix Finance Subsidiary and PSSFC
have caused this Receivables Transfer Agreement Supplement to be duly executed
by their respective officers as of the day and year first above written.
PHOENIX RECEIVABLES II, INC.
By:
------------------------------
Name:
Title:
PHOENIX LEASING INCORPORATED
By:
-----------------------------
Name:
Title:
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
By:
------------------------------
Name:
Title:
A-4
<PAGE> 1
EXHIBIT 10.2
- --------------------------------------------------------------------------------
CONTRIBUTION AGREEMENT
between
PHOENIX LEASING INCORPORATED
and
PHOENIX RECEIVABLES II, INC.
Dated as of
NOVEMBER 1, 1995
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
ARTICLE I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.01 Terms Defined in the Pooling and Servicing Agreement . . . . . . . . . . . . 2
SECTION 1.02 Additional Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II. CONVEYANCE OF INITIAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.01 Capital Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.02 Custody of Lease Files . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.03 Contributions of New Assets . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.01 Representations and Warranties of PLI. . . . . . . . . . . . . . . . . . . . 5
SECTION 3.02 Representations and Warranties of the Phoenix Finance Subsidiary. . . . . . . 12
SECTION 3.03 Acceptance of Reconveyance of Leases and Equipment by PLI . . . . . . . . . . 13
ARTICLE IV. COVENANTS OF PLI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.01 Covenants of PLI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.02 Phoenix Finance Subsidiary Covenants . . . . . . . . . . . . . . . . . . . . 17
SECTION 4.03 Transfer of Assets and Rights under this Agreement . . . . . . . . . . . . . 17
ARTICLE V. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 5.01 Conditions to the Phoenix Finance Subsidiary's Obligations . . . . . . . . . 18
SECTION 5.02 Conditions to the Obligations of PLI . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VI. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 6.01 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 6.02 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VII. MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 7.01 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 7.02 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 7.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.04 Severability of Provision . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.05 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.06 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.07 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.08 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
SECTION 7.09 Binding Effect; Third-Party Beneficiaries. . . . . . . . . . . . . . . . . . 21
SECTION 7.10 Merger and Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7.11 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7.12 Exhibit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7.13 No Bankruptcy Petition Against the Phoenix Finance Subsidiary . . . . . . . . 21
SECTION 7.14 Confirmation of Intent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Exhibit A Form of Contribution Agreement Supplement
</TABLE>
<PAGE> 4
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT, dated as of November 1, 1995 (this
"Agreement"), is entered into between PHOENIX LEASING INCORPORATED ("PLI"), a
California corporation located at 2401 Kerner Boulevard, San Rafael, California
94901-5527 and PHOENIX RECEIVABLES II, INC. (the "Phoenix Finance Subsidiary"),
a Delaware corporation located at 2401 Kerner Boulevard, San Rafael, California
94901-5527.
W I T N E S S E T H:
WHEREAS, PLI in the ordinary course of its business originates
and acquires equipment leases in the United States; and
WHEREAS, PLI desires to transfer and assign all of its right,
title and interest in and to the Assets to the Phoenix Finance Subsidiary upon
the terms and conditions hereinafter set forth; and
WHEREAS, it is contemplated that following such transfer and
assignment, the Phoenix Finance Subsidiary will transfer and assign all of its
right, title and interest in and to the Assets to Prudential Securities Secured
Financing Corporation ("PSSFC") upon the terms and conditions set forth in the
Receivables Transfer Agreement dated as of November 1, 1995 (the "Receivables
Transfer Agreement") between the Phoenix Finance Subsidiary and PSSFC; and
WHEREAS, it is contemplated that the Assets transferred
hereunder will be transferred by PSSFC to the Trust formed pursuant to the
Pooling and Servicing Agreement dated as of November 1, 1995 (the "Pooling and
Servicing Agreement") among PSSFC, PLI, as servicer (the "Servicer"), and
Bankers Trust Company, as trustee (the "Trustee"); and
WHEREAS, it is contemplated that following such transfers and
assignments the Servicer will service the Assets pursuant to the Pooling and
Servicing Agreement; and
WHEREAS, pursuant to the Receivables Transfer Agreement, the
Phoenix Finance Subsidiary will transfer to PSSFC, the Phoenix Finance
Subsidiary's right, title and interest to the Assets in and under this
Agreement; and
WHEREAS, pursuant to the Pooling and Servicing Agreement, PSSFC
will transfer to the Trustee, for the benefit of the Trust and the
Certificateholders, PSSFC's right, title and interest in and under the
Receivables Transfer Agreement, and PLI agrees that all
<PAGE> 5
covenants and agreements made by it herein shall also be for the benefit of the
Trust and the Certificateholders;
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 Terms Defined in the Pooling and Servicing
Agreement. For the purposes of this Agreement, capitalized terms used herein
but not otherwise defined shall have the respective meanings assigned to such
terms in the Pooling and Servicing Agreement.
SECTION 1.02 Additional Definitions. Whenever used in this
Agreement, the following words and phrases shall have the following meanings:
"Assets" shall mean, collectively, the Initial Assets
and all New Assets theretofore acquired by the Phoenix Finance Subsidiary.
"Capital Contribution" shall have the meaning set forth in
Section 2.01 hereof.
"Closing Date" shall mean November 30, 1995.
"Common Stock" shall mean the common stock of the
Phoenix Finance Subsidiary constituting all of its capital stock and comprised
of 1000 authorized shares.
"Contribution Agreement Supplement shall mean any Contribution
Agreement Supplement in the form of Exhibit A hereto.
"Cut-Off Date" shall mean the close of business on November 1,
1995.
"Franchise Business Leases" shall mean those Initial
Leases originated by PLI as part of the Servicer's Franchise Business Lease
portfolio including leases to franchisees of approved franchisors and other
small businesses.
"Initial Assets" shall mean (a) (i) any Initial
Equipment that is owned by PLI and any and all income and proceeds from such
Initial Equipment, but subject to the rights of any User to quiet enjoyment of
such Initial Equipment under the related Initial Lease and (ii) any security
interest of PLI in any of the Initial Equipment that is not owned by PLI, (b)
the Initial Leases,
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including, without limitation, all Scheduled Payments, Residual Receipts and any
other payments due with respect to the Initial Leases after the Cut-Off Date
relating to such Initial Leases, (c) any guarantees of a User's obligations
under a Initial Lease, (d) all other documents in the Lease Files with respect
to the Initial Leases, including, without limitation, any Uniform Commercial
Code financing statements relating to the Initial Leases or to the Initial
Equipment, (e) any Insurance Policies and Insurance Proceeds with respect to the
Initial Equipment, (f) the Security Deposits and (g) any and all income and
proceeds of any of the foregoing; but shall not include any right, title and
interest in and to the Initial Unpaid Amounts relating to the Initial Equipment,
together with any warrants issued by a User to PLI.
"New Assets" shall have the meaning set forth in the related
Contribution Agreement Supplement.
"Opinion of Counsel" shall mean a written opinion of counsel,
who may be counsel to the PLI or other counsel acceptable to the Phoenix Finance
Subsidiary, PSSFC and the Trustee.
"Pooling and Servicing Agreement" shall have the meaning set
forth in the fourth WHEREAS Clause of this Agreement.
"PSSFC" shall have the meaning set forth in the third WHEREAS
Clause of this Agreement.
"Receivables Transfer Agreement" shall have the meaning set
forth in the third WHEREAS Clause of this Agreement.
"Servicer" shall have the meaning set forth in the fourth
WHEREAS Clause of this Agreement.
"Phoenix Finance Subsidiary" shall have the meaning set forth
in the first paragraph of this Agreement.
"this Agreement" shall have the meaning set forth in the first
paragraph of this Agreement.
"Transferred Property" shall have the meaning set forth in the
Receivables Transfer Agreement.
"Trustee" shall have the meaning set forth in the
fourth WHEREAS Clause of this Agreement.
ARTICLE II.
CONVEYANCE OF INITIAL ASSETS
SECTION 2.01 Capital Contribution. (a) PLI hereby makes a
capital contribution (the "Capital Contribution") to the Phoenix Finance
Subsidiary of all of its respective right, title and
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interest in, to, and under the Initial Assets, whether now existing or hereafter
arising, and PLI hereby assigns, grants and transfers to the Phoenix Finance
Subsidiary, without recourse, all of its respective right, title and interest in
and to the Initial Assets, whether now existing or hereafter arising.
(b) In connection with such contribution and transfer, prior to
the Closing Date PLI agrees to record and file, at its own expense, financing
statements (and thereafter timely continuation statements with respect to such
financing statements) with respect to the Initial 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 and
contribution of the Initial Assets from PLI to the Phoenix Finance Subsidiary
pursuant hereto, the transfer of the Transferred Property (as defined in the
Receivables Transfer Agreement) from the Phoenix Finance Subsidiary to PSSFC
pursuant to the Receivables Transfer Agreement and the transfer of the
Transferred Property from PSSFC to the Trust pursuant to the Pooling and
Servicing Agreement, and to deliver copies of such financing statements or other
evidence of such filings to the Trustee (and copies to the Phoenix Finance
Subsidiary and PSSFC) on or prior to the Closing Date; provided, however, that
no financing statements will be recorded or filed with respect to the
contribution or transfer of the Equipment other than with respect to Growth
Capital leases in connection with which Equipment is located in California,
Washington and New Jersey; and provided, further, that the Lease Files will not
be physically delivered to the Phoenix Finance Subsidiary but instead will be
held by the Servicer on behalf of PSSFC, the Phoenix Finance Subsidiary and the
Trust.
(c) In connection with such contribution and conveyance, (i)
PLI shall, at its own expense, cause its books and records to be marked to show
that the Initial Assets have been contributed and transferred to the Phoenix
Finance Subsidiary in accordance with this Agreement, that the Initial
Transferred Property (as defined in the Receivables Transfer Agreement) has been
transferred to PSSFC in accordance with the Receivables Transfer Agreement and
that the Initial Transferred Property has been transferred to the Trust in
accordance with the Pooling and Servicing Agreement on or prior to the Closing
Date and (ii) on the Closing Date PLI shall deliver to the Trustee on behalf of
PSSFC the List of Initial Leases.
SECTION 2.02 Custody of Lease Files. In connection with the
assignment and transfer of the Leases and Lease Files to the Phoenix Finance
Subsidiary pursuant to this Agreement, to PSSFC pursuant to the Receivables
Transfer Agreement and to the Trust pursuant to the Pooling and Servicing
Agreement, the Servicer will retain the Lease Files and any related evidence of
insurance and payments all of which shall be held on behalf of the Trustee and
the Certificateholders.
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SECTION 2.03 Contributions of New Assets. Each contribution of
New Assets shall be evidenced by the execution and delivery by PLI and the
Phoenix Finance Subsidiary of a Contribution Agreement Supplement in the form of
Exhibit A hereto. Each such contribution shall be effective as of the related
Transfer Date.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Representations and Warranties of PLI. PLI hereby
makes the following representations and warranties for the benefit of the
Trustee, the Certificateholders, PSSFC and the Phoenix Finance Subsidiary, on
which the Phoenix Finance Subsidiary relies in issuing the Common Stock and
accepting the contribution of the Initial Assets, and on which PSSFC relies in
accepting the transfer of the Initial Transferred Property (as defined pursuant
to the Receivables Transfer Agreement) pursuant to the Receivables Transfer
Agreement, and on which the Trust relies in accepting the transfer of the New
Transferred Property pursuant to the Pooling and Servicing Agreement. Such
representations and warranties speak as of the Closing Date and shall be deemed
reaffirmed on each Transfer Date, but shall survive the contribution, assignment
and transfer of the Initial Assets to the Phoenix Finance Subsidiary and its
successors and assigns.
(a) PLI hereby represents and warrants with
respect to the Initial Assets contributed and conveyed by it as
follows:
(i) List of Initial Leases. The information with
respect to the Initial Leases in the List of Initial Leases is true and
correct in all respects as of the Cut-Off Date; the List of Initial
Leases is attached hereto;
(ii) No Default. As of the Cut-off Date, no more than
10% of a payment on any Initial Lease was more than 60 days past due
and (except for payments which are 60 days or less past due) (A) there
was no default, breach, violation or event permitting acceleration
under the terms of any Initial Lease (other than delinquent payments,
as previously described), (B) no event had occurred and was continuing
which with notice, the lapse of time or both would constitute a
default, breach, violation or event permitting acceleration under the
terms of any Initial Lease (other than delinquent payments, as
previously described) and (C) it has not waived any of the foregoing;
(iii) No Waiver. No provision of any Initial Lease has
been waived, altered or modified in any respect, except by instrument
or documents attached as part of such Initial Lease and identified by
it (other than payment delinquencies permitted under clause (a) (ii)
above);
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(iv) Binding Obligation. Each Initial Lease
represents the legal, valid and binding payment obligation of the User,
enforceable 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 a proceeding at law or in equity;
(v) No Defenses. Each Initial Lease is not and will
not be subject to any right of rescission, setoff, counterclaim or
defense, including the defense of usury, whether arising out of
transactions concerning such Initial Lease or otherwise, and the
operation of any of the terms of such Initial Lease or the exercise by
it, the Servicer or the User of any right under such Initial Lease will
not render such Initial Lease unenforceable in whole or in part, and no
such right of rescission, setoff, counterclaim or defense, including a
defense arising out of a breach of the User's right of quiet enjoyment
of the related Equipment, has been asserted with respect thereto,
except that certain rights or defenses may exist under applicable law
which, individually or in the aggregate, do not make the remedies
available with respect to such Initial Lease inadequate for the
practical realization of the benefits provided thereby;
(vi) Compliance with Law. All requirements of
applicable federal, state and local laws, and regulations thereunder,
including, without limitation, usury laws, if any, in respect of each
Initial Lease have been complied with in all material respects, and
each Initial Lease complied in all material respects at the time it was
originated or made and now complies in all material respects with all
legal requirements of the jurisdiction in which it was originated;
(vii) Characteristics of the Leases. (A) Each Initial
Lease contains provisions requiring the User to assume all risk of loss
or malfunction of the related Equipment, and making the User absolutely
and unconditionally liable for all payments required to be made
thereunder, without any right of setoff for any reason whatsoever, (B)
except for Initial Leases having Lease numbers of 52, 191, 192, 231,
232, 162, 163, 164, having an aggregate Lease Principal Balance as of
the Cut-Off Date of $579,492, and each of which allows for prepayment
in an amount not less than the related Prepayment Amount, no Initial
Lease provides the User with a right to terminate or prepay, (C) each
Initial Lease does not provide for the substitution, exchange or
addition of any other items of equipment pursuant to such Initial Lease
which would result in any reduction or extension
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of payments due under each Initial Lease, (D) each Initial Lease is
assignable by it, the Phoenix Finance Subsidiary and PSSFC, without the
consent of any Person, or, if any consent is required, the Person whose
consent is required has given its consent in accordance with the terms
of such Initial Lease no later than the Closing Date, (E) each Initial
Lease was originated in the United States, its territories or
possessions, by it in the ordinary course of its business, and in
accordance with its underwriting standards and has been fully and
properly executed by the parties thereto, (F) each Initial Lease
creates, a valid, subsisting and enforceable security interest in favor
of it in the related Equipment and such security interest has been
perfected, (G) each Initial Lease is in full force and effect in
accordance with its terms and contains enforceable provisions such that
the rights and remedies of the holder thereof shall be adequate for
realization against the related Equipment of the benefits of the
security, (H) each Initial Lease at the date of issuance of the
Certificates will be free and clear of all Liens; (I) each Initial
Lease provides for monthly payments (which payments have not been
reduced or suspended) as set forth for each Initial Lease in the List
of Initial Leases that fully amortize the original Lease Principal
Balance by maturity and (J) each Initial Lease is not more than 60 days
past due as of the Cut-Off Date;
(viii) Lawful Assignment. Each Initial Lease was not
originated in, nor is it subject to the laws of, any jurisdiction the
laws of which would make unlawful, void or voidable the contribution,
sale, transfer and assignment of such document under this Agreement, or
give rise to any repurchase obligation or option in accordance with
Section 3.03 hereof or Section 5.12 of the Pooling and Servicing
Agreement and all necessary action has been taken by it to transfer all
of its right, title and interest in and to each Initial Lease and the
related Equipment to the Phoenix Finance Subsidiary;
(ix) Capacity. All parties to each Initial Lease had
the legal capacity to execute the Initial Lease;
(x) Good Title. Each Initial Lease and the related
Equipment has not been sold, transferred, assigned or pledged by it to
any other Person and immediately prior to contributing the Initial
Leases and the related Equipment to the Phoenix Finance Subsidiary, it
was the sole owner of each Initial Lease and the related Equipment free
and clear of any liens or encumbrances and it has not taken any action
to convey to any Person any right to payments received under the
Initial Leases or the Insurance Policies;
(xi) Leases in Force. No Initial Lease has been
satisfied, subordinated or rescinded, and no Equipment or any
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security interest in Equipment has been released from the Initial Lease
in whole or in part;
(xii) One Original. There is only one original of
each Initial Lease for purposes of the UCC as in effect in California
and in New York and such counterpart will be delivered to the Servicer
on or before the Closing Date; each Initial Lease constitutes "chattel
paper" for purposes of the UCC as in effect in California and New York;
(xiii) Obligations; No Impairment. It has duly
fulfilled all material obligations on its part to be fulfilled under or
in connection with the Initial Leases, including, without limitation,
giving any notices or consents necessary to effect the contribution,
assignment, transfer and conveyance of the Initial Assets from it to
the Phoenix Finance Subsidiary, and has done nothing to impair the
rights of the Phoenix Finance Subsidiary, PSSFC and the
Certificateholders in the Initial Leases or the proceeds with respect
thereto;
(xiv) No Amendments. Except as otherwise reflected
in the List of Initial Leases, no Initial Lease has been amended such
that the amount of any Scheduled Payment or Final Lease Payment or the
aggregate of any Scheduled Payments or Final Lease Payments have been
decreased;
(xv) No Proceedings. There are no proceedings or
investigations pending or, to the best of its knowledge, threatened
before any court, regulatory body, administrative agency, or other
tribunal or governmental instrumentality (A) asserting the invalidity
of the Initial Lease, (B) asserting the bankruptcy or insolvency of a
User, (C) seeking to prevent payment and discharge of the Initial
Lease, or (D) seeking any determination or ruling that might materially
and adversely affect the validity or enforceability of the Initial
Lease;
(xvi) All Filings Made. All filings necessary to
evidence or perfect the contribution of the Initial Leases to the
Phoenix Finance Subsidiary have been made in all appropriate
jurisdictions;
(xvii) Miscellaneous. Each User's billing address is
in the United States or its possessions and all payments under the
Initial Leases are required to be made in United States dollars;
(xviii) Monthly Installments. The Scheduled Payments
on each Initial Lease are payable in monthly installments;
(xix) Aggregate Characteristics. As to the Initial
Leases in the aggregate:
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(a) Amounts. The aggregate Lease Principal
Balance on the Leases listed in the List of Initial Leases as
of the Cut-Off Date is equal to $29,756,661.70;
(b) Selection Criteria. Substantially all of
the Equipment and related Initial Leases owned by it having the
following characteristics have been contributed by it to the
Phoenix Finance Subsidiary:
The Initial Leases and the related
Equipment have the following characteristics: (A) each such
Initial Lease has a remaining term to maturity as of the
Cut-Off Date of not less than 20 months and not more than 65
months, (B) the weighted average remaining term to maturity of
such Initial Leases is 44.79 months, (C) each such Initial
Lease has a Lease Principal Balance as of the Cut-Off Date of
not less than $2,104.07 and not more than $668,060.17, (D) as
of the Cut-Off Date, no such item of Equipment has been
repossessed, (E) no more than 41.24% of the aggregate Lease
Principal Balances on the Cut-Off Date is attributable to such
Initial Leases with Users in any single State, (F) no more than
2.75% of the aggregate Lease Principal Balances on the Cut-Off
Date is attributable to any one Lessee (including Affiliates of
such Lessee), (G) the Servicer has received at least one lease
payment (which may include receipt by the Servicer of the
related Security Deposit) on account of each such piece of
Equipment from the related User, (H) approximately 46.45% of
the aggregate Lease Principal Balance for all Initial Leases on
the Cut-Off Date is attributable to Franchise Business Leases
and (I) approximately 53.55% of the aggregate Lease Principal
Balance for all Initial Leases on the Cut-Off Date is
attributable to Growth Capital Leases;
(c) Computer Tape. The Computer Tape made
available by it as of the Cut-Off Date was complete and
accurate as of its date and includes a description of the same
Initial Leases that are described in the List of Initial Leases
and the payments due thereunder as of the Cut-Off Date;
(xx) Maturity of Leases. Each Initial Lease has a
final Scheduled Payment date as set forth in the List of Initial
Leases, none of which is later than March, 2001; no Initial Lease has a
Final Lease Payment due after March, 2001;
(xxi) Security Interest in the Equipment and the
Initial Leases. All necessary and appropriate actions have been taken
that would result in the creation of a perfected security interest in
the Equipment not owned by it and in the Initial Leases in its favor as
secured party;
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(xxii) Maintenance and Insurance. Each Initial Lease
requires that the User maintain the related Equipment in good and
workable order and that the User obtain and maintain physical damage
and liability insurance covering such Equipment;
(xxiii) Foreclosure. The Trust will have the right to
exercise appropriate remedies with respect to the Equipment without
obtaining the consent of any third parties;
(xxiv) Representations and Warranties. The
representations and warranties in this Agreement are true and correct;
(xxv) Contribution of Assets. It has caused its
books and records to be marked to indicate that the Initial Assets have
been contributed to the Phoenix Finance Subsidiary and will be acquired
by PSSFC from the Phoenix Finance Subsidiary and will be transferred by
PSSFC to the Trust;
(xxvi) Business Enterprise; Legal Requirements. Each
User is a business enterprise; no Initial Lease is subject to legal
requirements relating to extensions of credit to consumers; and
(xxvii) Servicing. The prior servicing of the Initial
Leases has been conducted in accordance with all applicable law.
(b) PLI represents and warrants as follows:
(i) Organization and Good Standing. It is a
California corporation duly organized, validly existing and in good
standing under the laws of the State of California, with full power and
authority to own its properties and to conduct its business as
presently conducted, and had at all relevant times, and now has, power,
authority, and legal right to acquire and own the Assets;
(ii) Due Qualification. It is duly qualified to do
business as a foreign corporation and is in good standing, and has
obtained all necessary licenses and approvals, in all jurisdictions in
which its ownership or lease of property or the conduct of its business
requires such qualification, license or approval, except to the extent
that the failure to be so qualified, or to obtain such licenses and
approvals, would not, in the aggregate, materially and adversely affect
its ability to perform its obligations under this Agreement or any
Contribution Agreement Supplement or the collectibility of the Assets;
(iii) Power and Authority. It has the power and
authority to execute and deliver this Agreement and each Contribution
Agreement Supplement and to carry out their
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respective terms; it has duly authorized the contribution, transfer and
assignment to the Phoenix Finance Subsidiary of the Assets by all
necessary action; and the execution, delivery, and performance of this
Agreement and each Contribution Agreement Supplement has been duly
authorized by it by all necessary action;
(iv) Valid Contribution; Binding Obligations. This
Agreement constitutes a valid contribution, assignment and transfer to
the Phoenix Finance Subsidiary of all of its right, title, and interest
in, to and under the Initial Assets; upon execution and delivery of
each Contribution Agreement Supplement such Contribution Agreement
Supplement will constitute a valid contribution, assignment and
transfer to the Phoenix Finance Subsidiary of all of its right, title
and interest to and under the New Assets transferred thereby, and the
Assets will be held by the Phoenix Finance Subsidiary free and clear of
any Lien of any Person, except for Liens permitted under, or to be
created hereby and by the Receivables Transfer Agreement and the
Pooling and Servicing Agreement; this Agreement constitutes and each
Contribution Agreement Supplement, when duly executed and delivered,
will constitute its legal, valid, and binding obligation, enforceable
against it 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 (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 a proceeding at law or in equity;
(v) No Violation. The consummation of the
transactions contemplated by and the fulfillment of the terms of this
Agreement 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) a default under, its charter or by-laws or any material term
of any indenture, agreement, mortgage, deed of trust, or other
instrument to which it 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 and any
related Contribution Agreement Supplement, or violate any law or any
order, rule, or regulation applicable to it of any court or of any
federal or state regulatory body, administrative agency, or other
governmental authority having jurisdiction over it or any of its
properties which would have a material adverse effect on the Assets or
on its ability to perform its obligations under this Agreement or any
Contribution Agreement Supplement;
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(vi) No Proceedings. There are no proceedings or
investigations pending, or, to its knowledge, threatened, before any
court, regulatory body, administrative agency, or other tribunal or
governmental authority (A) asserting the invalidity of this Agreement,
(B) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or any Contribution Agreement Supplement
or (C) seeking any determination or ruling that might (in its
reasonable judgment) materially and adversely affect the performance by
it of its obligations under, or the validity or enforceability of, this
Agreement or any Contribution Agreement Supplement or the
collectibility of the Assets;
(vii) Insolvency. It is not insolvent and will not be
rendered insolvent by the transactions contemplated by this Agreement
or any Contribution Agreement Supplement;
(viii) Principal Place of Business. Its principal
place of business and chief executive office is at 2401 Kerner
Boulevard, San Rafael, California;
(ix) Valid Transfer. It is its intention that the
contribution, assignment and transfer herein contemplated constitute a
transfer of the Initial Assets from it to the Phoenix Finance
Subsidiary and that the beneficial interest in and title to the Assets
not be part of the debtor's estate in the event of the filing of a
bankruptcy petition by or against it under any bankruptcy law; and
(x) Bulk Transfers. The transfer and
assignment of the Initial Assets by it to the Phoenix Finance
Subsidiary pursuant to this Agreement are not subject to the bulk
transfer laws or any similar statutory provisions in effect in any
applicable jurisdiction.
SECTION 3.02 Representations and Warranties of the Phoenix
Finance Subsidiary. The Phoenix Finance Subsidiary hereby makes the following
representations and warranties on which PLI relies in investing in the Phoenix
Finance Subsidiary and transferring the Assets. Such representations and
warranties speak as of the Closing Date and shall be deemed re-affirmed on each
Transfer Date, but shall survive each assignment, transfer and conveyance of the
respective Assets to the Phoenix Finance Subsidiary and its successors and
assigns.
(a) Organization and Good Standing. The Phoenix Finance
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, with full power and authority
to own its properties and to conduct its business as presently conducted;
(b) Due Qualification. The Phoenix Finance Subsidiary is duly
qualified to do business as a foreign corporation and is in
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good standing, and has obtained all necessary licenses and approvals, in all
jurisdictions in which its ownership or lease of property or the conduct of its
business requires such qualification, license or approval, except to the extent
that the failure to be so qualified, or to obtain such license and approvals
would not, in the aggregate, materially and adversely affect the ability of the
Phoenix Finance Subsidiary to comply with the terms of this Agreement and each
Contribution Agreement Supplement;
(c) Power and Authority. The Phoenix Finance Subsidiary has the
power and authority to execute and deliver this Agreement and each Contribution
Agreement Supplement and to carry out its respective terms; The Phoenix Finance
Subsidiary has duly authorized the issuance of 1000 shares of Common Stock to
PLI by all necessary corporate action; and the execution, delivery, and
performance of this Agreement and each Contribution Agreement Supplement have
been duly authorized by the Phoenix Finance Subsidiary by all necessary action;
(d) Binding Obligations. This Agreement constitutes and each
Contribution Agreement Supplement, when each has been duly executed and
delivered, will constitute, a legal, valid, and binding obligation of the
Phoenix Finance Subsidiary enforceable against the Phoenix Finance Subsidiary 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 a proceeding at law or in equity;
(e) No Violation. The consummation of the transactions
contemplated by and the fulfillment of the terms of this Agreement and each
Contribution Agreement Supplement 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) a default under, the charter or by-laws of the Phoenix Finance
Subsidiary, or any material term of any indenture, agreement, mortgage, deed of
trust or other instrument to which the Phoenix Finance Subsidiary is a party;
and
(f) Common Stock. PLI is the record owner of 1000 shares of the
Common Stock of the Phoenix Finance Subsidiary, all of which are validly issued,
fully paid and non-assessable.
SECTION 3.03 Acceptance of Reconveyance of Leases and Equipment
by PLI. Upon discovery by PLI, the Phoenix Finance Subsidiary, PSSFC, the
Servicer or the Trustee of a breach of any of the representations and warranties
made pursuant to Section 3.01 that materially and adversely affects the
interests of the Phoenix Finance Subsidiary or PSSFC or their successors or
assigns,
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including the Trustee and the Certificateholders in any of the Leases or the
Equipment, the party discovering such breach shall give prompt written notice to
the others. Unless the breach shall have been cured or waived by the Trustee for
the benefit of the Certificateholders in all material respects on or before the
last day of the month following the month of discovery by PLI of, or receipt by
PLI of written notice from the Trustee, the Servicer, any Certificateholder, the
Phoenix Finance Subsidiary or PSSFC of, such breach, PLI shall accept the
reconveyance of any such Lease contributed and conveyed by it and the Equipment
subject to such Lease and shall remit the Reconveyance Amount to the Servicer
for allocation of such Reconveyance Amount pursuant to the terms of the Pooling
and Servicing Agreement. The obligation of PLI to accept the reconveyance of any
Lease and the Equipment subject to such Lease as to which a breach has occurred
and is continuing and to remit the Reconveyance Amount as provided in this
Section 3.03 shall constitute the sole remedy against PLI for such breach
available to the Phoenix Finance Subsidiary, PSSFC, the Trust and the
Certificateholders. The representations and warranties set forth in Section 3.01
shall survive the contribution and assignment of the Assets to the Phoenix
Finance Subsidiary and its successors and assigns.
ARTICLE IV.
COVENANTS OF PLI
SECTION 4.01 Covenants of PLI. PLI hereby covenants and agrees
with the Phoenix Finance Subsidiary as follows:
(a) Merger or Consolidation or Assumption of Obligations. Any
partnership or corporation (i) into which it may be merged or consolidated, (ii)
resulting from any merger, conversion, or consolidation to which it shall be
party, or (iii) succeeding to its business substantially as a whole, shall
execute an agreement of assumption to perform all of its obligations under this
Agreement, and upon such execution will be its successor under this Agreement,
without the execution or filing of any document or any further act on the part
of any of the parties to this Agreement, anything in this Agreement to the
contrary notwithstanding; provided, however, that (x) immediately after giving
effect to such transaction, no representation or warranty made pursuant to
Section 3.01 shall have been breached, (y) it shall have delivered to the
Phoenix Finance Subsidiary, PSSFC, the Rating Agency and the Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger, or succession and such agreement of assumption comply
with this Section 4.01 and that all conditions precedent, if any, provided for
in this Agreement relating to such transaction have been complied with and (z)
it shall have delivered to the Phoenix Finance Subsidiary, PSSFC, the Rating
Agency, and the Trustee an Opinion of Counsel either (1) stating that, in the
opinion of such counsel, all financing statements and continuation
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<PAGE> 18
statements and amendments thereto have been executed and filed that are
necessary fully to preserve and protect the interest of the Phoenix Finance
Subsidiary, PSSFC and the Trust, in the Leases and reciting the details of such
filings, or (2) stating that, in the opinion of such counsel, no such action
shall be necessary to preserve and protect such interest.
(b) Limitation on Liability. It and any of its directors or
officers or employees or agents may rely in good faith on any document of any
kind, prima facie properly executed and submitted by any Person respecting any
matters arising under this Agreement. It shall not be under any obligation to
appear in, prosecute, or defend any legal action that is not incidental to its
obligations as the transferor of the Assets under this Agreement and that in its
opinion may involve it in any expense or liability.
(c) Preservation of Security Interest. It shall cooperate in
connection with the execution and filing of financing statements and
continuation statements as may be required by law fully to preserve, maintain,
and protect the interest of the Phoenix Finance Subsidiary under this Agreement
and each Contribution Agreement Supplement, PSSFC under the Receivables Transfer
Agreement and each Receivables Transfer Agreement Supplement and the Trust under
the Pooling and Servicing Agreement and each Subsequent Transfer Agreement, and
of each of the Phoenix Finance Subsidiary, PSSFC and the Trust, in the Leases
and in any Equipment related to growth capital leases which Equipment is located
in California, Washington or New Jersey, and in the proceeds thereof.
(d) Preservation of Name, etc. It will not change its name,
identity or corporate structure in any manner that would, could, or might make
any financing statement or continuation statement filed in accordance with
Section 4.01 hereof seriously misleading within the meaning of Section 9-402(7)
of the UCC, unless it shall have given the Phoenix Finance Subsidiary at least
60 days' prior written notice thereof and shall have made any necessary
amendatory filings.
(e) Preservation of Office. It will give the Servicer and the
Phoenix Finance Subsidiary at least 60 days' prior written notice of any
relocation of its principal executive office if, as a result of such relocation,
the applicable provisions of the UCC would require the filing of any amendment
of any previously filed financing or continuation statement or of any new
financing statement filed hereunder or pursuant to the terms of any conveyance
agreement, and shall make any amendatory filings.
(f) Obligations with Respect to Assets. It will duly fulfill
all obligations on its part to be fulfilled under or in connection with each
Asset and will do nothing to impair the rights of the Phoenix Finance
Subsidiary, PSSFC or the Trust in the Assets. In the event that its rights under
any Lease, any guarantee of the related User's obligations under any Lease, or
any Insurance Policy
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<PAGE> 19
are not assignable to the Phoenix Finance Subsidiary, PSSFC or to the Trust, it
will enforce or it will cooperate in enforcing such rights on behalf of the
Trust.
(g) Compliance with Law. It will comply, in all material
respects, with all acts, rules, regulations, orders, decrees and directions of
any governmental authority applicable to the Assets or any part thereof;
provided, however, that it may contest any act, regulation, order, decree or
direction in any reasonable manner which shall not materially and adversely
affect the rights of the Phoenix Finance Subsidiary, PSSFC or the Trust in the
Assets, or the collectibility of the Assets.
(h) Transfer of Assets; Security Interests. Except for the
transfers hereunder and under any Contribution Agreement Supplements, it will
not sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any Lien, on any Asset, or any interest therein
and it shall defend the right, title, and interest of the Phoenix Finance
Subsidiary, PSSFC, the Trust and their successors and assigns in, to, and under
the Assets, against all claims of third parties claiming through or under it.
(i) Notification of Breach. It will advise the Phoenix Finance
Subsidiary, PSSFC and the Trustee promptly, in reasonable detail, of the
occurrence of any breach by it following discovery by it of such breach of any
of its representations, warranties and covenants contained herein.
(j) Further Assurances. It will make, execute or endorse,
acknowledge and file or deliver to the Phoenix Finance Subsidiary, PSSFC and the
Trustee from time to time such schedules, confirmatory assignments, transfer
endorsements, powers of attorney, certificates, reports and other assurances or
instruments and take such further steps relating to the Assets and other rights
covered by this Agreement, as the Phoenix Finance Subsidiary, PSSFC or the
Trustee may request and reasonably require; provided, that, no UCC filing will
be required with respect to the Equipment except with respect to Equipment
related to the growth capital Leases which Equipment is located in the states of
California, Washington or New Jersey.
(k) Indemnification. It agrees to indemnify, defend and hold
the Phoenix Finance Subsidiary, the Trust and PSSFC 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 the Phoenix Finance Subsidiary, the Trust or PSSFC may
become subject insofar as such loss, liability, damage, judgment, claim,
deficiency or expense arises out of or is based upon a breach by it of its
covenants contained in this Section 4.01, or any information certified in any
schedule delivered by it hereunder or under any Contribution Agreement
Supplement, being untrue in any material
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<PAGE> 20
respect at any time. Its obligations under this Section 4.01(k) shall be
considered to have been relied upon by the Phoenix Finance Subsidiary, the Trust
and PSSFC and shall survive the execution, delivery, and performance of this
Agreement regardless of any investigation made by the Phoenix Finance
Subsidiary, the Trust or PSSFC or on their behalf.
(l) Notice of Liens. It shall notify the Phoenix
Finance Subsidiary, PSSFC and the Trustee promptly after becoming aware of any
Lien on any Asset.
(m) Contribution of New Assets. During the
Interest-Only Period, (i) it will remain in the business of originating and
purchasing equipment and related leases substantially similar to the Initial
Equipment and the Initial Leases, (ii) it will use its best efforts to originate
and purchase such equipment and related leases in a quantity no less than the
cumulative amount of Base Principal Amount, Residual Receipts and Defaulted
Residual Receipts during the Interest-Only Period, (iii) it will not sell, or
enter into agreements to sell, such equipment or related leases to others in a
manner which would materially and adversely affect its ability to perform its
obligations hereunder to make available New Leases for transfer to the Phoenix
Finance Subsidiary and subsequently to the Trust and (iv) if the Trust
Certificate Principal Balance is reduced below 5%, then on the next Payment Date
it will arrange for the transfer to the Trust of New Transferred Property
relating to New Leases having an aggregate Lease Principal Balance necessary to
increase the Trust Certificate Principal Balance to the 5% level.
SECTION 4.02 Phoenix Finance Subsidiary Covenants. The
Phoenix Finance Subsidiary hereby covenants and agrees with PLI as follows:
(a) Reconveyance. Prior to each date as of which Leases
and the Equipment subject to such Leases are to be reconveyed pursuant to
Section 3.03, the Trustee shall, in accordance with Section 5.11 of the Pooling
and Servicing Agreement, assign, on behalf of the Trust, without recourse,
representation, or warranty, to PLI all of the Trust's right, title, and
interest in and to such reconveyed Lease, such purchased Equipment, and all
security and documents relating thereto, such assignment being an assignment
outright and not for security; and upon payment of the Reconveyance Amount, PLI
will thereupon own such Lease, such Equipment and all such security and
documents, free of any further obligation to the Trust with respect thereto.
(b) User's Quiet Enjoyment. The Phoenix Finance
Subsidiary hereby acknowledges and agrees that its rights in the Equipment are
expressly subject to the rights of the related Users in such Equipment pursuant
to the applicable Lease. The Phoenix Finance Subsidiary covenants and agrees
that, so long as a User shall not be in default of any of the provisions of the
applicable Lease, neither the Phoenix Finance Subsidiary nor any assignee of
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<PAGE> 21
the Phoenix Finance Subsidiary will disturb the User's quiet and peaceful
possession of the related Equipment and the User's unrestricted use thereof for
its intended purpose.
SECTION 4.03 Transfer of Assets and Rights under this
Agreement. PLI understands that the Phoenix Finance Subsidiary intends to
transfer the Transferred Property to PSSFC pursuant to the Receivables Transfer
Agreement and that PSSFC intends to transfer the Transferred Property to the
Trust pursuant to the Pooling and Servicing Agreement and hereby consents to the
assignment of all or any portion of this Agreement by the Phoenix Finance
Subsidiary to PSSFC and by PSSFC to the Trust. PLI agrees that any such assignee
of the Phoenix Finance Subsidiary or PSSFC may exercise the rights of the
Phoenix Finance Subsidiary hereunder and shall be entitled to all of the
benefits of the Phoenix Finance Subsidiary hereunder.
ARTICLE V.
CONDITIONS PRECEDENT
SECTION 5.01 Conditions to the Phoenix Finance Subsidiary's
Obligations. The obligations of the Phoenix Finance Subsidiary to accept the
contribution of the Initial Assets and issue the Common Stock on the Closing
Date shall be subject to the satisfaction of the following conditions:
(a) All representations and warranties of PLI 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 Assets provided to
the Phoenix Finance Subsidiary, PSSFC and the Trust shall be true and correct as
of the Cut-Off Date in all material respects;
(c) PLI shall have delivered to the Phoenix Finance Subsidiary,
PSSFC and the Trust a List of Initial Leases as of the Cut-Off Date and shall
have substantially performed all other obligations required to be performed by
the provisions of this Agreement;
(d) PLI shall have recorded and filed, at its expense, any
financing statement with respect to the Initial Assets contributed to the
Phoenix Finance pursuant to this Agreement meeting the requirements of
applicable state law in such manner in such jurisdictions as are necessary to
perfect the transfer and contribution of the Assets from it to the Phoenix
Finance Subsidiary, except that such filings with respect to the Equipment shall
only be required with respect to Equipment related to growth capital leases
which Equipment is located in California, Washington
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or New Jersey, and shall have delivered copies of such financing statements to
the Trustee (with copies to the Phoenix Finance Subsidiary and PSSFC); and
(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 Phoenix Finance Subsidiary, and the
Phoenix Finance Subsidiary shall have received from PLI copies of all documents
(including, without limitation, records of corporate proceedings) relevant to
the transactions herein contemplated as the Phoenix Finance Subsidiary may
reasonably have requested.
SECTION 5.02 Conditions to the Obligations of PLI. The
obligation of PLI to transfer and contribute the Initial Assets on the Closing
Date and to perform its obligations hereunder shall be subject to the
satisfaction of the following conditions:
(a) All representations and warranties of the Phoenix Finance
Subsidiary contained in this Agreement shall be true and correct with the same
effect as though such representations and warranties had been made on such date;
(b) The Common Stock shall have been validly authorized; and
(c) 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 PLI, and PLI shall have received from the
Phoenix Finance Subsidiary copies of all documents (including, without
limitation, records of corporate proceedings) relevant to the transactions
herein contemplated as it may reasonably have requested.
ARTICLE VI.
TERMINATION
SECTION 6.01 Termination. The respective obligations
and responsibilities of PLI and the Phoenix Finance Subsidiary created by this
Agreement shall terminate a year and a day after the latest of (i) the maturity
or other liquidation of the last Lease and the disposition of any amounts
received upon disposition of any Defaulted Leases; (ii) the distribution to the
Phoenix Finance Subsidiary of all amounts required to be paid to it pursuant to
this Agreement; and (iii) the termination of the Pooling and Servicing
Agreement.
SECTION 6.02 Effect of Termination. No termination nor
rejection nor failure to assume the executory obligations of this Agreement in
the bankruptcy of PLI or the Phoenix Finance Subsidiary shall be deemed to
impair or affect the obligations pertaining to
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any executed contribution or executed obligations, including, without
limitation, pretermination breaches of representations and warranties by PLI or
the Phoenix Finance Subsidiary.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
SECTION 7.01 Amendment. This Agreement may be amended
from time to time by PLI and the Phoenix Finance Subsidiary only with the prior
written consent of PSSFC and the Trustee. A copy of any such amendment shall be
furnished to the Rating Agency.
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 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 PLI, at the
following address: 2401 Kerner Boulevard, San Rafael, California 94901-5527,
Attention: Chief Financial Officer and (b) in the case of the Phoenix Finance
Subsidiary, at the following address: 2401 Kerner Boulevard, San Rafael,
California 94901-5527, Attention: Chief Financial Officer. 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 7.03 for
giving notice and by otherwise complying with any applicable terms of this
Agreement, including but not limited to, subsections 4.01(d) and (e).
SECTION 7.04 Severability of Provision. 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 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 7.05 Assignment. Notwithstanding anything to
the contrary contained in this Agreement, this Agreement may not be assigned by
PLI, except as provided in Section 4.01(a), without the prior written consent of
the Phoenix Finance Subsidiary, PSSFC and
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the Trustee. Except as provided in Section 4.03, this Agreement may not be
assigned by the Phoenix Finance Subsidiary without the prior written consent of
PLI, PSSFC and the Trustee. Notice of any such assignment shall be given to the
Rating Agency.
SECTION 7.06 Further Assurances. PLI and the Phoenix
Finance Subsidiary agree to do such further acts and things and to execute and
deliver to the Trustee such additional assignments, agreements, powers and
instruments as are required by the Trustee to carry into effect the purposes of
this Agreement or to better assure and confirm unto the Trustee or the
Certificateholders their rights, powers and remedies hereunder.
SECTION 7.07 No Waiver; Cumulative Remedies. No failure
to exercise and no delay in exercising, on the part of PLI or the Phoenix
Finance Subsidiary 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 7.08 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 7.09 Binding Effect; Third-Party Beneficiaries.
This Agreement will inure to the benefit of and be binding upon the parties
hereto, PSSFC, the Trust, the Certificateholders and their respective successors
and permitted assigns.
SECTION 7.10 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 7.11 Headings. The headings herein are for
purposes of reference only and shall not otherwise affect the meaning or
interpretation of any provision hereof.
SECTION 7.12 Exhibit. The exhibit attached hereto and
referred to herein shall constitute a part of this Agreement and is incorporated
into this Agreement for all purposes.
SECTION 7.13 No Bankruptcy Petition Against the Phoenix
Finance Subsidiary. PLI agrees that, prior to the date that is one year and
one day after the payment in full of all outstanding Certificates, it will not
institute against the Phoenix Finance
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Subsidiary, or join any other Person in instituting against the Phoenix Finance
Subsidiary, 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 7.13 shall survive the
termination of this Agreement.
SECTION 7.14 Confirmation of Intent. It is the
intention of PLI and the Phoenix Finance Subsidiary that the contribution and
transfer hereunder constitute the acquisition by the Phoenix Finance Subsidiary
of the Assets transferring good title thereto and constituting a sale for
financial accounting purposes, free and clear of all Liens, from PLI to the
Phoenix Finance Subsidiary and that the Assets not be part of PLI's estate in
the event of the insolvency or bankruptcy of PLI. In the event that the Assets
or any portion thereof is held to be property of PLI's estate, or if for any
reason this Agreement is held or deemed to create a security interest in the
Assets, then (x) this Agreement shall also be deemed to be a security agreement
within the meaning of Article 8 and Article 9 of the Uniform Commercial Code as
in effect in the States of New York and California and (y) the transfer provided
for in this Agreement shall be deemed to be a grant by PLI to the Phoenix
Finance Subsidiary of (A) a valid first priority perfected security interest in
all of PLI's right, title and interest in and to the Assets, except for the
Equipment not owned by PLI, and (B) a valid assignment of its security interest
in the Equipment not owned by PLI. PLI hereby grants such a security interest.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, PLI and the Phoenix Finance Subsidiary have
caused this Contribution Agreement to be duly executed by their respective
officers as of the day and year first above written.
PHOENIX LEASING INCORPORATED,
a California corporation
By: /s/ Paritosh K. Choksi
-----------------------------------
Name: Paritosh K. Choksi
Title: Chief Financial Officer
PHOENIX RECEIVABLES II, INC.,
a Delaware corporation
By: /s/ Paritosh K. Choksi
-----------------------------------
Name: Paritosh K. Choksi
Title: Chief Financial Officer
[Contribution Agreement Signature Page]
<PAGE> 27
EXHIBIT A
Form Of Contribution Agreement Supplement
This Contribution Agreement Supplement (this "Agreement"),
dated ____________ (the "Transfer Date"), is entered into among PHOENIX LEASING
INCORPORATED, ("PLI"), a California corporation located at 2401 Kerner
Boulevard, San Rafael, California 94901-5527 and PHOENIX RECEIVABLES II, INC.
(the "Phoenix Finance Subsidiary"), a Delaware corporation located at 2401
Kerner Boulevard, San Rafael, California 94901-5527.
W I T N E S S E T H:
Reference is hereby made to that certain Contribution Agreement
dated as of November 1, 1995 (the "Contribution Agreement") between PLI and the
Phoenix Finance Subsidiary. Pursuant to the Contribution Agreement, PLI agreed
to contribute, and the Phoenix Finance Subsidiary agreed to accept, from time to
time, New Assets (as defined below) and to transfer such New Assets to PSSFC.
The Contribution Agreement provides that each such contribution of New Assets be
evidenced by the execution of delivery of a Contribution Agreement Supplement in
the form of this Contribution Agreement Supplement.
The New Assets consist of (a) (i) any New Equipment that is
owned by PLI and any and all income and proceeds from such New Equipment, but
subject to the rights of any User to quiet enjoyment of such New Equipment under
the related New Lease and (ii) any security interest of PLI in any of the New
Equipment that is not owned by PLI, (b) the New Leases, including, without
limitation, all Scheduled Payments, Residual Receipts and any other payments due
with respect to the New Leases after the Cut-Off Date relating to such New
Leases, (c) any guarantees of a User's obligations under a New Lease, (d) all
other documents in the Lease Files with respect to the New Leases, including,
without limitation, any Uniform Commercial Code financing statements relating to
the New Leases or to the New Equipment; (e) any Insurance Policies and Insurance
Proceeds with respect to the New Equipment, (f) the Security Deposits and (g)
any and all income and proceeds of any of the foregoing; but shall not consist
of any right, title and interest in and to the Initial Unpaid Amounts relating
to the New Equipment, or any warrants issued by a User to PLI.
The "New Leases" are those Leases listed on the List of New
Leases attached hereto.
"New Equipment" shall mean the equipment leased to a User
pursuant to any New Lease.
<PAGE> 28
The Cut-Off Date with respect to the New Leases is close of
business on the day prior to the Transfer Date.
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:
Section 1. Definitions. For the purposes of this
Agreement, capitalized terms used herein but not otherwise defined herein shall
have the respective meanings assigned to such terms in the Contribution
Agreement.
Section 2. Contribution; Transfer. (a) PLI hereby makes
an additional capital contribution to the Phoenix Finance Subsidiary of all of
its respective right, title and interest in, to, and under the New Assets,
whether now existing or hereafter arising, and PLI hereby assigns, grants and
transfers to the Phoenix Finance Subsidiary, without recourse, all of its right,
title and interest in and to the New Assets, whether now existing or hereafter
arising. Upon the Phoenix Finance Subsidiary's receipt of the New Assets, the
Phoenix Finance Subsidiary shall transfer the New Transferred Property to PSSFC
pursuant to a Receivables Transfer Agreement Supplement and PSSFC shall transfer
the New Transferred Property to the Trust by executing and delivering to the
Trust, an instrument of conveyance in substantially the form of Annex 1 to
Exhibit 1 to the Receivables Transfer Agreement.
(b) In connection with such contribution and transfer, PLI has
heretofore filed, at its own expense, financing statements (and will hereafter
file timely continuation statements with respect to such financing statements)
with respect to the New 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 and contribution of the New Assets from
PLI to the Phoenix Finance Subsidiary, the transfers of the New Transferred
Property (as defined in the Receivables Transfer Act) from the Phoenix Finance
Subsidiary to PSSFC pursuant to the Receivables Transfer Agreement, and the
transfer of the New Transferred Property from PSSFC to the Trustee pursuant to
the Pooling and Servicing Agreement, and delivered copies of such filings or
other evidence of such filings to the Trustee (and copies to the Phoenix Finance
Subsidiary and PSSFC); provided, however, that no financing
statements will be recorded or filed with respect to the contribution or
transfer of the Equipment except with respect to Equipment related to Growth
Capital Leases which Equipment is located in California, Washington and New
Jersey; and provided, further, that the Lease Files will not be
physically delivered to the Phoenix Finance Subsidiary but instead will be held
by the Servicer on behalf of PSSFC, the Phoenix Finance Subsidiary and the
Trust.
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(c) In connection with such contribution and transfer, (i) PLI
shall, at its own respective expense, cause its books and records to be marked
to show that the New Assets have been contributed and transferred to the Phoenix
Finance Subsidiary in accordance with this Agreement, that the New Transferred
Property (as defined in the Receivables Transfer Agreement) has been transferred
to PSSFC in accordance with the Receivables Transfer Agreement and that the New
Transferred Property has been transferred to the Trust in accordance with the
Pooling and Servicing Agreement on or prior to the Transfer Date and (ii) on the
Transfer Date PLI shall deliver to the Trustee on behalf of PSSFC the List of
New Leases.
(d) PLI hereby acknowledges receipt from the Phoenix Finance
Subsidiary of $____________, in respect of the contribution of the New Assets.
Section 3. Representations and Warranties of PLI. PLI
hereby makes the following representations and warranties for the benefit of the
Trustee, the Certificateholders, PSSFC and the Phoenix Finance Subsidiary, on
which the Phoenix Finance Subsidiary relies in accepting the contribution of the
New Assets and on which PSSFC relies in accepting the transfer of the New
Transferred Property (as defined pursuant to the Receivables Transfer Agreement)
pursuant to the Receivables Transfer Agreement, and on which the Trust relies in
accepting the transfer of the New Transferred Property pursuant to the Pooling
and Servicing Agreement. Such representations and warranties speak as of the
Transfer Date but shall survive the contribution, assignment and transfer of the
respective New Assets to the Phoenix Finance Subsidiary and its successors and
assigns.
(i) List of New Leases. The information with respect to
the New Leases in the List of New Leases is true and correct in all
respects as of the Cut-Off Date; the List of New Leases is attached
hereto;
(ii) No Default. As of the Cut-off Date, no payment on
any New Lease was more than 60 days past due and (except for payments
which are 60 days or less past due) (A) there was no default, breach,
violation or event permitting acceleration under the terms of any New
Lease (other than delinquent payments, as previously described), (B) no
event had occurred and was continuing which with notice, the lapse of
time or both would constitute a default, breach, violation or event
permitting acceleration under the terms of any New Lease (other than
delinquent payments, as previously described) and (C) it has not waived
any of the foregoing;
(iii) No Waiver. No provision of any New Lease has been
waived, altered or modified in any respect, except by instrument or
documents attached as part of such New Lease and
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identified by it (other than payment delinquencies permitted under
clause (ii) above);
(iv) Binding Obligation. Each New Lease represents the
legal, valid and binding payment obligation of the User, enforceable 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 a proceeding at law or in equity;
(v) No Defenses. Each New Lease is not and will not be
subject to any right of rescission, setoff, counterclaim or defense,
including the defense of usury, whether arising out of transactions
concerning such New Lease or otherwise, and the operation of any of the
terms of such New Lease or the exercise by it, the Servicer or the User
of any right under such New Lease will not render such New Lease
unenforceable in whole or in part, and no such right of rescission,
setoff, counterclaim or defense, including a defense arising out of a
breach of the User's right of quiet enjoyment of the related Equipment,
has been asserted with respect thereto, except that certain rights or
defenses may exist under applicable law which, individually or in the
aggregate, do not make the remedies available with respect to such New
Lease inadequate for the practical realization of the benefits provided
thereby;
(vi) Compliance with Law. All requirements of
applicable federal, state and local laws, and regulations thereunder,
including, without limitation, usury laws, if any, in respect of each
New Lease have been complied with in all material respects, and each
New Lease complied in all material respects at the time it was
originated or made and now complies in all material respects with all
legal requirements of the jurisdiction in which it was originated;
(vii) Characteristics of the New Leases. (A) Each
New Lease contains provisions requiring the User to assume all risk of
loss or malfunction of the related Equipment, and making the User
absolutely and unconditionally liable for all payments required to be
made thereunder, without any right of setoff for any reason whatsoever,
(B) except for New Leases having Lease numbers of ____________________,
having an aggregate Lease Principal Balance as of the Cut-Off Date of
$_______________, and each of which allows for prepayment in an amount
not less than the related Prepayment Amount, no New Lease provides the
User with a right to terminate or prepay, (C) each New Lease does not
provide for the substitution,
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exchange or addition of any other items of equipment pursuant to such
New Lease which would result in any reduction or extension of payments
due under each New Lease, (D) each New Lease is assignable by it, the
Phoenix Finance Subsidiary and PSSFC, without the consent of any
Person, or, if any consent is required, the Person whose consent is
required has given its consent in accordance with the terms of such New
Lease no later than the Closing Date, (E) each New Lease was originated
in the United States, its territories or possessions, by it in the
ordinary course of its business, and in accordance with its
underwriting standards and has been fully and properly executed by the
parties thereto, (F) each New Lease creates a valid, subsisting and
enforceable security interest in favor of it in the related Equipment
and such security interest has been perfected, (G) each New Lease is in
full force and effect in accordance with its terms and contains
enforceable provisions such that the rights and remedies of the holder
thereof shall be adequate for realization against the related Equipment
of the benefits of the security, (H) each New Lease at the date of
issuance of the Certificates will be free and clear of all Liens; (I)
each New Lease provides for monthly payments (which payments have not
been reduced or suspended) as set forth for each New Lease in the List
of New Leases that fully amortize the original Lease Principal Balance
by maturity and (J) each New Lease is not more than 60 days past due as
of the Cut-Off Date;
(viii) Lawful Assignment. Each New Lease was not
originated in, nor is it subject to the laws of, any jurisdiction the
laws of which would make unlawful, void or voidable the sale, transfer
and assignment of such document under this Agreement, or give rise to
any repurchase obligation or option in accordance with Section 3.03
hereof or Section 5.12 of the Pooling and Servicing Agreement and all
necessary action has been taken by it to transfer all of its right,
title and interest in and to each New Lease and the related Equipment
to the Phoenix Finance Subsidiary;
(ix) Capacity. All parties to each New Lease had the
legal capacity to execute the New Lease;
(x) Good Title. Each New Lease and the related
Equipment has not been sold, transferred, assigned or pledged by it to
any other Person and immediately prior to contributing the New Leases
and the related Equipment to the Phoenix Finance Subsidiary, it was the
sole owner of each New Lease and the related Equipment free and clear
of any liens or encumbrances and it has not taken any action to convey
to any Person any right to payments received under the New Leases or
the Insurance Policies;
(xi) Leases in Force. No New Lease has been satisfied,
subordinated or rescinded, and no Equipment or any
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security interest in Equipment has been released from the New Lease in
whole or in part;
(xii) One Original. There is only one original of each New
Lease for purposes of the UCC as in effect in California and in New
York and such counterpart will be delivered to the Servicer on or
before the Closing Date; each New Lease constitutes "chattel paper" for
purposes of the UCC as in effect in California and New York;
(xiii) Obligations; No Impairment. It has duly fulfilled
all material obligations on its part to be fulfilled under or in
connection with the New Leases, including, without limitation, giving
any notices or consents necessary to effect the contribution,
assignment, transfer and conveyance of the New Assets from it to the
Phoenix Finance Subsidiary, and has done nothing to impair the rights
of the Phoenix Finance Subsidiary, PSSFC and the Certificateholders in
the New Leases or the proceeds with respect thereto;
(xiv) No Amendments. Except as otherwise reflected in the
List of New Leases, no New Lease has been amended such that the amount
of any Scheduled Payment or Final Lease Payment or the aggregate of any
Scheduled Payments or Final Lease Payments have been decreased;
(xv) No Proceedings. There are no proceedings or
investigations pending or, to the best of its knowledge, threatened
before any court, regulatory body, administrative agency, or other
tribunal or governmental instrumentality (A) asserting the invalidity
of the New Lease, (B) asserting the bankruptcy or insolvency of a User,
(C) seeking to prevent payment and discharge of the New Lease, or (D)
seeking any determination or ruling that might materially and adversely
affect the validity or enforceability of the New Lease;
(xvi) All Filings Made. All filings necessary to evidence
the contribution of the New Leases to the Phoenix Finance Subsidiary
have been made in all appropriate jurisdictions;
(xvii) Miscellaneous. Each User's billing address is in
the United States or its possessions and all payments under the New
Leases are required to be made in United States dollars;
(xviii) Monthly Installments. The Scheduled Payments on
each New Lease are payable in monthly installments;
(xix) Aggregate Characteristics. As to the New Leases in
the aggregate:
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(a) Amounts. The aggregate Lease Principal Balance
on the Leases listed in the List of New Leases as of the Cut-
Off Date is equal to $_______________;
(b) Selection Criteria. Substantially all of
the Equipment and related New Leases owned by it having the
following characteristics have been contributed by it to the
Phoenix Finance Subsidiary:
The New Leases and the related Equipment have
the following characteristics: (A) each such New Lease has a
remaining term to maturity as of the Cut-Off Date of not less
than 20 months and not more than 72 months, (B) the weighted
average remaining term to maturity of the Leases is not less
than 26 months, (C) each such New Lease has a Lease Principal
Balance as of the Cut-Off Date of not less than $2,000 and not
more than $1,000,000, (D) as of the Cut-Off Date, no such item
of Equipment has been repossessed, (E) no more than 50% of the
aggregate Lease Principal Balances on the Cut-Off Date is
attributable to such New Leases with Users in any single State,
(F) no more than __% of the aggregate Lease Principal Balances
on the Cut-Off Date is attributable to any one User (including
Affiliates of such User), (G) the Servicer has received at
least one lease payment (which may include receipt by the
Servicer of the related Security Deposit) on account of each
such piece of Equipment from the related User, (H) no more than
47% of the aggregate Lease Principal Balance for all New Leases
on the related Cut-Off Date is attributable to franchise
business leases;
(c) Computer Tape. The Computer Tape made
available by it as of the Cut-Off Date was complete and
accurate as of its date and includes a description of the same
New Leases that are described in the List of New Leases and the
payments due thereunder as of the Cut-Off Date;
(xx) Maturity of Leases. Each New Lease has a
final Scheduled Payment date as set forth in the List of New Leases,
none of which is later than January 1, 2003; No New Lease has a Final
Lease Payment due after January 1, 2003;
(xxi) Security Interest in the Equipment and the New
Leases. All necessary and appropriate actions have been taken that
would result in the creation of a perfected security interest in the
Equipment not owned by it and in the New Leases in its favor as secured
party;
(xxii) Maintenance and Insurance. Each New Lease
requires that the User maintain the related Equipment in good and
workable order and that the User obtain and maintain physical damage
and liability insurance covering such Equipment;
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(xxiii) Foreclosure. The Trust will have the right to
exercise appropriate remedies with respect to the Equipment without
obtaining the consent of any third parties;
(xxiv) Representations and Warranties. The representations
and warranties in this Agreement are true and correct;
(xxv) Contribution of Assets. It has caused its
books and records to be marked to indicate that the New Assets have
been contributed to the Phoenix Finance Subsidiary and will be acquired
by PSSFC from the Phoenix Finance Subsidiary and will be transferred by
PSSFC to the Trust;
(xxvi) Business Enterprise; Legal Requirements. Each User is
a business enterprise; no New Lease is subject to legal requirements
relating to extensions of credit to consumers; and
(xxvii) Servicing. The prior servicing of the New Leases has
been conducted in accordance with all applicable law.
Section 4. Financing Statements. PLI shall deliver to
the Trustee on the Transfer Date copies of such filings or other evidence of
such filings as is required by Section 2(b) hereof.
Section 5. Amendment. This Agreement may be amended
from time to time by PLI and the Phoenix Finance Subsidiary only with the prior
written consent of PSSFC and the Trustee.
Section 6. Governing Law. This Agreement and any
amendment hereof pursuant to Section 5 hereof 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. 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 8. Binding Effect; Third-Party Beneficiaries.
This Agreement will inure to the benefit of and be binding upon the parties
hereto, PSSFC, the Trust, the Certificateholders and their respective successors
and permitted assigns.
Section 9. 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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[REMAINDER INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, PLI and the Phoenix Finance Subsidiary have
caused this Contribution Agreement Supplement to be duly executed by their
respective officers as of the day and year first above written.
PHOENIX LEASING INCORPORATED
By:
----------------------------
Name:
Title:
PHOENIX RECEIVABLES II, INC.
By:
----------------------------
Name:
Title:
